I have not watched Chennai Express. I like to catch the usually low IQ blockbuster Bollywood movies at the multiplex, to marvel the immensely successful Hindi movie mindless masala business model play out yet again.
My money is hard earned, not due to proximity of power, Vadra-Gandhi-land-use-change-nomics. So, I am naturally worried. Over the last few years I have come to terms with stocks that I have picked being reduced to scrap.
I bought them as per advice of experts in the pink papers and recommendations of well-dressed wealth managers. Today one share I bought for about Rs. 100 quotes under Rs. 3. The fate of another has been similar. I was told these stocks would grow exponentially. They have, in the other direction.
If I sell these shares today, I might just be able to buy a cinema ticket, I am not so sure. I had bargained for more. The wealth managers say they were not wrong, as they are never wrong. They showed me graphs where the said stocks quoted somewhat more than Rs. 100 for a couple of days in four years.
I was supposed to exit then, make a killing and become filthy rich, probably produce a movie starring Deepika Padukone. In the meantime, the wealth managers showed me another graph. This depicted guaranteed notional growth (whatever that means) that could make me as rich as Mukesh Ambani or at least M.S. Dhoni (currently, high on Forbes list like Maria Sharapova due to endorsements) in a few years if I started investing afresh as Europe and America are getting back in business.
I told my investment advisors to take a walk, dumped the graph into the dustbin and decided to play it safe by focusing on bonds and debt funds to be able to sleep peacefully again. Unfortunately, my net worth has been drastically battered again. The change was very abrupt, like going to bed safe and snug, but waking up to find that your limbs have disappeared for good.
Here I was worth a million at 10 p.m., only to discover I was near worthless the next morning. The Indian economy is very shaky again. The rupee has crashed quicker than Usain Bolt’s mighty strides or Chennai Express clocking Rs. 100 crore.
Given my stock market experience, I have gauged it is best to exit (and book profits, if possible) when the milieu begins to turn bearish.
However, just as the first alarm linked the falling rupee, capital outflow and crashing bond market, my investments had already fallen steeply, the regular supposedly safe returns vanished, the principal eroded.
Some wealth managers I spoke to, said, there is always risk in bonds, it is best the money is held as cash. Do we need MBAs in finance or Chartered Accountants to figure this out? I need to find out what the wealth managers do with their money. Probably they have lockers at home. One day I will steal their money.
“What is the use of earning money if I keep losing it,” I asked myself. It would have been better if it was never there, than appearing and then disappearing, making one feel like a fool. Or maybe I should have splurged on gadgets rather than save.
The Reserve Bank of India is trying (not to) tinker with high interest rates to retrieve the situation. They have made it difficult for individuals and entities to remit dollars overseas, including buying cheaper LED TVs in South East Asia and selling dear in India. This is like giving Disprin (cold medicine) to a patient suffering from acute dysentery.
I have a humble advice to the very well qualified Reserve Bank of India chiefs, Raghuram Rajan, and policy makers in Delhi, Manmohan Singh. They need to look beyond their fat textbooks to figure out why the Indian economy is so jammed.
They should try and take a round of Delhi, Mumbai or any other city, not in VVIP convoys but personal transport to experience first-hand, millions of vehicles going nowhere. It is a catch-22 situation.
People use cars and two-wheelers, as public transport is woefully inadequate. And, then they are stuck in traffic jams as the infrastructure is unable to support so many vehicles, in the process guzzling more and more gas, diesel or CNG, all of which India imports (as crude oil or LNG), hiking our energy bill — the biggest forex drain.
This is just one of the major problems. Our policy makers need to address the structural infirmities of the Indian economy – over regulation, lack of infrastructure, power, roads, absence of governance, and corruption.
The challenge lies here. Not, tinkering with repo rate, the easy way out in the short-run. Please act now, or else, our once robust economy that is sinking fast, will soon be dead.
!-- Start Alexa Certify Javascript -->
Siddharth Srivastava is India correspondent for Siliconeer. He lives in New Delhi.
