7/28/2019 Many Experts and Advisors on Television and Other Media Advise Retail Investors to Invest in Equities

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Many experts and advisors on television and other media advise retail investors to invest in equities,but to no avail. There is absolutely no interest in equities at the retail level and mutual funds, too, areseeing record redemptions.

As it happens, retail investors are helping markets more by staying out than by investing in equities, so,from a purely selfish point of view, we (current equity market participants) do not mind if you stay awayfrom equities. Keep your money in low-interest bearing savings accounts and this will help banks raisecheap funds. Then, while you earn taxable 9% per year in fixed deposits and 4% in savings accounts, wewill continue to buy HDFC Bank, IndusInd Bank, Yes Bank and the like, which are up 3.5 times, 11 timesand 5.9 times, respectively, since December 2008. Also, remember to pay all your EMI instalments ontime so that retail loans made by the private banks do not get into trouble and we can continue to do wellowning their stocks.

Indian retail investors are more or less completely out of equities and would rather buy gold instead. So,keep buying gold so that we can do better than you by owning stock in Titan Industries and otherjewellery companies. You should not care at all that while the gold that you bought is up 2.58 times in fouryears, the stock of Titan Industries, which sells gold to you, is up 6.9 times during the same period. If

Rakesh Jhunjhunwala had bought physical gold instead of shares in Titan when he did, he would not be abillionaire today.

In fact, go ahead and buy real estate, taking mortgages from HDFC and LICHousing Finance. How else would we have made 2.8 times and 5.7 times in thesestocks in five years? And when you do buy these apartments and houses, doinsist on using the best construction material cement, sanitary ware and so on.It is only because you do not buy equities and instead spend on real things thatwe could make 192% on ACC and 4.5 times on Hindustan Sanitaryware since2008. A house is not done until its painted, so remember to keep a good budgetfor decorative paints from Asian Paints (stock is up 4.8 times in four years).

Why should you invest in equities when you can buy insurance products? Thisworld is interesting precisely because we think differently from each other whileyou are happy buying insurance, we are happy owning shares in companies that

sell you insurance. Thanks to you, shares in Bajaj Finserve are up 6 times in value and shares in MaxIndia are up 2 times in the past four years.

Follow your heart (and we will follow you). If you like going tomalls and spending time there, please do some shopping aswell some of us own shares in Phoenix Mills, which is up 2.7times since 2008. In fact, it may be time for you to upgradeyour car. Why buy equities when you can spend the samemoney on a new car or motorcycle? Let us do the more boringjob of continuing to own stocks in Maruti and Bajaj Auto, whichare up 2.9 and 10.8 times, respectively, since 2008. Why notadd your name to the waiting list for an Enfield this year whilewe own shares in its manufacturer, Eicher Motors, which is up12 times since 2008?

Life isnt just about making and investing money; its importantto enjoy lifes little pleasures. So go watch a movie at themultiplex and munch some popcorn while youre there.Meanwhile, well buy shares in PVR (up 3 times in four years).Youd rather spend time at home in front of the telly? Well still

Indian retailinvestors aremore or lesscompletely outof equities andwould ratherbuy gold orreal estate

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7/28/2019 Many Experts and Advisors on Television and Other Media Advise Retail Investors to Invest in Equities

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love you shares in Zee Telefilms and Sun are up 3 and 3.5 times because of loyal viewers such asyou. Call for pizza delivery at home Jubilant Foodworks (which owns Dominos) is up 5.4 times sinceits IPO in 2010.

While youre in the mood to be sinfully self-indulgent, dont make any resolutions to give up smoking ordrinking. You may not want to invest in equities, but spare a thought for investors in these stocks. Your

actions so far have helped these investors make 3.8 times in ITC, 10.3 times in United Breweries and 2.2times in United Spirits in four years but they still look for your continued patronage of these businesses.

We wish you a very happy and healthy 2013. If, God forbid, you have to visit a hospital, remember that asstakeholders in Apollo Hospitals (stock up 3.8 times) we will be thanking you from the bottom of ourcollective hearts. And if you do fall sick in 2013, take comfort in the fact that you are helping investors instocks of companies such as Dr Reddys (stock up 4 times) and Cipla (stock up 2.3 times).

We invite you over to our side in 2013 but still love you for choosing instead to be loyal customers of thebusinesses we own. Now its up to you to decide who you would rather be part owners of Indiancompanies or just their loyal customers.

Stocks mentioned in this article are not to be viewed as recommendations for buying or selling. Stock

returns are for December 31, 2008, to November 30, 2012

COMMENTS PRINT MORE SHARING SERVICESSHARE ON FACEBOOKSHARE ON PINTEREST_SHARESHAREON TWITTERSHARE ON EMAIL

FILED IN:AUTHORS: SAMIR ARORASECTION: FEATURE

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COMMENTS:Latest First

HAVEYOUR

SAY

JAN 26, 2013 11:36PM

2

great analysis sir,in the last 5 yeari bought a flat,my critic bought unitech,dlf,hdil sharesi bought a tab,my critic bought rcom sharesi flew kingfisher,my critic bought kingfisher sharesi travelled and paid at toll gates,my critic bought gmr,irb,ivrcli paid my electric bills,my critic bought gvk power,lancoi bought clothes,my critic bought arvindmills,skumar sharesi read deccan chronicle,my critic bought deccan chronicle sharesnext time when i buy something,i will surely inform you.you too can benefit like mycritic.jaiho suicide bombersNATHHYDERABAD, INDIA

JAN 25, 2013 04:43PM

1

Sir/Madam,I find this article very interesting in the fact that it has been written with a "survivorshipbias" note. If the author's substantial investment in Arshiya is considered, it has had abear run from 2010 high of 303 to the current 39. The author hasn't mentioned abouthis loss(es) in this article. As per the author when the public go and watch moviesand build houses he is making money on those companies which offer services to thepublic. How about the mobile and telecom companies which have been beaten down

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like a dead snake? Despite having a large customer base, the mobile instrumentmakers and the telecom service providers don't have any kind of returns to boast of.GEEKAYBEECHENNAI, INDIA