{"id":2359,"date":"2013-11-01T12:31:25","date_gmt":"2013-11-01T07:01:25","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=2359"},"modified":"2013-11-01T12:31:25","modified_gmt":"2013-11-01T07:01:25","slug":"sensex-record-high-when-the-bull-met-an-old-time-investor","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2013\/11\/01\/sensex-record-high-when-the-bull-met-an-old-time-investor\/","title":{"rendered":"Sensex record high: When the bull met an old-time investor"},"content":{"rendered":"

\"bullfighting\"<\/a>Vivek Kaul \u00a0<\/span>
\n\u201cSo your horns are shining,\u201d he said.
\n\u201cYes,\u201d said the bull \u201cwith the BSE Sensex at an all time high and all that.\u201d
\n\u201cYou must be really happy today?\u201d
\n\u201cYes. Its taken me nearly six years to get there,\u201d replied the bull. \u201cThe last time the Sensex reached these levels was in early January 2008.\u201d
\n\u201cYes, I know. Its been a tough ride.\u201d
\n\u201cBut why are you so sad?\u201d asked the bull. \u201cI don’t see any champagne bottles lying around.\u201d
\n\u201cYou know the first time I invested in the stock market was in late 1991.\u201d
\n\u201cAh, seems like you are old timer,\u201d said the bull. \u201cYour white hair should have told me that.\u201d
\n\u201cAnd I made a few good gains. Got my friends and family to invest as well.\u201d
\n\u201cYes, yes. That’s a good thing to do. If there is a good deal going, no harm in friends and family also benefiting a little.\u201d
\n\u201cThen on April 23, 1992, it all came crashing.\u201d
\n\u201cOh, what happened?\u201d asked the bull.
\n\u201cArre\u00a0<\/i>Harshad\u00a0bhai<\/i>‘s game came to an end.\u201d
\n\u201cHarshad who?\u201d
\n\u201cAh. You are a bull. How come you have never heard of him?\u201d he asked.
\n\u201cSo tell me then.\u201d
\n\u201cHarshad Mehta.\u201d
\n\u201cAh. Now I remember. My father used to tell me about him. He was the Big Bull among us small bulls.\u201d
\n\u201cYes. That’s what they called him when he drove around in his Lexus. He was the Amitabh Bachchan of stock brokers.\u201d
\n\u201cOh, really?\u201d asked the bull.
\n\u201cBut then his luck ran out. All he had been doing was siphoning off money from the banking system and investing it into the stock market.\u201d
\n\u201cAnd that drove up the market?\u201d
\n\u201cIt sure did. The system finally caught up with him. And a huge number of cases were filed against him. He died on December 31, 2001, in a jail in Thane. At that time a decision had been made in only in one of the many cases that had been filed against him.\u201d
\n\u201cYou must have lost a lot of money?\u201d
\n\u201cYes, I did. But then I told myself, only if I had got out at the right time I would have made a lot of money.\u201d
\n\u201cYes, that is the trick,\u201d said the bull.
\n\u201cAnd then in 1994, a lot of new companies started hitting the stock market with their initial public offerings (IPOs). And my brother-in-law had become a broker by then.\u201d
\n\u201cThat’s cool.\u201d
\n\u201cAnd he asked me to put some money in these companies and I did.\u201d
\n\u201cYou must have surely made money there. IPOs are a sure shot way of making money,\u201d said the bull.
\n\u201cActually I did not. These companies simply took the money and disappeared. I guess no one ever made a proper estimate of how much money was looted. But it must have run into thousands of crores,\u201d he said.
\n\u201cOh, so you have been bitten by the stock market, twice.\u201d
\n\u201cThen I took a break from the stock market and decided to go back to the good old fixed deposit.\u201d
\n\u201cBut fixed deposits are boring,\u201d jeered the bull.
\n\u201cOh, sure they are,\u201d he replied. \u201cBut they ensure safety of capital.\u201d
\n\u201cAnd you never invested in the stock market after that?\u201d
\n\u201cWell I held out till 2000.\u201d
\n\u201cThen what happened?\u201d
\n\u201cI saw everyone around me making money in what came to be known as K-10 stocks.\u201d
\n\u201cYes, I have heard of K-10,\u201d said the bull. \u201cSome of those stocks are still around.\u201d
\n\u201cSo K-10 stocks were stocks which were a favourite with the broker Ketan Mehta.\u201d
\n\u201cYes, another Big Bull.\u201d
\n\u201cThese included stocks were Aftek Infosys, DSQ Software, Global Telesystems (GTL), Himachal Futuristic Communiations Ltd (HFCL), Ranbaxy Labs, SSI, Silverline, Satyam Computers, Pentamedia Graphics and Zee Telefilms.\u201d
\n\u201cSome of these names are still around.\u201d
\n\u201cYes, they are. Also, around the same time the dotcom boom was also on. Hence, the price of information technology stocks was also going through the roof.\u201d
\n\u201cYes, I remember that. I was just starting my innings in the stock market then,\u201d said the bull.
\n\u201cSo someone told me there is this company called Infosys, you should invest in that.\u201d
\n\u201cAnd you did?\u201d
\n\u201cYes I did. And this time I decided to do some research.\u201d
\n\u201cYes, research is a must before investing in the stock market,\u201d said the bull, making another motherhood statement.
\n\u201cThe stock price had shot up from around Rs 2000 (Rs 10 paid up) in January 1999 to Rs 12,000 (Rs 5 paid up) in March 2000.\u201d
\n\u201cMassive returns.\u201d
\n\u201cYes. I knew that the stock was overpriced.\u201d
\n\u201cBut you still bought?\u201d
\n\u201cYes. Well I thought I was smarter than the others and would be able to find a greater fool to unload my shares on.\u201d
\n\u201cAnd that did not happen?\u201d asked the bull.
\n\u201cNo, it did not. And I was stuck with huge positions in IT stocks. In fact, I found a beautiful explanation of how big a fool I was in a book called\u00a0Stocks to Riches<\/i>\u00a0written by stock broker Paragh Parikh. Parikh wrote \u201cIn the financial year 2000, Infosys reported revenues of Rs 882 crore. If we were to compound this figure at 85% annually for 10 years (as some people believed the growth would continue), then in 2010, Infosys would report revenues of a staggering Rs 4,14,176 crore. At that time, assuming a market capitalisation of 100 times revenues (similar to what Infosys was quoting at its peak), it would put Infosys’ value at $9.2 trillion. The GDP of the US was around the same figure!”\u201d
\n\u201cOh, freak.\u201d
\n\u201cThat was how stupid the Infosys trade was at that point of time.\u201d
\n\u201cTrue.\u201d
\n\u201cThe system also caught up with Ketan\u00a0<\/span>bhai.\u00a0<\/i><\/span>He was also siphoning off money from banks and investing it into the stock market.\u00a0So after this I decided enough is enough, and retired from the stock market. I placed all my money in fixed deposits, post office savings schemes and some of it went into real estate.\u201d
\n\u201cAnd you lived happily ever after?\u201d asked the bull.
\n\u201cOnly bulls can do that,\u201d he replied.
\n\u201cThen?\u201d
\n\u201cWell the market started to rally again sometime in 2003. But I managed to resist for a few years. Then one day, my brother in law, who had become an insurance agent by then, came to me.\u201d
\n\u201cAnd then?\u201d
\n\u201cHe told me,\u00a0<\/span>ke boss<\/i><\/span>, forget stock market, too much risk. You should try this new product called unit linked insurance plan (Ulip).\u201d
\n\u201cAnd you invested?\u201d
\n\u201cNot immediately. I resisted for a while. But finally I took the plunge in January 2008.\u201d
\n\u201cAh, not the best time to invest.\u201d
\n\u201cYes.\u201d
\n\u201cBut now with the Sensex crossing its previous all time high, your investment must be in positive territory again.\u201d
\n\u201cNah. It took me two years to figure out the Ulip structure, it was so complicated. My brother in law was paid a huge commission for selling me the Ulip. That commission was recovered from me as a premium allocation charge. Then there were other charges like policy administration charge, and what not. So my investment is still in the red.. Only insurance agents made money of Ulips.\u201d
\n\u201cThat’s sad,\u201d said the bull.
\n\u201cYes, it is,\u201d he replied. \u201cHopefully, I should be able to stay away from the market from now on.\u201d
\n\u201cBut who are you?\u201d
\n\u201cOh, I didn’t tell you,\u201d he replied. \u201cI am the Indian retail investor who lives in perpetual hope.\u00a0<\/span>Wo subah kabhi to aayegi.<\/i><\/span>\u201d
\nThis article originally appeared on www.firstpost.com<\/a> on November 1, 2013
\n<\/span>(Vivek Kaul is a retail investor who has been religiously continuing with his SIPs since 2006 in the hope that he will make money one day. He tweets @kaul_vivek)\u00a0<\/b><\/i><\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Kaul \u00a0 \u201cSo your horns are shining,\u201d he said. \u201cYes,\u201d said the bull \u201cwith the BSE Sensex at an all time high and all that.\u201d \u201cYou must be really happy today?\u201d \u201cYes. Its taken me nearly six years to get there,\u201d replied the bull. \u201cThe last time the Sensex reached these levels was in … <\/p>\n

Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"qubely_global_settings":"","qubely_interactions":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,33,39,68],"tags":[557,1526,1984,3072],"qubely_featured_image_url":null,"qubely_author":{"display_name":"Vivek Kaul","author_link":"https:\/\/vivekkaul.com\/author\/vivekkaul\/"},"qubely_comment":0,"qubely_category":"Financial Crisis<\/a> Firstpost<\/a> Humor<\/a> Satire<\/a>","qubely_excerpt":"Vivek Kaul \u00a0 \u201cSo your horns are shining,\u201d he said. \u201cYes,\u201d said the bull \u201cwith the BSE Sensex at an all time high and all that.\u201d \u201cYou must be really happy today?\u201d \u201cYes. Its taken me nearly six years to get there,\u201d replied the bull. \u201cThe last time the Sensex reached these levels was in…","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/2359"}],"collection":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/comments?post=2359"}],"version-history":[{"count":0,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/2359\/revisions"}],"wp:attachment":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/media?parent=2359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/categories?post=2359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/tags?post=2359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}