Saturday, February 16, 2008

Taking stocks

Family elders play a crucial role in one’s life, right from the time they stop trying to control you to the time they start dribbling into their bibs and diapers. This window during which they make sense is sometimes so short that if you blink, you’ll miss it; but in that brief golden moment you’ll find the old bags full of handy tips. Their most consistently valuable advice to me has been: Don’t play with fire, knives, boys, or the stock market.

For the most part I have paid heed. I don’t play with fire, except for occasionally passing my finger slowly through a candle flame to see how it feels. I try to keep my pocket knife sheathed, because the memory of dropping my grand-uncle’s sword onto my foot, point first, is forever engraved in my mind and on my foot. I can’t find any boys to play with anymore. As for the stock market, I’m beginning to see what they were getting at.

Like many people who are very nice but no good at making money, I am very nice but no good at making money. I’m fortunate to have good infrastructure and quality of life, but the state of my liquidity and general finances can only be called dire. So, with a fire lit under my fundamentals by the prospect of a pension-less old age and a few holidays I wish I could take, I decided that I needed to Grow My Money. At about the same time, I discovered that the Sensex was not an English county between Essex and Wessex, but an instrument with which to acquire untold millions by doing nothing. This is probably the sort of thinking that the family elders were trying to nip in the bud.

I stomped off to see my brother, who has incredible financial instincts, which is very lucky because he’s busy working on a PhD in Philosophy. He said Risk Appetite, and Investment Horizon, and I immediately started to do crosswords in my head. He rolled his eyes and made me take notes on what I later found I’d earnestly recorded as ‘Madcap Stocks’.

Of course, I did nothing with the information he gave me when the Sensex was at 16,000. The workings of the market are, for me, buried within an impenetrable fog. All I know is that sometimes ‘Sensex Soars, Millions Make Killing’, and sometimes ‘Sensex Crashes, Millions Kill Selves’, and that almost always, the former is considered to be better.

But then, an old friend rang me up and described his life of leisure financed by stock market earnings, and another old friend scolded me for not having a Demat account. I didn’t tell him that I don’t even have a credit card. Momentum was building.

When the Sensex went from 16,000 to 20,000 I cunningly decided that it was time to buy. I gathered together my few beans, borrowed a couple of peanuts, and put the lot into Mutual Funds—which, it turns out, is not the technical term for "your parents’ money". I sat back and waited for five days, and in this interim there was a ‘Sensex Bloodbath, Everyone Buggers Off’. When I checked my Portfolio, I discovered that it had been reduced to a Portfol, which is to say that some of it was missing.

But I’ve re-evaluated my Horizon; I’m a Long Term Investor and I’m not going to get fussed about these blips. The whole thing is notional anyway, they tell me, so my next move is going to be to get myself a rich avatar on Second Life. At least there, if I lose my money, I can still be tall and thin.


Anonymous said...

one of your better pieces, definitely.

ArSENik said...

Hahaha...very bullish post with classics like playing with boys, the origins of Sensex and the good luck of your PhD in Phil brother.

Anonymous said...

Got to know about this place through Jabberwock, & I'm hooked since then.
Liked this piece very much.

- Puneet