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A Lion’s eye on the Bulls and Bears

“In India, companies may fall sick, but promoters rarely do!”

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October 17, 2008

There’s More Value to Hear Warren Buffett in Person than anybody else

Honestly tell me !…have you truly benefited from attending those “few hour” speeches or seminars or workshops on any subject or topic…no matter who is giving them or organising them!…often paying through your nose for them,especially where overseas experts are involved  !

I was wondering if I was in a minority here when I confess I yet have to find true Value in these….I’ve been to many in the past few years…Jim Rogers and Ohmae among others….One needs to work with them or be associated with them for longer periods to really absorb value

Have you wondered the frequency at which we quote the legendary Value Investor, Warren Buffett these days as he is more alive and surviving than any of us in this financial and investment chaos 

Warren Buffett is one legend I would love to hear….Why has he not yet come into India to share in person some of his fundas ?…..He does not think Long term…he thinks Lifelong and Beyond!…Most of us can’t think beyond Instant Gratification when we really need to create a mindset for delayed gratification

Warren Buffett does not

  • make a living by being a speaker or running workshops and seminars
  • write Books
  • advise and manage on individual portfolios

Maybe this is the Secret of his Phenomenal Success…Quietly applying Theory to Practice…and not preaching just Theory from one audience to another ! Think about it !

Buffett runs Berkshire Hathaway which closed at US $ 113150 yesterday in USA giving a market cap of US $ 175 billion and a P/E of 15+ on a trailing EPS of US $ 7300+…BH holds stakes in companies across many sectors. 


Mutual Funds….A Mutually Worried Lot

Equity markets Collapsing has taken it’s toll on Mutual Funds too in many ways

  • Redemption Pressures are High forcing Equity Sales and Increased Borrowing at higher rates
  • No Takers and Markets for New Schemes
  • NAVs under relentless pressure on relentless selling
  • Access to Financing restricted as risks of counterparty exposure limits being breached and overleverage play up
  • Distinct possibility of rating downgrades on FMPs on growing concern of deterioration of credit quality of portfolios
  • Structual Flaws revealed in Liquid Funds and Fixed Maturity plans in that they are largely invested in longer term corporate paper while they have to provide for same day liquidity in case of redemptions  

Data released by the Association of Mutual Fund Industry (AMFI) shows that Assets Under Management (AUM) for all debt and equity funds had dropped by 3% to Rs 529122 crs as on September 30,2008….AUM as on October 31,2008 should be even lower

RBI has announced a liquidity window of Rs 20000 crs as risk aversion and counter party exposure had reduced the access to finance

Some Mutual Funds are limiting withdrawal amounts daily under the Fixed Maturity Plans,infuriating Clients in no small measure…there is talk of them even putting pressure on the government to allow a temporary freeze on withdrawals.

The CEO of a Leading MF,winner of several performance awards too, is said to be so upset at the massive loss that has come on the books because of forced selling of equities to fund redemptions that he wanted a way out of not showing such a loss so as the NAV is not impacted….This is not posssible unless the loss is transferred to the AMC…and this is not posssible as auditors who certify the NAV daily will not allow this 

The Mutual Funds Industry is bound to see a big Churn in Funds and Fund Managers…most of them have simply not performed


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