Don’t believe everything you read or hear !….Even legendary Investment Icons seem to deliberately preach one thing and practice quite another !

It’s not some startling truth that I’m revealing to you…..but deliberate misguidance has been a major weapon in the armoury of Investment Icons….I daresay when they play ‘Scale’ they will make monies only when you lose !….in that they influence and guide you to take contrary positions to what they actually do !…It’s a common occurrence in India Too…so when you Hear the experts on the stock channels,do play devils advocate and be skeptic…it could save you a lot of Money !

Last few days ,I have come across some very astute observations,which have gone largely unreported in the Press…deliberately so…you’ll understand why as you read this Blog

Our Vice President,Mr Hamid Ansari, gave a speech in January which highlighted the dangers of this fast growing practice of ‘Paid News’ in leading Newspapers with a National Footprint….he spoke of the potential danger of destabilising the Polity and Economy of India through this practice of  ‘Buying Newspaper and Television Space’ to promote Interests by spreading what one wants to deliberately disseminate

The way I look at this is that this ‘Paid News’ is a way of legitimising an age old practice of wooing top Journalists and editors to plant headline stories !….I know of one leading ex-editor of a top Pink Paper who unabashedly indulged in this practice and was rewarded handsomely and regularly,obviously not on records!, by a top Industrial House….he also shamefully,in the 1980s,as if it was his right, ordered promoters of New Companies to allot shares to him from their quotas before the IPOs…made a killing from such cornered and preferred Investments !…SEBI and Demat came later in the 1990s…In return the Company’s IPO was reported favourably with high ratings…guaranteeing oversubscription and a high price on listing !

M V Kamath reported in his column in Mumbai’s daily tabloid that the Vice Prersident’s speech was covered only by ‘Hindu’….the others,deliberately did not cover it as they were the ‘ire’ of the Speech for resorting to ‘Paid News’…Money Matters,not Content !   

So don’t believe everything you read ! 

But more Interesting to me,is the accusations being levelled at two of our biggest Investment Icons in the World….Warren Buffett and George Soros

Both have been “talking their book”….giving opinions contrary to what they actually are implementing in their investment strategies 

Why would they do this ?….obviously to help them profit from their strategies…they would do so,only when those holding contrary positions to theirs lose…and the irony is that these contrary Investors would have lost if they followed or were guided by the stated ‘Opinions’ of these Icons! 

In 2009,Warren Buffett had heavily shorted the US Dollar and continued to ‘opine’ of it’s weakness…what he however was quietly doing was short covering the Dollar as it was clearly rebounding in the short term. so he’s being accused of fooling people for a short time to square up and exit his short position at a profit 

Then just last month in January 2010,in Davos in Switzerland, George Soros stated “The ultimate asset bubble is gold.” ….But SEC records reveal that Soros Fund Management had purchased 6.2 million shares of the SPDR Gold Trust ETF (NYSE: GLD) for $663 million !

 

Now this is what Soros said in the 1990s

 

Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.

So who do you trust for Investment Advice with Integrity and no Vested Interests !?….Let me know if anyone fits the Bill !

Cheers !

 

 

 

One thought on “Don’t believe everything you read or hear !….Even legendary Investment Icons seem to deliberately preach one thing and practice quite another !

  1. Oops ! Kumar…seem to have offended you by mentioning an accusation being levelled at Warren Buffett on ‘talking the book’ on the Dollar

    But Slander !?…I was just stating what many in the US levelled against Buffett…Ian Wyatts,for example…He’s the Editor of ‘Daily Profit’

    The Message here is not a tirade against Buffett…I hold him,his thinking and his record in great awe…no one has consistently beaten the Benchmark Index over 44 years by a huge margin like his Berkshire Hathaway has done…I have blogged on this before and even cover it in my sessions on Investment Gurus

    The Point I’m trying to blog is that be a bit skeptical and play the Devils Advocate to understand why an Expert is opining as he does…..for example last years Buffett US $ 26 billion cash buy out acquiring the US $ 10 billion debt too of the Railroad,Burlington Northern Santa Fe….Clearly to deploy such huge amounts on a basic Infrastructure play revealed the mind of Buffett…it’s safer and more rewarding than keeping Cash in Treasuries or Deposits

    Or,like I blogged much earlier,on why did Buffett really invest in Goldman Sachs..I’ve related it to huge notional losses suffered on the huge value of the Derivatives Put Contracts that BH sold in private arrangements through GS over long term periods of 20 + years

    Buffett has been regularly short on the US Dollar for many years now…as a hedge to his massive US Dollar Stocks Portfolio…you can easily Google this…in fact he even bought a basket of stronger foreign currencies…the alternative would have been to sell off the whole Portfolio !

    I’ve seen leading Institutions in India recommend to buy a particular stock strongly,only to exit it,when others are influenced by this advice to buy !…they were creating a smooth exit route for a huge volume without disturbing the price on the downside !

    How RIL played the sale of RPL in spot in late 2007 by quietly shorting RPL in F & O first at high levels and letting RPL zoom towards Rs 300 and then selling off is another example

    I even know of an IIM Ahmedabad Professor who was specially retained to glorify a particular company and give out a colourful research recommendation in print

    I’m sure you may recollect one,Henry Blodget…he was a Merrill Lynch ‘Brand’ analyst…with just a few words he could send a stock to the Moon !…his famous,rather infamous recommendation in 1998,when at Oppenheimer was Amazon.com at US $ 80….His target was US $ 150…..When it crossed this and was at US $ 240,the Oppenheimer Sales Team urged him for a new target…he gave US $ 400….this was reached within weeks….Blodget actually wanted to downgrade Internet Stocks…but was forced to play ‘Bull’…he became the Media darling…CNBC,WSJ and USA Today wooed him

    That’s why when you read and hear Investment Experts,think and reflect on what they’ve said and why are they saying this

    And Yes,I quite agree with you…If any Investment Icon,fits the bill for Integrity,it’s got to be Warren Buffett

    Perhaps when you have millions around the Globe,watching your every move constantly,it becomes difficult to operate discreetly…This may adversely affect price movements when implementing your strategies in the market…I’m sure Warren Buffett realises this

    Apologies,Kumar,if you took offence…but slander !?…Not at all

    Cheers ! and thanks for responding now and then and viewing my blog

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