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  read more

Investment Guru Mark Mobius calls for an end to Short Selling…I disagree

Investment Guru,Mark Mobius, calls for an end to Short Selling…”Short Selling is Not Investing.We have to seperate Investing from Gambling……We’ve got to get back to the fundamental concept of the stock market-the supply of Capital,the raising money for Growth” says he. 

Mr Mobius,with due respect to your justified sentiments in these troubled times,I disagree.

Although I too don’t Short Sell as I believe it creates Wealth by actually Destroying Wealth…if you know what I mean !

But Short Selling has a definitive Role to Play.

Speculation is the lifeline of a thriving Secondary Market.Ofcourse it must be controlled and regulated and not allowed to become wanton or reach dangerous proportions

Short Selling serves the twin purpose of fair price discovery and share availability…it is only it’s misuse that creates the anger and angst.

For example if Infosys in India was traded at an excessive price of Rs 16000,like it did in 2000,at crazy triple digit P/E multiples why should I not be allowed to put my money where my mouth is and short Infosys…It dropped to below Rs 2000 at one stage

I’m sure you wish for Short Selling to be banned across all Asset Classes and Derivatives…..Was George Soros wrong in shorting the British Pound in 1991 to make his Billion ?…The Pound was clearly overvalued at the time as England refused to join the ECU and the Central Bank tried in vain to defend the Pound…If I recall it spend 44 Billion Pounds to do so 

Also the Secondary Market will thrive if there is continuous and adequate Liquidity and availability of Stock

By a Blanket ban on Short Selling, as you have strongly called for,Mr Mobius,you would be throwing out the Baby with the Bathwater.