Some unhappiness in a lot of joy - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
Some unhappiness in a lot of joy A  A  A
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9 FEBRUARY 2009

A study (written about in the Times of India a few weeks ago) concluded that women have better sex when they are with rich men. And this leaves them more fulfilled and complete in some way. The logic, explained one of the women, is that when you are with a rich person you don’t worry about basic things like food, clothes and a home to live. And the money you need to buy all that stuff.

The man you are with is rich - therefore you can enjoy the mental pleasure of the physical touch. "Honey, do we have money to pay for the milk?" sort of kills the mood when two people are trying to get physical. And an absolute killer for any satisfaction when the answer is a "No, sweetheart, I am broke".

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Well, a lot of woman hanging around with awfully rich men engaged in the financial services industry are about to get a taste of the not-so-good times. President Obama has just frozen the salary of senior executives of companies that are surviving on US taxpayer money. Salaries are being frozen at USD 500,000 per annum. Stock options and awards can still continue - but the rewards are back-ended, as they should always have been. The employees will only get rich if the companies they work with prosper and have compensated the US tax payer for the cost of the rescue.

The media also suffers
But unsatisfied women are not the only fall-out of the Obama dictat. The media and all those who focus on the lists like Ten Richest, Ten Biggest, and Ten Largest will have to re-think their business models. At a USD 500,000 freeze those lists will shrink.

Much of the print media (exceptions that come to mind are DNA, Hindu Business Daily, and Indian Express) likes to write about large companies and rich people. And we need our dose of daily gods. So the media happily manufactures them for us. The news is no longer "news" it is "lists". Just as the women who prefer having sex with rich men, the media has been wooing the "List-men". If you are big, there is an immediate assumption of satisfaction.

With the stock markets down over -50% from its peak - and many new age business barons losing anywhere between -80% and -95% of their market-induced wealth - reading newspapers these days actually gives you some news. Not lists, but news.

Like who would have thought that a sale of shares by a Satyam insider before the failed merger with Maytas would actually be front page news? Or the fact that real estate developers cannot sell property and have to borrow money at 48% per annum would make it to the newspapers? Or the fact that SEBI had to wait nearly one month to meet crooks and question them on frauds they have confessed to? The media must be really bored of covering news.

Prior to January 2008, any real news would have been a ticker on a TV channel sandwiched between some breaking news of some share reaching an all time high and someone having made it to the Top Ten lists. In the print media, the real news would have been placed strategically between the photograph of the model in a bikini and the photograph of the model with a smaller bikini - all this in a financial newspaper. If Al-Qaeda has its suicide bombers, the global media had its fair share of suicidal editors who wish to blow-up respectable franchises grown over decades. Just the way the folks employed in the modern day version of traditional firms like Bear Stearns, Lehman, and Merrill blew up the franchise the founders of those firms built.

In many ways we are all like the women in the survey, I guess. The women knew where their next meal was coming from - so they lay back and enjoyed it. Who cares about what kind of person they are with? Who cares about whether they are potentially good fathers to potential children? Who cares how they make the money? As of now they make the cut: they have money to pay the bills. Yippee, dim the lights! The media is happy to note that the market caps of the subjects they cover support their lists. Shine the spotlights!

But now there is a dose of reality. And lists have begun to give way to news. I am happy for that - though I know there is some unhappiness for those who need to worry about whether there is enough money to buy milk.

Note: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt Ltd and Quantum Asset Management Company Pvt Ltd.. Views expressed in this article are entirely those of the author and may not be regarded as views of the Quantum Mutual Fund or Quantum Asset Management Company Private Limited.


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