The Inside Job - a movie every investor must see - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
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PRINTER FRIENDLY | ARCHIVES
8 JULY 2011

SEBI wants to spend money on investor education.

The NSE has a profit after tax of some Rs 600 crore and spent Rs 3.5 crore on investor education in the year ended March 31, 2010.

----------------------------- A Good Time To Sell Bad Stocks -----------------------------

It's never too late to get rid of 'bad stocks'.

After all, you never know how bad a market crash could get.

But what are these 'bad stocks'? How do you identify them?

For answers to these questions, and more, click here to read on...

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AMFI - the association for mutual fund manufacturers, not for mutual fund investors - is keen to penetrate rural India to open up a source of new investors. It has a marketing spend budget to make mutual funds more popular. Its website has a ticker which reads: "In the current financial year 19 AMCs have conducted 1,123 Investor Awareness Programmes covering 115 cities and 30,589 participants by May, 2011".

Every Finance Minister - in between their trips to the more comforting cities of Hong Kong, London, and New York - will speak with remorse about the lack of penetration of the financial services industry into rural pockets.

Well, before these agencies embark on a mission to rope in rural (and urban) investors into the clutches of the organised financial services industry, I have a suggestion: they should purchase the distribution rights of the award-winning documentary "The Inside Job" and make that mandatory viewing for all existing and potential investors in India.

Instead of all this focus on doing a KYC on clients, the regulators and the various industry bodies that wish to penetrate your savings pool should know whether you have done a KYC of another kind: "Know your Chor". The Inside Job is a good reminder that all that you see - no matter how frequent the TV ads may be - is not holy.

Is the financial services industry similar to organised crime?

"The Inside Job" is a documentary - not a fictitious movie with actors playing assigned roles. Admittedly, the documentary is not for professors of finance and scientists who need proof beyond doubt that the financial system in the US is run by a mafia whose sole job is to maximise their salaries and bonuses.

But it is for us ordinary people who know that something is wrong somewhere in the system but don't quite know what it is.

Like all good documentaries, "The Inside Job" won many awards - but very few people have seen it. It did show up in the Indian theatres - but only in some of them. And it ran for just one week.

Giving his acceptance speech for receiving the 2011 Academy Award, the director, Charles Ferguson, said, "Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong."

Please borrow the film from your rental library, get the popcorn and wafers ready, and watch it with your family and friends.

And after you watch the film, please email me what you think of the film and this report in the Business Standard filed when the Finance Minister of India met with the Secretary of the Treasury of the US (equivalent to the post of Finance Minister) on June 27th.

The Business Standard headlined: "Geithner eyes India financial reform, US access" and goes on to write that Geithner stated that the future of India's growth depended on the "next wave" of financial reforms. "I think from our perspective, the most important thing we'd like to see is progress on financial reforms that provide a deeper, more liquid market for corporate debt for infrastructure financing, that allow a little more access of American companies and their technology in the financial area," Geithner said. "Our interests are pretty complementary as a whole."

As an fyi, it is now mandatory for any employee working with Quantum AMC and Quantum Advisors to watch this film.
And, yes, we provide them with the snacks to munch on.


Suggested allocation in Quantum Mutual Funds (after keeping safe money aside)
Quantum Long Term Equity Fund Quantum Gold Fund
(NSE symbol: QGOLDHALF)
Quantum Liquid Fund
Why you
should own
it:
An investment for the future and an opportunity to profit from the long term economic growth in India A hedge against a global financial crisis and an "insurance" for your portfolio Cash in hand for any emergency uses but should get better returns than a savings account in a bank
Suggested allocation 80% 20% Keep aside money to meet your expenses for 6 months to 2 years

Disclaimer: Past performance may or may not be sustained in the future. Mutual Fund investments are subject to market risks, fluctuation in NAV's and uncertainty of dividend distributions. Please read offer documents of the relevant schemes carefully before making any investments. Click here for the detailed risk factors and statutory information"


Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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16 Responses to "The Inside Job - a movie every investor must see"

ranjit minhas

Jul 22, 2011

I WOULD LIKE TO KNOW MORE BEFORE I CAN COMMENT

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A

Jul 10, 2011

Dear Dayal. i am regular reader of your articals. Wish you through some light on the stocks which on listing go 40% up and next day fall 80%.
The market seems to be manipulated by few sitting some where known to Sebi and alike but investor get doped.

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M.K.Sreedhar

Jul 9, 2011

Financial advisors and experts on most of the Business TV channels recommend investment in Mutual Funds and SIPs, for new investors as they may not know how to pick a good share and have no time or expertise to study the finacial strengths and weakness of a company they wish to invest. People believe such advise and invest in MF as the funds are managed by expert portfolio managers. The cost of their services is debited to the fund. This is trust. But can we trust them ? The fact that most of the leading Funds, just said yes to most of the company's resolutions or obstained from voting shows the laxity or connivance with the companies. Should there not be a more transperant system to regulate the MFs? But who will do it ? SEBI? The auditors? Who should audit their work? There is mistrust every where.

Mr Pranab Mukharjee, the respectable FM, with a clean image till now, must take the advise of the US Tresury secretary, Mr Geithner for "next wave" of financial reforms with a pich of salt. We dont want the financial mess that the US is in because of the unbriddled freedom in the financial sector there. Let us not import Sub Prime in a big way. Luckily our Banks under the vigil of the competent RBI is doing a fine job. We shall continue to strngthen their roles and supervision and just remove bottle necks for genuine investment, without allowing a wave, which may turn out to be a flood or a ptsunami in India. Let us be careful in importing such dangerous reforms!

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pandit arjun

Jul 8, 2011

dear dayalji, this is one of the best articles ever by you, for it is rarest to find a person on the helm of a financial firm spreading the truth and asking eveyone to know the truth as mandatory. god bless you for sticking to and focusing on the truth. "the company men" is also a realistic movie that focuses on unemployment and corporate affairs akin to inside job which is purely on markets, economy, manipulation et all. keep doing the great work and please note that there are lakhs of fans of your articles in the world who read your website in general and your honest truth in particular.

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girish

Jul 8, 2011

FORTUNATELY MOST UNEDUCATED INDIANS ARE NOT DUMB
WHEN EVER I SPEAK TO THEM OF INVESTING IN STOCK MARKET THEY TURN A DEAF YEAR
BUT INVESTMENT SUGGESTION IN REAL ASSESTS LIKE GOLD AND LAND ALWAYS GET ME A KEEN EAR

TILL A FEW YEARS AGO THE PROMOTORS OF COMPANIES NEED NOT DISCLOSE(FILE) THEIR INCOMETAX NUMBERS IN THE PROSPECTUS NOR DID THE AUTHORITIES NEED THEM AS CHOR KA BHAI GHAANTI CHOR

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satheesh babu s

Jul 8, 2011

About The Inside Job - Its a must watch for anyone who understands English.
This may not happen in India today, but is something waiting to happen may be 15-20 years down the lane.
The financial top-shots in the Govt itself are slowly, but steadily moving the hurdles from their path to make this happen. Consider the following or please do a search on the following
1. The current SEBI chairman - which post did he hold just prior to being appointed the SEBI chairman? Did your search find anything interesting? Is lobbying not strong in India? Should India's crores of "ill-educated/uninformed" investor count themselves lucky or unlucky of being guided by a "investor friendly" AMFI & SEBI?
2. What "financial misappropriation investigation" is happening against ex-SEBI directors? The one who tried to reduce the influence of "middlemen" in MF sales and the one who reported to regulate the Sahara "Ponzy schemes"?
3. I work in the IT industry. In late 2007 and early 2008,
I used to get atleast 2-3 calls per week from all top 4 Indian private banks (no-exclusions) with unsolicited offer for lakhs of rupees loans without any paper work. I know of so many cases where guys i know received multiple home and personal loans from Indian private banks with the same docs xeroxed and submitted (originals not mortgaged). Isn't this a time-bomb waiting to go off if not now, may be a few years down the lane?
There would be dozens more...

And as a personal preference - I would have found it ethically more satisfying (not from an advisory point of view) if Equitymaster hadn't started the derivative recommendation service.

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anupam garg

Jul 8, 2011

thnx 4 the recommendation, Mr. Ajit...u shld goto replace masand & recommend such movies. But please note tht the name of documentary is inside job (not the inside job). & coz of recession, we prefer torrents instead of costly DVDs.

Its a revision of facts like poor functionin of regulatory bodies like SEC & consultants like KPMG. It also xplains well the reason of crisis but wht amazed me the most were the ppl who were behind it & r still there..look at alan greenspan, omg...the word called shame is gone...academic conflicts of interest was another revelation...the amount paid to these prof will obviously cause them to write wht the meney wants em to write...US govt is not tht of republicans / democrats...its a govt run by Wall Street...so rightly said

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Bhateshwar

Jul 8, 2011

The Inside Job

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m t chiddarwar

Jul 8, 2011

Where can I get the three documentaries 1)The inside Job, 2)IOUSA 2008 and
3)Too Big To Fail 2011.

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Jay Jani

Jul 8, 2011

I will recommend two other documentary movies to supplement Inside Job which brings the facts to forefront.

IOUSA 2008 and even extremely more relevant today.

Too Big To Fail 2011.

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