"In the future", noted the famous pop art icon Andy Warhol, "everyone will be famous for fifteen minutes."
Mr. Warhol was not setting the time limit of "fifteen minutes" because there were so many famous people in a queue who were waiting to become famous.
Rather, Mr. Warhol's comment was about the short attention span that tends to rule the mind of most humans.
Fifteen minutes, he surmised, was the extent of the human mind's ability to stick with something.
But Mr. Warhol made his prediction in 1968 - before the invention of business TV channels. With a "24/7" need to match the senseless tickers scrolling at the bottom of their screens, the media have to create famous people. And they don't have 15 minutes to do it. The TV channels have about a minute to create a new "expert" and then move on to their next creation.
A roll-call of experts come and go on TV channels, telling us why things have happened and what will happen next. For fifteen minutes their words rule our mind. And then, like a soap bubble floating on the surface of a bathtub, their words pop into nothingness. This is because the listener and the speaker are both chasing their fifteen minutes of fame. The human investor, full of passion and emotions wants to hear something different. The expert, seeking his slot in history, is willing to provide it.
The media experts, seeking another fifteen minutes of fame, will happily change their statements - and make even more absurd statements - to grab the attention of the investors. For the next fifteen minutes of fame.
Strong currency becomes a weak currency In the year 2007 - which actually was only some 200 days ago - analysts and rating agencies were all telling us how wonderful India was and what a wide golden road lay ahead for India. The Indian rupee, they concluded, would be a strong currency. The media, attracted to sound bytes the way a bee zooms in on a flower, were all over the expert views. Now, things are different. The new sound byte is how terrible the Indian investment environment is. And the Indian currency is doomed to die.
In the boom days (again, less than 200 days ago) respected commentators were telling us how the Reserve Bank of India was being too nervous about the high growth scenario - and the RBI was wrong in trying to reduce economic activity by sucking out credit from the system.
Today, these same experts are telling us that the RBI was sleeping on the job - they should have moved faster and controlled economic activity and suppressed the inflationary pressures. Maybe the RBI did the right thing and these experts were wrong - the experts had their emotions ruling their fact sheets.
India, we were told, has decoupled from the world. Now we are told that India is very coupled with the world - oil is the great re-coupler. Being in the de-coupling camp, I am keen to know what impact the buying habits and economic activity of a person in El Paso, Texas has on the buying habits and economic activity of a person in Nagpur, Maharashtra? Just because they both uses oil - at different prices, in different quantities, for different reasons? The act of using oil is not re-coupling.
Sensationalism Sensationalism is in.
Everyone wants to be known as the person who "called" the market. Bull or bear does not matter - the fifteen minute plug has to be captured.
So, Fitch ratings "downgraded" India's GDP growth rate to 7.8%.
What a downgrade!
It is a "downgrade" the Japanese, the Europeans, and the Americans would have loved to see. With their GDP growth rates at 1% and 2%, the developed world economies would give an arm and a leg to hear that their GDP would grow by 7.8%. But, hey, who wants to be the hero in the arena when the lions will eat anyone who raises their heads? So, rather than write: "India's GDP will grow by over 7% per annum and we believe that this sustainable growth rate will not be hampered by external factors like oil prices at USD 140/barrell", Fitch gave India a thumbs down. India's GDP was "downgraded". They got their 15 minutes of fame.
The Index got knocked -4.6% the same day.
Not all of it because of Fitch - we must not give credit where credit is not due.
But that monkey in the human mind wants to hear negative things.
And Fitch gave a spoonful.
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The analysts who work for the brokerage houses loved the banking stocks - 200 days ago, in the year 2007. That was then. Today, they trash them in their reports. Because, globally, it is fashionable to trash finance companies and banks. The banks are in trouble around the world - so why should Indian banks be different?
HDFC Bank is rumoured to own bonds of USA banks and financial companies, never mind that they are not allowed to! We own <>HDFC Bank for our clients and watch in awe as it gets massacred. Sure, we hated the price they paid for the merger with CBoP - and still do. But knocking the stocks because they have some rumoured large exposure to US finance companies?
So, there it is: a potent cocktail of news channels that need views all the time.
A billion Indians lined up to give their views on anything the channels wish to air.
An investor base that is actually a speculator base, waiting for sell and buy signals.
What a nation of dead-brained zombies we have turned into; stampeding in senseless direction like a lost herd.
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Note: Ajit Dayal, the author is a Director in Quantum Information Services Private Limited and Quantum Asset Management Company Private Limited. 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 or Quantum Information Services Private Limited.
Mutual Fund Investments are subject to market risks. Please read the offer documents of the respective schemes before making any investments.
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