The BSE-30 Index did not reach the "target" of 19,000 and nor did it - with the help of enthusiastically strong foreign money flows - hit the 21,000 level by July 2010.
I had made that bullish call of a 21,000 Index on November 7th 2008 on an equitymaster webinar. Please note that the BSE 30 Index had closed at 9,734 on November 6th, 2008.
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So, you can damn me for missing the last 5% (from 19,000) or totally mis-timing the last 14% (from 21,000) or, as some like to, congratulate us for figuring out the +86% move, a pretty decent trend to ride on.
As a long term investor, I like to study and figure out the simple themes that I can invest in.
Unlike many people, I don't drink multiple cups of tea or coffee every day to get my fix of wide-eyed energy.
And I don't need to stay tuned to any of the business channels to get my fix of useless information.
Or read many of the business magazines and newspapers for their news.
When I do read the newspapers or listen to the business TV channels, it is more to get a sense of which PR agency is paying whom to carry what.
Now, don't get me wrong.
Television is an important medium.
As are newspapers and magazines.
Or internet web sites.
But that's the point: the politicians know that and the business people know that.
If something is important and is followed, the interest groups will try to spin you some pretty fancy stuff.
And the owners of the medium will carry that message.
How many newspapers, internet sites, or TV channels make money on subscriptions from you? And how many make money based on advertising?
So, yes, I do read and see some of the stuff that passes on as "news" put out there. But, I am not sure if I would base my investment decisions on information that is fed to me - on information that can be manipulated for its visibility, its frequency, and its depth of content. What investor Jim Rogers recently referred to as the purpose of the PR machines whose objective is to ensure that the stocks of companies who hired them head north.
Again, there is nothing wrong in seeking visibility for any product, company, or business. But sometimes - or many a time - the line between visibility and self-promotion is blurred.
Take the case of The Honest Truth.
Is The Honest Truth a self-serving, self-promoting gimmick that is built as a snare to entrap the gullible investors into shovelling their hard-earned savings into Quantum Mutual Funds?
Is The Honest Truth a honey-trap of sweet Index forecasting so that equitymaster can bombard you with my 21,000 forecast on You Tube and lure you into subscribing for research reports and views on individual stocks?
Or am I sharing with you my views and experiences and asking you to stay away from the geniuses of high finance?
And not to overpay the financial wizards and keep your hand firmly on your wallet.
Does The Honest Truth enrich you - or enrich me?
A macro framework, a view on management
While I will let you ponder over who gains from The Honest Truth, I would like to lay bare the simplicity of investing for the long term.
I base my investment views on some pretty common sense stuff like:
And I compare all this worrying over risk and return with how much guaranteed interest I could earn in the safest bank out there on a 3 year time deposit with no worries.
- What is the framework for where India is heading in an economic sense - are we heading towards rewards and incentives for growth (what we started in 1985) or are we heading to a framework of punishing people for enterprise (the Nehru experiment with Socialism that went totally wrong)?
- What are the political and social risks for India? What are the trends?
- What are consumers likely to want and buy over the next few years - and which companies can - or could - provide that service?
- Which managements can I trust with my money?
- What price am I paying to buy into the stock? What risks am I taking? What return can I expect? Over what time frame?
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We are, Quantum Mutual Fund, a fund house that works on a set philosophy - the same philosophy reflected in the Honest Truth - Non-commissions, Transparent Costs, Basic Products, Long Term Investing!
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Don't judge me by the Index!
I believe that individuals must put theirs savings to use - to work for them to help them leave a better life.
Very few of us will be like those grandparents we see on television ads hawking insurance as investment products.
Life is not pretty.
And the cost of living is heading up for most of us.
I don't have any stats on this, but - on retirement - probably 10% to 20% of us will have the money we need to maintain the lifestyle we have today and skip along like young folks even though we have walking sticks.
Another 30% to 40% of us will probably have to cut back on something to live decently. We may have to sell our apartment in Bombay and live in Pune; or sell the car we had because the costs of petrol, insurance, repairs, and drivers is increasing and becomes a drain on our investment income.
And probably 50% of us will find life tough.
While I don't believe that everyone who retires will be monetarily comfortable (challenges in Life will ensure some of us not that fortunate), I do believe that there are too many people out there who are investing in a way that will guarantee them a sub-par retirement life.
There is no substitute for hard work and there is no substitute for sensible, simple, and long term investing. But many people are doomed because of bad advice, or poor implementation of the advice they get.
So, while I may get the Index right or wrong, my real happiness comes from knowing that the 3 financial entities that I have helped start (www.equitymaster.com for making your own stock market decisions, www.PersonalFn.com for helping individuals plan for their future financial needs, and www.QuantumAMC.com for those individuals who trust the investment approach of Quantum Mutual Fund) are actually making a difference to investors.
And that they will sustain and carry on the work I started long after I am gone.
That would really make me happy.
Meanwhile, yes, let's see what happens to my call of the BSE-30 Index reaching 31,000 by July 2012.
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
|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
||Keep aside money to meet your expenses for 6 months to 2 years |
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