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I received a rather disturbing mail the other day. Among other things it read, “ With all these writings against mutual funds, TV analysts, religion and IFAs, you must be a very sour and bitter person in real life.

Usually I am a very self assured person, however this strong statement forced me to look inward to see if may be the statement has any merit.

I would like to believe that I am a very happy person, however all that belief amounts to nothing as even Hitler must have been his favorite person. You need a third party vantage point to conclude something like this.

All my friends, family and new people I meet also vouch for the fact that I am generally a happy person. I mean of course while behind the wheels, if somebody overtakes me or something, the Punjabi in me would show up and use some choice words but barring that I don’t even remember the last time I ever lost my temper.

So why then my writings have a tinge of sarcasm and doom & gloom.

I feel the answer lies in my upbringing and my heroes. In fact I totally agree with Warren Buffet’s quote where he said something like,

show me the ideals of a person and I would tell you where he would be in life.

Books I have read, people who have influenced me over the years has kind of made me into a Skeptic, Question everything attitude, there are no free lunches in the world, Incentives make the world go round etc.

So at a spiritual level, I am influenced by Swami Parthasarthy, who talks about logic and reasoning, ability to discard authority. Without logic and reason, religion is a set of dogmas, do’s and don’ts for animals. With that set of background, you are bound to offend almost everyone as for 99% of people their entire existence is based on dogmas and rules which defy logic and are followed only coz their parents told them.

Right from Sikhs keeping long hair to hindus NOT eating non Veg on Tuesday to not washing clothes on x date, doing that on Y date, pleasing your god by doing sundry crap, they all tantamount to same thing.

Then you extend the same logic to social life, new insights start showing up. Ability to question changes everything. When you decide in life to question the status quo on everything, you have arrived. From now on, you can have a hope to actually learn something.

Richard Feynman famously said once,

There is a difference between knowing a name of something Vs knowing something.

This is a profound statement. For e.x I switch on the button and light bulb ignites. I know the name of it, its called electricity. But I don’t know how it happened. I only know its name.

We generally know the name of so many things in life and not so much the actual thing.

The art of asking questions, challenge the status quo is the ONLY way to knowledge. Let me give you another example to bring home the point.

Long time ago, I had a very good looking, articulate and sweet American lady boss named Kelly Fowler. While addressing a Town hall, she cracked a joke which had reference to some local American cultural characters. Everybody laughed out loud while I felt guilty of lack of my ‘knowledge’. She confronted me asking you didn't find it funny?, I told her I didn't get it?. She then asked the crowd to explain the joke to me and guess what, NO BODY DID!!!

Equipped with this power of questioning everything, let us take this knowledge on social front. How come it is very difficult if not impossible to figure out if a man is newly married or not where as for a women, with all these rules of Chooda and sindoor and crap it is like a A BIG PLACARD IS PLACED ON HER FOREHEAD, ‘TAKEN’. That is discrimination right in your face. A lot of women folk tell me, they are doing it out of choice, my answer is, you would only know that the day you take a stand NOT to do this.

One of my cousins (girl) got married off at a very young age, she claimed (out of guilt I guess coz I never asked) that it was HER CHOICE. Like I said before, the only time you would know if you have a choice or not is when you exercise it, or threat to exercise it. The same set of sweet, nice and cute parents will turn into emotional blackmailers in no time and if you are in some parts of the country they mite even kill you for their honor. And besides what CHOICE are we referring to. If you are brought up like a DOCILE COW, subconsciously your choices are already MADE for you. Writing is ON THE WALL, you are made to choose between a range that is suitable to your parents. For e.x I was never made to go to kitchen growing up, my sister was!!!!

Taking the same knowledge and ability to question everything on financial world, lets dig deeper. Here I found inspiration from people like Nasim Taleb who in a very simple way demonstrated that you learn from failures and not so much by successes.

Success would automatically attract ‘HALO effect’. Autobiographies are written by winners and not losers. If a loser writes an autobiography, nobody would read it (although you should because you will learn valuable ‘what not to do’ lessons)

You can only learn what not to do, What to do will always be marred by survivorship bias. Ofcourse Roger Federer would write (in his own words) his hardwork, perseverance and all the halo words to describe his success. I am yet to read a book where someone said, “I am basically an Asshole who had more than his share of luck so suck it”

And so anytime I see a narrative being painted on a success story, I write my rebuttal on it. I simply write, what about those who had all the traits and yet failed. Does that make me a negative or a hyper rational person. I don’t think so. Yet again I am that guy in the huddle who is not laughing.

Another of very important heuristic he gives is “skin in the game”.

In one line it can be explained as follows

When a seller of wheat eats the same produce himself, he is more likely to give you a good product Vs lets say when it is not the case.

By that logic Parag parikh mutual fund is the only fund house I know which is eating its own pudding. Rest of them has no disincentive to cook a crappy meal.

Without skin in the game, the entire game becomes that of Asset gathering. Loudest mouth wins, which essentially means deepest pocket because to be loud on media, you need dough.

A friend of mine who is a VP in a 5* hotel showed me an excel sheet detailing their best clients booking most of banquets for free lunches, dinners and cocktails. No surprises there, our friendly next door mutual funds are not leaving any stone unturned in incentivicing the IFAs to unleash the power of SIP on gullible public

What is wrong with that you ask? Before you label me as a socialist, let me reassure you, I believe in free markets, and capitalism while ugly, is still the only viable model. What I am saying is that without skin in the game, you unleash a beast which will become too big to handle as we have seen in the past, with the right incentive at place, poison would have its sellers.

Fiduciary Responsibility is passed on to the next person in chain. Mutual funds expect IFAs to do asset allocation for the clients. IFAs copy paste warren buffet buy and hold quotes and educate clients ‘Markets cannot be timed, so SIP YOUR WAY TO FINANCIAL INDEPENDENCE’

Warren is perhaps the best market timers of them all, and he is vocally against Mutual fund charade

They will never understand this, there salary depends on NOT understanding it.

And what would happen after yet another boom bust cycle. Nothing just like before, every Asset gatherer will shed retail losers off its sheet and start afresh with new sheet without any blood stains and start the pitching process with new set of bakras (a cat with nine lives)

Does this blog make me a negative person, I guess not. I am yet again that person in the huddle who is not laughing.

Lastly we come to TV ANAL ysts. Without naming names do you know these “Technical Analysts” are paid 8–10 lakhs a month for uttering out buy sell calls which has A) No accountability and B) no skin in the game. Without accountability, there is no scorecard and without a scorecard I am afraid there is NO GAME. One of the top analysts on national TV trades with 05 Nifty Lots. Without Skin in the game he is just toying with the public, earning his fortune through “salary” and selling his “software”. These stupid carnivals and festivals are no different. Amongst them are salaried individuals, trading par-time with 02 lots Nifty telling us what to do!!!!.

Who has the fiduciary responsibility of million of Rs down the drain due to TV channel recommendations!!?? Once again I am not being negative; I am perhaps the most positive person around (too idealistic may be) trying my bit to save a handful of people who read my blog.

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I write well wen i am HIGH, you feel high wen i write well ;) WIN WIN.

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