The Revenge of the Non-Vegetarian : Book Review

One of the greatest advantages of residing in Mhow is having three good  libraries within a radius of two Kms. The icing on the cake is that all these libraries face an identical problem during this part of the year; how to expend the budgetary allotment for purchase of new books before the end of the financial year !

As one approaches the new arrivals corner of the library , there’s the distinct ambiance of a posh books store . Picked up the latest novel of Upamanyu Chatterjee “The Revenge of the Non-Vegetarian ” and not disappointed at all.

The setting is similar to ‘English August’ and ‘The Mammaries of a Welfare State’. A young anglophile bureaucrat in a rural district moving about as a detached observer looking on everything minutely at times incredulously yet not being judgmental.   He just goes about doing his sarkari stuff like  a true karma yogi.

The title is rather misleading. In the polarized world we inhabit today, mental auto-fill would complete the title to “revenge of the non-vegetarian ….against vegetarians” ; and nothing could be far from truth. If anything , it is the revenge of a forced vegetarian against well to do, practicing non vegetarians. After all , in India most non vegetarians are forced into vegetarianism not by religion or politics but sheer economics.

The plot revolves around a crime in a fictional province of India ,Narmada Pradesh, in India easily identifiable as Madhya Pradesh with some characteristics of Bihar and Bengal thrown in. A servant bludgeons to death the entire family of his employer for some beef stew and some grudge against not being fed properly .

The rest of the story is about the predictable but long meandrous course that the justice system is India takes. The crime is committed in 1949 and there is some kind of conclusion in 1973.  For some reason the protagonist , a passionate lover of all kinds of meat, vows to turn vegetarian till the culprit is hanged.

As it happens, it is not just the lawyers, but every criminal is well aware of the loopholes in the justice system in India. An accused can keep prolonging the trial and conviction.  Even after conviction and sentence, there is a whole series of hurdles before the sentence becomes final. For someone sentenced to death, there are special provisions for appeals and confirmations ; the whole process goes on for years till the final relief comes through mercy petitions to the President of India. For the record, there are over 350 prisoners on death row and only four were hanged in the past 15 years. A passing thought on the present status of persons convicted in the horrendous  Delhi rape case of 2012, prompted me to google; to find that the law is still on its course to justice. The juvenile culprit, who is now no more a juvenile, even by the dubious records of Indian Census  has already walked free.

Coming back to Upamanyu Chatterjee’s novel, the narrative is almost in  slow motion, gently moving on from one scene to another, with hardly any twists or turns. Yet the book is “un-putdownable “. It is like a series of haiku poems just describing the scenes in detail and leaving the actions and dialogues  to the imagination of the readers.

There is plenty of black humour as always, in this case the gallows humour is not just figurative but literal.  He talks of the ‘never say die attitude ‘ of a death row convict fighting through the legal system to stay alive.


It is published by Speaking Tiger publications and the hard bound edition costs
₹ 350/-. Oh, I love libraries !

A Painting in the Library of MCTE, Mhow.

The Big Fat Indian Wedding

Big Fat Indian Weddings.


The cliche Big Fat Indian Wedding is somewhat misleading.  India is too diverse a country to be slotted into one word or phrase. Every region , sub region has it’s own way of conducting their weddings. If you had some people spending in crores  for just the wedding outfits for the bride and groom, there are others who  go through the rituals  in plain cotton dhotis and saris dyed yellow in  haldi.

Thanks to Films and TV serials, there is a kind of convergence defying time and space .

There was a time when the entire village became one huge pandal or mandapam ; food was cooked on industry scale for over a week, though the formal functions were spread over ‘only’ four days.  The mud-ovens in the houses were physically destroyed  so that everyone was forced to depend on the community kitchen.

As people moved to the cities, the  leisurely four day affair  got telescoped into one day .

Now the trend shows a switch to a three days revelry. The only difference is that religious rituals take a back seat while  fun events like  sangeet and mehndi to accompaniment of DJ Music and choreographed dance sequences hog the time. Nowhere is it as pronounced as in a Sikh wedding where the actual wedding ceremony is reduced to about half an hour. Why cut into fun time ? Why not have more time for  daru and chicken, music and dance, bhangra and giddha fused with bollywood beats.  Even the sedate southies are readily taking to Karan Johar and Ekta kapoor type boisterous , colorful  functions.

Recently , I attended a wedding. Baraat with the groom on horseback is always the central point ; the famous Band, Baja ,Baraat.  When the bride and groom are from different regions , the ubiquitous  pagris become even more colurful.  The tall Rajput pagris  can be seen along with the flat Puneri (from Pune) pagris.

The Bride and the Groom go through the rituals ,conducted by the pandits while the rest go about the business of eating, drinking and socializing till they are called to shower their blessings on the young couple followed by group photographs. In short , all have fun except may be the the main characters as  in most communities the bride and groom are on some kind of fast till the rituals are over .

Screaming kids can appear anywhere at anytime , with are without their video-games on  smart phones.

So today , what is it that defines a typical Indian wedding ?  May be it is the riot of colours, loud music, be it the traditional Dhol or the modern DJ (often it is the fusion of both), plenty of food and all kinds of drinks, lots of dance and some religion for the Wedding Album !


Tips and Tricks

When I say, I trade in equities , the first question I face is “where do you get tips from ” . Or it could be “give some tips , na” . No tips, No trading; so it sounds.

Tips can mean anything . Peter Lynch says in his book; When two fund managers run into each other, may be in an office corridor, the first conversation after hello would be “hey, what are you looking at ” and the response could be “there’s something happening at General Motors ” or “may be a buy back offer at abc company…..” . That’s what fund mangers do; keep tabs on the businesses”. Tips could also mean precise directions to trade; buy ABC at 683 for 5 months period; target 790 and stop loss 627.

It is the latter connotation one is more familiar with . Everyone wants someone else to hook the fish so that you can pose with catch proudly.

Good Tips, Good Catch. Easy does it

I just fail to understand how such tips can work in practice. Even if seven out of ten such trades work, anyone can become a millionaire just by following these directions, precisely. There would be minor losses and major gains as the losses incurred would be just 20-30 % of the gains accrued when the target is hit.

But does it really happen ? Obviously not. Even paid advisory services , which are dime a dozen do not have the kind of hit : miss ratio that can keep you in the positive zone, leave alone make you a millionaire.

Ironically , when people find  that the system does not work, they hardly blame the method , but just attribute the losses to  bad tips or poor implementation. So, the chase for the holy grail called ‘Good Tips’ resumes.

There are people who swear by fundamental analysis and there are others who take technical analysis as Gospel Truth . The Fundamental Analysts go through earnings, past present and future, the book value , and whole host of ratios to come out with one number that would be the price target in next 12 months. As a rule the targets given by the analysts vary from -20% to + 20% with all kinds of recommendations , buy, hold or sell. Here’s one after the recent Q2 results

As for technical analysts , they pour over charts and a dozen indicators and prophesy the future course of the price movements. Here, the variance is even more pronounced. On the TV Channels, if there are three technical analysts , there are six opinions. Why six ? After all each sentence is followed by , “if this, then that ” and “having said that ….” Most of the time the second part of the opinion totally negates the first part.

This is the research based on which TV Channels provide precise directions down to a rupee for buy price and target price. Some channels make it more interesting by going for fancy formats like 20-20 after the 20-20 Cricket.

I can almost hear the cry “ek ka do, ek ka do” in their enthusiasm to provide foolproof tips.

In reality about 50% of the tips would be productive, which is also the probability of flipping a coin and calling  right .

So, the question is do traders need tips at all . One can easily find 10-20 tradable stocks from any of the web sites on stocks. They give real time inputs on prevailing trends. Here’s an example

Real Trends as on 17 Jan 2019.

Assuming that people need the name of a stock to start with and all are not net savvy, (Though all are TV Savvy) we come to the next question; how to use these tips. Some follow it to the letter; there are others who partially follow. Then there is another class of people who take a totally contrarian call on the view that the entire herd would go in the direction of the tips while they could runaway with the booty by taking the opposite direction!

Be that as it may, in my view, most tips are only as useful as a coin unless it is insider information which is illegal anyway.

So, what’s the way out ? There are many methods to make money in the market and probably even more ways to lose money . As I see, one has to find a way that works for himself or herself. A lot depends upon the time available, money available, risk appetite , loss aversion, mental discipline, ability to focus and the state of one’s nerves. Of course some principles may be applied almost universally.

Some principles that I can think of :-

  1. Fundamental Analysts tell you what to buy and Technical Analysts tell you when to buy.
  2. Technical analysts’ recommendations work only for short term trades and fundamental analysis would need to be done every quarter or on occurrence of fresh inputs on the business .
  3. It is better to book a small loss when the trade does not go your way, rather than wait for the loss to go bigger by which time one becomes even more reluctant to book a loss. Will power does not work in the face of bad business or bad sentiments. Yes,  sentiments are as important as the business.
  4. Averaging is bad . I am surprised by many experts on TV Channels advising traders to average. Your holding a particular stock should not influence your buying decisions. If you would buy a stock irrespective of whether you are holding it or not, then sure go ahead and buy. Averaging to mean, buying more of the same stock, is no method to reduce the loss you have already incurred . The loss can be recovered through any other trade. Of course, if you are not sure of the right price for a stock, you can buy it in small lots to average. The risk and reward , both are reduced.
  5. Never ever convert your short term trade to long term one or vice versa, just because the trade is not going your way in the originally intended period. For long term or short term, the type of stock and size of positions would vary a lot.
  6. Money management is often overlooked. Trading is a risky activity and only solid money management can cover the huge risks inherent to trading. As I view, one needs Solid Blue chips stocks to provide stability to a portfolio, then mid and small caps to provide growth and liquid cash to exploit the opportunities and to mitigate losses in case of a crash. For example a conservative trader could have 60% in blue chips 20% in mid caps and remaining 20% in cash at any given time.
  7. Mental Discipline would be the single most important factor that separates successful traders from the not so successful. Good traders book their losses when they go wrong and let the profits run when they are right. Amateur traders who are too reluctant to book losses and too eager to take home the profits end up doing exactly the opposite. They let the losses run and cut short the profits.

Different Drums


Dr M Scott Peck has many bestsellers beginning with “The Road Less Traveled” and two others with similar titles. “Beyond Road Less Traveled’ and ‘Further Along Road Less Traveled’. For a full list of his books see here.

an earlier post on a book by Dr Peck . here

His books traverses though fields far beyond psychiatry and goes deep into mysticism and philosophy. He has also done some pioneering work in Community Building. His ideas and experiences in this field are covered in his “Different Drums”.

Dr Peck says, It is community building that would save the world. The world today is getting more and more pluralistic and differences are getting sharper by day, there is an effort to make people think and behave in a uniform manner. This is not going to work. The idea is to accept the differences and may be even celebrate them. This is not something new in India, but where we go wrong is in being very selective about accepting the differences or weird behaviour. A naga sadhu is considered too weird, which he is, while whole communities taking over a public road to pray, which is as weird , is not considered so. Probably, the only criteria to accept weirdness should be “does this behaviour threaten or inconvenience other citizens ?” If so , it cannot be accepted .

The approach to community building is designed to work for the smallest community, ie a nuclear family and also the largest community that we know today, the global community.

As long as one doesn’t threaten or inconvenience others, all ideas, clothing ,or lack of it, behaviour and life style should be perfectly okay.

The book is organized into seventeen chapters in three parts. The first part talks of characteristics of a community and problems in community building. The second part is aptly The ‘bridge’. It dwells on the human nature on dealing with situations. and Part III suggests solutions. In a book of this nature, it is better to go directly into the source before trying to explain.

Here are some excerpts from the book. These excerpts are from my highlights while reading the book. These are given as block quotes , while my own annotations are in red italics.

……..Secure though it was, my home was not a place where it was safe for me to be anxious, afraid, depressed, or dependent— to be myself……

At some place the author claims , the entire aim of evolution of an individual is to be himself or herself.


As it happens a child is exactly that. That is one reason Indian Philosophers have suggested “be child like”

Chapter III: The True Meaning of Community > Page 61

Community is and must be inclusive. The great enemy of community is exclusivity. Groups that exclude others because they are poor or doubters or divorced or sinners or of some different race or nationality are not communities; they are cliques— actually defensive bastions against community.

Chapter III: The True Meaning of Community > Page 61 There was no pressure to conform.

Chapter III: The True Meaning of Community > Page 62 Our individualism must be counterbalanced by commitment.

Chapter III: The True Meaning of Community > Page 65 Begin to appreciate each others’ gifts, and you begin to appreciate your own limitations.

Chapter III: The True Meaning of Community > Page 65 : a group of people do these things— as they become a community— they become more and more humble, not only as individuals but also as a group— and hence more realistic. From which kind of group would you expect a wise, realistic decision: an arrogant one, or a humble one?

 Chapter III: The True Meaning of Community > Page 67 : Once a group has achieved community, the single most common thing members express is: “I feel safe here.”

 Chapter III: The True Meaning of Community > Page 67 : everyone enters a new group situation with his or her guard up.

Chapter III gives the characteristics of a community; inclusive, non-judgmental and non threatening. The corollary is that once you feel you ‘belong’, the guard is down.

Chapter III: The True Meaning of Community > Page 68
health and wholeness and holiness. (All three words are derived from the same root.)
 Chapter III: The True Meaning of Community > Page 68
When we are safe, there is a natural tendency for us to heal and convert ourselves.
Chapter III: The True Meaning of Community > Page 68
So they focus not so much on healing as on making their relationship a safe place where the patient is likely to heal himself.
 Chapter III: The True Meaning of Community > Page 68
are free to discard defenses, masks, disguises; free to seek your own psychological and spiritual health; free to become your whole and holy self. A LABORATORY FOR PERSONAL DISARMAMENT

In a community as visualized in this book, there is absolutely no effort to heal or convert. Normally when we are tolerant and sympathetic to someone having different views, there is an underlying assumption that the other person is sick and needs to be healed.

Dr Peck lays great importance to vulnerability. A child does not hide its vulnerability to her mother, though among playmates there may be an air of arrogance or bravado. Dr Peck goes to the extent of suggesting that for two nations to reconcile their differences they need to expose their weakness rather than arm themselves literally and figuratively. I am sure when people or close enough to one another they are not really looking to project their best appearance or behaviour. That is when one really feels at home, irrespective of the place be it an office, restaurant or a Temple. Today, one may include a social media group also. Are you part of the group to sermonize or seek information or just to be yourself and enjoy the warmth of the real community on a virtual platform.

Chapter III: The True Meaning of Community > Page 74
even the agnostic and atheist members will generally report a community- building workshop as a spiritual experience.

One area where there are profound differences is Religious beliefs. Replacing religious ‘isms’ spiritualism helps. Though many people don’t believe in spirit either , most people have experienced ‘out of the world’ feelings for which they are at loss to give a label.

Chapter IV: The Genesis of Community > Page 79
But I am reminded of the Chinese word for crisis, which consists of two characters: one represents “danger” and the other “hidden opportunity.

Interesting take on the word “crisis’

The author warns of pseudo community where everyone is polite to each other but the warmth would be missing. In a true community , there would be differences, there would be conflicts, every member may be becoming more and more of himself or herself, yet there would be not tolerance but acceptance of the individuality of others. There would be no conformity to generally accepted ideas , yet the conflicts would cease to be.

It is tempting to go into the complete book, which besides being a boring sermon may impinge on the Intellectual Property rights. I have uploaded my notes on the book in pdf form on my website , more for my reference than to be part of this post. I wind up with one final excerpt from Chapter IX. Dr Peck has categorized the evolution of individuals into four stages, based on his own experience.

Chapter IX: Patterns of Transformation > Page 188
Again it didn’t compute— until I realized that we are not all in the same place spiritually. With that realization came another: there is a pattern of progression through identifiable stages in human spiritual life. I myself have passed through them in my own spiritual journey. But here I will talk about those stages only in general, for individuals are unique and do not always fit neatly into any psychological or spiritual pigeonhole. With that caveat, let me list my own understanding of these stages and the names I have chosen to give them: STAGE I: Chaotic, antisocial STAGE II: Formal, institutional STAGE III: Skeptic, individual STAGE IV: Mystic, communal


Stage I is “who says”. There is disorder. One questions everything, every rule, every tradition or convention.


Stage II One is reconciled to following some rules imposed by an institution; may be a family, religious order, army . There is a need here for rigid beliefs to sustain the accepted behaviour.


Stage III One becomes skeptical about religion, and rules imposed by institutions, but acceptable behaviour holds.


Stage IV It is all mysticism and communal .Incidentally, ‘communal’ is not at all a bad word in this book. One is comfortable with God, religion, yours and others. One willingly works for the community without any induced incentives or threats.

Just as with any views, one may or may not agree with Dr Peck. But reaching the Stage IV for individuals as defined by the author appears to be a desirable goal. If nations follow this approach to community buiding, there would be no Wars of yesteryears or conflicts as they call it today.


Trading times : Motive for Trading

contd from

As we have seen , people call themselves, long term investors, short term investors, intra-day traders, swing traders, position traders , momentum traders and what ever, depending on the positions they have on different stocks.

Except in a secular bull market, many of us are in the Red. There are people switching from quick losses to slow motion losses  (read short term term investing to long term investing ) and vice versa. Whatever be , hardly anyone calls himself an ‘universal donor’ kind of trader , though that could  be exactly what he achieves. It is  a kind of public service to provide liquidity to the market, unfortunately it is all done inadvertently and they get absolutely no credit for this Yeoman service. There are people who continue to keep trading in this mode. So, what is the motive ? Is ‘money making’ the only motive to be in the market ?

As I see there could be many other motives to deal in stocks quite unrelated to making money. Some that I can think of:-

Peer pressure . It is so cool to talk about stock market , particularly among men. Ladies are catching up fast in everything from cuss words and  drinking to gambling ! 

Intellectual Stimulus. Trading is very challenging. There is so much to understand , so much to conquer. Fundamental Analysis is full of ratios  to study and  numbers to digest and Technical analysis is a world of charts hiding in a few lines on the charts, the entire gamut of human emotions Fear and Greed. It is a fascinating world telling a different story every day, every hour. Some people just try to predict the markets ,just for the thrill of “I told you so” feeling. Just as hill folks love to predict weather , analysts love to predict the market moves.

Snob value . Surprisingly , the ability to lose big money has as much snob value as the ability to spend money. I lost a lakh today has more snob value than to say I made 500 bucks today.

Gambler’s thrill . When you risk something big and you are waiting for the outcome , there is that adrenaline rush which is so addictive. Stock market is some place where you can get the thrill by putting away just that amount you need to get that kick; too less makes it all too pedestrian and too much can destroy your Capital. 

One can think of many other motives. Once I heard a fellow officer saying with a rather dreamy look, “can’t wait to quit ….. post retirement, this is all I am going to do…” When asked , if it would be online, he was shocked.

“Why would I do that ? Look, a man can’t sit at home all day, running errands for the lady. The idea is to go to a brokerage , a trading place, join a gang of punters , talk crap, eat and drink junk food and just enjoy the bonding and go back home in the evening fully  refreshed.”

Those days, the trading stations were mostly ‘men only’ place .

As for me, I am more fascinated by the tools of the trade rather than the trade itself. The kind of software and database you have today is absolutely phenomenal. When you sit at a terminal, you have minute to minute data on your screen, even while you are listening to some great songs on you-tube and chatting with friends on social media. Once in a while I have a game of chess going on in one tab. At the end of the day , it is +1000 or -500, who cares ? It all evens out and the day is well spent and mostly pays for itself.  Mutual Funds and a few steady stocks along with some debt instruments beat the inflation comfortably.

Next is … Tips and Tricks !  

Trading Time


Time is a commodity available in plenty, post retirement. So, one looks for time-consuming activities rather than time saving gadgets or tricks.

Trading in stock , is indeed a time consuming activity. Starting from the time spent on learning about fundamental analysis and technical analysis , one needs to be always aware of the ever-changing macro and micro issues . Ashwini Gujral , a market guru calls trading a dance on moving dance floor. May be a guru can just let the floor do the dance for him, but others have to be constantly moving to keep from falling on their faces.

Trading in stock , is indeed a time consuming activity.

If that be so, how is it that you find so many people with busy schedules professing to be traders and that too successful ones? (Yours truly included in this group till a couple of years back; only now I realize what I had been doing)

I have always been calling myself a long term investor particularly after reading some great investor/authors like Warren Buffet,  Peter Lynch etc; it does not matter that this long term investor is yet to see a multi-bagger. In bullish times, when you are sitting on a profit of 50-60 % it is simply too tempting to book profits and thump your chest. The lurking fear is also present that a sudden crash could come anytime and wash away all profits in jiffy. Of course when you are sitting on loss , however small, for years together , it helps to remember the wisdom of Warren Buffet & Co and counsel yourself that long term investors are not easily deterred by short term losses on the book; it doesn’t matter that the short term may extend beyond five years.

All stock market ‘investors’ , including Warren Buffet  claim that they  were not speculators but investors in a business. Nothing can be far from truth. They are really not investors at all. Everyone in the stock market is a sheer speculator.  When TCS came out with a public offer to sell a share of face value Rs 1/- at a premium of Rs 899/- , we  investors bought it at such a huge premium hoping that the premium would rise much further in future. Noone bought it for the dividend of Rs 5 /- and Rs 10/- that the company gave every year.  So it is all about speculation on capital appreciation rather than for returns through dividends, which alone an investor should be looking for. It is a different matter that the capital appreciation could be dependent on the quality of business; wealth creation is through speculation as to how the market appreciates or discounts a business. very good businesses have given luke warm returns while ordinary companies have given great returns. 

Everyone in the stock market is a sheer speculator.  When TCS came out with a public offer to sell a share of face value Rs 1/- at a premium of Rs 899/- , we  investors bought it at such a huge premium hoping that the premium would rise much further in future. No one bought it for the dividend of Rs 5 /- and Rs 10/- that the company gave every year. 

The only time I was an investor was when I put some money in a cousin’s start up. Rs 5000/ in the eighties was large sum. For three years the company gave 20% dividend ie Rs 1000/ per year. The company was not listed in any exchange , so you could sell it to or buy it from only the company . For next 2-3 years there was reduced dividend pay out and one fine day the company folded up.

Fortunately, this long term investor had a short term requirement  for money and could sell the share back to the company without any buy back offer. No one who ever held the share saw any capital appreciation or depreciation till the day it just became zero.

Coming back to the world of traders /investors, in my opinion there is only one category Speculators. They may be divided into long term speculators or short term speculators. So wherever I use the word trader it could be read as a speculator.

An average trader buys a stock based on ‘tips’ from colleagues, friends, TV Channels and well just about any source. Many a time it is just a group of letters like ONGC rather than a company with real people and real operations. The normal question is “will it move up, when , how much “etc .Once the stock is bought then you watch the tickers everywhere; on TV and  mobile phone. The day you see green , the chest fills out and any red streak on the ticker prompts one to seek assurance from experts, in order to continue being long term investors. Who wants to book losses ? Losses are left unrealized and they keep growing . How else would you hear such queries on business channels, “bought xyz stock at 1020 three years back; should I continue holding it; I am a long term investor”. The stock would be trading around 250/-.

It is always the intellectual honesty that becomes the first casualty . It doesn’t matter what you tell others, but it certainly matters what you tell yourself.

It goes like this .

When booking profits, however smalllet me book the profits now; At least I am getting something ;have been holding on for over a month; after all you can’t keep holding on to it for ever ;It might take a nose-dive again to below my purchase price. I am a position trader

When holding on to a stock at a huge lossI am a long term trader and I’ll not sell at a loss

When booking a higher loss on the same stockyou know I need money to buy ABC stock which is sure to go up”

Then you can call yourself, day trader, swing trader, position trader and what have you , to justify the fear , greed, insecurity, need to brag,need to cry and loss aversion.

Fortunately or unfortunately, the very process of trading becomes so random that it becomes difficult to keep track of the profit and loss. Human mind is so smart, the profits remain on the surface while the losses are buried deep into sub-conscious mind ,as Freud calls it. 

Today, you have all kinds of reports generated by the web interface of your brokerage company . It is not just the overall profit and loss for the year, but the exact XIRR for each trade done. 

So, as I see it, the first requirement of successful trading is , absolute intellectual honesty to understand where you stand.

——will continue..









Mutual Funds in India – SIP (Systematic Investment Plan)

Human Mind is hardwired to lose money in Stock markets. There is a perpetual oscillation between greed and fear, that influences any buy/sell/hold decisions. (hold is also a decision , remember our late PM PV Narasimha Rao) I have attempted an illustration of the human mind while dealing with stocks. (pic 1)

Human Mind is hardwired to lose money in Stock markets.

If one is to succeed there is a need to detach human mind from our buy / sell decisions.

Another example of how an automated system is better suited to certain situations

You come back home tired , late at night and ask your Mom to wake you up early for an important meeting . Then you find in the morning you are late, having overslept. You ask your mom and she says sweetly, “you were sleeping so soundly that I didn’t have the heart to wake you up” … Ok , it would have been a different matter had you asked your wife. She would have taken it as a great opportunity to pour a bucket of cold water on your head ! Under the circumstances an alarm clock , set to multiple rings , would have solved the purpose wonderfully, sans emotions.

So we come to SIP or Systematic Investment Plan .

Many of us would have come across tables to illustrate how investing through a Systematic Investment plan is superior to investing a lump sum.

Two options are compared through the table; lump sum investment of Rs 12,000 at the beginning of a 12 month period and monthly investment of Rs 1000/- for 12 months. The SIP route has resulted in getting an addition unit of MF for the same cost price even though the amount invested is in installments.  You get more units when the market is down and less units when the market is up. It is also called Rupee Cost averaging.

A point to note is that this is not always the case.  In a bear market, SIP is more efficient and in a bull market SIP may actually result in getting less number of units. Ideally one should invest in a lump sum when the market has bottomed out. But the catch is that Nobody knows when the market has bottoms out. In 2008, No one knew , that the market was at its peak and in 2009 No one knew that it had bottomed out. If an investor had got out of the market in Jan 2008 and re-entered anytime between Oct 2008 and Mar 2009, he would be sitting on a huge fortune today. But that is hindsight. In reality most people sold out in mid 2008 at a loss after waiting for a reversal and were scared to re-enter till 2012 when the market was already up. Some are still keeping away and are just coming back in trickles in 2017-18 .

If an investor had got out of the market in Jan 2008 and re-entered anytime between Oct 2008 and Mar 2009, he would be sitting on a huge fortune today. But that is hindsight. In reality most people sold out in mid 2008 at a loss after a long painful wait for a reversal and were scared to re-enter till 2012 when the market was already up. Some are still keeping away and are just coming back in trickles in 2017-18 .

It’s like riding a roller-coaster ride blind-folded; you can’t brace yourself for the ups and downs.  For a deeper understanding  click here

More important than the arithmetic, it is the detachment of human mind that makes SIP great. When I first started regular investments in MF, it was during the bull run post 2004 elections. Then in 2006, there was a slump and every stock, every Mutual Fund started heading south. I had a tech heavy portfolio and these stocks lost wealth faster as dollar was depreciating against rupee. My first action was to redeem my MFs. Why should I actually pay someone to lose my money ?

More important than the arithmetic, it is the detachment of human mind that makes SIP great.

On hindsight , I had made two big mistakes. Firstly, I had compared the MF performance in absolute terms and not with its benchmark Index. These MFs were still losing money slower than their benchmark indices and so, were still performing great. The second mistake was that while I was prepared to invest at higher NAV while I was hesitating to do so at lower NAVs.

Stock market pundits would tell you that , 10 shares of Infosys bought at IPO at Rs 95/ per share (all of Rs 950/) in 1993 (it was under-subscribed) would now be worth over 50 lakhs. So is it with the wealth created by Wipro or Reliance. I wonder how many of us have met any person who have actually benefited from such an investment. On the contrary, prior to Harshad Mehta scam, the same shares Infosys and Wipro had reached astronomical prices with three figure PEs and many investors lost big-time as the bubble burst. I am sure we would have met some of these investors . In short, big losses are real while big profits are hypothetical and on hindsight.

In short, big losses are real while big profits are hypothetical and on hindsight.

Sundaram Finance undertook an exercise to identify the beneficiaries of one of its top performing MFs Sundaram Select Midcap Fund. The idea was to honour these people in their AGM to highlight the importance of long term view on investments. It had given 5400% returns in 15 years since launch. After a lot of digging into their databases they could physically identify only a handful of investors. Half of these were dead and the others were not aware that they were holding these valuable assets. They were the only people who created wealth through long term investment ; the dead and the duds. So, if you want to make money through stock markets, after investing, be dead to the market or just be unaware, forget about the market; easier said than done.

the only people who created wealth through long term investment ; the dead and the duds. So, if you want to make money through stock markets, after investing, be dead to the market or just be unaware, forget about the market; easier said than done.

More than anything, an SIP ensures that you are not affected by the swings in the stock market .  It goes like the steady tick-tick of a grandfather’s clock even though a storm may be raging all around. I’ll conclude with my personal experience on the effectiveness of SIP.

Most of us are used to the monthly subscription we make to some kind of provident fund , partly to avoid paying higher income tax. Provident Fund gives about 8 % returns and there is a tax rebate. After retirement in 2012, I started investing in ELSS (Equity Linked Saving Schemes) through SIP. Last year I had invested in Axis Long Term Equty Fund . I get the same tax rebate as someone who invests in PPF, and the returns given by the MFs are about 12-18% annualized. Since there is a lock-in period of three years , it is a forced long term investment. Pic

Axis Long Term Equity Fund – ELSS

Note that there is no growth for the first year and a half but it is made up subsequently. Normally , a human mind is susceptible to intervene in such situations, often to a disastrous effect.

The only thing which is always true in a MF brochure is the mandatory disclaimer :  Mutual Funds are subject to market risks ; …. Past performance of a Fund is no guarantee for future returns.

We know from the historical data that Market rewards long term investors. We also know from anecdotal evidence that most people buy high and sell low.  It is not the people , but their emotions , greed and fear that make the buy / sell decisions.  Detach the emotions from investment decisions and you have SIP.

Next we see how individual MFs are evaluated.

Mutual Funds in India – Resources on the Net

Every brokerage firm wants to sell , sell and sell. So they just want you to buy ,buy and buy.  Advertisement for a financial product is just as for any other product in the market. However, there is one big difference; In a financial product, there is no tyre to kick; there is no hardware. Then there is the disclaimer “Mutual Funds are subject to market risks blah blah blah” . So, it is very easy to mis-sell Schemes with fancy names like Guaranteed Income Scheme. How can you expect any guarantee when “ Mutual Funds are subject to market risks …..” ?

In the MF industry , there are three main players; AMC, Distributors and investors. The Distributors are paid by the AMCs commission for every unit of a Scheme sold and the investors bear these costs irrespective of profit or loss they incur. Who bears the cost of running the AMCs ? It is investors again. How do the AMCs charge  after all Investors don’t write out a cheque, as fees? The charges are deducted from the NAV (Net asset value) of a unit in the name of expense ratio , the charges for running a MF . An innocuous looking 1.5 % expense ratio can make a significant dent in your returns. For example, Rs 1 lakh over 10 years at the rate of 15 per cent will grow to Rs 4.05 lakh. But if we consider an expense ratio of 1.5 per cent, your actual total returns would be Rs 3.55 lakh, nearly 14 per cent less than what would have been achieved without any expense charge.

  An innocuous looking 1.5 % expense ratio can make a significant dent in your returns. For example, Rs 1 lakh over 10 years at the rate of 15 per cent will grow to Rs 4.05 lakh. But if we consider an expense ratio of 1.5 per cent, your actual total returns would be Rs 3.55 lakh, nearly 14 per cent less than what would have been achieved without any expense charge.

An equity MF can charge upto 2.5 % and a debt fund can charge upto 2.25 %. In effect , once a product is sold, for a distributor an one time  return is guaranteed and for an AMC, an annual return is guaranteed and only the investors return is subject to market risks !!

With assured outgo of 1 – 2.5 % per annum from your investment, wouldn’t it be prudent to do some check before buying ?

The Net is a boon as well as a bane.

The Net is teeming with analysts and advisors on Mutual Funds. I am wary of clichés like “There’s no free lunch”. Actually in the digital world , there is free lunch with dessert included provided one is careful about his surfing habits and sources. I don’t mean piracy, but legitimate sources of information and data. Generally there is no dearth of places for Gyaan starting from the American “Investopaedia” to our own start up from Bengaluru zerodha . They are excellent free sources if only one is prepared to read. But who wants to read. ? We often hear “yeh sab chhod , batao kaunsa fund thik hai” . People just want the proceeds rather than the process. Just give me a list of stocks or funds to invest in.  That’s understandable; perfectly okay. There are places to get such lists also.

Though most of the brokerages publish their general recommendations and bring out free newsletters, the specific recommendations are restricted to paid subscribers. So, to begin with one should study the website of your own brokerage company thoroughly.

Here , I am giving some screen-shots from ICICI Direct Brokerage . I hope it is not an infringement on IP  rights. Most of it is in public domain anyway.

Specific Recommendations

A Model Portfolio Pick one as per your temperament

General Recommendations – Different types.

Then there is outlook money magazine which brings out a list of Funds every year as OLM 50. Here’s a snap shot .

Picks from Outlook Money – OLM 50


After investing , unlike Stocks, there is no need to monitor on daily basis as that is what the Fund manager and his team are paid for. However, at-least every quarter one should have a look at the portfolio to decide on ” buy , hold or sell”. If due diligence  is done before buying, there would be no need to churn the portfolio too often.

The least one should do is the have a look at the last column of portfolio details on the web site . You won’t be very wrong even if you just follow the recommendations in the remarks columns.


To summarize, firstly, one should avoid falling prey to mis-selling by distributors . Secondly, a little bit of study will help to build a balanced portfolio for growth and stability.

SIP will require a separate post by itself.

A list of links to study for Mutual Funds Pick

Moneycontrol Zerodha Mutual Funds of India Value research online AMFI (Association of Mutual Funds of India) Outlook Money – OLM 50

Investment in Mutualfunds

Saving and investing through Mutual Funds

Traditionally , Indians invest in real estate , gold and fixed deposits and it is only in the recent years that Equities and Mutual Funds have attracted the investors’ attention. Our pension funds have just started investing in the Stock Market. Still there is a long way to go before every investor has a stake in some mutual fund or the other, directly or indirectly.

Year after year MF AUM (Asset Under Management) is increasing 20-30 percent. I am not an expert on Investments or Mutual Funds but I am trying to learn the ropes as I go along , over the past 10-12 years. This just an attempt to share my experiences for investors starting out now; a primer in Mutual Fund Investing.

Why Mutual Funds

Everybody hears stories of people having got excellent returns from investment in the share markets. But unfortunately they also hear stories of the big crashes in the stock markets and crores of rupees being wiped out in a day. There are people whose life times savings have shrunk to one fifth or one sixth of the original capital. Is it worth the risk ? Investing in mutual funds helps to mitigate the risks involved in direct investment in equities.

If you need to cross a lake, you may just  put on a life jacket , pack something to eat and drink , and set about to “row row , row the boat ,gently down the lake” . But if you need to go into a sea , where there are too many unknowns and too many risks like winds and waves, hurricanes and Icebergs , it is better to look for a ship equipped to negotiate through all kinds of obstacles. Also you need an astute Skipper and a navigator.

While an investor can easily understand financial instruments like fixed deposits and bonds to invest on their own , Equity is a different kettle of fish. If one is not careful, a financial tsunami can wipe out the entire capital. So you need a qualified fund manager backed up by a battery of research assistants with all technical and tactical tools they can muster.

So, if you want to undertake a voyage you need to find a good ship and a good skipper. The Mutual Fund Scheme is the Ship and the Fund manager is the captain of that ship and there is a qualified and experienced crew to assist him.

Next question is how do you select one or two out of the myriad number of schemes in the market. Every day there are new schemes and offers announced to attract investors. Here, we need to understand the idea of risk reward chart.

Risks and Rewards

Higher the risk, higher the reward. Debt funds are like open ended fixed deposits . They give a low return but always a positive one. The Debt / Liquid MFs invest in Govt bonds and such instruments which give fixed returns.

The next in order is Hybrid Funds that invest in Equities and Bonds in a fixed ratio. Depending on the ratio they could be equity heavy or Bonds heavy. Suffice to say that equity oriented Hybrid funds carry higher risks and they also offer higher rewards.

Next we have diversified , large caps followed by diversified mid cap funds. There are also multicap mutual funds which fall somewhere in between. Lastly, we have the sector specific mutual funds. There are times when investors are bullish on a particular sector like technology, pharma or say banking , AMCs(Asset management Companies) launch sector specific schemes to take advantage. But when the tide turns, these happen to be the most affected schemes. To give an example, in 2005-6 bull run, IT funds gave more than 100 % returns in a year and in the crash of 2008, it is the power and infrastructure MFs which saw a huge downturn. You can see the chart of reliance power and infrastructure MF. The scheme was sold with a lot of promise in 2008 and crashed with every dip in the market. An investor who had entered in 2008 would have hardly seen any gain till 2016. This may be compared to the performance of a typical diversified equity MF. HDFC top 100. It can be seen from the chart that from Rs 10/ in 1998, it has steadily rose to Rs 540 in 2018; a return of 50 times in 20 years.

Reliance Power and Infrastructure Fund

HDFC Top 100 MF

It doesn’t mean that sector funds are to be avoided altogether. The risk must be understood correctly and a small percentage of the total capital , say 10% can be invested in such schemes.

How is MF Scheme judged ?

Primarily , a scheme is nothing but the composition of underlying equity assets. A  scheme buying risky equities is risky and one buying stocks of a solid company like blue chips are safer.  The performance of a Scheme is judged against its bench mark index . It could be Nifty 50 or BSE 100 or banking Index etc. That’s why a Scheme is said to be performing well even when it gives negative returns. It may have given a return of -5 % when its bench mark index , say Nifty 50 has given -10%. So if you are buying  a Pharma  MF, you should compare it with the NSE Pharma Index to track it’s performance.

New Fund Offers (NFOs)

Earlier the new schemes were called IPOs. People went for these “IPOs” as they cost only rs 10/ per unit compared to older schemes which cost anything like 500-600 rs per unit. The irony is that people never seem to understand that 10 X 500 and 500 X 10 gives the same result. If anything, the Rs 500 per unit scheme just shows that it has multiplied 50 times since inception. Now they are called NFOs as per directions of SEBI.

Why do AMCs come up with NFOs ? There may be a genuine reason or a necessity to exploit some opportunity in the stock market like arbitrage Fund. But mostly NFOs are ploys to attract more investors. Sometimes an AMC has to float a scheme just to match the competitors who have launched a new thematic fund. Theoretically, there are enough schemes in the market to cater for all kinds of investors. Before going for an NFO, one should be aware that the company is planning to start building his “ship” only with the money collected from the investors like you. Then it takes time to deploy the money. So, initially the Rs 10/ will dip to 9.xx before any gains. It is always better to wait for a Scheme to deploy the money and see how the underlying stocks perform.

Steps to Invest in MF.

How to identifies the schemes most suitable to you. Here I make an assumption that the money set aside for investment should be locked in for atleast three years if not more. Unlike premature withdrwal of Fds, premature selling of MFs can prove very costly.

Top Down Approach

Supposing we have 10 L for investment, it would be a good idea to decide how the risk / reard is to be spread. It would depend on your own temperament and appetite for risk. Normally midcaps and sector funds provide growth to the portfolio while balanced MFs and bluechip MFs provide stability. The debt/liquid funds are equally important. Liquid funds are used for temporary parking of money and also as a reserve to be deployed during market downturns. The ratio could be as under :

Sector Funds – 10%

Midcap Funds – 30%

Largecap diversified funds – 30%

balanced funds – 15 %

Liquid funds – 15%

Bottom up Approach

There are a number of organizations that evaluates the MFs and rate them as three star, five star etc. The details are also available on their web sites. Some of these sites are valueresearch org , mutual funds of india etc. They  can be accessed at my web site  under the menu Money —> Investments.

Of course , one gets lots of tips from people dealing in MFs.  But one has to be aware of the fact that there is more mis-selling than genuine ,free, financial advice. So, it is worth checking back from a second source.

Whichever way , first individual Schemes can be  picked and a portfolio be built , keeping in mind the aspect of Risk – Reward.

In the next part , we’ll go about on-line platforms and SIP mode for investments.


Secularism: A perspective

In our country, today, if you ask me for one most misused / abused word, I would say ,it is the word “secularism” . It is closely followed by communal-ism.

The word secular originated from Latin saecularis or Old French seculer, meaning a generation or an age used to mean this world as different from Spiritual world.  

Today, as defined by any dictionary , say wictionary, it means

Not connected with religious or spiritual matters . Some of the synonyms are non-religious,non-church,temporal,worldly,earthly etc. Some examples are Secular music, secular books, secular building etc.

A secular person is a non-religious person (definitely not someone who attends every iftar and Christmas gathering)

A secular state is a non-religious state . Ancient India did not have a concept of a religious state, so one needs to look at European history to understand what a religious state is. As it happens , even in the present day there are many modern Western States who are bound by constitution / laws to promote a particular faith.    A case in point is the composition of the House of Lords wherein Up to 12 Church of England bishops may sit in the house as ex officio “Lords Spiritual”. (Only the Church of England, mind you, not any riff-raff denomination like Catholic or Presbyterian) In our country, the liberals are up in arms , even when a  person gets duly elected to the parliament or the assembly, if he is religious.

Now , let us see how the religious states evolved to delink religion from state affairs, and in the process “discovered secularism in politics”.

There was a time when the Church was very powerful, more powerful than the kings. It had its own army and a hierarchy of officials for implementing the Lord’s will across the length and breadth of its domain , which was striving to expand forever.

Being  a chess enthusiast, as a child I often wondered what a bishop had to do on  the battle field . Chaturang (the four arms , infantry, cavalry, elephants and chariots  under the king and prime minister ) in Europe , had become Chess .( pawns,bishops , knights and rooks under the King and Queen) . Later , I realized , If the Pope had to wield political power, the cardinals and bishops had to go  into the battle along with the Knights. Even now when I look at a chess board I can visualize the Bishops and Knights criss crossing ‘battlefield Spain’ under the directions of King Ferdinand and Queen Isabella enforcing the Spanish Inquisition.

The Catholic Church was all Powerful in 11the Century

The Church During the period of Papal Wars. 15th century when the church fought a series of battles to expand its domain.

After French Revolution , for the first time Church was stripped of Political Powers






















Now, let us have a look at the History of India , Ancient or medieval. Buddha or Shankaracharya or any other religious leader did not have  armies like the ones Caliphs and the Popes had. So the idea of a Secular State was inherent in any Hindu Kingdom. Each dynasty had a favorite sect or God , keeping with the idea of Ishta devata. Ups and downs in popularity of a particular sect were more fluid and least violent. While  Mahendra Pallava patronized the Jains more, his son Narasimha Pallava patronized the Shaivites more; but by and large all faiths were promoted and none were persecuted.

The only exception was the Sikhs under Guru Gobind Singh  ; but this army was born to fight oppression rather than for persecution of heretics/ kafirs like the armies raised for crusades or the Spanish Inquisition. Still , a religious army has no place in a modern state and the country has already paid a heavy price  in the effort to contain Khalisthan movement.

We come to 1948.  The Indian Constitution was being drafted ,and  it was proposed by KT Shah  to include the word “Secular ” in the preamble,  and it was Dr BR Ambedkar , who vehemently opposed it. He opposed it, not because he wanted a religious state(opposite of secular is religious , not communal ,we’ll come to it later) , but just found the word superfluous.  Jawaharlal Nehru, who was keen on a socialist state was also happy  omitting ‘secular’  and ‘socialist’.

It was left to his daughter Indira Gandhi to introduce the word in the preamble , that too during the Emergency period ,in 1976.  Why was it introduced ? It was part of the 42nd amendment in a bid to retain power with herself  and her party. The amendment was also called mini constitution as it was quite exhaustive in changes across the board. Mainly, she went after curbing the powers of Judiciary. Clauses like ‘anti national activities ‘ were introduced so that any one questioning her could be booked. The word ‘secular’ was introduced to beat the RW parties with , but even she would never have imagined as to what degree that word would be misused as it is being done today.

Suffice to say that the Amendment was unpopular and was forced down the throat of the nation, under emergency conditions.  As it happens, some of the States who use the word Secular frequently did not ratify the 42nd Amendment; to name a few,  J & K, Kerala and Tamilnadu.

Another joke is that opposite of “secular” is “communal”. Communal society is defined as a society in which everyone lives and works together and property and possessions are shared rather than being owned by a particular person. The community can be based on religion , ethnicity or any other factor.  Living as a non religious community is actually called  secular communalism. Now, try chewing on it.

How do we differentiate  secular from communal in modern India ? A tall order indeed.

To simplify the process, RW community is called communal society while other religious communities are secular communities !!!

Now for some light hearted diversion ……

here’s an article calling bharathanatyam as cutural nationalism

The day when rasam (mulagutawny soup) became brahminical

Brahminical Tyranyny : Rasam





Can wearing a saree make you communal ? may be it can, as Asgar Qadri in Ny times says it is a symbol of hindu nationalism.

secular dress and communal dress





Is bindi secular ? Christian educational institutions don’t think so . They do not let the children sport bindi.  However, for Rana Ayub , a bindi is mandatory to prove her secular credentials.

Bindi , religious or secular ?







There are many more questions one finds on  the social media platforms .Just posting a random tweet to have an idea of  the  the line of thinking… There are others tweets debating if idli is secular food  or if  a game of chess is secular ? Then we have a you know who , with a long secular beard lecturing on   the kind of emoticons the secular community can use. As per him,


are  haram , thereby meaning not secular.






Finally, a picture which all “secular people” generally agree to be a  truly secular image. Obviously , there seems to be Nothing Religious about it .

Truly secular; nothing religious about it.