Wednesday, December 1, 2010

Scam season – the endless story

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We are in earshot of multi-crore scams and scandals involved by our Honourable Ministers, politicians, senior Govt servants, corporate negotiators, media icons and other top class officials. Filthy CWG scam, outrageous 2G Spectrum deals, greedy loan scams headed by officials of India’s Largest Home lenders LIC Housing finance, escorted by reputed PSU bank officials of Bank of India, Central Bank, Punjab National Bank etc..etc.

The amounts involved in such scams/scandals are proportionately increasing like the prices of Sugar, Onion or Gold. Money is becoming valueless. I remember the days; 1Kg Sugar was less than Rs.1.50/-, Onion at less than Re. 1/Kg and Gold was less than Rs. 100/Gm. The then scams were limited too with in thousands or lakhs keeping the ratios. Now we have grown, paying 20-40 times higher for above stuffs. The proportion of sums involved in scams are more attractive and may be its the reason, majority is interested in fiddling than anything.

Negative global developments including Irish reactions, Korean build-ups and finally serious wikileaks paranoia are adding the fuel. The Korean and probable revelations from wikileaks are more serious than anything. My assumptions may be wrong, but I am anxious because, US is playing at both the faces, they even took official advance bail on the wikileaks revelations by alerting us, you don’t believe all these.


The investor fraternity is in negative sentiment and its reflecting in the market as usual. Market has corrected almost 10% since the recent peak on 5 November 2010 due to a blend of international and India specific issues and is gradually recovering. There is no vaccine to cure the corruption plague. It was there in our blood, it is there and it will be!. We have keep roared as much with the media whenever we noticed such dirty practices. Media, the people we trusted or leaned on all these times, who shared our pain and enlighten our wishes each time we hassled by scams/scandals/politicians. They are also leaving us by realizing that they can make much more than what they earn by strolling within the four walls of channel studios. They too, finally found the alluring outside world which provides huge opportunities. If the revealed tapes are correct, its highly harassing. I could not yet convinced my sense up on the rolls played by our reputed media idols, especially Padma Shri Barkha Dutt. Recall her Kargil & Mumbai attack reporting, and the Padma Shri, our fourth highest civilian honour is still with her name. Won't we respect that class civilian decoration or we disregarding the others who awarded it?

Lets come back. Crashes and booms are common phenomenon towards every market and economy. I think whatever going on is simply related to sentiments and the economy is intact in our case. Such types of scams/scandals were there with every emerging economies and history denotes the same. Its our good luck that things revealed even lately because we are in a democratic structure. As investors, we should not be paranoid on such temporary sentiments but its wise to be very aware and cautious on such developments. Whatever going on is just a psychological extract and I don’t feel any big thrust on such issues. I am happy that, finally we got to know all these, God is with us and we are skilled or immunized to absorb all these shocking deeds with a cool sense. I think its an opportunity for our politicians for self realization as well thinking on remedies. From our part, we can only pray for some kind of Wikileaks exclusively for Indians and it will provide us some more interesting times with the market, moreover we always need some kicks to walk straight.

Market is a place where investors should prepare for the worst always and expect the unexpected. We have to be firm in such testing periods because we are strong enough. We are one of the fastest recovered markets from the recent historic downturn and there is hardly anything hazardous ahead. In the recent tweak, some sectors and stocks have corrected much more than the main stream because of certain sector specific bad news related to telecom, infrastructure, realty and banking etc... The valuations have turned more reasonable for certain scrips and those who unreasonably punished will recover fast.

regards

Shabu Thachat - sthachat@gmail.com

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The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.



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