Domestic bull run
My wife has been dabbling in stock market-related ‘economics’ for the last year or so. The other day I was told that our national savings rate had gone up astronomically. Even if 3 per cent is played in the stock market based on ‘Big Bull’ predictions, then we should all be singing. We should, therefore, put the bulk of our savings into the stock market at a suitable opportunity. We may then be able to acquire a villa in Shimla. I retorted meekly that every 15th Indian would have a cottage in the hills if the Sensex keeps climbing the way it is now. But we shouldn’t invest our limited resources in stocks.
I reminded her that the American ‘small bear’ had opined recently that foreign investors always come in when the markets are booming and the wise investor will stay away at such time. I persisted that we had led a dignified life — thanks to our saving and the Army’s after-retirement care. She retorted that this dignified existence could do with some more funds.
She pressed on that we may have survived, but our net worth had not improved while that of others of our ilk was sky-rocketing. At her scathing best, she showered me with comments on my inability to think big, all because of my disciplined cautious military mind.
She was kind enough to suggest that I could think big only while planning military operations on paper. She reminded me of Warren Buffett’s speech at Harvard Business School, where he tested the mike by saying “one million, two million, three million — can you hear me at the back?” That is motivation, she asserted.
It was clearly a case of villa or bust. And there I was, repeating to myself the words of another renowned financial wizard, “Invest only in the business you understand.” Did we understand the nuances of the recent economic global connection? The effect of the fragile US dollar, upward revision of their interest rate, the oil politics, the health of the European and Japanese economies among a host of other complications.
She walked off by saying that we were destined to wash disposable plastic glasses for the rest of our lives for so-called ‘dignified existence’.