Sunday, October 02, 2005

Dheeraj and the stock market

Bulls and bears were the most exotic species of animals for my cousin, Dheeraj. He had nothing to do with animals, he was a big fan of the stock market. I could judge the stock market by simply taking a look at him or listening to his voice from time to time.

He would be exuberant on the day the market scaled up and depressed on days when the market went southwards. A greater degree of exuberance meant a bull run while a sustained depression meant the market tanked. One day the tune would be “India rocks”; while at other times, it would be “India is going to the dogs”

His day was made when he had one more convert into the legion of investors. It was in this context that he used to meet me and try to entice me into getting my feet wet in the water. Our typical conversations would go like this.

“Invest in the markets now”
“No, I am very happy the way I am”
“I am going to be rich. I am just letting you in onto the opportunity. Don’t tell me I did not tell you”
“I am happy with my small savings”
“You have no ambition”

As the bull run slowly gathered momentum, Dheeraj invested in a mobile phone.
“I sold ACC and brought this beauty”
A few days later, he was zooming in on a new bike.
“What happened to that old warhorse scooter of yours?”
“TVS has launched a new bike. I financed it by selling Hero Honda”

Meanwhile, I was left with my cycle. But I refused to relent. It was my firm belief that in the long run, especially in the stock markets, it all adds up to zero. The sensex moved from its pre 5000 levels to 5000 and then slowly but surely scaled up through the 5100, 5500, 6000 and 8000. The markets would go down. For every bull run, there would be a Harshad Mehta or a Bhupen Dalal was my counter argument. My money, or whatever little of it, was safer with the Government and the Life Insurers.

I tried to keep my head high. The sensex was still higher than my head. Ultimately, I decided to enter the market. Like the reluctant cat moves towards hot milk, I landed up at a brokers office with some money of my own. The first few days were good. My portfolio tool on MS Excel began to show newly sprouted green at many places. I began to see dreams of my new scooter and perhaps some refurbishing for my house.

After that the market began to move strangely. Each day the index went up, my stocks would go down and each day that the index went down, my stocks went down further.

As the market continued on its random journey up, down, sideways and rangebound, my portfolio began to change colour. It was red in patches, green in some other patches. My dreams began to get intermittent. The market would determine my mood ( interestingly, it never happened the other way round try as I might). I began to live on hope. Until, the Monday happened and then Tuesday and Wednesday and some Thursdays and Fridays as well. The portfolio tool now shone in red and with some effort and imagination, colourwise, would resemble Mars, if Mars could be suitably represented on a spreadsheet.

I am still left with my cycle. Hoping for the bull run to power my cycle into a scooter. What happened to Dheeraj? I saw him a few days back pedaling furiously on an oldish bicycle, “I had to sell my TVS, because Hero Honda is a good buy”