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Subbu's Solution

5 Productivity Killers in Dalal Street

I left office early, to pick up my tailored shirt and then head home. Just as I left, my wife called to announce that she will join me and was keen to visit one of those well-known bars in Bandra Kurla Complex. My wife joined me at the tailor’s shop and we then proceeded to the bar. Since it was early in the evening, it was not yet full. Bars or pubs haven't changed much since the early 90's when they first hit the market in places like Bangalore. Dark furniture, loud music, large doors appeared to be standard fixtures. This bar wasn’t any different. The drinks were as usual but the names were different. There were some seats occupied by large noisy office groups. There were few couples at some tables. It was the day when the Supreme Court passed the judgment on Section 377 and I could see some couples celebrating the verdict. We ordered our drinks and as the evening progressed, the place became darker.

We were relaxed and chatting when she suddenly slipped in a question which I least expected, "Why don't you tell my brother where the market is headed? I see our neighbors asking you the same question when we go for our walks and you seem to be talking to them on this topic at least for a few minutes. You come on TV to talk about the markets. Yet, when my brother asks; you just say that - Markets are unpredictable". I said that I comment on long term trends of sectors or markets and never on "where is the market headed?" which generally refers to short term movements. My answer could have been "markets may go up or down". Since I didn’t want to be rude with your brother I answer “Markets are complex and cannot be predicted”. I then went on to explain that there are a few unproductive activities in work and in stock markets.

Here are the 5 productivity killers in Dalal Street that I shared with her.

• In order to impress neighbor's, predicting the stock market movement over short periods. Different people behave differently to the noise they hear. Market over a short period is a reflection of this behavior.

• Discussing the level of the ten year yields and how India is different and therefore no emerging market contagion will affect us.

• Discussing with NRI cousins about the level of the currency and why the rupee will not cross Rs 68 to the dollar because we have a strong government. Government and Currency are two different things.

• Assuring your sister-in-law that Indians will never go back to investing in Real estate as ill-gotten wealth has reduced and there is no corruption in India. Really!! Is this believable??

• Debating with colleagues on the possible outcomes in the coming general election. The undercurrents are fluid and could throw up any name as candidate to lead the next generation.

We left the bar after I raised the bar on discussion about stock markets. She had that "smile" on her face for which I do not know whether it was the wine or the discussion. Yet something in my mind said "Something is brewing in her head" and I should be ready for a sharp pincer attack. Just then my phone rang. Shucks!! It was my brother-in-law.

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Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

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