Recently, a senior citizen in our neighbourhood complained about an unbearably high decibel sound from an adjoining house. Contrary to the belief that it was high-decibel music that was contributing to the discomfort, it turned out that the accused was merely watching a prime-time news debate and that too without the volume bar cranked up.
The cacophony that is sought to be passed off as news and debate on Television and the amount of misinformation that can be passed through a high decibel pitch is a phenomenon meriting a psychological study. I thus prefer to read rather than watch news online as it gives me the opportunity to select what I wish to read at any given point in time.
A few months ago, I was amazed to find a clearly sponsored company feature passing off as an ‘analysis’ where the promoter and the company as well as its financial performance was extolled and hold your breath, projections made about over 100% growth in not only its profitability but also share price.
Though unaware of the merits of the case, I recently read of some regulatory action on a couple of celebrities and also an alert put out by one of the stock exchanges about a couple of persons who were hoodwinking gullible investors to part with their money on the assurance of guaranteed returns.
Friends, professional acquaintances and even patrons at times forward opinions of self-appointed market experts on mobile phone groups and at times even reports from ‘reputed’ brokerage houses suggesting the possibility of raking in abnormal returns. This, to my mind, is the most basic of mistakes investors make, led on by those preying on their naivety and greed.
A recent directive of the regulator has been to ask certain entities registered with it to affix its logo, address and even a line on investments being subject to market risk in all its market communications. Well, I may be wrong but unless the intent was something else altogether, my hunch is that the majority of the ‘operators’ (the most polite word that can be used for such predators) mentioned above are unregistered fly-by-night operators who shed old and assume new identities rapidly.
Hence, further regulating the already regulated and also largely compliant, while these operators continue to remain unregulated and unfettered, would be akin to missing the woods for the trees.
Without getting into the relative impossibility of monitoring the proliferation of blatantly loaded messages by such fly-by-night operators, it would suffice to say that this is a menace that shows no sign of abating. To be fair to the regulator though, it cannot let the impossibility of the situation grow in scale and has to keep making efforts to blunt such predators.
On our part, we repeatedly remind anyone who bothers to ask, that if only the art of investing was so easy that one could act on such pearls of wisdom (of which there is no dearth, courtesy of the hyperactive social media) and profit, then everyone ought to be doubling their wealth monthly. Alas, that must remain a pipe dream.
Hence, all we can do is once again remind investors of the Latin phrase, Caveat Emptor
– Let the Buyer Beware.
Ashok Kumar
Head of LKW-India.
He can be reached at ceolotus@hotmail.com
(Views expressed here are personal)