Stop Fooling Investors

What’s the easiest way of earning money? Watching business TV channels & following their advice to buy or sell stock/market. This is true for many of the investors who start their day with a business channel and follow so called experts blindly.

I would not like to add more – just check the video & picks. Decide what is right for you – experts are not loosing anything from your financial decisions but you……

Disclaimer: Its not to harm reputation of any person or channel but just to tell naive investors that this is not the way investing is done.

Also check this Sensex chart of Past 5 year – will help you in relating to the timeline.

 

Video Ashwani Gujral (Technical Analyst) & Shankar Sharma (Market Guru)

You can also check this video on youtube

Also check market commentary of Ramesh Damani – a well know equity bull.




 Money Mantra Magazine did a Full story on this “TV Wale Baba”

You can download full magazine from here.


So now question is “Do you call these people experts?”

45 COMMENTS

  1. Sir,

    I very much like the last blogspot on Dhamani. I hope the same may be done with Shankar sharma, who 100% believe on decouple theory. But our market has proven something.

    Regards,

    Anuj Johari

    • Dear Anuj,

      Infact, shankar is facing legal problems with the regulator, so you can very well understand his anger with the markets. but like you i also feel that these guys owe a responsiblity if they are comenting on markets which affects lot of households and businesses.

  2. Hi Hemant
    Calling such experts to give their views has become a regular feature of all business channels.What is surprising is that views are sought on Indian market by foreign experts who don’t seem to have any idea of Indian market.I think it is much better to become informed investor by first acquiring financial literacy than to rely on the views of the so called experts.

    • Hi Anil,
      I partially agree on this – yes one should become financial literate but even after that don’t rely on media experts or even bloggers(I hate to be called a blogger) including me.
      Do we (so called experts in TV, Newspaper or Blog) know IQ, attitude, financial status, objectives etc of each (or any) individual reader/viewer. Even we don’t know your job, family structure & even in some cases full or real name.
      Let’s take your case – we are interacting from couple of months but only 10 days back (retirement article) I realised that you are close to 50 years. So if I would have given you some personal advice before that assuming you are in 30s – you can just imagine I have ruined your financial future. If I have give you some personal advice don’t follow it. 😉
      That’s the reason I shy from answering specific questions.

  3. i am investing and learning for almost 5 years but i never watched any TV Channels. so i really don’t know about these experts.

    i always look for fundamentally sound companies available at Low P/E for investment.

  4. Hi Hemant
    I regularly watch Business Channels and also read Personal Finance Magazines but my investment in Mutual Funds is not influenced by the views of so called experts.

    • Hi Anil,
      Getting information is a good habit but thinking it is knowledge is a mistake. So in one senses you are on right track – that it is not influencing your investment decisions. But you never know…..

      • Hi Hemant
        I am reproducing below the message which I received today.

        Dear Reader,
        This is an interesting scenario that we are witnessing.
        Stock markets are volatile, going down one day and coming up on another.
        And many like you are wondering whether you should be
        investing now
        selling now
        or just holding on to your investments.
        What ever it might be, you should not lose your hard earned money.
        We would like to recommend a simple strategy here.
        If you need your money in the next 3 years, you should not invest your money in the stock markets. If you already have investments, it would be prudent to take them out now.
        OK, but then what do you do with that money?
        Invest in debt.

        Hemant my question is can such blanket advice be given without knowing anything about the investor ? I have read the message but decided to ignore it.

        • Hi Anil,
          I know who has shared this 😉 Blanket advice or software generated advice is of no use.
          Such message ends with………
          So, what are you waiting for?
          Do not miss on this fabulous opportunity!
          Take action now and start making superior returns. LOL

          • Hi Hemant
            What is interesting is that TV channels call a large number of experts for their views on the markets and all experts have different views on the present or future direction of the market.For an average viewer it is not easy to decide whether to believe the expert or not.For instance one expert said that the market will remain rangebound between 17000 and 20000 throughout the year.The other expert said that we can easily see the levels of 22000 by the end of the year.My question is how can you call levels between 17000 and 20000 as range bound.If this is the definition of range bound than I can also safely make this prediction.I think this is the right time for all Business Channels to start Astrological programs just like other TV channels and call these astrologers for their views on markets.This will definitely increase their viewership.

    • Hi Paresh,
      My post is on every analyst that appears on stupid box. If you go through the moneymantra article – 90% of analyst’s calls went wrong. Percentage was even higher in case of technical analysts.

  5. Hi Hemanth,

    I Have invested
    DLFLIM 100 386.47 Jaiprakash Assocites JAIASS 540 112.20 Gujrath Nre Coke GUJNRE 528 59.92 United bewrages holdings UNIBRE 261 211.57
    National hydro power corp NHPC 191 24.69 Reliance power RELPOW
    3449 199 Suzlon Energy SUZENE 275 79.17 Reliance Industries RELIND
    286 930.00 . I will try to hold the stocks upto 3 years can you please suggest the stocks position . I am looking to buy another 3000 shares of reliance power in next one year and try to hold it upto 2013 (upto starting production) of reliance power.
    Please suggest me i am trying average all my shares curruntly in 3 lakhs loss.
    Please suggest valuble shares. In next mail i will ask you about My ulips and mutual funds

    • Hi Naveen,
      I don’t track direct equity but still can say what you are trying to do is wrong. Actually what you are trying to do can be explained by prospect theory. Prospect theory explains the occurrence of the disposition effect, which is the tendency for investors to hold on to losing stocks for too long and sell winning stocks too soon.
      Do You Know: Most of the IT stocks (more than 99%) have not reached their highs of 2000 – 11 years is a long period.
      My suggestion is think -> learn -> decide – rather than doing it other way round.

  6. Dear Hemant,

    Superb article, drafted exactly how it should be read..

    Infact, most of the business channels are taking over from CRICKET MATCH telecast..Just like there is PRE-MATCH discussions, LUNCH TIME review, and POST MATCH analysis – these business channels are doing the same..Making noise with PRE-TRADING sessions, warming up with MIDCAP BAZAAR and AAJ KA SAUDA, then moving towards ANTIM BAAZI and FINAL CALL, to finally AAJ KA VYPAAR and MARKETS TODAY etc..

    Its now become more of a joke rather than helping some serious traders or retail investor…

  7. Hi Hemant,

    I completely agree with this Article….I myself have lost almost 30% of my portfolio during the past years.

    But Hemant, for an investor what should be the ideal source of correct/ true information of companies’ Direction? Since , not all investors are able to understand Balacesheet or Annual report of the companies, they (including me) rely on so called experts’ opinion.

    According to you,(besides following 4/5 * rated funds from sites like valueresearch or moneycontrol) what are the advisable ways of doing research on funds or equity….before investing?

    • Hi Sumu,
      I really appreciate that you shared your loss – its really tough to accept mistakes.
      My suggestion is to stick with mutual funds as we both don’t have a single quality that we can beat fund managers. Rating is one of the ways but they are many other things that people should watch – I will try to write few of them in my coming posts.

      • This is truly one of the finest example of making people fool on a large scale..And that too without any legal action against them. They never say anything about market and company PE and no fundamentals discussed. Actually these people have either very short term view about market or they seriously make people fool for their respective brokerage firm. I have never seen any of them saying market is trading at historical high PE in 2008. So what else to say…

  8. Hi,

    I used to listen to the views from these so called tech Gurus Ashwani Gujral and Shankar Sharma through TV channels. But I was having some doubt in mind that if they are really great in predicting the markets, then why are not they making money in markets and becoming like “Warren Buffet” and “Rakesh Jhunjunwala”.
    After seeing this article, I realized how much time I would have wasted watching their views in TV channels. Instead I would have spent time some where else where it makes sense. Really I feel they are chameleons. They will change their words immediately according to market conditions to survive.

    Thanks for opening my eyes.

    Thanks,
    Playboy.

  9. Hi

    Great collection. Though i knew about these jokers (learned the hard way) years back, was too good to see in the video play of 7min. Great work and keep going.

    Thanks

    Shinu

  10. Hi Hemanth ,
    From past few months i have been reading your articles and i have shared few articles with my friends also please continue the good work.I am working as software engineer my age is 28 years and i am not married.Now days started learing about finance and investment because i donot want loose my hard earned money:) by choosing the wrong investment. I have started investing in ELSS funds through SIP option. This is the first time i have done my investment in ELSS Mutuval fund because of good salary hike my income is comming in 10 % Tax braket . My fund selection is below .
    (1) Canara rebeco
    (2) HDFC long term advantage.
    (3) Fedility tax advantage
    (4)Franklin india TAX sheild
    (5) HDFC Tax SAVER
    In all the funds i have selected Growth Option.
    Please let me know your thoughts about my fund selection is it good or bad ?
    Please be frank i am ready for any comments good or bad some times learing lesson also matters apart from earning.:)

    Thanks,
    Anand

    • Hi Anand
      Since you are interested in learning I would like to tell you to go through the post Best Mutual Funds for SIP.Investment in equity mutual funds is done to meet your long term goals like retirement etc.For this you have to remain invested for more than five years.First step is to construct your mutual fund portfolio.The amount to be invested per month will depend on the corpus required by you to meet your goals.To start with select one large cap fund,one large and midcap fund,one multicap fund and one mid and small cap fund in your portfolio.
      You have only mentioned the name of the fund house in item 1.Major portion of your portfolio consists of tax savers which is not the correct approach.Have a proper diversified portfolio as suggested.

  11. Hi Anil,
    Thanks for replying .I agree with your comments i have selected the above funds with the focus of Tax saving only. Let me clear , My income comes under 10 % tax braket .To save tax and get returns better than FD and ULIP or insurance i have choosen ELSS funds .I know risk is involved and i am ready to take risk.
    My investments in ELSS mutuval funds is 60,000 Per annum through SIP this is only for the present financial year. Next year i am not sure whether ELSS funds are eligibale for Tax excemption.
    My question was ?The peformance of below selected fund is good or bad?
    (1) Canara robeco equity tax saver
    (2) HDFC long term advantage.
    (3) Fedility tax advantage
    (4)Franklin india TAX sheild
    (5) HDFC Tax SAVER
    Apart form this i am planing to invest 15000.00 in PPF and 5000.00 in Term insurance . (No ..no not in ULIP:).).On more thing my deduction for EPF is 43000.00 Per annum this includes employer contrbution also.
    In the view of TAX saving my allocation is good or any thing is missing i want to know. ?
    If you feel i am asking same question again i am really sorry.Can you please explain breifly so that i can understand. I agree my financial knowledge is poor as i am in learning stage now.

    Thanks,
    Anand

    • Hi Anand
      I hope you know that lock in period of three years is involved in ELSS Mutual funds.Hence you will be able to get out of these funds only after three years.If no income tax benefit is available then these funds will be just like any other equity fund.Once you are already invested in these funds you can not do anything even if some of these funds do not perform.After the lock in period is over you can get out of these funds and construct your portfolio as already mentioned.Moreover you could have managed with only two ELSS funds.Using so many funds of the same type does not provide any diversification.Once you get out of these funds you can consider increasing your contribution in PPF.

  12. Hi Anil,
    I know that lock in period of three years is involved in ELSS Mutual funds.I have choosen ELSS because of 3 years lockin period only( In case of FD term is 5 years and intrest is Taxable and PPF is 15 years lockin period)and I read income tax benefit is available for ELSS for this financial year.If i feel fund peformance is not good. I may consider to remove 2 funds from my list after lockin period of three years.As you mentioned i agree having so many funds of same type will not provide any diversification .But i read for starters who don’t know much knowledge about fund performance it’s okey to have 5 funds in there folio.
    My question : Apart from ELSS & PPF and Fixed Deposit What are the other good investment Tax saving Plans available in the market .Can you please guide me or share me if you know any better investments plans better than PPF , ELSS and FD for TAX saving.

    Thanks,
    Anand

    • Hi Anand
      You are a young person with risk appetite.At this time your focus should be on wealth creation to meet your long term goals.You should not be concentrating only on saving tax.Moreover you can invest only Rs one lac on tax saving schemes which you can easily do in the options you have mentioned.There is no need to look for something else.This is the right time for you to start investing in equity mutual funds.

  13. Hi Anil,

    Yes ,You are right.

    My age is 28 and i am not married and my expenses are less.Yes apart from

    Tax saving investments i need to look for other investment options in the market.

    I am planning to Investment in equity mutual funds through SIP.I read your post Best Mutual Funds for SIP. The information is really good.

    I will collect some more information and start Investing in equity mutual funds.

    Finally i really appreciate you and Hemant for sharing the knowledge and teaching us about Financial planning.Thank you thanks again:)

    Thanks and Regards,
    Anand

  14. Dear Anil,
    I want some information on Guaranteed saving insurance plan. through icici , whether is this good to buy or not. please advice me and tell me its merits and demerits

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