Investing as a theme pops up periodically here, a testament to my abiding interest therein. Success here can have a fairly direct correlation with material well-being. That said, in matters financial, it matters more what not to do than otherwise. In this, I am reminded of Teesri Kasam and its quintessential Bihari ethos.
Flashback 1966. Mare Gaye Gulfam, penned by the indomitable Phanishwarnath Renu, was turned to a film by some of Indian cinema's tallest. On camera were Raj Kapoor and Waheeda Rehman, but also Iftekhar, Keshto Mukherjee, AK Hangal and Asit Sen: names that veritably lit up the silver screen much as they did the faces of cinemagoers for generations. Rest of the crew was no less luminous: Renu himself, Basu Bhattacharya, Shankar-Jaikishan, Lata Mangeshkar, Manna Dey, Asha Bhosle, Mukesh etc. Perhaps above all was Shailendra, this being the only movie the lyricist extraordinaire ever produced. Thus, we got Teesri Kasam.
So how does Teesri Kasam connect to my investing experience, personal or observed? Simply that Hiraman, its bullock-cart-driving protagonist — idealist yet unafraid to try the new — makes mistakes in his pursuit of life's affairs, swearing each time never to repeat them. And in a fashion, his three blunders, which lead to the eponymous three vows, mirror my view of the most common slips in financial matters.
Perhaps unsurprisingly, Hiraman stumbles first in ignoring the risk-reward equation. His simpleton character tries to make a fast buck ferrying smuggled goods, managing only to land a brush with the police, and promising himself a long-term focus thereafter. Many of us, myself included, start life at the other end, content with managing money near-term and confusing a bank balance for financial security. We fret about market risk but assume inflation immunity. Consequently, savings go to FDs, PF contributions stay at a minimum, and equity action is confined to a rushed, year-end Sec 80 investment at most. Thus, the power of compounding is missed for years.
Hiraman's second folly is not planning for oversized loads. He picks up a consignment of bamboo, and — being inexperienced — rams it into a horse-cart, earning a royal thrashing. His kasam: avoid 'long poles'. Of such cargo, real estate is the most ubiquitous in our lives and the cause of much financial misery. I didn't buy my first until 12 years into my career (missing two Gurgaon booms); yet others buy too early, or too much, and some simply a 2BHK that they outgrow in no time. A similar case could be made for Insurance. The point is to tackle the big rocks as soon as one is able, which requires a financial plan.
Twice singed, Hiraman is then felled by the most confounding folly of 'em all. Tasked to transport Hirabai, a performer in the Great Bharat Nautanki Company, to the village fair, he is smitten by her beauty and (in his eyes) apparent virtue, during the course of their day-long journey. His consequent conflict with zaalim zamana and zamindar is typical filmi (the denouement is anything but), culminating in his third and final vow: say no to nautanki-walis. Cut to our financial lives; and how often have we similarly lost when appearances and emotions outbid logic and facts?
A tad more on that last-named. Its typical setting, interestingly, involves folks who spend a lifetime mistaking investing to be a spectator sport. They watch the market ceaselessly, debate it tirelessly, and wait for the 'right level' endlessly. Then suddenly one day, armed with an ostensibly hot tip (delivered over sips of 'Glen' perhaps), they rush in to bet the ranch. They may get lucky, but mostly they don't, only to slink back into the corner, cursing their luck, the market, or both.
Be it rooted in any of these mistakes, it is the dud that we carry too long that has the biggest bite (I have never lost as much money as I have selling late). Through pigheadedness, optimism, or sloth, we only invite peril home when the basic principle of stop-loss goes amiss.
These experiences aside, like most walks of life, success in investing must rest on the bedrock of hard-won lessons. "The four most dangerous words in investing are — this time it’s different", as one of the greats so adroitly put it. It remains a game where discipline and math plainly trump creativity and chance. Ignore this, and one is left to rue mare gaye gulfam.
Flashback 1966. Mare Gaye Gulfam, penned by the indomitable Phanishwarnath Renu, was turned to a film by some of Indian cinema's tallest. On camera were Raj Kapoor and Waheeda Rehman, but also Iftekhar, Keshto Mukherjee, AK Hangal and Asit Sen: names that veritably lit up the silver screen much as they did the faces of cinemagoers for generations. Rest of the crew was no less luminous: Renu himself, Basu Bhattacharya, Shankar-Jaikishan, Lata Mangeshkar, Manna Dey, Asha Bhosle, Mukesh etc. Perhaps above all was Shailendra, this being the only movie the lyricist extraordinaire ever produced. Thus, we got Teesri Kasam.
So how does Teesri Kasam connect to my investing experience, personal or observed? Simply that Hiraman, its bullock-cart-driving protagonist — idealist yet unafraid to try the new — makes mistakes in his pursuit of life's affairs, swearing each time never to repeat them. And in a fashion, his three blunders, which lead to the eponymous three vows, mirror my view of the most common slips in financial matters.
Perhaps unsurprisingly, Hiraman stumbles first in ignoring the risk-reward equation. His simpleton character tries to make a fast buck ferrying smuggled goods, managing only to land a brush with the police, and promising himself a long-term focus thereafter. Many of us, myself included, start life at the other end, content with managing money near-term and confusing a bank balance for financial security. We fret about market risk but assume inflation immunity. Consequently, savings go to FDs, PF contributions stay at a minimum, and equity action is confined to a rushed, year-end Sec 80 investment at most. Thus, the power of compounding is missed for years.
Hiraman's second folly is not planning for oversized loads. He picks up a consignment of bamboo, and — being inexperienced — rams it into a horse-cart, earning a royal thrashing. His kasam: avoid 'long poles'. Of such cargo, real estate is the most ubiquitous in our lives and the cause of much financial misery. I didn't buy my first until 12 years into my career (missing two Gurgaon booms); yet others buy too early, or too much, and some simply a 2BHK that they outgrow in no time. A similar case could be made for Insurance. The point is to tackle the big rocks as soon as one is able, which requires a financial plan.
Twice singed, Hiraman is then felled by the most confounding folly of 'em all. Tasked to transport Hirabai, a performer in the Great Bharat Nautanki Company, to the village fair, he is smitten by her beauty and (in his eyes) apparent virtue, during the course of their day-long journey. His consequent conflict with zaalim zamana and zamindar is typical filmi (the denouement is anything but), culminating in his third and final vow: say no to nautanki-walis. Cut to our financial lives; and how often have we similarly lost when appearances and emotions outbid logic and facts?
A tad more on that last-named. Its typical setting, interestingly, involves folks who spend a lifetime mistaking investing to be a spectator sport. They watch the market ceaselessly, debate it tirelessly, and wait for the 'right level' endlessly. Then suddenly one day, armed with an ostensibly hot tip (delivered over sips of 'Glen' perhaps), they rush in to bet the ranch. They may get lucky, but mostly they don't, only to slink back into the corner, cursing their luck, the market, or both.
Be it rooted in any of these mistakes, it is the dud that we carry too long that has the biggest bite (I have never lost as much money as I have selling late). Through pigheadedness, optimism, or sloth, we only invite peril home when the basic principle of stop-loss goes amiss.
These experiences aside, like most walks of life, success in investing must rest on the bedrock of hard-won lessons. "The four most dangerous words in investing are — this time it’s different", as one of the greats so adroitly put it. It remains a game where discipline and math plainly trump creativity and chance. Ignore this, and one is left to rue mare gaye gulfam.
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