Who should you trust your money with?

Wednesday, March 19, 2008 | | |

ver the last couple of days, I heard some mutual fund heads talking on television about the current “compelling valuations” in the stock market and how investors should just buy and sit tight for a couple of months.

But when they were specifically asked what they themselves were buying, there was no clear answer forthcoming.

Which brings me to the question, what / who / when should you trust with your money?

My answer is simple —- yourself!

It is not that the people voicing their opinion in the public domain are dishonest.

They just have to be wrong to make you poorer.

They may also (more often than not ) omit to mention a few important facts (the valuations are compelling but I am not buying yet!).

When it comes to survival, it is usually to each his own.

History has recorded for posterity that humans have eaten their dead kith and kin in wars and other extenuating circumstances to survive.

Why should the markets be any different?

What are the markets anyway? Markets are a collection of all the emotions of the participants put together. Greed, fear, compassion and cruelty included.

When it comes to self preservation, even murder is allowed by the courts in certain circumstances.
Big-ticket players routinely lead retail players to slaughter houses. Cold bloodedly and calculatively.

Books have been written on the subject, talk shows conducted by the dozens but retail players have yet to learn that lesson.

Going further, I have found that Indian markets are a lot more volatile compared with their developed counterparts as the participation has a higher component of emotions in the combination of intelligence and emotions.