Confused Government – “Selling Public Enterprises and Buying Private Enterprises”.

 12^th January 2022

Confused Government – “Selling Public Enterprises and Buying Private Enterprises”.

Dear Fellow Investors,

Namaste! There is an English proverb – More you change, more you remain the same. Yesterday two news came in the media – Government will become the shareholder in Idea and Tata Tele. On one hand, they are privatizing their diamond companies at throw-away prices and on the other hand, they are investing in sick companies at prime valuations.

The message from the TOP: -

One-word message from the TOP is – Confusion. They had kept a very bullish target for the disinvestments in the last budget which they are not going to reach before March 2022. They have an additional burden of financing COVID -3 related support to the small people in the country. They are fighting ELECTIONS in 5 states. And in this BUSYNESS – they are adding private sector companies back door.

The biggest killer of Wealth and Happiness: -

In the share market, there is a saying – “Bulls make money, Bears Make money but Pigs get slaughtered”. The single biggest reason for killing wealth and personal happiness is – LACK of CLARITY in your thought and actions.

Unrelated and unnecessary diversification in investments is proof of a lack of clarity. You ask an average investor or average financial advisor – he will recommend diversification. The idea of recommending diversification is to save the skin in the game. All top investors are always focused. They will surely go wrong and suffer a lot of losses but they have the power of clarity in what they did and why they did. They are okay with losses but when they gain – they want to gain tons of money and not average return.  

In persona life – many couples are not compatible to stay together. They fight every day but they stay together. Their blame game kills the happiness in life.  

With the above two in place – they don’t have money and they don’t have happiness. Their life becomes average.

What is the CLARITY?

When promotors are not able to pay the dues – find out whether they are not able to pay the dues due to their mismanagement or other motives or due to government policies.

In the first case – allow the company to die down and sell it to the other company or close the company with losses written down – however big it may be. Punish the promoters fast, in case they are wrong.

In the second case, work honestly to come out with the policies in consultation with the respective expert in the business domain. Accidents happen when a person who knows cycling is given the command of the Steering Wheel.

What is the LESSON for small investors?

In the book – Buffettology, the first chapter is dedicated to establishing clarity. Buffett says –

Before buying a stock, it is important to first determine -what you want to own, understand why you want to    own it and then wait for a   good price. The price that you pay for investment will determine your rate of return. Always aim to pay a low price for a good investment. (this is 90% of the investing success and 90% of the investors fail in this step).

 This is the power of clarity.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.