December 15, 2011
I was listening to an episode of BBC radio's Great Lives series this afternoon. It was on Wittgenstein, perhaps the greatest among 20th century philosophers. Born into an exceptionally wealthy family in Austria, he studied aeronautical engineering. He got fascinated by the mathematics behind the engineering and then by the logic behind the mathematics.
While attending Cambridge, he became a student of Bertrand Russell. One day, at the end of a semester, Wittgenstein approaches Prof. Russell and asks him, "Please tell me if I am a complete idiot. If I am, I will become an aeronautical engineer. Otherwise, I want to be a philosopher." Russell doesn't answer him immediately but asks him to write an essay on some philosophical topic and bring it back.
At the beginning of the next semester, Wittgenstein submits the essay, Russell reads the first sentence and tells him not to become an aeronautical engineer. It speaks volumes of Russell's greatness that he immediately recognizes that this young man is a genius who can carry his torch.
Perhaps, this is not a great story to be told to aerospace engineering students!
Went to the local branch of a private bank with a friend towards noon. He wanted to see how his holdings were holding up in the tumultuous financial climate.
As we walked in, I wondered if I set off the metal detector frame a little louder than usual owing to all the new titanium bolts in my abs.
The receptionist stood at a podium with a name board on it. The name: "CHIPPY". Somehow it evoked a casino feel!
The financial advisers, all young men in their 20s and early 30s were lined behind a long desk. Historically accurate setting!
The word bank comes from the Latin 'banc' which means bench, if I remember correctly. The Jewish money lenders and traders in Italy conducted their business from long benches centuries ago.
Our particular financial adviser seems to have had the prudence to move half of the holdings to relatively risk free debt markets from equities. But soon he tried to convince my friend to buy back some equities.
"This is a great time to buy. Sensex is at 15,000 levels."
Friend looked unconvinced. The young man behind the desk pulled out the great "anchoring" trick of behavioral finance.
"It will soon go to 18,000. It is a great time to get into a short term SIP."
The allure of 18,000 hung in the air.
SIP sounded a lot like the dread SIVs, so I needed clarification.
Me: "SIP? Is that Short-term Investment Portfolio?"
He: "No, Systematic Investment Plan"
Ah, plan sounds good. I don't know if the Indian minds that grew up on sugary sip-ups (freeze pops) are primed to think that SIPs will always go up.
"Market will definitely go up next year. FIIs will come in," pitched in another man from the left end of the desk.
"If we reach 21,000..." before he could anchor in another number, I countered, "What if we reach 12,000?"
Bam! I see your 'anchoring' and raise you a 'loss aversion'!
"No, that won't happen" impressive teamwork from behind the desk.
"Short term investment at this time can give you 8-9% gain next summer"
The same '18,000' wine in new 'percentage gain' bottle!
We depart without making any decision.
I think all Indians are learning well from our Prime Minister the art of delayed indecision.
Credit Suisse expects the Sensex to be in 13,000 area by mid-2012. Morgan Stanley expects Sensex to be at 21,000 by end of 2012. Credit Suisse had also expected, in the same report, that the Rupee to fall to 54-55 against the Dollar by mid-2012. Rupee breached that level today, within a fortnight of that report!
The bank visit was my second trip out of home in more than a month. Exclusively stuck at home means unavoidable TV time. The four or five English movie channels provide good entertainment with their bleeping silences and sanitized subtitles. All shit is crap on Indian tv. In one of the heated argument scenes from Alien Resurrection, the hardass Ellen Ripley's (Sigourney Weaver)outburst receives the subtitle, "Who do I have to please here to get out of this ship?!"
Polite, pretty 'please'! Indeed!
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