Sensex record high: When the bull met an old-time investor

bullfightingVivek Kaul  

So your horns are shining,” he said.
“Yes,” said the bull “with the BSE Sensex at an all time high and all that.”
“You must be really happy today?”
“Yes. Its taken me nearly six years to get there,” replied the bull. “The last time the Sensex reached these levels was in early January 2008.”
“Yes, I know. Its been a tough ride.”
“But why are you so sad?” asked the bull. “I don’t see any champagne bottles lying around.”
“You know the first time I invested in the stock market was in late 1991.”
“Ah, seems like you are old timer,” said the bull. “Your white hair should have told me that.”
“And I made a few good gains. Got my friends and family to invest as well.”
“Yes, yes. That’s a good thing to do. If there is a good deal going, no harm in friends and family also benefiting a little.”
“Then on April 23, 1992, it all came crashing.”
“Oh, what happened?” asked the bull.
Arre Harshad bhai‘s game came to an end.”
“Harshad who?”
“Ah. You are a bull. How come you have never heard of him?” he asked.
“So tell me then.”
“Harshad Mehta.”
“Ah. Now I remember. My father used to tell me about him. He was the Big Bull among us small bulls.”
“Yes. That’s what they called him when he drove around in his Lexus. He was the Amitabh Bachchan of stock brokers.”
“Oh, really?” asked the bull.
“But then his luck ran out. All he had been doing was siphoning off money from the banking system and investing it into the stock market.”
“And that drove up the market?”
“It sure did. The system finally caught up with him. And a huge number of cases were filed against him. He died on December 31, 2001, in a jail in Thane. At that time a decision had been made in only in one of the many cases that had been filed against him.”
“You must have lost a lot of money?”
“Yes, I did. But then I told myself, only if I had got out at the right time I would have made a lot of money.”
“Yes, that is the trick,” said the bull.
“And then in 1994, a lot of new companies started hitting the stock market with their initial public offerings (IPOs). And my brother-in-law had become a broker by then.”
“That’s cool.”
“And he asked me to put some money in these companies and I did.”
“You must have surely made money there. IPOs are a sure shot way of making money,” said the bull.
“Actually I did not. These companies simply took the money and disappeared. I guess no one ever made a proper estimate of how much money was looted. But it must have run into thousands of crores,” he said.
“Oh, so you have been bitten by the stock market, twice.”
“Then I took a break from the stock market and decided to go back to the good old fixed deposit.”
“But fixed deposits are boring,” jeered the bull.
“Oh, sure they are,” he replied. “But they ensure safety of capital.”
“And you never invested in the stock market after that?”
“Well I held out till 2000.”
“Then what happened?”
“I saw everyone around me making money in what came to be known as K-10 stocks.”
“Yes, I have heard of K-10,” said the bull. “Some of those stocks are still around.”
“So K-10 stocks were stocks which were a favourite with the broker Ketan Mehta.”
“Yes, another Big Bull.”
“These included stocks were Aftek Infosys, DSQ Software, Global Telesystems (GTL), Himachal Futuristic Communiations Ltd (HFCL), Ranbaxy Labs, SSI, Silverline, Satyam Computers, Pentamedia Graphics and Zee Telefilms.”
“Some of these names are still around.”
“Yes, they are. Also, around the same time the dotcom boom was also on. Hence, the price of information technology stocks was also going through the roof.”
“Yes, I remember that. I was just starting my innings in the stock market then,” said the bull.
“So someone told me there is this company called Infosys, you should invest in that.”
“And you did?”
“Yes I did. And this time I decided to do some research.”
“Yes, research is a must before investing in the stock market,” said the bull, making another motherhood statement.
“The stock price had shot up from around Rs 2000 (Rs 10 paid up) in January 1999 to Rs 12,000 (Rs 5 paid up) in March 2000.”
“Massive returns.”
“Yes. I knew that the stock was overpriced.”
“But you still bought?”
“Yes. Well I thought I was smarter than the others and would be able to find a greater fool to unload my shares on.”
“And that did not happen?” asked the bull.
“No, it did not. And I was stuck with huge positions in IT stocks. In fact, I found a beautiful explanation of how big a fool I was in a book called Stocks to Riches written by stock broker Paragh Parikh. Parikh wrote “In the financial year 2000, Infosys reported revenues of Rs 882 crore. If we were to compound this figure at 85% annually for 10 years (as some people believed the growth would continue), then in 2010, Infosys would report revenues of a staggering Rs 4,14,176 crore. At that time, assuming a market capitalisation of 100 times revenues (similar to what Infosys was quoting at its peak), it would put Infosys’ value at $9.2 trillion. The GDP of the US was around the same figure!””
“Oh, freak.”
“That was how stupid the Infosys trade was at that point of time.”
“The system also caught up with Ketan 
bhai. He was also siphoning off money from banks and investing it into the stock market. So after this I decided enough is enough, and retired from the stock market. I placed all my money in fixed deposits, post office savings schemes and some of it went into real estate.”
“And you lived happily ever after?” asked the bull.
“Only bulls can do that,” he replied.
“Well the market started to rally again sometime in 2003. But I managed to resist for a few years. Then one day, my brother in law, who had become an insurance agent by then, came to me.”
“And then?”
“He told me, 
ke boss, forget stock market, too much risk. You should try this new product called unit linked insurance plan (Ulip).”
“And you invested?”
“Not immediately. I resisted for a while. But finally I took the plunge in January 2008.”
“Ah, not the best time to invest.”
“But now with the Sensex crossing its previous all time high, your investment must be in positive territory again.”
“Nah. It took me two years to figure out the Ulip structure, it was so complicated. My brother in law was paid a huge commission for selling me the Ulip. That commission was recovered from me as a premium allocation charge. Then there were other charges like policy administration charge, and what not. So my investment is still in the red.. Only insurance agents made money of Ulips.”
“That’s sad,” said the bull.
“Yes, it is,” he replied. “Hopefully, I should be able to stay away from the market from now on.”
“But who are you?”
“Oh, I didn’t tell you,” he replied. “I am the Indian retail investor who lives in perpetual hope. 
Wo subah kabhi to aayegi.

This article originally appeared on on November 1, 2013

(Vivek Kaul is a retail investor who has been religiously continuing with his SIPs since 2006 in the hope that he will make money one day. He tweets @kaul_vivek) 


About vivekkaul
Vivek Kaul is a writer who has worked at senior positions with the Daily News and Analysis(DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System , the latest book in the trilogy has just been published. The first two books in the trilogy were published in November 2013 and July 2014 respectively. Both the books were bestsellers on and Currently he works as an economic commentator and writes regular columns for He is also the India editor of The Daily Reckoning newsletter published by His writing has appeared across various other publications in India. These include The Times of India, Business Standard,Business Today, Business World, The Hindu, The Hindu Business Line, Indian Management, The Asian Age, Deccan Chronicle, Forbes India, Mutual Fund Insight, The Free Press Journal,,, Business World, Huffington Post and Wealth Insight. In the past he has also been a regular columnist for He has lectured at IIM Bangalore, IIM Indore, TA PAI Institute of Management and the Alliance University (Bangalore). He has also taught a course titled Indian Economy to the PGPMX batch of IIM Indore. His areas of interest are the intersection between politics and economics, the international financial crisis, personal finance, marketing and branding, and anything to do with cinema and music. He can be reached at

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