A bear and bull story

It took Sandeep almost half of his service life to pay off all the loans he had taken to obtain a decent flat in the city and a car. And then he started dreaming about enjoying the fruits of his toil – a steady job, a decent bank balance, one that was large enough to see through any expense spikes that come with unfailing regularity, a clutch of insurance policies for his family and himself – he had them all.

And then they called. Two relationship managers from the two banks that he did business with. The first one was a very attractive lady, the other, a suave gentleman. They talked about how the raging inflation would eat up the gain through interest from bank deposits, and the need to invest in the stock market. The stock market, they said, made people rich much faster than the damage from inflation. The best way was to buy unit-linked insurance policies, whose returns would be manifold and tax-free. They sent large documents that promised to place the pot of gold at the end of the rainbow right in Sandeep’s hands…….

Sandeep took his advice from the lady and invested in mutual funds and insurance. In six months she became a vice-president at her bank. The suave gentleman at the other bank quit the job and joined a theatre group, never to be heard of again.

One year later, when the first reports came in, he discovered that his investments were doing extremely well, but given the deductions by the bank, the total fund value was just about the same. He called up the bank and wanted to withdraw. The vice president explained that he was being foolish, and introduced him to two new animals – the bear and the bull. “The bull is running,” she said, “wait for it to stop”. Sandeep stopped, and waited for the bull.

That winter the stock market plummeted. He called up the vice president. “It is just a market correction”, she said. The bull was apparently taking a breather. Then she got married and quit the bank, before the bull could start running again.

A month later, suave gentleman # 2 replaced her. He requested for a two hour meeting. Sandeep met him at the bank and was treated to coffee and cakes, while he demonstrated a new software tool that told you exactly how well you would live thirty years on. Fortune–telling in a new avatar. He asked Sandeep some questions, and entered the data. Poom !!! The software told him that he needed a corpus of some thirty million in fifteen years’ time to even begin to emulate his current life-style. And then G2 said, “Let me build that corpus for you”.

Sandeep had already gone down that road once. He was wary. He explained how his funds had not grown and blamed the bank. G2 flashed a knowing smile and said, “Sir, all investment decisions are your own, and you need to read documents carefully”. He showed him one document where it was written: “Insurance policies are a matter of solicitation. Unit linked insurance policies are subject to market risks.” Just like that. In miniature font.

“But please do not worry Sir”, said G2, “I will set things right.” He fished out a large document and said that it needed to be filled. Government regulations. It contained all sorts of personal questions about income and expenditure patterns. The bank had added some more. What is your favourite colour ? What is your favourite flower ? Sandeep asked why they needed to know. G2 explained that the document was called KYC, or “know your customer”. Then why those personal questions, he persisted. G2 explained that some economist somewhere in the world (or perhaps from Andromeda galaxy) had deduced that people’s lifestyle was based on their preferences and therefore influenced their investment decisions.

The KYC had him wrapped in brown paper. Like sliced bread. It helped the bank reach to the conclusion that Sandeep would need thirty million in his twilight years to remain attached to his favourite colour and flower.

The discussion moved back to investing and stock market behaviour. He proceeded to explain that FDIs go to China only while FIIs come to India. Which is why the Indian bulls take a breather periodically. Else they would have been running and foaming at the mouth. Forever. The global recession notwithstanding. One way to circumvent the global recession was to invest in infrastructure bonds. The US of A had done just that to get out of the 1930’s depression. 

Sandeep was convinced. The rainbow would get brighter, and therefore, nearer. He invested in infrastructure bonds, and a new ULIP. G2 helped him out of a couple of past investments and re-directed the funds to the new ones.

And then he too, became a vice president at the bank.

By and by the bulls ran out of steam and foam. The bears took over. They first caught his investments in a bear-hug. And then locked their jaws on them. And then started floating to the ground with their feet up in the air. Like autumn leaves.

Last winter they were actually planning to go underground to hibernate. The cock-and-bull stories of his childhood came back to haunt Sandeep with the cock replaced.

He called up the bank. VP G2 had quit his job and was due to join another investment bank. “Why do you need to pull out the money, Sir ?” he asked. “You do not need it so long as you are working”, he explained.

There was only one colour in Sandeep’s rainbow. Even his evening peg of Scotch had that colour. Red.

The other evening he received another phone call from his bank. Someone had replaced G2 and was extremely worried about Sandeep’s investments – they had tanked and needed to be re-invested elsewhere. And he promised to take care of it.

Naughty.

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