Amazing what the 2003-2007 boom in the markets have done to people!

Many people have taken their income from 2001-2007 and are extrapolating that growth over the next 20 years, so some of them are hoping to retire on a salary of Rs. 3 crores a year – at least that is what the excel sheet is telling them.

People who have done 1 or 2 transactions in real estate in one city suddenly know how to extrapolate real estate prices, rents, inflation for the next 10 years and believe in that excel sheet.

People who have bought and sold a few shares can now suddenly tell you why Tata Motors, L&T, India Cement, Hindustan Oil, are great buys and your answer to alpha. Of course they all have their own theories or they are now armed with charts.

So suddenly you have experts on economic trends, real estate, equities, etc. and some of them are clearly of the belief ‘this has happened to me, so it will happen to everybody and everytime’ . This is just a version of cut n paste.

Unfortunately when you tell them that it may / may not happen, they can quote the scriptures – like:

– “when you buy the shares of a good company it does not matter if you pay a slightly higher price

– in the long run equities give better return than debt

-greater the risk, greater the return

– Just as you said I am averaging. I have been buying 10 shares of Hindalco every month. Now I am in a loss of Rs. 5000, but that I can afford. I have been averaging for the past 23 months.”

OMG…I refuse to take responsibility for the understanding of the customers / readers of this website. I can only write. How you read, how you interpret, is your call please…..please…