509. To Buy or Sell?

"Sir! We bought the shares of 'Alpha Delta' before three years. We bought the shares at 65 rupees per share. The price has fallen to 52 rupees now. They say the price will fall still further. Every one says that it is better to sell the shares now" said Vivek, the Personal Secretary of industrialist Ramanathan.

"Who is 'every one?'" asked Ramanathan.

"The financial experts who give investment advice on television channels."

"Ok. I will think and decide."

After a week, Vivek told Ramanathan, "Sir! Last week, I told you about selling the shares of 'Alpha Delta.' Now, the price has fallen further. Today, it has opened at 48 rupees in the exchange."

"It is good that you reminded me of this. Buy 1000 more shares, when the price comes to 45 rupees" said Ramanathan.

"Sir! It will be risky. They say the price will go further down."

"Who? The investment advisors who appear in the TV channels?"

"Our Finance Manager is also of the same opinion."

Ramanathan chuckled and said, "If it is a matter relating to our firm's finances, I will go by the advice of our Finance Manager. For my personal investments, I have another advisor. As far as stock market investments are concerned, I can only go by his advice."

"Yes, sir. You have told me about him. But, when his opinion is divergent from that of most of the other experts, will it be wise to go by his advice?" 

"Vivek! I understand your concerns. Your question whether my advisor's opinion can be relied upon, when it differs from that of other experts is quite reasonable. But, you know about me. Before I select anyone, I will make a thorough assessment about that person. I have selected you also only that way! 

"Investment advice is an art. Apart from a thorough knowledge about Finance, the Economy and the market, giving such advice involves incisive analysis and some instinct or intuition too. Not every one can excel in this expertise. Most of the investment advisors give their advice based on the market conditions and price movements. Their advice may go wrong on many occasions. 

"But, my advisor is a professional. He gives his advice after making a deep study of  the performance of a company, the country's economy and the long term market movements. He will not be perturbed by short term price movements in the market. 

"I selected him as my advisor only after studying his approach and his track record. In the past also, his views about some shares have been at divergence with that of many other people. But on those occasions, he was proved right. 

"Once I have selected a person as my advisor, after making a thorough assessment of him, it is only proper that I act as per his advice. It is possible that his advice may turn out to be wrong this time. But, this is likely to happen with all kinds of experts. I am going to strictly follow his advice. So, once the price comes down to 45 rupees, buy 1000 shares more" said Ramanathan.

Thirukkural
Section 2

Materialism

Chapter 51
Assess Before Accepting

Verse 509 (in Tamil):

thERaRka yAraiyum thErAdhu thErndha pin
thERuga thERum poruL

Meaning:

Don't choose anyone without assessment; once chosen,

trust the person to deliver on the assigned tasks.

(This is the English version of the Tamil story 'viRpadhA vAnguvadhA?' by the same author.)

Verse 510 (Soon)
Verse 508