There is an almost eerie continuity in policy thinking, even a year after Narendra Modi became the prime minister on the promise of radical change. But India seeks friendship with an unrepentant Pakistan, it aims to block a sensible WTO (World Trade Organisation) deal, it still loves the public sector (no privatisation). Of course, the new government, too, is now afflicted with corruption and indecision which ultimately derailed the UPA (United Progressive Alliance). It is disappointing that the NDA (National Democratic Alliance) doesn’t break out of the policy framework of the UPA.
Political parties come and go from government but India’s babus retain their power and influence in the system. For now, it seems like the Modi government is being haunted by the ghost of Sir Humphrey Appleby, the (fictional) cabinet secretary of the United Kingdom who famously said, “It is my job to protect the Prime Minister from the great tide of ‘irrelevant’ information that beats against the walls of 10 Downing Street everyday.” It seems now that the wave of fresh, new ideas—there are plenty around— is being blocked from reaching 7 Race Course Road. Also Mr Modi’s silence on Sushma, Raje, et al, is baffling.
The babus won’t miss an opportunity to shackle the political masters. It is not possible to convert the Indian system into a US-style system. Yet, it isn’t too late. There were times in the 1970s (Indira Gandhi), 1980s and 1990s, when India’s economic policy establishment was drawn from outside. That is what enabled senior officers like Manmohan Singh, Bimal Jalan, Montek Singh Ahluwalia and several others to enter government (in its political establishment) and bring new ideas and implement decisive policy change. It is up to the prime minister and his key ministers to prevent themselves from being led up a pre-determined path.
Isn’t NDA-2 really UPA-3?
Subrahmanian SH, by email
Why was the Street Beat Section Dropped?
I am sorry to read in the 9th July issue of Moneylife that you have dropped the Street Beat section as well as the Model Portfolio section. In fact, about 50%-60% of my current portfolio (of about 25 scrips in equities) is made up of stocks recommended in these two sections of the magazine. The reasons given by the editor for dropping these sections are not convincing. He has mentioned that Moneylife is finding it difficult to find new recommendations from micro- and small-cap stocks as they have become expensive. There are more than 3,000 regularly traded scrips in the Indian market and, surely, there may be quite a few undervalued stocks among these. Moneylife’s excellent research team is ably equipped to dig into these and unearth gems like it has always done.
The other reason cited is overlap between Street Beat and MSSN Stockletters. As a reader of the magazine, and a recipient of Stockletters (I am an MSSN member), I have never faced any such dilemma. In fact, in the Moneylife long-term portfolio, there are about 50 stocks. Aren’t the readers spoilt for choice here itself? Moneylife is only offering them an even wider choice by recommending certain options in Stockletters and certain others in the magazine.
Maybe the real reason is your anxiety to offer some sort of exclusivity for Stockletter recipients, by denying the Street Beat and Model Portfolio recommendations to Moneylife readers. If that be the case, I feel let down by Moneylife which, until now, I have held in high esteem. Principles, and not profit alone, have been Moneylife’s guiding spirit: hope you will not stray from that path.
a) If the research team does not find any good stock for the Street Beat section, in that issue it can review one of the earlier recommended scrips and give its advice on whether to keep, hold, or buy more of that stock.
b) In case the research team does not find any good scrip among the small-/micro-cap stocks, it can review a mid-/large-cap stocks in Moneylife’s unique style which is undeniably one of the best.
The editor has mentioned about Street Beat offering distinctive choice to the readers. Very true! The magazine’s distinctiveness derives a lot from this section. So, please continue to be different. Do not yield to commercialism.
I hope the editor will take my request seriously, and re-consider the decision to stop Street Beat and Model Portfolio sections. Do not drop the Street Beat section, at any cost.
BV Krishnan, online comment
We are glad to know that you have benefited from these sections. You are unconvinced about the fact that we are not getting undervalued scrips to recommend. This is because you are not aware of the difficulty our rigorous research is facing, while identifying good-quality scrips, whose valuations are also low—even though you admit to have benefited from the rigorous research.
The reason Street Beat has beaten almost all mutual funds hollow is because, over the past three years, it had the advantage of valuation, not just selection. Everybody knows which are the good-quality stocks. It is buying them when they are undervalued that makes all the difference to the outstanding results we have secured for our readers. That advantage is now gone.
While there are 3,000 regularly traded scrips in the Indian stock market, why do just around 40 stocks make up 50% of the mutual fund portfolios? Because most of them are garbage.
While you may be an accomplished investor, and know exactly what to do with the Street Beat stocks and Stockletters stocks, we have been unable to guide readers, who have asked us how to choose from the 26 stocks of Street Beat every year and 20-22 stocks in each of the Stockletters.
What you have identified as the ‘real reason’ (yes, you are wrong)—our anxiety to offer some sort of exclusivity for Stockletter recipients—is wide off the mark and uncalled for. In effect, you are accusing us of mis-statements. It is sad that just because you are not able to buy a few extra stocks, we go down in your ‘high esteem’. Indeed, would you have 26 new stocks over the next one year from Street Beat? Buying stocks is not like buying vegetables. We don’t look for new ones daily. By the way, while we thank you for your subscription, we hardly make any profits. So much for ‘commercialism’! But then, you may not believe that either. One last point. SEBI has now come up with regulations that prohibit anybody and everybody from recommending stocks. We will fall foul of this rule, if we continue to ‘recommend’ stocks.
Through your lengthy response, you seem to have ignored the most important change. Earlier, the stocks section was four pages. It was eight pages in the previous issue. We are sorry if we have disappointed you by offering more!
Short on Governance?
This is with regard to “Stop One-sided Contracts of E-commerce companies” by Sucheta Dalal. E-commerce has ignored consumer protection. The government has been a party to it. FDI (foreign direct investment) is permitted under some legal loopholes. Flipkart, Uber, etc, are all surviving with venture capital money and gyp the consumer with no warranties. I welcome this trade, but the consumer must have recourse. This government, unfortunately, is short on governance.
Government Can Retrieve the Situation
This is with regard to “Housing for All: Slogan vs Action” by Sucheta Dalal. Even now, the government can retrieve the situation, if it is serious. The government has to acquire land, adopt high-class town planning, construct quality houses through contracts awarded by transparent bidding, ensure efficient monitoring, and sell flats at low prices. Safeguards can always be built in, to avoid unscrupulous trade. But governments always throw figures, without any feasibility studies, and corruption and lack of commitment remain the government’s hallmarks. Banks have allowed builders to borrow incessantly and have no will to discipline the errant builders.
Rajendra M Ganatra
A Small Healthy Step
This is with regard to “Empowerment through Feminine Hygiene” by N Madhavan. This is a potentially powerful idea for implementation, especially in India. It can be a small healthy step that can reduce medical costs substantially.