Sanjay Dutt to surrender on Thursday, jail gets letter about life threat
Dutt’s lawyer Subhash Yadav submitted before the special TADA court that the 53-year-old actor wanted to withdraw his application filed yesterday seeking leave to surrender before Yerwada jail in Pune instead of giving himself up in the TADA court in Mumbai
Bollywood actor Sanjay Dutt today told a Mumbai court that he will surrender before it on Thursday to undergo the prison term in the 1993 Mumbai blasts case, even as a jail official said he would be provided adequate security in the wake of an anonymous letter alleging threat to his life.
Dutt’s lawyer Subhash Yadav submitted before the special TADA court that the 53-year-old actor wanted to withdraw his application filed yesterday seeking leave to surrender before Yerwada jail in Pune instead of giving himself up in the TADA court in Mumbai.
However, Yadav did not assign any reason for withdrawing the application. The court also did not ask him why he was not pressing for his plea.
As the court allowed Dutt to withdraw the application, the lawyer said the actor would surrender on Thursday.
Dutt had made an oral plea in the same court earlier about surrendering before Yerwada prison authorities but it was turned down by the designated TADA judge. Thereafter, he moved a written application which he abruptly withdrew today.
Meanwhile, IGP (Prisons) Vinod Lokhande said Arthur Road Central Jail authorities in Mumbai had received an anonymous letter alleging threat to Dutt’s life. However, he did not divulge details.
“We have taken cognisance of the letter received three days ago and shall be providing adequate security to Sanjay Dutt,” said a top officer of the Arthur Road jail.
It is not clear in which jail Dutt would be lodged but authorities said he might be taken initially to Arthur Road Jail and then shifted to Yerwada prison, police sources said.
Normally, as per the practice, undertrials are kept at Arthur Road jail while convicts are lodged in Yerwada prison and other jails in Maharashtra, the sources said.
Dutt has been convicted under the Arms Act and sentenced to a five-year jail term. He has already undergone imprisonment for one-and-a-half-years.
The Supreme Court had yesterday refused to grant more time to him to surrender to undergo remaining three-and-a- half-year jail term. On May 10, the apex court had dismissed Dutt's plea seeking review of its judgement on his conviction and five-year jail term.
Dutt was earlier granted four weeks more time to surrender to undergo the remaining part of his jail term.
The very first step to smart investment is to understand various investment classes, the risks that they carry and how to decide what suits your needs, income level and your personal risk profile. Debashis Basu, in a session titled “Invest Smartly” explained these concepts and how to use various investment classes successfully over different time horizons
The best investment lesson is to be cautious and avoid making mistakes and losing capital. However, too many investors are lured by the image of big financial brands or glib talk of sales staff hawking their products. In order to get to there, Debashis Basu, editor and publisher of Moneylife magazine started by explaining various asset classes and the risks that they carry. These included stocks, mutual funds, gold and realty. He explained the difference between investment products and speculative investments and then took the audience through a clear understanding of the impact of inflation on their savings and how it erodes the value of their nest egg.
Planning one’s long term investment requires you to select smartly and find products that will give positive returns, adjusted for inflation. In order to do that, investors need to understand the best and worst returns that a chosen asset class has given over an extended period of time. This requires a little work to obtain historical date spanning over a decade or access to the kind of analysis that is done at Moneylife. For instance, Mr Basu pointed out that capital markets and gold are both investment classes where price data is available for an extended period; on the other hand, there is no proper data available for the realty sector and the little that is collated by housing institutions already shows glaring inaccuracies. This makes the assessment of risk very difficult. Mr Basu said that one you are clear about how much you can possibly expect from a certain asset class, it was important to work out a mix of investment that would be safe, but beat inflation and give you a positive return.
A key to smart investment is to “start early and save as much as possible” said Mr Basu, explaining how the magic of compounding helps multiply the savings and wealth for early birds who have the benefit of financial literacy.
On gold, Mr Basu said that the metal is a precious but speculative investment and it cannot be valued since it does not pay interest or dividend. The price of gold is only derived by what others are willing to pay for it on a given day. If you buy gold betting on guaranteed returns based on previous price trends, you may be in for a nasty surprise. This has been Moneylife’s stand for over three years and the recent crash in gold prices demonstrated the risk it carries.
Mr Basu spoke at length about real estate and how easy it was to extrapolate the price experience in a certain area to the entire country. He also pointed out that all talk about realty returns were based on anecdotes rather than hard data, which is simply not available in a uniform, standardised form over a long period. Mr Basu said that people must differentiate between a house that one buys to live in (which can also appreciate significantly) and realty as an investment, which will be bought and sold. Realty carries high transaction costs in terms of stamp duty, transfer charges and taxes. This leads to significant erosion in returns. And most important of all, there is no regulator.
On insurance, Mr Basu said, it should be used primarily for its main purpose—to guard against risk. He warned against mixing investment with insurance through products like unit linked insurance plans (ULIPs). These investments involve huge costs and there is no long-term data readily available on the fund management performance. However, there are better investment products available at lower costs that can be used for investment.
Stocks and equity funds are the best assets available for creating long-term wealth. The best way to invest in stocks is through equity funds. Stocks and mutual funds are risky. However, he cautioned the participants on the hoards of different funds available and how one should pick and choose the right fund. One should focus on defined goals and invest in limited products. As these investments are volatile one should invest systematically to use the volatility to his/her benefit.
Before ending the session Mr Basu gave the participants a list of investment products which one should avoid as these products require deep research and understanding. This was followed by an interactive question and answer session.
In the first of a three-part series we saw how FIIs investment crests near market peaks. In this second part we look at how FIIs, like retail investors, chase prices up and down
We pointed our yesterday that the maximum investments by FIIs (foreign institutional investors) came when the index levels were near their peaks. In most cases, after the FIIs have rushed in with massive investments, the subsequent performance of indices has been below average. The peak of 2010 November has still not been surpassed while the two months prior to that witnessed the largest two-month burst of FII investment ever. The large investment after the market index has run up a lot is a sign of what is called performance-chasing or momentum-chasing.
This happens after the market has turned around and run up against the prevailing wisdom. Investors who were out of the market suddenly feel left out. Institutional investors have a bigger problem. They are held accountable for performance vis-à-vis a popular market index like the Sensex or Nifty. When these indices take off, they feel compelled to chase these indices so that their performance does not suffer. This is why not only have the largest monthly FII investments have been timed with medium-term market peaks, but many large monthly investments have also come well after the market bottoms, trying to play catch up with the rally. The opposite of momentum-chasing happens when the market is sliding. At those times, momentum-chasing takes the form of selling.
Here is some data of both kinds. In October 2008, it seemed that the world would come to an end, as the global financial crisis reached its climax. Investors were shell-shocked at the ferocity with which the market had declined in a few months. For months thereafter the aftershocks were visible. FIIs were selling almost every month, quite understandably, because they were unsure of the future. However, almost all global markets made a low in early March 2009 and embarked on a massive rally. FIIs, who like retail investors, avidly watch prices (formed by millions of others) to decide what they should be doing, were net sellers even in March 2009. By April the Sensex was over 11,400, from over 9,700 in March. Did they see a train pulling out of the station?
In April 2009, FIIs invested Rs5,560 crore, an average month, by their normal standards. In the third week of May, the Congress-led government came to power, which made the Sensex shoot up to over 14,600 by the end of May. The train seemed to be certainly leaving the station now and the FIIs couldn’t miss it at any cost. They invested almost Rs14,000 crore that month—well after the Sensex was up from March 2009 lows and exactly timed with the sudden market momentum. In September 2009, as the market trended higher, they invested over Rs13,3000 crore. But chasing momentum irrespective of valuation levels can often be disastrous. The very next month of this huge investment, the Sensex promptly fell below 16,000.
Evidence of performance- or momentum-chasing is pervasive. In August 2011, the Sensex was around 18,200 when the Eurozone crisis erupted. The market fell and the FIIs turned sellers. As the market headed lower they were not buying. They were selling in a market that was already low. In November and December 2011 when the index was at around 16,000 FIIs were net sellers after turning marginal buyers in October. But when the market picked up in January 2012, the upward shift in momentum had FIIs scrambling to be net buyers, leading to the mother of performance chasing—the market peak in February 2012 when they put in their highest monthly investment ever—Rs23,236 crore. By May 2012, when the Sensex was down below 16,000, FIIs were selling!
The best examples of momentum-chasing can be found in a rising market. When the market declines, FIIs usually stop buying. When it hits 52-week or multi-year lows, they sell. This is what happened in May 2010. As the Sensex headed towards 16,000 from over 17,500 the previous month, FIIs pressed net sales of a huge Rs12,071 crore worth of stocks.
Retail investors jump in at the peak, buy when the market has run up and sell when the market has fallen a lot. FIIs seem to be prey to a similar behavioural pattern. They also do one other thing that retail investors do—panic selling during a severe market decline. We will look at that in the third and last instalment of this series.
Also read: Do FIIs buy high and sell low – I? Maximum buying at peak index levels