Man, you’re such a phony!

You are such a phony, Uday!!!

What was all that talk about never owning a government company scrip, because of the inherent inefficiency in the way the government functions?

And then you go ahead and buy into a mutual fund that will only invest in PSUs! A mutual fund! One thought you were not getting into mutual funds at all, because on market highs they didn’t book proper profits owing to public investment demand, and because on market lows they didn’t invest all they had owing to public redemption requests.

Hold it right there, Mr. Holden Caulfield! Before calling me a phony, let me just point out to you the rationale here. Every investment has a rationale, okay, remember that.

Now listen carefully. Here the rationale is simple. India is opening up its Navratnas and extended Ratnas to the public for purchase for the first time. So the government is going to hype them up, to get a good price for them.

Then, 18 of such extended “gems” are practically debt free. They quote at a lower valuation than the market average currently. They pay out a huge dividend. They are going to be let upon the public soon. I want a piece of the pie.

After this disinvestment story is over, I will let go off this investment, mind you. I’m not going to be holding on to it for longer than 5 years. So let a fund manager have the headache of when to book profits. That’s why a mutual fund, do you understand? And that’s why the dividend payout option.

So I’m not such a phony after all, right? I mean this whole PSU mutual fund thing is a black-box approach. The fund manager does his thing during the disinvestment process, and hands me out about 3 or 4 dividend payouts and then the principal in 5 years. End of story.

I can see you nodding in comprehension, Holden, thanks for the dialogue.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s