Be the change
Wishing you all a prosperous and Happy New Year.
At the same time I would like to apologise my fellow investors to whom I have not returned a phone call, since I do not like to discuss stocks. This is not to say I don’t have an open mind but I like to build conviction in isolation.
My expectation from the likes of other mature investors who spend more than couple of hours a day is to promote a culture of partnerships in India. I expect the likes of @kudva, @rahul and others even more Senior in investing field than myself, and those who have been applying their mind and energy for years to open your own partnerships over coming months, years.
Other alternative discussed in Lynch’s book also is investment clubs where everyone pools money and there isn’t any controlling partner. I for one am not a good candidate for the latter.
All PMS and Mutual Funds in India are charging 1 – 2 % fixed Management Fees. You would be doing a great service to retail investors, consequently society by wiping out intermediate charges. At the moment Management Fees (same as wholesalers charges from farm produce to retail shops) is charged irrespective of fact, whether their funds grew or shrunk.
No wonder Bufett has this bet http://www.longbets.org/362
2% extra compounding can make a huge difference in long term returns. Its an idea whose time has come.
Next logical institution / business idea
I am not aware of similar body in the West but once we do have a few number of partnerships working on model of no fixed Management Fees, either someone who is reading this or we could ourselves over the coming years form an institution of Association of Independent Partners thus giving you a corporate form, probably buy a joint insurance and have wider reach. My motto is to save retail investors from 2% cut of fixed management fees in PMS and Mutual Funds.
While I have no plans to relocate to India for the next couple of years to actively pursue this change, I hope to see atleast many more partnerships from you. I believe it has a bright future, Walmart’s success and Retail sector’s potential in India is for similar reasons and we are yet to see a revolution in financial sector by cutting off middlemen.