Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Do we need millions of Warren Buffetts ?

with 9 comments

In a business book I read recently, Wisdom of the Bees (What the Hive Can Teach Business about Leadership, Efficiency and Growth – http://www.amazon.com/The-Wisdom-Bees-Leadership-Efficiency/dp/159184326X), what I found most fascinating was
honey bees’ dance used for communicating distance, quality, direction of flowers/pollen. Karl von Frisch won a Nobel prize for deciphering this dance.

http://en.wikipedia.org/wiki/Karl_von_Frisch

It may sound astounding, a Nobel prize for this. Now compare a Fund that manages 100 Billion$ worth of assets. Other than the culture, respect and harmony that
exists in the company, the sum total value for society for sloshing money to and fro is absolutely Zero. In my opinion Funds contribution to society is less than contribution from a single genuine teacher who moulds the minds of others. Or even a researcher who give back a newer, disease resistant species of potato back to the world.

Thus, in a nutshell the value that I, CNBC, all fund managers are providing to society is actually Negative. Except for energy of money and what direction one could channel it in. It would be too presumptuous to presume that “we are providing risk capital to budding enterpreneurs” argument. Its vain and self serving. “Apne man ko behlaney ka khayaal acha hai”.

US is paying for this crime of virtual and non-existent wealth. Also, the world does not need 10 million Warren Buffetts / 10 million Curators of Museums of companies. Therefore, at best trading in stocks is source of income by eating into other persons granary as Munger laments, and at worst a gambling addiction.
What I am suggesting is that Warren Buffett as each one of us wants to be has Zero value to society, imagine 30 crore Warren Buffetts in India sitting at home holding share certificates. Real hero does something else and creates another type of wealth via financial wealth. That is my understanding.

Written by amitdipsite

September 9, 2012 at 9:34 pm

Posted in Uncategorized

9 Responses

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  1. I agree this speculating business , shouldn't increase manifold , we require skilled professionals in lot of areas to create a better society.
    On a side note, what r the ways u think people(investors) like us can create some value…
    some possible ways that come to mind are ,as a long term investor we have more flexibility time-wise in getting involved in certain causes…

    Aditya

    September 10, 2012 at 5:16 am

  2. http://beta.bseindia.com/corporates/anndet.aspx?newsid=fdf4efbc-a50e-4b8f-b881-03c14a74ea5e

    22nd branch on target! With Madurai as its HQ they are connecting cities in all possible directions! We have to see how the story unfolds for the stock to move up much higher!

    vel

    September 10, 2012 at 6:47 am

  3. My Father could not understand Share market, n even do not want to. Same is from Investing purpose, He rather happy to sow seeds in farm, do some WORK/Task kind of business or give some money to other so they can do business..These all produce something!

    I agree with you, Amit. Our IITisan writing code/Algo for Trading…What a waste of Talent, energy and money in USA!

    Rahul Paliwal

    September 10, 2012 at 8:36 am

  4. That is going to end up being Chakrahvyuh for others.

    ————————————————

    Amit Arora

    September 10, 2012 at 8:43 am

  5. hi amit,
    you recently said you had 10 microcaps on your radar (few of them barely having any liquidity). Could you share a few of those ideas.

    Ankit Solanki

    September 10, 2012 at 9:40 am

  6. hey what did you mean by your statement “Real hero does something else and creates another type of wealth via financial wealth”?

    vinod

    September 10, 2012 at 6:01 pm

  7. I understand your stand on this subject..But it is a profession(allocating capital) like anything else, would you agree? I agree that Money management industry as a whole don't provide excess value for the clients. It is true in almost all profession where labor is involved(so the costs). The incentive for this profession is odd compared to others. So I think you may want to attack on the incentive part for this profession than the profession itself.. My few cents anyway!

    Gopinath

    October 4, 2012 at 4:24 pm

  8. Dear Gopinath

    I appreciate your views, but please note the title of the post. If Buffett can manage 50 Billion $ single handedly then we need 20 persons to manage funds in Indian economy. Rest is excess cost paid.

    Regards

    Amit Arora

    October 5, 2012 at 3:25 am

  9. Yes your right amit

    Md Jamil

    October 6, 2012 at 3:13 pm


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