The Pav Bhaji Analogy
The Pav Bhaji Analogy3 mins 394 3 mins 394
Eating Pav Bhaji changed forever when I was having the same one day and was going through a discussion Future prospects of Stock Market.
I realized that making our favorite Pav Bhaji and the Stock Market had a lot in common.
They both have various variables affecting the tasty returns that one will get .
First of all one brings the proposal of making the pav bhaji , discusses the same in the family and starts the preparations for the same , thereby issuing a request for the required veggies. Similarly the company’s board discusses the proposal to raise money from the public , discusses it with bankers and financial institutions and thus starts the preparations for raising money from the public , thereby sending a request to the SEBI for the required approvals.
As we put the oil in the utensils to fry the vegetables we start the dicing of the vegetables too and the preparations are on the way. As in the company scenario , IPO is floated in the market and the company also starts the promotion for the same.
Company fundamentals can be compared to the Pav Bhaji Masala that we put in. We know it is the most essential ingredient and that will spice things up. But what went into the making of it is a mystery. We only know that much whatever is written on the packet of the masala mix similar to what companies are disclosing in the annual reports and disclosures. What they tell is actually what we know and what went into the making of the company’s reports is nothing more than a magician’s code which is not revealed.
The smell which emanates from the dish is what is the most crucial part for the company and also the most essential part for the investors. This smell is what decides the future of the issue even before it opens and its all hidden in the “Grey”. This is what makes or breaks the ice for the opening day gap ups and gap downs .
Now when the company is trading in the market , cooking the Bhaji and adding coriander leaves is what is left to be done . Accurately cooking the Books and adding rosy picture to the company prospects is what is left to be done. Whatsoever the governance structure tries to stand tall and protect the delinquencies of some one else , some malicious intent creeps and tries to diminish the taste. What protects the dish is the independent bodies which act as a watchdog to protect one's tasty interest.
People use there bread and butter which they have earned after years of hard work invest in the dish to better there future prospects but what they get is mystery about where there money is going to and where the returns are coming from. They all enjoy the taste and the returns from the tasty bite. Many sides are used for eating our Pav Bhaji like the onion , lemon , futures , options , etc. but what mainly matters is how was the Bhaji prepared . After all the Value is hidden in the greatest of the preparations.