Friday, April 27, 2012

To be or not to be?

It is again that time of the year when the plebian salaried class people employed in the financial sector have to suffer strange palpitations, sleepless nights, irritable demeanor and an all pervasive sense of doom. No, I am not talking about a new bug in town. It is simply the beginning of the new financial year which brings with it the threat of layoffs and salary cuts. I remember the times, although just barely, when April was awaited with a great sense of anticipation of the vacations to be taken and the new possessions to be bought with a fat bonus cheque and an hefty salary increment. And then came the financial crisis which unceremoniously crash landed on our door step leaving “the new normal” in its wake.

People in their late twenties, such as myself, have aged more than decades in capital market years. When we joined the industry maybe a decade back, the stock markets were just gearing up for a massive rally. New businesses were emerging within the financial space which allowed many of us an entry into the crazy world of stock markets. The only problem was that this in your face advertisment did not come with a disclaimer. We worked hard, learned more and were happy to be a part of this moneyed world. Then a few years later markets threw all caution to the wind and rallied like never before. India became the new must have “Birkin” on every portfolio worth its salt. India was after all “shining” and every one hoped for a bit of the star dust to rub off on them as well. Foreigners poured in heaps of money and the markets knew of only one direction. Every stock that one laid their hands upon gave massive returns. Suddenly, our jobs were worthless, but no one noticed. If every stock gave 20% returns then what was the need for an analyst or even a saleperson? Every stock market participant worth his salt became a portfolio manager or a fund manager. And then the excesses of the west came to haunt us. And haunt us they did.

Not wanting to delve on the exhaustively written financial crisis I would like to jump straight to the present. For a while post the crisis we all thought that things were on the mend. Maybe they are, who knows? Its been four years since the crisis and the Indian broking industry is feeling the pain now more than ever. Due to the current government’s lethargy or even worse still its warped policies, the FIIs have simply written us off. Volumes in the market have completely dried up and there is absolutely no trend that is emerging. The only trend that I see emerging is a constant threat to job security. Which brings me to the big question in my life currently. “IS IT WORTH INVESTING MY MOST PRODUCTIVE YEARS IN AN INDUSTRY WHICH IS GRAPPLING TO GET ON ITS FEET?” They say that stock markets are lead indicators of the health of the economy. So if markets are non trending or trending downwards a logical conclusion would be that the economy and hence the other sectors are unlikely to offer much in terms of growth. In which case it make sense to weather the storm currently facing the industry and gear ourselves for the next big run. Unfortunately it is not quite as simplistic as that. With interest in investing in India waning and a complete lack of investor participation in the market, broking houses have no choice but to cut costs. After all it’s the capitalists who brought about the boom in the first place, so its unlikely that we would see them burning cash on a monthly basis. But how does all of this help us, the salaried class? Do we accept the salary cuts for now and wait for a bigger blow in the future or do we spread ourselves thin and try our luck in other industries? Any suggestions Mr Hobson?

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