Read an interesting book “Biography of an Indian Fund Manager” by Surin Usgaonkar.
The title is misleading as it is not really a biography but an insider’s look at how the Indian Mutual Fund industry operated from 1991-2003.
The author worked in a private mutual fund and does an admirable job of exposing the dirty tricks of trade of mutual fund managers.
The part that I found most shocking was how fund managers would buy dud stocks from operators for a commission.In this way, the operators would ramp up the stock from nothing to elevated levels after which the mutual funds would buy them.Veteran market observers would instantly identify this with Ketan Parekh’s machinations.
Another shocking thing was the role of cooperative banks in funding operators and mutual funds.You almost begin to feel sorry for the bank depositors of these rotten cooperative banks.
The author explores the role of the underworld in the stock market.Many brokers have been ruined because of various scams resulting in a calamity for their sub brokers, clients and employees.
Just as Jindal exposed how corrupt the media is, the author also exposes the financial press media-how for a fee they will carry positive recommendations , flattering company profiles etc.
The ordinary investor’s ordeals is covered in the book-how they get carried away with the lure of easy money till it bankrupts them.I personally know people whose lives were destroyed by the Harshad Mehta/Ketan Parikh scams and this part stuck a chord with me.
The writing style of this book is amateurish but it makes up for it by the content.
A must read for investors in the Indian equity markets.But reading this book may ensure that you never buy a mutual fund again !!