REALTY STOCKS SCAM – WHO IS GUILTY THE DUPED OR THE GULLIBLE ?

1.Land
2.Building

Due to various Govt controls and and irritants, the prices of Real Estate Market are prone to all kind of manipulation in India. However it is also true that when prices are low/flat, then nobody in India would like to invest in Stock or Property Market. It is only when the Markets are at the peak majority of unique Gambling instincts of Indian minds drive them to invest in Stock Market or real estate etc. But when such people lose their money they feel cheated. In my opinion their complaints are not justified entirely becoz their motivation was GREED only then seeking a reasonable return. Actually expectations of decent/ reassonable return make you a prudent & calculative investor, while Greed induces to become Gambler/ Speculator only.

However, as earlier said Real Estate Market has two different components( Land & Building), therefore those who have made investments in the rights of land also need not to worry too much becoz in a billion plus growing economy, Land will remain the hottest commodity. Land prices will bounce back to touch not only the previous levels but will also surpass them in many cases. But those people who bought flats/ apartments only with no rights on land at the astronomical prices may consult their astrologers for some magic.

Contribution from Bhavesh Shah, Sales Trader

Hi Ruchika

Investors themselves are responsible, they do not study facts and believe on info gathered from various sources like media, newspapers or may be friends, which all time cannot be true.

Moreover retail people are last ones to get in the markets as well last one to exit the mkts.
Just watching TV channels does not mean you have gathered all info and start investing, you need to u/stand biz cycles of Industry, ,trends, mkt study etc before investing as INVESTING IS AN ART.

Contribution from Prasanna Jha, VP with the world’s leading bank

Think this is responsibility of the small investors, primarily. Driven by the greed of making a quick kill, they have invested in all and sundry IPOs (including the answerers, by the way). Small investors start investing in the stock markets direct on advice of their colleagues/ friends and others who have no idea of stock markets. Naturally, they invest almost at the peak, having seen everyone else gaining from the stocks. And hence, suffer the highest loss.

There is this big institution of small investors called Mutual Fund, which pools in individual money to invest as an institution and has the expertise of investing knowledge. Discounting the cons of MF investing, think small investors will be better off using the MF route for investing in the markets. The gains may be marginally lower as compared to direct investing but the downside also is limited, as Fund managers of MFs are able to churn portfolio and sell off something which is losing value.

 

 

10 comments

  • Stacey Derbinshire

    I’ve been reading along for a while now. I just wanted to drop you a comment to say keep up the good work.

  • Facing the reality of the circumstances over the last few years, the small investor has let himself down and is now looking for a scape goat to blame all his losses and anguish on.
    The usual targets would be the corporate itself, the government, economic policies or its delay, incorrect advise received, amongst others.
    In the question you have chosen to indicate blame on the corporate; however, you may realize that they are only one part of a very large picture in an even larger dynamic scenario. Further, there are no guardian angles around and no free lunch tickets in the stock markets.
    Caution is advised at all times.
    Happy investing,
    Akash

  • What makes you think that only small investors got duped?
    I know cases where big shot PE firms have made losses in excess of 50%.
    Sticking to the question at hand,
    You cannot have everybody making money in the markets…. then you wont have a market.
    Its like a eco system… you need the bulls, the bears and the sheep.
    Warm regards
    Neil Bahal

  • This is a very interesting mail sent by Mr. Adam Petty, against this very question raised in a different forum. I enjoyed reading it.
    ———————————————-
    Once upon a time, a young lad was born without a belly button. In its place, was a silver screw. All the doctors told his mother that there was nothing they could do. Like it or not, he was stuck with it….. he was screwed.
    All the years of growing up was real tough on him, as all who saw the screw made fun of him. He avoided ever leaving his house…. and thus, never made any friends.
    One day, a mysterious stranger saw his belly and told him of a swami in Tibet who could get rid of the screw for him. He was thrilled. The next day, he took all of his life’s savings and bought a ticket to Nepal.
    After several days of climbing up steep cliffs, he came upon a giant monastery. The swami knew exactly why he had come. The screwy guy was told to sleep in the highest tower of the monastery…. and the following day when he awoke, the screw would have been removed.
    The man immediately went to the room and fell asleep. During the night while he slept, a purple fog floated in an open window, bearing in its mist, a solid silver screwdriver. In just moments, the screwdriver removed the screw and disappeared out the window.
    The next morning when the man awoke, he saw the silver screw laying on the pillow next to him. Reaching down, he felt his navel, and there was no screw there!
    Jubilant, he leaped out of bed…… and his butt fell off.
    The moral to this story is:’Don’t screw around with things you don’t understand…….. you could lose your behind.’

  • 1)The small investors were never duped.
    2)Organized Financial like regulatory authorities approve these big promises (when the issue approaches the markets).
    3)People have a choice and they choose the real estate companies.
    The point is either no one dupes or everybody dupes. There is never a free meal. This is a dog eat dog world and if you are not cautious , you are the only one responsible for the consequences. If you don’t have enough knowledge, finance and sustainability don’t play with fire.

  • Jonathan Warkentien

    The small investors are to blame.
    It’s just that simple. If you succumb to greed, if you don’t do your homework, if you fall for the same old bull recycled and repackaged, you’ve only yourself to blame.
    Remember what “Canada” Bill Jones said: “It is morally wrong to allow a sucker to keep his money.

  • Booming markets invariably bring with it unsavory people, who try to make some quick money through dubious methods. This is more or less the state of India’s property market at this point of time. There are developers who sell the same piece of land to number of customers and there are those who sell land without clear titles or mandatory permissions from the authorities.
    There are many fly-by-night operators and others in the unorganized sector who indulges in such fraud. So what should a buyer do? I would suggest buyers to investigate the background of any developer thoroughly. Believe me, if you are not careful, your life’s savings could be at risk.For more view- realtydigest.blogspot.com

  • Brian Borakowski Phoenix, Arizona

    The investor is responsible. Learn to read a chart and support lines. Enron, MCI all had great numbers while skidding off the ticker. There is a lot more to a stock than the numbers put out

  • Susan Shwartz PhD, USA

    Anything too good to be true almost certainly is.
    Ethically speaking, however, with India’s markets growing as fast as they’ve been doing, I think you need a program of financial literacy for individual investors. They’re not -prey-.
    I have a strong belief in fiduciary responsibility. If investors are investing with a brokerage firm of which you happen to be part, or if their accounts are in your bank, they ought to have some system of redress and should be discouraged from making investments for which they lack the capital, the sophistication, or the risk tolerance.

  • Ronald Garner, USA

    Whenever “new math” is invented to support outrageous assumptions for any market of investors, and is promoted as replacing the tried and true formulae, there lays the cause of the bubble.
    To answer your question, to whatever extent the research firms, banks, brokerages, industry promoters, and or media went to create confidence in unproven data measures the extent of there role in, as you put it, “duping the small investors
    Similarly, industry regulators, absent in questioning the “new math,” share blame for not being suspicious and requiring these new experts use more caution.
    The investors themselves should learn to be leery of “new math”. Trust people who have regularly made money in the market for advice. When they are concerned, ask why.

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