Dear @atul1082 Ji,
1)There will always be some companies,around the world, that will skirt the law or blatantly violate it.
The US, which is believed to have stringent corporate governance standards has had several companies that indulged in unscrupulous practices. The actions of those companies were in wanton disregard of the law. Rather they were contemptible.
Let’s not conveniently select some companies that have indulged in unscrupulous practices and paint the entire universe of stocks with the same brush.
And, when we decide to invest in stocks we have to embrace the risks associated with it. It’s entirely possible that the company we invest in is a sham. But, is there anything we can do about it?
We can diversify sufficiently to protect our portfolio?
Beyond that, there’s precious little we can do.
If a person isn’t willing to shoulder this risk then investments in equity should be avoided.
Now, coming to the supposedly risk free investments- Fixed Deposits
Over centuries there have been banks that have failed. Even the ‘too big to fail’ ones have failed.
Does that mean we stop placing faith in banking institutions?
It’d be imprudent to do so.
At some point we have to place faith, we have to trust. The entire modern economy is based on the faith that the future will be better,that businesses will grow, that life will improve.
I agree it’s wrong to have blind faith. We must introduce safeguards to protect ourselves. But, there’s only so much we can do.
Shams, manipulations and charlatans will always be there. We’ll sometimes be their victims.
But, we have to accept it and move on.
And, finally it boils down to having reasonable expectations. I don’t think I can ever be as successful as the investor whose story I shared. Not even close.
All I want from equity investments is preservation of purchasing power and some.
If I achieve that I’m a happy person.
Many thanks for sharing your thoughts. I truly appreciate it.