Arthashastra

Friends suggested that I try to write about other Nitis of Chanakya, too! Hence, this is an attempt to write about Arthashatra, although I am not an expert in this field.

Chanakya’s seminal work, the Arthashastra, is a timeless repository of wisdom. It provides insights into the intricate art of safeguarding a nation. Despite originating in ancient times, Chanakya’s reflections resonate remarkably with contemporary military imperatives in India.

I have mainly written about individual investments in share markets.

I will not write this as an essay, but I have selected some experts’ sayings. I will briefly elaborate on each. Finally, I have written my comments.

Randy Thurman:

The broker said the stock was “poised to move.” Silly me, I thought he meant up.

Most investors make this error. Very rarely does a stock go only in one direction—up! It is common sense that anything that goes up is bound to come down because of the simple law of gravity. We forget this law and would lose in a big way if we acted silly!

David Tepper:

This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes, the hardest thing to do is to do nothing.

We forget that sometimes doing nothing in a share market is doing something. But we are told that someone who does not do anything is lazy!

Warren Buffet

A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with excellent management at reasonable prices.

The great Warren Buffet has said this. Once we are confident about the workings of the share market, there is a good possibility that you will end up with shares of great companies, and I am sure you will make decent money over a period.

Benjamin Frankin

An investment in knowledge always pays the best interest.

Since this is an old quote, Franklin has used the word interest instead of returns. But again, he also talks about knowledge!

Honestly, I do not know, even today, how the share market works. Twenty years ago, a banker friend told me I should try for six months since I was not keen on playing the share market. He told me to buy four blue chip shares worth twenty-five thousand each. He also advised that I should sell when the share price goes ten per cent above what I bought. But he also said that I should only sell when he advised. In the end, I should sell all the shares at the end of six months, irrespective of the share price. One share gave me 15% on the 15^th day. The other two gave me significant returns over six months. The fourth one remained almost unchanged at the buying price. I earned about forty-five thousand rupees. The first share had become minus twenty-five % at the end of six months. So, with my friend’s advice, I made forty-five per cent! But my friend said I was fortunate to have made this money! I never played again. I have also been told that if we invest in Blue Chips for 15 to 20 years, we are likely to earn a decent sum! I never bought any shares!

Here are a few interesting tidbits to keep in mind:

Nearly half the people don’t even understand the fundamental financial markets, which is crucial to understanding the market as a whole.

Half the people with money in the market have less than Rs One lac invested.

Among non-investors, 53 per cent say they don’t have the money to invest, and 31 per cent say they don’t trust stockbrokers or financial advisors.

On average, women invest more conservatively than men. Over the long run, this can result in lower returns and a greater risk of your assets not keeping pace with inflation.

66% of people aged 18-29 (and 65% of those 30 to 39) say investing in the stock market is scary or intimidating, compared with 58% of those aged 40 to 54 and 57% of those 55 and older.

The world of investing can be challenging and appears confusing. But as you start learning, reading, and investing your money, you’ll see results over time. 

Don’t be afraid to make some minor mistakes in the early days. Good investing takes time. Even when you have the best information and advice in the world, you’ll still be slipping up.

These can be great learning experiences, ensuring you aren’t putting your entire financial life at risk.

Refer to these investing quotes and insights about growing your investments if you feel stuck or confused. These have served as solid reminders as we grow in investing knowledge.

What are the key takeaways?

• Finance broadly describes the study and system of money, investments, and other financial instruments.
• Finance can be divided into three categories: public, corporate, and personal.
• More recent subcategories of finance include social finance and behavioural finance.
• The history of finance and financial activities dates back to the dawn of civilisation
• While it has roots in scientific fields, such as statistics, economics, and mathematics, finance also includes non-scientific elements that liken it to an art.

Did I make you guys financial experts?