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Grin and bear It
Over the past couple of days finance minister P Chidambaram has gone above and beyond the call of ministerial duty and has zealously – though perhaps not very effectively – been trying to talk up the crashing market.
Time and again he has urged investors to stay invested. A well meant piece of advice perhaps, but is it the finance minister’s job to do double duty as a portfolio manager?
The ingenuous might have thought the function of any minister is to provide as good governance as possible in his particular sector, and not to make pronouncements on matters of market sentiment or other public concerns which are outside the limits of his jurisdiction.
In the present case Chidambaram’s advice could be seen to be antithetical to the interests of the bears, i.e. those investors who, for their own reasons, would prefer to see the market fall further.
This is a legitimate exercise and should not incur the implicit disapproval of the finance minister. True, many if not most investors would naturally like to see the markets and their own holdings rise.
However, a free market democracy is not just majority rule, it’s also about the rights of minorities, including economic minorities. It’s not just religious minorities who have the right to profess their faith; so do bears.
The government pronouncing on which way stocks should go is akin to its taking a stand on which religion one should profess. The stock market is one area where you can’t impose the nanny state.
You have the chance to grow rich by investing in shares; the flip side is that you also risk losing your money. You can’t have one while forgoing the other – that’s why the bear performs an essential function in stock markets.
Bulls and bears have equal rights to the market. In fact, they often morph from one to the other in pursuit of legitimate profit. That is why those who believe in free market principles should insist on the constitutional right of the bear to sell – that’s his livelihood and he hasn’t broken any specific law in doing so. Undue governmental intervention in the market – over and above the role that SEBI plays as a regulator to ensure that no laws are transgressed – is not only inimical to a free market but is a total subversion of it.
<B>From India
Source: Editorial
© Times of India</B>
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