Comment on IndiaInfoline Winding up Retail Broking
commented on
04 Nov 2013, 08:25 AM
The decision of “IndiaInfoline” is an expected one.
The businesses are started and are raised to higher level and with this the aspect of cost and returns always mismatch as far as a business as “trading” is concerned.
Trading/Investing in markets is actually not profitable for “ALL- ALL THE TIMES”
We consider common items of life as salt.grain.tea coffee- are such businesses which have stood test of time and have very long cycle of reversal ….In such businesses the people consuming the items do not face the risk of loss which is commonly felt in a business as trading or investment and is applicale to all even if the investor or trader is a seasoned one.
When such businesses are started which have the probability of success less than “ALL”-The business is done on per “LIFE” of “years ” basis.i.e Lets say average age of an Indian IS 30 YEARS and he starts trading/investing and if after 5 years he is fade up with the losses then he will quit it and may not look at it for years unless he again feels interested in the same.But at the same time a new breed enters the same and it continues ….So very few people remain in trading or investment for a very long period of time but at the same “entry and drop out” is a CONSTANT factor.
India is an absolute market as far as trading or investment is concerned where literacy of trading or investment is the least and this gives importance to the illiterate class of traders to survive with minimum losses.
SO THE BUSINESS IMPORTANCE IS TO THE ILLITERATE CLASS TO SURVIVE AND THEN TO THE LITERATE CLASS
All these brokerage houses have focussed on volume traders and these “volumes” have never allowed newcomers like us to trade at the ” ACCEPTABLE” cost which hampered their growth.
Further if acceptable losses are incurred,then survival rates also will be higher…But in vain, the brokerage houses did not focus on that.
RESULT IS “TODAY”
The restrospective simplicity of “failures” in brokerage business is that the business is:
1.paradoxical in nature where a businessman is expected to deliver” BEST AND LEAST”(Which is the case of perhaps every business) -BEST ARE WHAT NITHIN HAVE STATED AS TECHNOLOGY,TOOLS ,SUPPORT ETC AND LEAST ARE THE COST.
2.Businesses need to operated at the least cost in the growth phase at all the times.
3.With the initial phase of expansion say after 5 years corporate lethargy breaks out and new ideas are difficult to be “seen” which anyway hampers the existing and new base of customers.If new ideas cannot be “seen”, implementation and benefits to the customers is a far away scenario.
4.Fresh ideas can come from fresh people which have to be admitted again and again and management at the top need to admit and execute that.
Else the dominant forces of the market will implement fresh ideas.”ZERODHA ” have proved to be one such dominant force.
Today is a great phase for Zerodha and all our wishes are with them for their growth as We have huge population with fast pace of urbanisation and infrastructure and huge scope for every one to trade or invest and penetration of our investments is at the least levels for the population as a whole.So an idea as “ZERODHA” WILL DEFINITELY find its way ahead
ALL THE BEST