The Supreme Court appointing a panel to investigate the alleged irregularities in Adani Companies is a welcome step. Presided by former supreme court judge Mr A M Sapre, the panel has highly respected people in the world of business, finance and law.
The Hindenburg report caused havoc for more than a month in nearly all Adani owned companies. Now this expert committee will hopefully cover all alleged irregularities such as round tripping, stock price manipulation, regulatory failures and failure of disclosures on the part of Adani group apart from some other issues. Meanwhile SEBI will continue its ongoing investigation in this matter.
The one area that this committee will suggest measures to improve is “investor awareness”. Now this is interesting because a normal investor generally follows the trend and starts investing or dumping shares based on prevailing trend. In the last four days, there is a big rally in Adani stocks and investors are taking notice of this up trend. Many will be considering investing in these stocks. So spreading investor awareness is a great challenge for anyone. This challenge is further amplified by the cooked up books. Even if certain sections of investors are quite aware and knowledgeable, they may not decipher what is truth vs fictitious.
Every investigation results in something good for the people. We have seen a number of scams in the past and that resulted in making our regulatory system better. This committee will also help us make our system more robust. But investor awareness will always remain an issue as long as they focus more on external rather than internal factors.
Watch out these factors-
– Your financial goals
– Your risk profile
– Time horizon of your goals
– Disciplined investments through systematic investments
– Portfolio diversification
– Right asset allocation
These factors are far more important for your investment success than focusing on factors which sometimes even regulators could not pickup in time.
Yes, investor awareness is the key but that awareness is more about understanding self rather watching and trying to catch the trend of the market.
Manoj Pandey
CFP
