BY SIDDHARTH SHANKAR
Director, Kassa Financial Advisors Pvt Ltd
Before I became a finance professional, I was a diamond specialist and I always wondered what the similarities between the two professions were. The immediate answer I always got was “none”. The only similarity I can think of is that both the professions deal with big numbers of money, although only on paper. There are certain inherent qualities that one has, qualities one is born with, and if you don’t have them, you’ll never achieve certain things. So I would say I was an amateur diamond merchant but a good finance professional; so I made the right decision by moving into finance.
As a diamond merchant and as a finance specialist, everything to me had to stand to logic, else it was useless. My focus was always on mathematical models, but perhaps I was wrong. Finance is not about mathematical modelling, and the diamond trade is not purely about judging the four Cs of a diamond. It is about human psychology; it is about cultures and how different cultures interact with one another; it is about the greed of a human being; it is about the fear of a human being and it is about the herd behaviour of humans. Logic is left behind; it is beyond the comprehensive capacity of a normal human mind like mine.
I’ve been in the forecasting business for more than two decades now. If I’m right 60% of the time, I consider myself successful. We cannot forecast the future, what we merely do is work on probabilities on what would impact what, how and to what degree.
When I got into finance, my prediction was how the franc would move against the dollar and I would be happy if it moved in my favour by merely 10 ticks even though it would have gone 20 ticks against me before moving in my favour. I would wait for hours in the hope that it would move in my favour, without realizing that it may never happen and probabilities do go wrong.
So excited was I with the correct prediction rate that I bought for myself one of the market data provider services and was no longer dependent upon the rates getting updated on television, that too every hour. My rate of success still remained the same. The only negative I added was that I was glued to the screen each moment, rather than each hour earlier. I am not sure if the change was net gain for me, but it does give me a deep insight into the movement of the market, more than anything else ever would.
Feedback: siddharth.shankar@kassa.in
