BUSINESS LINE's INVESTMENT WORLD
From THE HINDU group of publications
Sunday, May 27, 2001












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`I have faith in the tech story'

Rasheeda Bhagat

MR Srinivas Gopal is a young software professional.

An engineering graduate from the Madurai Kamaraj University, and armed with an IT qualification from the US, he has been working as a programmer with a big broker house (he would rather not divulge its name) in New York since 1998.

He had just finished a ``delightful'' one week with his parents in a Chennai hotel (they live in Tirunelveli, Tamil Nadu). On the British Airways flight from Chennai to London, Mr Srinivas Gopal shared with Business Line his investment experience in the US over the last three years.

During this period he invested about $20,000 in the stock market, both in the New York Stock Exchange and Nasdaq. He made some profits in such shares as Monsanto, Sun Microsystems and Novell, but really lost his fight with such home-grown companies as Satyam Infoway.

But taking up the positive side of his investment first, he bought Monsanto as $42 in early 1999 and sold it at $50 in about six months. ``I bought Sun Microsystems at $75 and sold it at $105, making a profit of $600 on this share alone in six months. I bought it at the end of 1999 and sold it in 2000.''

But when it comes to Satyam Infoway (Sify), it has

been a horror story for Mr Gopalan. ``I bought about 30 Sify shares -- for $90 a share in April 2000. A couple of my Indian friends too invested in Sify at around that level. Today, the share price has fallen to a miserable $3 and ``I feel terribly cheated. I feel when the company made a secondary offering...when it diluted its holding...a lot of insiders sold out at that level.

``At that time the price was $80 and after about a month, we entered when it was $90. In the short term, it went up to $113 but I could not sell because I work for a brokerage house and I am bound by certain rules and have to hold the shares I buy for one or two months, as the case may be,'' he says sadly.

Again, his job does not allow him to do Internet trading. ``The result is that I end up paying much more as brokerage...often we have to pay a flat brokerage fee of around $30''.

In Sify's case, his compulsory holding period was two months and at the end of that period, its value had come down by 40 per cent ``and hence I did not feel like selling it. Of course, today it is so low that I feel, what is the point in selling it at all. Let it be a worthless...almost worthless piece of paper money.''

Does he believe in the concept of averaging?

``Oh no, I feel so disappointed after my experience in investing in the equity market that for some time, I am not going to put any more money in the stock market''.

But he is confident of returning some day, sooner than later. For one thing he has faith in the technology story. And for another, he is 26 and single, which means his risk appetite is high. ``And when you are young and without commitments, you tend to be careless too,'' he says happily.

Returning to his faith in the tech story, he says that good companies will do well, though many of the dotcoms will fall by the `Web-side'.

Mr Srinivas Gopal regrets that he did not invest in Infosys. ``But then Infy was selling at around $300 and I felt that Sify, being cheaper, was within my reach. But though Infy has come down from $300 to $150 a share... Sify has come down from $90 to $3, but that is my luck I suppose.''

Mr Srinivas Gopal's other investments are in treasury bonds... he has parked about 10 per cent of his money in this, and a similar part of his investment is in the Money Funds ``which is like a savings account in India,'' he says.

On how much money his friends have lost, he says with a smile: ``I know that in the crash of the technology shares, many people have lost money. But the problem is that people brag about their winnings, but rarely do they talk about their losses.'' But he does know of his manager, working in the same brokerage house, who has made a loss up to $9,000 in Iridium. ``He is a software engineer from Andhra Pradesh and it will take him three years to wipe out his losses, as in income-tax he can

claim only up to $3,000 a year,''says Mr Srinivas Gopal.

Has he been following the Ketan Parekh story?

``Of course, though I do not know the details, I know

his operation was similar to that of Harshad Mehta. I have been reading a bit about that in the Indian newspapers on Samachar.com, adds the young engineer.

(Would you like to share your experience as an investor? Write to us at bleditor@thehindu.co.in)


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