The gasping forces of an era bequeath its waning energies to the new one. A new star gets scripted. Exchange of spirits transpire. Friction sources fire. And, eventually, a new way of life emerges to live, follow, prosper, and pass. We have evolved through revolutions. The first economic revolution was agriculture; Industrial Revolution was the next, followed by the technological revolution that led the way for the ongoing revolution that is the internet.
The internet reimagined reality, not through a suite of theoretical axioms built in academic strong rooms, but through incremental experiments, ingenious improvisations, and a relentless pursuit of exploration for the brighter dawn of a new tomorrow. The special aspect of the revolution led by the Internet is that it is an organic evolution. And, a democratic one at that. For, it has allowed the participation of a larger populace by demolishing the erstwhile moats, enabling people even with modest means the choice to be more than they believed fate had in offer for them. It’s the rise of the unheard.
The Internet has recast commerce and is redesigning industries. The industry of Finance is no exception to this phenomenon. In fact, it is one of the most transformed sectors and an exemplar for others. Especially the financial markets. Before the advent of the internet, trading and investing in the stock market was in rings of the exchanges, outside the reach of ordinary working class people. They had no means to obtain financial statements and if they could manage the documents, understanding them would require nothing short of a miracle.
Access to bespoke curation of financial news was not available to them nor was the access to brokerages easy. Contrast this to today, when financial information is available to them on a real-time basis, opening a brokerage account is a minute’s work, and they can do a SIP at the cost of a cup of coffee.
The internet has enabled a way of life for people that they have reasons to value. One can not be anything but impressed at the expanse and impact of this revolution. So much so that now understanding finance is the new cool. People who understand numbers, including those from the dreary field of accounting, are seen as specimens sprinkled with stardust. Some of them have their pictures on billboards and participate in events that were once reserved only for film stars and champion cricketers.
This is an extraordinary feat and deserves praise, however, there is also a fair share of trouble that this fast-paced transformation has brewed. The market of the internet is built around the consumption of content. And, one should make no bones about stating the fact that not all content on the internet is to offer a public good; a part of the producer community is also fuelled by a parasitic greed that exploits the gullible working-class people by offering them lies and deceit.
These have turned the financial markets into a greed concert. People watch these traders live on Youtube executing trades. People follow them. Even their private lives, obsessing over little details. People care for the screenshots that emanate out of their consoles to relish their edited profits, vicariously.
These parasitic fin-influencers have invented stories of easy successes, including about Rakesh Jhunjhunwala making billions of dollars with only 5000 rupees through trading. This ilk of fin-influencers offers beautiful lies to their audiences to cajole them to run after the mirage of fantasy. The goal on offer is quick and assured financial independence. They promulgate fantastical edicts that denounce the values of earning an honest day’s living as a total passé. They sell courses and programmes that help their audience feel ready about hitting a home run in life by falling in love with an unruly risk.
The only part the subscribers lack is core knowledge and practical experience. That small bit is covered by the parasitic fin-influencers who offer direct and free stock tips in return for views on Youtube or subscribers on Telegram. This helps this section of fin-influencers develop an entirely different revenue stream that perhaps helps them make a lot more money than they would themselves earn from their investments or have ever made from it.
A big fillip to this enterprise of deceit was fuelled by vulnerabilities of the public during the pandemic. People wanted to make money from home. This desire was exploited to the hilt by a section of fin-influencers. The SARS CoV-2 was just the perfect fit for them to go viral.
The impact of the virus has attenuated, but the impact of reprobate greed has not. Today, it’s not difficult to find hoodwinkers even on the streets of cities, outside corporate offices, offering people fraudulent schemes to invest in “Futures and Options”. There’s no vaccine yet to counter this virus, but there needs to be one made soon.
The Finance Minister’s statement on Ponzi apps and guiding Indians to practise caution before making themselves available to being influenced is a welcome sign. India needs to protect its people from brazen frauds that are proliferating under the garb of finance in the country. People need to be told success is never easy.
Especially in the stock markets, where perhaps it’s the toughest. The good people at Zerodha bring out data that delineates that close to 90% of the traders lose money in the stock markets. Neither is investing an adventure activity like it is portrayed by a set of fin-influencers. “Investing should be more like watching paint dry or watching grass grow;” said Warren Buffet, “If you want excitement, take your money and go to Las Vegas.”
The regulators need to maintain a vigil on a set of fin-influencers. It has to be a constant guard. For, misinformation is a social condition. It cannot be fixed at once. It has to be constantly monitored and the black-hats need to be booked. It costs an average person work of a lifetime to save investable capital. It should not be allowed to be placed in the hands of people who run an enterprise of deceit and deception. The other important aspect of ensuring people’s money in safe hands is to expand the programmes of financial literacy. This will help our people with the faculties to identify the swindlers.
The internet offers exciting opportunities to enterprise, save and invest. However, there’s no substitute for handwork, knowledge and expertise. Rakesh Jhunjhunwala did not make his fortune by subscribing to fantasies. Nor will anybody else. Success is the work of a lifetime. And, it will remain so.
-The author is a Chartered Accountant. Views expressed are personal.
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