I was in Bombay in January 2005 to work with a stock broker, an acquaintance of a friend of mine. I had heard and read about Dalal Street in newspapers and there was some kind of aura around it in my head. I thought it would be something special; maybe with lots of people shouting outside the tall building like in the photographs newspapers print after every stock market crash. It turned out be a very ordinary looking street with loads of random people hanging around.
The broker, a laid back but sharp, wealthy, BMW-owning Gujju patiently sat and explained to us (my friend and I) how stock market worked and how stocks are traded online. He told us what the different things on the trading terminal meant and showed us a few trades. His sermon was interrupted by various calls by his customers to place trades and what struck me was that he began are conversation with us at the exact word he left off before the phone call. It sounds trivial, the accuracy struck me as uncanny. No “hmmm, what was I saying?” type pauses.
I think on 21st Jan or somewhere around that date, the Supreme Court was deciding the fate of ITC regarding the humongous tax obligation case filed against it by the tax department. As it turned out, the judgement went in favour of ITC at ten thirty a.m. in Delhi, and right there in front of us the ITC scrip shot up. It did I think from around Rs. 830 to Rs.1390 before settling at around Rs.1310 at the end of the day. Our man, the broker, “bought” around 25000 shares at Rs. 1320.23 and sold them within 25 seconds at Rs. 1322, making a neat profit of Rs. 44,250!!! That’s equal to what lawschoolites earn in a month!! He looked at us, smiled and said, “Looks easy, no? But the key is knowing when to stop. Because if you don’t, to kab pant utar jati hai, pata nahi chalta”. Lots of people did burn their fingers later in the day playing with the ITC scrip when he came down from Rs. 1390 to Rs. 1310 at day end. All this set me thinking about the need for stock markets, or rather allowing day trading of scrips on stock markets. I can understand that stock markets help raising of capital, but what is the purpose of day trading? Even if trading is to realize the real value of the company, why are people allowed to buy and sell shares that they don’t own? (I think earlier settlement used to be every alternate Friday, though now you can’t extend your ownership beyond the end of the day without actually paying for the shares). So is it at the end of the day informed gambling? I asked a few people about day trading, but couldn’t really get any convincing answers. One thing which I learnt is that it is much better to have a terminal of your own (or sit at your broker’s terminal) to day-trade and make a tidy sum, i.e. after taking measured risks.
That Bombay trip, though short, was memorable for another reason too. The Kala Ghoda festival was on and they were playing some free movies. I didn’t care what they were playing. Saw FREE and went it. The movie was called the Last Waltz. I entered and sat and there was a long scene shot from inside a car and outside. The camera placed (rather fitted) next to the side of the front bumper, camera from the driver’s perspective observing people on the road. This has to Scorsese, I told myself. In two minutes, the title sequence began and it was Scorsese!! Being a huge admirer of his, it was quite a high to recognize his signature style film making in one shot. The shot was quite similar to those he shot in Taxi Driver (1976). The movie however was very different from the typical gangster-obsession-DeNiro Scorsese– it’s a cult movie with live performances by various rock bands.