The Hindu Business Line : Is it increasingly necessary for Indians to know Chinese and the Chinese?

Story so far: During a week when the markets kept yo-yoing, I meet my neighbours for a session on investment basics. To my horror, I find that their level of financial literacy is dangerously inadequate.

Episode 131

You met my friendly and knowledge-eager neighbours last week: Such as Kiran, who relies on his broker for investment decisions, Pavitra-aunty, `safely' guided by her friend on what to buy and sell, and Ramu-uncle, whose investment strategy is to toss a lucky coin! The worry that I'd left you with was the dismal status of financial literacy amidst us.

In response, P. V. Sudhakar Rao mails in from Ongole: "Dear Swatigaru, in my opinion the investment strategy must be as follows: Study the industry scenario; know the antecedents of promoters; purchase price of the share should be below book value; PE ratio should be below 5; and never go for speculation." He also advises that shares purchased as per his strategy could be sold at any time with an assured positive margin. Useful guidelines, Sudhakar. Problem, however, is of knowledge percolation.

"I should really appreciate the effort you have spent in publishing such useful data. I added your blog to my Favourites. Was here from Business Line," reads a blog post from `blogger' located in Hartford, Connecticut, US. Cool! He has a dreadfully named blog called `bosses' but I found this quote of Gandhiji there, in a recent posting: "You must be the change you want to see in the world. Infinite striving to be the best is man's duty; it is its own reward. Everything else is in God's hands."

S. Gnana Haran of Virtuous Enterprise has this to say about last week's theme: "Dear Swati, thanks for highlighting the importance of financial literacy for investors. You did the right thing by spreading financial literacy among your co-dwellers in the apartment." Thanks Gnana!

"The need is twofold: One, as Priya has pointed out rightly, all our rural people should have basic literacy. This issue, at least in Kerala and Tamil Nadu, has nearly been addressed. Other parts of the country, particularly the BIMARU States, need urgent attention now."

Okay, what's the second? "Two, functional literacy is no longer sufficient in this modern world. The digital divide is all about the divide between those who can use computer power and those who can't. Now, like in most other cases, we have one benefit being a late developer or bloomer. The advantage lies in combining one with another. That is, basic literacy can be given along with computer literacy — a two-in-one solution." Reassuring insight about the plus point of arriving late!

Gnana is of the view that the solution to financial illiteracy can come in a different form, that is, `by bundling all into one.' Meaning? "Most people may not invest in shares.

But it would be next to impossible to find someone who is not interested in investing (if that word can be used) in gold. Everybody aspires to own a house or an apartment. At some point of time one would like to buy a vehicle. All these involve understanding finance. These could be related to financial literacy. It can happen through the involvement of relevant industry players."

I tend to agree to that broad approach to finance. Gnana gives the example of one such industry, viz. insurance.

"The most important problem confronted by the insurance industry starts from recruiting the advisors. A properly designed Financial Literacy Programme (FLP) can solve all these and bring new investors into the market." Great.

Candlelight dinner at Great Wall!

A few days ago, a Chinese delegation visited our company, to explore the possibility of a collaboration.

The leader of the team, Wong, was a finance grad from Stanford. When the rest of the team, comprising scientists, was interacting with my company's R&D staff, I learnt a few things from Wong about his approach to financial problems. For instance, he built an Excel worksheet for me to apply CAPM or capital asset pricing model.

"Swati, I'm getting bored, shunting between the hotel and the meeting rooms," he said one afternoon. "Go off to Mahabalipuram," I suggested. "Shall I arrange a taxi for you?" Wong shook his head, and said, "No, I simply want to breathe in the air of your city!" I smiled and offered to take him to the Chinese restaurant nearby.

Well, that evening we were at a quiet table at `Great Wall.' Wong took a long breath, and beamed. I said, "Polluted air, some say, but infinitely free!" Tactfully, he didn't react to that politically charged statement.

During the next hour-and-a-half, politics was the last thing we talked about because there were a hundred thousand things to chat about the culture of the two countries.

"You are named after Wong Fei Hung," I said, referring to the legendary martial arts hero. Wong nodded, "True. In fact, once I tried to jump out of a tea shop using my dad's umbrella, but then got saved by the sunshade!" We both laughed...

The dinner was the right occasion to try out my knowledge of Chinese, though with imperfect accent. "Knee-how," I said, to mean hello. Wong responded, "Shyeh-shyeh," for thank you. Or did he think I'd said, `You're good'?

With only candlelights as witnesses, such slips are never a big deal. In the surreal ambience of the restaurant, my mind was on a different trip. I was wondering if it was becoming increasingly necessary for Indians to know the Chinese and Chinese, even as the two economies were rubbing shoulders with each other, on a racetrack called global progress. Send in your thoughts by Friday.

Swati_CA@hotmail.com

Blog: http://Swati-CA.blogspot.com

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