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11 December 2016

MEMEHIF Paradoxes: Episode 1

MEMEHIF is a dear friend of mine. Early in our friendship, I asked him about his unusual name.

"My father wanted me to be a friend to all. He also wanted me to be highly educated. In addition, early in my life he realized the I had a high IQ. So he wanted everyone to call me MEMEHIF, which stands for 'My Engineer MBA Educated Highly Intelligent Friend' ", he told me.

We have some highly involved discussions of late, MEMEHIF and me. Sometimes, I find his arguments paradoxical, though I do not tell him so.

Here is one such argument.

"Investing in FD is better than investing in Stocks. At least your capital is protected and your money earn some positive growth", I tell him

"Are you crazy?", he asks, "Equity is the best form of investment available for long term. Stock market leads the economic growth of the country"

"Ever since this government came into power is 2014, Sensex and Nifty have hardly moved", I point out.

"How can you consider stock market as a barometer of economic growth?", he asks, " There could be umpteen reasons why the stock market goes up and down.", he deadpans.

P is for Paradox....

Here is another example...

"Demonetization has impacted the poor and vulnerable the most", I tell MEMEHIF

"Do you know what is the percentage of poor in India?" he asks me.

"I read somewhere that it is about 400 Million. Should be around 40% or so", I respond somewhat cautiously.

"Your data is so outdated. 400 Million poverty was in 2005. Currently it is about 200 Million. So it is not that 'Poor' are significantly impacted. In fact 'Poor' form only about 25% of India's population. You are making a mountain out of a small hillock". He responds.

"So that means that most of the poverty reduction in India happened during UPA Rule. Right?" I ask him.

"Dont be stupid (MEMEHIF can be harsh, but he means well), what can you get at 32 rupees per day, which the per capita poverty baseline measure? The poverty reduction numbers are a joke. UPA was a disaster.", MEMEHIF replies somewhat caustically....

P is for Paradox...

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