Why Hindus get Capitalism.....

Easter is a time of year, as a ten year old, I had terrible “Hindu girl envy”. Now I was brought up strictly Catholic in India where the majority of the girls in my school were Hindu. We had holidays for the lead up to Easter but my family bring Christian would spend the majority of Maundy Thursday and Good Friday in church listening to the brutal death of Christ as well as starving ourselves in penance. All this while my non-Christian classmates had actual holidays to do as they pleased.

As a ten year old this was unbearable….

Our church ran along the back of the central restaurant drag in Bangalore (Brigade Road). My abiding memory of the Easter season was sitting for a long time (starving may I remind you) while the various bible readings went on, smelling the hot cross buns baking in the Christian bakeries, the dosais frying in the vegetarian “eateries” and the Muslim biryani teaming for late night feasts. The fragrant food aromas wafted in as I realised I was only allowed water until nightfall.

This weekend a few of my Bangalore classmates and I gathered in London with our families to celebrate Easter. True to the secular way we were brought up in 1980’s India… we celebrate Easter & Diwali without a thought to who among us is actually a Christian or Hindu. Being Indian our coming together is all about the food.

My fascination with studying Hinduism continued into adulthood and I continued to study it in depth in college. The Hindus believe in the concept of Trimurti - literally Three Idols who govern the cyclicality of the Universe:

  • Brahma, the force for Creation
  • Vishnu, the force of Preservation
  • Shiva, the force of Destruction
download (7).png

All things in life -- the circle of life - are in one of the three tages moving inevitably to the next stage.

This makes so much sense in the investing world. Companies are born with a brilliant entrepreneurial idea… they grow and become mainstream… their economic viability is preserved by a vast army of employees and then as the world changes inevitably their time is over and they go into decline… either the company recreates itself with new ideas or technolog, else another company emerges to take its place.

For example the Ford Motor Company, started in 1903, was created out of years of learning around internal combustion engines. In the 20th centur it had a dominant role in motorizing our lives with cars and trucks. It now struggles to maintain market position and must reinvent itself with cleaner technologies and changing transportation needs.

In 2016 only ONE of the companies in the original 120 year old Dow Jones Index of the largest US companies remains - the others all have been absorbed into later born competitors. In 2126 one can predict that only a handful of the seemingly unbeatable beasts such as Apple, Facebook and Goldman Sachs will remain.

Whole industries are also in the creation - preservation - destruction cycle. One of the original Dow companies created leather tool belts for workers…. It disappeared without a trace.

So how can this concept of comparing individual companies and industries to the Hindu cycle of life help us:

1. Ask yourself before you invest where in the cycle the company is. You don’t want to invest in something that is in a death spiral. At the same time you don’t want to invest too close to the time of creation where ideas (please listen to me all you venture capital fans) can get pulled back into the flames of destruction.

2. The other thing the cycle can teach us in investing is simple acceptance. It is what it is. When an industry fails, a stock collapses, we’re just seeing a cycle collapse and from it will come a rebirth and a new creation. We can position our investment portfolio so we stack the decks against destruction and try to take advantage of the forces of creation and preservation.

I leave you with picture of my favourite Hindu deity -- Nataraja

May you too dance the dance of investing conquests.

download (8).png

Happy Easter!

Mallika