An interview with Mr. K. Jagannathan, Orient Capital Markets (P) Ltd.

How did you get into the broking business?

Broking is an interesting field; everyday is different here and holds a lot of possibilities. Frankly, I did not look at the monetary aspect when I made the plunge. What excited me was that one is constantly involved in the various changes the whole system goes through. You get to meet a lot of people, and you are exposed to a whole new way of doing business.

After I got into it I realised that it is not an easy job and had to struggle to establish myself. A clientele is built only after a long period of mutual trust. So its imperative that you are absolutely transparent in all your dealings because once you lose your reputation then you cannot work in this industry.

With the system becoming totally computerised how efficient have the operations become? Has it facilitated international trading any?

The whole system has definitely become much more efficient. Earlier, we had to send representatives from the firm to the trading floor and it used be very difficult to complete the orders. Inside the ring you had to transact purely by hearsay, which is very difficult, whereas now you can execute orders at a touch of a button. QLThere are a few people who have put up terminals abroad, and we are also trying to hook up in Dubai for the NRI clientele. When e-commerce systems are in place and net trading begins then the clients will become more aware of the whole process, the defaults will come down, and the clients will be able to pay from anywhere. However, it will take time for the system to be put into place and there are going to be a lot of teething problems.

There are people who are wary of the stock market and think it's a gamble. What do you think?

Stock market is the best bet, but one shouldn't look at it for short-term results. Look at it for a period of at least 15years, then one will be guaranteed a 20% result on all ones investments. There are chances where some companies might exceed your expectations, and others who will fall short. You need to look at it as a long- term investment. If you are building a house you don't expect it to appreciate the next day, next month or even next year. The money you put in should be a capital that is not needed for immediate requirements. What I have seen is that people invest an amount in the market, which they need after six or eight months. They fail to do any kind of market analysis and end up investing in C- grade companies. Within that short period the market may or may not go up. When investors are unable to make any sizeable returns and when there is an impending requirement they end up selling at a lower price in the process losing money too. At times they might not even be able to sell as the company loses its liquidity and they are left with nothing.

If an individual invests blindly with the sole motive of making quick money, it can backfire. This as you know, can result in a negative impression of the stock market. If you are playing the market you should be ready to take in a bit of risk too.

Can you tell us what type of people succeed in this profession?

I am not sure whether this profession is within everybody's reach, because it's become more capital intensive. Earlier, people traded keeping in mind the amount of money they had access to, but now with computerisation there is access to greater volumes and clients tend to lose sight of their limits. This makes life tougher for a broker. At the end of the day it is not the money they pay me but the amount they have to pay to the exchange. If they default then the broker's position becomes difficult.

MALINI SURYANARAYANAN

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