Hindsight Bias

The house is suddenly abuzz with terms such as presumptive loss, notional loss and opportunity loss.  And depending on one’s political proclivity   ‘the no loss’ theory also has been aired with equal felicity. The lady in the house has suddenly taken a fancy to the word ‘presumptive loss’ to get even with her male counterpart. For so long, she has been trying hard to get her point across when ever a decision concerning money was involved. Now with the CAG report to shore her up she has been on the offensive on many of my financial and investment decisions.  She has also dug up incidents of the past and put them under the microscopic scanner. Mercifully she has not cast her inquiry to the pre marital days but in all likely hood, might reassess her losses on her father’s decision to give her in matrimony to a dull wit like yours truly.

She has now found the stick to beat me with for my alleged acts of procrastinations and avoidance. Her stock argument is that I have caused irreparable loss to the family’s financial position by not acting on her advices. The losses are both capital and revenue, and if you may, sweeten it by prefixing ‘presumptive’. (By the way, a loss presupposes a possible gain. So a presumptive loss of 376000 crores means every Indian could have been richer by Rs 3000, which is a nice elevating thought. This logic takes off from a very original idea propounded by VKN: that is, increase the population so that   the ‘per capita debt burden’ of India would lessen!  My acknowledgements.)

Her first charge is that the family (read, I)   has not considered the dirty yellow metal as profitable investment option. By this act of omission, the presumptive loss, according to her, would be the sum of both the scams put together, if you, as much as, ignore the crore tag.  I agree, albeit, with a slight modification… the loss is ab initio, as the investible amount was presumptuous to begin with.

Her second charge …. We could have saved a lot on the house construction had we started it early, courtesy her advice.  The difference in cost of construction between the dates we finished our house and the date of her advice, is a loss we could have avoided, if I had listened to her.  How I prefix the loss, the choice is mine…notional, presumpumtive or opportunity, so long as I don’t emulate Mr. Sibal in claiming no loss.  She will not buy my claim to a whopping capital gain, notional if she insists, considering the sky rocketing realty prices. Her advice: be cautious of the bubble around the corner and do not rejoice in haste.

The third charge is my reluctance to heed to her advice on my stock market exposure. She accuses me that my timing of the market is so amateurish that I have only made losses. Had I listened to her advice I would be sitting on heaps of money, she avers. And pray what’s her advice?  When ever she sees the slightest signs of the bulls taking over the market she wants me to offload all the stocks I hold.  When I tell her that I should stay invested and participate in the rally and see my portfolio grow, her view is that the growth is all ephemeral. Hard cash is all that appeals to her. And when the markets tank she will be the first to point her finger……..didn’t I tell you.  She doesn’t buy the argument, the losses are all notional and as a risk averse investor, it is best go long. Her outlook on the market resembles that of Anil Ambani who says a bear cartel is working extra time.

Another issue on which she smells a rat is the skyrocketing prices of Onions and Tomato. Her expert view is that somebody has played the commodities market in respect of these vegetables. Not the ‘futures and options’ but something like what the legendary Puzhakkare Vettil Chathu Nair did in the epic (will it qualify?) Pithamahan by VKN: the daring act of burning 200 bags of paddy in the Cochin beach, which act earned him the Sir title from Queen Elizabeth. Chathu did this not to manipulate the market but to teach the Dewan a lesson. In the instant case, the prices of onions have come down fast but she smells a scam there also. Luckily, no demand for a JPC!