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This happened during under-graduate days of Analyst. There was one inter-college competition on “hospital waste management”, it was pretty good learning experience. Team went around hospitals speaking to hospital management & other related people to understand how waste is managed or disposed.

So student team along with college professor went to meet person in charge of waste disposal in one of leading government hospital. So students were getting tour of hospital & systems, and then team sat down for more discussion. During meeting, Analyst asked what hospital does with expired medicines. Reply was pretty simple, they throw it in dustbin. Analyst further queried, whether that was the right way to dispose? And reply was affirmative….its right way to do it. Still unsatisfied, analyst queried but don’t you think that can be bit dangerous? And reply was… “Hospital has never come across any such situation”.  By this time, team was miffed…why analyst was stuck on this and not moving on, so somebody dropped in with another question and conversation moved on.

Few days later on, while working on project one team member comes and announced loudly…you got listen to this case…… it was story about how street on kids live, they find food by looking in dumpster/waste basket and one such unfortunate kid happen to find strips of colourful medicine. Thinking it as chocolate he popped few and fell seriously ill & was admitted to hospital. Post recovering kid was questioned on source of those chocolates and he pointed to dumpster outside hospital.  Whole team was taken aback and thought to make this as key point.

Analyst was wondering why anybody didn’t see this coming when he was questioning about hospital throwing/disposing expired medicine in dustbin. Well sometime one has to lay things bare out; one has to actually say out loud things for people to understand. However, it’s not that easy, there is popular saying in legal parlance “kanoon sabut mangata hai”.

So if I tell you gold can actually fail to be good investment, most of the general people would discard that idea without second thought. But have a look at this (click on pick to enlarge or click on this link – Graph -1)

International Gold Price -1

That is graph of gold price in US$ / ounce from 1983 till date, look how price that was ~US$400 (1983) was around that level till Oct-2003, full 20 years. Needless to say one would have made mistake. However argumentative Indian would say that is in US$, while I am India, I buy in INR. Then have a look at this (click on pick to enlarge or click on this link – table-1 RBI historic gold prices).

India Gold Prices - 2

Notice price in 1993-94 ~Rs4500, while in 2001-02 it was near same. Time period is slightly less than decade (8-years to be precious) but still one didn’t make any money.

So now you know how to judge your Relationship Manager/ Investment Advisor/ Analyst (quality of their knowledge & advice). Next time if somebody comes and says gold is good investment as it has always risen, think like Jason Bourne and search for emergency exit for run away.