Tuesday, July 21, 2009

Let the brothers fight

Has there been any controversy bigger than the feud between the Ambani brothers? I doubt it and I give full marks to the brothers for their impeccable record of figuring in the newspapers for all the wrong reasons. The bone of contention now, is the pricing of gas. The 'Big' Ambani (the smaller one) as he loves to call all his brands by that name, for instance the Big entertainment, Big cinema, Big TV and so on now alleges that his real big bro is playing spoilsport in keeping his word on the gas agreement that they had signed during the peace process when their fight came out in public in 2006. He spared nobody as he went on to allege that the government is backing the big brother instead of being neutral.

The bureaucrats wasted absolutely no time in giving interviews to news channels on how the brothers should touch their mother's feet and bury the hatchet and all. But I say lets cut the crap. But whats wrong if these brothers fight? I have absolutely no problem if they do. Their fighting does more good than bad to the millions of shareholders or the aam aadmi. Confused? Let me explain.

Whenever the brothers go to court or give statements in public, the stock market reacts to each and every petty issue. For instance, On 15th June 2009, the Bombay High court ordered RIL, a company owned by the elder brother to sell natural gas to RNRL, a company owned by his younger brother for a price which was 44 percent less than that set by the government. The share market reacted similarly and the little bro's company's share price jumped 24% while big bro's company's share price fell by 8%. But after a week, everything was normal for both companies. Investors started buying both shares and they corrected. All the events in the past have followed the same trend.
The good thing is that the share prices of the companies owned by the brothers seem to correct way too fast compared to other listed companies.

We must not follow the adage- 'Don't take risks in a stock market'. What we should do is pile up shares of all the companies owned by the brothers and wait for them to quarrel. If the brothers couldn't bury the hatchet in the past four years, they never will. The animosity will not mitigate. When you are assured of controversies every year, then why not take risks to capitalize on them? Keeping in mind the average time the Indian court takes to give justice, I believe that it is a good idea to do so. So go ahead, open DEMAT accounts, buy Reliance shares, wait for a controversy and make money! With the brothers, It is that easy. Long live the brothers. Amen.

1 comment:

  1. Wow.. what an insight!
    I have been following their family fight but then gave up on it,as it had become way too Mundane..
    I just don't understand even if they're fighting why do the politicians have to pitch in publicly?
    add Mr. Amar Singh to the scene and you've got a near perfect entertainer.