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Quick Summary: Bulls, Bears, and Other Beasts by Santosh Nair is a tale of India’s evolving stock markets from the late 1980s to the early 2000s.
Through anecdotes, scams, and the rise and fall of market titans, the book brings alive the drama of Dalal Street.
It’s not just a financial history; it’s a rollercoaster ride showcasing greed, ambition, and the sheer chaos of a rapidly changing India.
Tapan’s Verdict: Skim it 🤓
Bulls, Bears, and Other Beats: Actionable Insights
Assess Risk Thoughtfully
Your returns are directly tied to the risk you take, but remember to only risk what you can afford to lose.
Sleepless nights and emotional turmoil are signs you’ve overleveraged.
Big risks don’t always mean big rewards—they often lead to big losses too.
- Start small and scale as your understanding grows. Staying within your circle of competence—a concept popularised by Warren Buffett and Charlie Munger—can save you from unnecessary risks
- Losses? Think of them as tuition fees for the market’s lessons.
- Avoid waiting endlessly for a “perfect price.” Stocks with strong fundamentals grow over time—buying late is better than not buying at all.
Avoid Price Anchoring
Like the book suggests, focus on the intrinsic value of a stock, not the price.
A stock priced at ₹10,000 might have outperformed a ₹10 stock over the years.
Similarly, avoid hesitation due to relative highs.
If a stock’s fundamentals remain strong, its higher price is often a reflection of its success.
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Recognise Market Cycles and Patterns
Every bull and bear market starts when the last optimist or pessimist has given up.
Market psychology is cyclical, and understanding these rhythms can help avoid the mania and despair many fall prey to.
The market, like human nature, is predictable in its unpredictability. Recognising recurring patterns is key and Morgan Housel’s perspective in Same as Ever on what stays consistent over time is necessary.
Case in point: the Reliance vs. Manu Manek bear cartel saga illustrates how sentiment can drive price movements to extremes.
Insider Trading and the Early Market Structure
The 1980s Indian stock market was rife with insider trading disguised as ‘research.’
Learning from history, today’s SEBI-enforced regulations ensure better transparency, but retail investors should still scrutinize sources and beware of red flags.
Technology as a Game-Changer
The opposition to computerisation in BSE in the late 1980s shows how clinging to outdated systems can lead to obsolescence.
This paved the way for the NSE’s dominance, proving that early adoption of technology isn’t just smart—it’s survival.
If your business resists progress, competitors will devour your market share.
Don’t Chase the Herd
When “everyone” believes in a particular stock or sector, it’s time to pause.
The book quotes, “Experience tells me it’s good to have some disbelievers”.
This was evident during the tech bubble of 1999-2000, where unjustifiable valuations caused catastrophic losses.
When everyone is blindly chasing the same trend, it often leads to irrational outcomes, what’s known as ‘herd mentality.’
This behaviour is akin to cargo cult thinking, where actions mimic success without understanding the underlying logic.
Be Wary of IPO Hype
The Morgan Stanley Growth Fund disaster in 1993-94 serves as a warning.
Blindly following IPO trends without understanding basics like NAVs or lock-in periods often leads to regret.
Always dig into fundamentals over hype.
Long-Term Resilience Wins
Rakesh Jhunjhunwala’s journey shows that patience and quality investments trump speculative bets.
Despite setbacks during the tech bubble, his focus on fundamentally sound companies like Titan Industries exemplifies the virtues of value investing.
Memorable Quotes
A bull market does not start till the last bull has given up hope and a bear market does not start till the last bear has given up hope.
You are never going to get any stock at a price you are most comfortable with. And even if you do get that price, you are unlikely to buy the quantity you want to.
The amount of risk you are willing to take will decide the level of returns you make. But you need to see this in the context of another stock market truism: only risk what you can afford to lose. A few sleepless nights are unavoidable once you decide to play the game. But too many of them, and the fun goes out of it. Also remember, big risks do not always guarantee big returns; you can lose big too. Know what you are getting into and why you are doing so.
