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Wednesday, 21 December 2011

Romancing with Finance- Investment lessons from Dev Anand

The demise of evergreen chocolate hero of Bollywood- Dev Anand introduced to the world hitherto unknown facets of his personality. The honest first person accounts of face to face meeting with Dev Anand by many journalists brought out the debonair image of the legend in a different league.  Such spontaneous coverage underlines that Dev Anand had some unique and extraordinary qualities, beyond the usual glitz and glamour associated with the film stars in India.

Now what are the qualities that Dev Anand possessed and an investor needs to be inspired about? His numerous flop films in the later part of his career did not really make any financial sense for many. Although, how he managed his cash flows, in spite of these flops year after year, can indeed make a good Case study. The sale of DVD/CD, TV and overseas market rights of Dev Anand’s old classic movies earned him lot of money year after year. Further, his recording and sound remixing facility in Mumbai earned him millions per year. Most of the movies made by him in the later part of his career were made by following stringent budgets and strictly adhering to it. It is believed that the cost of a Dev Anand movie was less than 75% cost of other Bollywood films in the same era. No wonder the accreditation of these films claimed- Story, Screenplay, Direction by Dev Anand. This is apart from the fact that he was also producing the film and playing the central character on screen. With sale of CD/DVD and TV rights he recovered at least part of the cost. In the end, his self-proclaimed ‘expensive hobby’ of making films was not so expensive considering his rich cash flows. And he continued churning out film after film with unmatched passion right until he breathed his last.

Learning’s for an investor from the above are that always adhere to the budget. Cost of investment is an important factor to determine the final profitability. Limit of risks to be taken depends on your cash flows. Good investments in the past and nurtured with time are the wealth creators in future. Try and know the investment product inside out and develop a passion to follow it. Passion is the key word. Enormous time and effort is put in by individuals to earn money however, when it comes to preserving or investing it, not many are that keen or passionate.

Dev Anand’s nephew Shekhar Kapoor narrated an incident after a release of Dev Anand film in 1974. The film was a disaster at the box office. “He was sad. Reflective. For all of five minutes……Ten minutes later his eyes were vibrant. His face excited. He was unable to sit down for his excitement.” Dev Anand had got an idea of his next film.

Apart from positivity the above incident highlights that an investor has to take quick decisions without ruing the past. The idea is to look forward for opportunities instead of bearing the load of past mistakes. All this helps an investor to beat the Fear- Greed- Hope cycle and get over the herd mentality.  Lyricist Sahir Ludhianvi’s famous song picturized on Dev Anand sums it all very well- Jo mil gaya usi ko muqaddar samajh liya, Jo kho gaya main usko bhulata chala gaya.’

In an interview to Economic Times, Dev Anand had once remarked, “ Once you graduate into making films, you can keep on doing it as long as you have the capacity and money. It is a hell of a risk, but without risk what is the use?”.  Investors have to learn that returns from ‘safe havens’ aka traditional fixed return instruments are eaten away by inflation. This makes it mandatory that element of risk should be considered. In pursuit of wealth creation, systematic and calculated risk taking is imperative. When, where, how ……….is the ultimate million dollar question.

Dev Anand aptly titled his autobiography as 'Romancing with Life', it is for the investor to get inspired and begin 'Romancing with Finance'.