Then there were four: Thoughts about Satyam

There was a group known as the “Big Five.” One of them died, and then there were four. What am I talking about? After the Enron scandal scandal broke, one of the leading auditing companies of that time Artur Andersen died. What happens to Pricewaterhouse Coopers, the auditing firm for Satyam?

That to me is the important question. What happens to the auditors who let this happen, and how did this happen? How many dropped the ball innocently? A CA attempts to answer this question (I do not fully understand what he says). I would be surprised if Ramalinga Raju is the only one who was aware that the numbers were made up.

Some heads will roll, but what about the investors now? Well, this is India’s Enron, and if you invested money you lose. 80% overnight to be exact. Sorry for you, but move on.

Do I have money invested in Satyam? Indirectly, yes; though mutual funds. Do I care if it goes under? No. Satyam is one of several baskets that I have kept my eggs in. The stock market gave me returns that I played no (or a very minimal) role in. Similarly, it will also take away my money though no act of mine. Anyone investing in the stock market should be prepared for these turbulences. Diversify, diversify and diversify. You will be safe.

On a side note, Satyam’s bad news yesterday, did not bode well for all other stocks in general. The BSE Sensex fell 7%, which to me is very good news. I am an investor who does not pay close attention to market fluctuations. Once in a while when I have some liquid cash, I dump it in the market. Today is probably a good time to do that. “Buy low” is the mantra.