Stocks & Sandal Sticks
In its editorial, The Economist wrote - “The humbling in the markets calls into question Mr. Adani’s pharaonic ambitions. It is also a political embarrassment for Narendra Modi, the prime minister of India and a close associate of Mr. Adani. And it confronts Indian capitalism with its sternest test in years.” It’s the kind of editorial that summarises what happened and what it means for the future. But it will provoke the passions of those who probably care too much and those who care for all the wrong reasons. But it reminded me of a story from my childhood.
There is an Akbar-Birbal story that my grandfather used to read to me as a kid. It went something like this:
Once someone complains in the royal court of Akbar about their stuff getting stolen. The sufferer also accuses a bunch of people. But the accused are of high repute, so, Akbar knows that the regular way of inquiry won't work. It would be too embarrassing for the court. Akbar asks Birbal to find the thief, silently. Birbal personally visits all the accused, respectfully greets them, and gives them small sandal sticks as gifts. He then casually mentions that the sandal sticks are thought to be pious and shrink faster when they are in the homes of those morally corrupt - thieves and liars. Two days later, Birbal revisits them all and brings one of them, privately, to Akbar as the thief. The man confesses his crime. Curious Akbar asks Birbal how he did it. Birbal says that there was nothing pious about the sandal sticks. When he revisited all the accused, they had dried out in all the homes, except one - that of the thief. Others didn't care about them, only the thief did. The thief cared enough to do everything that he could to make the sticks appear fresh.
This story has stayed with me because it let my tiny mind meander in all possible, maybe even incorrect and incongruent ideas. We often talk about “having a conscience”. But what does that mean? It is not about “being moral”. If that were the case, conscience would have prevented people from engaging in behaviors that they consider morally reprehensible. It only kicks in afterward. It leaves regret and guilt. The human conscience does not operate like a vaccine, but a bitter medicine. The human conscience is a curse for those guilty. Because in the minds of the guilty, it inspires up conspiracies where all their bad times are now connected to their past bad actions. It births superstitions, wills of gods, and calculations. It kicks in because we are scared of the unseen consequences of our actions. Because we are scared of the terrible possibilities in the future. Scared of death. So, it’s about survival. The human conscience is purely for survival.
Adani lost $100 billion - 1/2 of his entire wealth - in a week. This didn't happen due to some production or service problem, an inquiry or action from a regulatory body going hard on a tycoon, or a market-wide tumult that impacted a new but massive empire on a bad day. It happened because someone accused him of fraud and his present and future investors, who were in his corner till the day before, got scared. Do you know why billionaires with calculating brains backing Adani got scared? Because deep down in their human hearts they already know that the accusations if pursued will hold up. They know they have bet on a lightening fast horse who would fail every drug test. They know that overpriced stocks are just seemingly fresh sandal sticks that should have dried out a long time ago.