Clean lessons in investing, told through crisp and compelling tales

Long and Short: 72 stories by Groww to unravel stock markets

Producer: Groww Digest team

Publisher: Bloomsbury

Pages:  254

Price: Rs 499 

Dale Carnegie perhaps did more than anyone else to popularise the idea that public speaking is not an innate gift but a skill that can be cultivated through practice. In his landmark book The Quick and Effective Way to Public Speaking, Carnegie strongly advocated the use of stories. He encouraged speakers to begin their talks with anecdotes, especially those drawn from personal experiences. Such stories help audiences perceive the speaker as trustworthy, allowing a rapport to be established immediately.

 

Facts and figures presented in isolation tend to be forgotten quickly. When conveyed through storytelling, they become memorable.

 

Carnegie believed stories can serve as a tool for subtle persuasion. A barrage of fact-based arguments may well end up stiffening peoples’ resistance. But a story allows the audience to arrive at conclusions on its own.

 

Why are stories so effective at communicating ideas? Researchers have found that when listeners hear plain facts, only the brain’s language-processing areas are activated. But stories stimulate multiple regions, including those linked to emotion, sensory perception, and motor activity. In effect, the brain processes a story as if it is experiencing it.

 

With Indian retail investors entering the market like never before over the past few years, cautionary tales are a good way of educating them about the complexities of investing. Groww, India’s largest stockbroker, has tapped into the power of storytelling to connect with and build its clientele, mostly young investors. It sends out a newsletter to subscribers six days a week. The Sunday edition focuses on investor education. The team at Groww found that stories struck a chord with readers. Their stories are non-fictional and impart financial lessons in an engaging way. Seventy-two of them have been compiled into a recently released book titled  Long and Short .

 

One story discusses the high-risk profession of King Crab fishing in Alaska. Alaskan fishermen can earn tens of thousands of dollars on one fishing expedition lasting a couple of weeks. But the Bureau of Labour Statistics lists crab fishing as the most dangerous occupation in the US with very high casualty rates. The story concludes with the question: Is the reward worth the risk? There is no definitive answer, but the message is clear: Returns are easily visible, risks less so. Nevertheless, they must be given considerable weight when making investment decisions.

 

Another story centres on Adam Neumann, founder of WeWork, who pitched his company as a technology firm rather than as a conventional real estate enterprise. Such portrayal allowed him to raise capital from early investors like SoftBank at inflated valuations. Only during the initial public offering (IPO) did the company’s financial and governance issues come to the fore. India’s IPO market, too, was hot in 2024. This story stresses the importance of reading the prospectus and doing thorough due diligence instead of getting swayed by hype.

 

A big part of being a successful investor is avoiding scams. The book features stories of scamsters such as Charles Ponzi, Harshad Mehta, and Theranos founder Elizabeth Holmes. Scams erupt with disconcerting regularity in the Indian financial markets as well. One was the Ulip scam, wherein insurers launched high-cost products that made it difficult for investors to earn good returns even after being invested for a long time. Another was the real estate scam: Thousands of buyers bought homes but did not receive delivery for years. The scam-related stories in the book highlight the need for investors to never let their guard down.

 

Among the few Indian stories, there is one on the Tata Nano—the car targeted at families that travelled on a scooter (parents and often two children) and got wet in the rain. It highlights the many manufacturing innovations the Tatas undertook to achieve the price point of  ~1,00,000. Yet, the car did not take off as expected, due to a few early mechanical problems and perception issues. The story underscores the point that executing a simple idea can, at times, be more challenging than implementing a complex one. In investing, buy and hold is a simple strategy that many investors have used to build immense wealth. Yet, whenever a major downswing comes, many investors throw in the towel and exit at precisely the wrong moment.    

 

The stories included in this volume are of a high standard and ensure that the reader’s interest never flags. Groww’s team has done a good job of winnowing away complexities and distilling the essence of each tale. The next volume will hopefully incorporate more stories from the Indian market. There is much, however, that newcomers in the markets can learn from the present one.