Hubris

One feels the need to highlight three separate scenarios that have been played out over the last couple of months. Like a Woody Allen script.

Story #1
A chance discovery of a couple of blogs led to a rapid discovery of various other blogs. Most of these were unrelated to me but pointed towards an online community that lived, loved, hated, abused ... in a virtual plane. What shocked me was that I used to know some of these people, and they were decent in our interactions. But in an online world, they snarled, roared, complained, washed dirty linen, hurled invectives ... essentially, the works. Some were targetted towards me, and refers to a point in time when I used to interact with these people. Quite hilarious, now that I do think about it, that during my interactions with some of these people, I was oblivious to the fact that they were keeping one eye on a PC, abusing me at will.

Fast forward a couple of years, and speed-reading some of the posts indicates a big chill that seems to have set in amongst the community members. It appears that each has plunged a knife in someone else's back, only to find that the same favour is being done to them at that moment. Quite a unique loop, this.

However, cowardice and betrayal is not a key learning here. The hubris that surrounded some of the initial posts indicates that there was an aura of invincibility surrounding their online personas. Self-indulgence led to abusive posts, with each personality claiming superiority in form, content, humour etc. Old stories and emotions were being replayed like a faded yesteryear movie in sepia tones. Each was seeking their Muse, seeking assurances from external sources that they were indeed a poet.

The Internet played the role of a superstructure supporting very fragile egos.

Story #2
The India story and influx of several funds has caused a concern: structurally, we are no different than we were a couple of years back. Yet, the hubris that surrounds investment themes has led me to become a confirmed 'Contrarian' and adopt the role of a 'Cassandra'. I would be hard-pressed to see this growth sustain, and I would suggest a pruning down to focus on industry leaders in growing markets. The 20th century saw three great stock market bubbles and at least three great industrial crashes in America alone. The glut of investments, scarcity of ideas and volatile demand saw an eventual crash. Put simply, too much money was put at too much risk, and a hundred thousand lemmings said they could not be wrong.

Story #3
A glut of reading over the last couple of months has led me to finish a very sober, well - documented book: "Enron: The Rise and Fall" by Loren Fox. Again, Enron did not fail because of accounting fraud. They were led to accounting fraud and were caught out by their accounting fraud. But where they failed was poorly researched, expensive investments into non-core businesses. Aided by Wall Street pressures to maintain steady earnings growth and an internal mania to seek stock price growth, they faltered along the way. Returns from several businesses did not even cover their cost of capital. But their blind over-confidence led them to absorb ever increasing levels of debt in myriad forms; pre-paid swaps, credit-quality linked loans, promisory notes etc. The underlying economics of their businesses could not deliver the promised returns. Compound that with hubris, and there was an inevitable implosion created by a wave of accounting scandals.

These three stories have taken place simultaneously and independently. But I hear the quiet voice of reason gently pointing out the dangers of hubris. Gentle prodding reminds me of the tale of Icarus. The irony of Icarus' death is that it went unnoticed - a mere splash in the sea - during springtime. The tale points out the poets' fear of exultantly flying higher, only to end as a tiny splash of failure ... unnoticed, and in many cases, unloved.

This has only strengthened my resolve: no matter how high I fly, I will always remember where I came from, remember who I am, remember how often I've failed, and remain sober. My licence to freedom does not grant me the right to infringe on another's licence to be free.

Happy New Year.