Merger mirage fades

Mumbai: The brief window for a "Pawar Family Reunion" appears to have slammed shut. Any lingering hopes of merging the two factions of the Nationalist Congress Party (NCP) following the tragic demise of Ajit Pawar have effectively evaporated in the last 24 hours. The emotional overtures of the past week have been replaced by a bitter political trench war, fueled by explosive allegations from Rohit Pawar, aggressive maneuvering in Parliament, and a decisive "stamp of approval" from New Delhi...

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Mumbai: The brief window for a "Pawar Family Reunion" appears to have slammed shut. Any lingering hopes of merging the two factions of the Nationalist Congress Party (NCP) following the tragic demise of Ajit Pawar have effectively evaporated in the last 24 hours. The emotional overtures of the past week have been replaced by a bitter political trench war, fueled by explosive allegations from Rohit Pawar, aggressive maneuvering in Parliament, and a decisive "stamp of approval" from New Delhi for Deputy Chief Minister Sunetra Pawar. The most damaging blow to the reconciliation efforts came not from the BJP, but from within the Sharad Pawar camp itself. Senior NCP (SP) leader Rohit Pawar has started raising doubts over the "accidental" nature of Ajit Pawar’s death. Rohit Pawar has been alluding to "unanswered questions" surrounding the plane crash. This narrative has infuriated the leadership of the Ajit Pawar faction, who view it as a politicization of a family tragedy and an indirect attack on the state’s security apparatus. Sensing the volatility of his stance, Rohit Pawar abruptly postponed a scheduled press conference in Mumbai where he was expected to clarify the party’s position on the merger. "The postponement wasn't just logistical; it was strategic," says a political analyst. "By raising doubts about the accident, Rohit has burned the bridge. You cannot merge with a faction while implying they—or their allies—are covering up the truth about your uncle's death." Simultaneously, the battle lines have hardened in New Delhi. In a move that signals zero intent of truce with the ruling NDA, at least three Members of Parliament from the NCP (SP) have signed a no-confidence motion against Lok Sabha Speaker Om Birla. This parliamentary aggression has effectively killed the merger from the BJP’s perspective. "The BJP was already wary of Sharad Pawar’s influence returning to their coalition," notes a senior NDA strategist. "Now, with NCP (SP) MPs actively trying to destabilize the Lok Sabha Speaker, the BJP will never allow the state unit to merge. They cannot have an ally in Maharashtra whose parent faction is waging war against them in Delhi." While the opposition faction engaged in confrontation, the ruling faction solidified its legitimacy. Deputy Chief Minister Sunetra Pawar undertook her first-ever "political" tour of the capital, holding high-profile meetings with Prime Minister Narendra Modi and Home Minister Amit Shah. The visuals of these meetings serve a dual purpose. It signals that the central leadership recognizes Sunetra Pawar not just as a grieving widow, but as the de facto leader of the NCP and a key NDA partner. Also, by hosting her, the BJP top brass has sent a message to the state units that the alliance with the Ajit Pawar faction stands firm, independent of the Sharad Pawar family drama. Emerging from these meetings, NCP State President Sunil Tatkare delivered the final rebuff to the merger proponents. Addressing the media, Tatkare issued a stern "advice" to leaders from "other" parties—a clear reference to Sharad and Rohit Pawar—to stop interfering in the internal affairs of his party. "We are capable of making the right decisions on our own," Tatkare asserted, effectively declaring that the NCP (Ajit Pawar faction) is an independent entity that does not require guidance or "mergers" from Baramati to survive. The events of the last two days have clarified the political landscape. The NCP (SP) has chosen the path of aggressive opposition, using conspiracy theories and parliamentary procedure to attack the ruling coalition. In response, the NCP (Ajit Pawar faction) has sought and received the protection of the BJP's central command. The "Merger" is no longer a possibility; it is now a closed chapter in the history of the Pawar clan.

Derivative vs. Discipline

C.S. Krishnamurthy
2 hours ago
3 min read

Bengaluru recently witnessed an unusual but telling medical intervention. Doctors at National Institute of Mental Health and Neuro Sciences (Nimhans) helped a 29-year-old young man, identified as ‘Mr. D,’ break free from what was diagnosed as stock trading addiction. According to the case report, the individual moved from modest investing to aggressive intraday and Futures and Options (F&O) trading, chasing rapid gains until financial stress, anxiety, and behavioural issues took over. To fund his addiction and chase losses, he reportedly turned to digital loan apps, eventually accumulating a staggering debt of Rs.80 lakh. This episode is not an exception. It is a sign of a deeper malaise quietly spreading across India’s capital markets.

High Spirits

Derivative trading attracts first-time investors with speed and excitement. A small margin promises control over large positions. A few successful trades create confidence. Screens flash green and red, mimicking the emotional highs of speculation, if not gambling. SEBI data shows that close to nine out of ten retail participants in the F&O segment lose money over time. Yet participation continues to rise, driven by hope, bravado, and fear of missing out (FOMO).

Over the last three decades, markets have repeatedly shown that short-term price movements are noisy and unpredictable. The Harshad Mehta episode in 1992, the dot-com collapse of 2000, the global financial crisis of 2008, and the pandemic crash of 2020 all triggered sharp falls followed by recoveries. Traders betting on direction during these phases were often wiped out. Investors who stayed invested survived and prospered.

The psychological burden of derivative trading is heavy. Losses demand recovery. Recovery demands larger risks. Overconfidence alternates with panic. Nobel laureate Daniel Kahneman famously observed that people feel the pain of losses twice as strongly as the pleasure of gains. Derivatives magnify this imbalance. Many traders mistake activity for intelligence, while markets quietly penalise impatience.

Constant Companion

Technology has turned markets into a constant companion. Mobile trading apps have removed friction and restraint. Decisions are taken in seconds, often without strategy or risk control. Leverage ensures that mistakes hurt faster. When capital erodes, emotions worsen. Several Nimhans case studies highlight how trading losses spill into family life, work performance, and mental health.

Globally, the pattern is identical. Studies in the United States and South Korea show retail derivative traders consistently underperform even basic index returns. Legendary investor Warren Buffett has warned that derivatives are financial weapons of mass destruction, not because they are evil, but because they amplify human error.

In contrast, history offers clarity. Over the past 40 years, Indian equities have delivered roughly 12 to 14 percent annualised returns despite wars, scams, political shifts, and recessions. This return did not come in straight lines. It came through patience, reinvestment, and discipline.

The Safer Bet

Mutual funds convert market volatility from an enemy into an ally. Systematic Investment Plans ensure that investors buy more units when markets fall and fewer when they rise. This simple discipline reduces timing risk and emotional interference.

Consider an investor who started a monthly SIP during the turbulent early 2000s. The dot-com bust, global recession, and later crises would have tested conviction. Yet the same investor, continuing uninterrupted, would today sit on a substantial corpus. The power of compounding rewards time, not brilliance.

Fund managers often remind investors that markets correct portfolios, not patience. Market expert Ramesh Damani has repeatedly said that wealth in equities is created not by trading frequently, but by owning quality businesses and allowing time to work its magic.

Mutual funds also provide diversification, professional management, and regulatory oversight. Hybrid funds, index funds, and retirement-oriented schemes cater to different risk appetites without demanding constant decision-making. Most importantly, they protect investors from themselves.

The emotional difference is striking. Traders live with constant tension. Investors live with acceptance. One reacts to noise. The other responds to value. Over decades, this difference compounds into vastly different.

The Nimhans intervention reminds us that financial decisions are never purely numerical. They are deeply psychological. Markets will always tempt with speed and shortcuts. Yet history, data, and experience point in one direction. Sustainable wealth is built slowly, deliberately, and patiently.

Derivatives may promise excitement, but disciplined investing offers dignity. In choosing the long road, investors choose peace of mind along with prosperity. Over time, the market does not reward the restless. It rewards the resolute.

(The writer is a retired banker and author of ‘Money Does Matter.’ He can be reached at krs1957@hotmail.com. Views personal.)