Markets with Bertie: Taxing times and trendy tees

Every August, Bertie takes his chartered accountant, Roy, out for dinner. Roy and Bertie go way back to their college days, and this annual dinner is Bertie’s way of thanking his old friend for the gruelling task of filing his tax return. Plus, Roy isn’t your typical chartered accountant (CA); he’s actually fun to hang out with. As the evening progressed, Roy got a bit nostalgic. “Remember Mrs. Talwar, our Economics professor?” he asked. A G&T-soaked Bertie needed no prompting to drift into fond memories of Phillips and other curves.

“In the final year, she taught us about promissory estoppel.” he went on. Bertie was still in his reverie. “Are you even listening, Bert?” Roy was annoyed. “Promise to stop. Yes, yes. I remember” Bertie blurted. Roy responded with his usual ‘what a duffer’ expression but continued nonetheless. “In taxation, it means if you have been promised a certain tax treatment at the time of an asset purchase, the government is duty bound to keep its promise.” Bertie was trying to keep up. “Which is why, when you change any asset taxation, it has to be prospective. One cannot unilaterally change the rules in the middle of the game.” Roy said with feeling.

Read this | Markets with Bertie: A tale of paneer manchurian, taxes and bankers

“What are you going on about, Roy? You used to be a fun chap.” It was Bertie’s turn to be annoyed. “You will know when you sell your investments, Bert,” Roy smiled.

Whither the deposits?

Last week, Bertie found himself munching on samosas in the back row of a ‘Bull vs Bear’ debate between two market veterans, hosted by his favourite business news anchor, Sasha. The veterans were locked in a contest of who could be more bullish, which made Bertie wonder if bears were already extinct in India. Just as he was about to leave, one of the veterans boomed, “I don’t like banks, especially private ones.” The room, filled with portfolios heavy on private banks, fell silent. Even Bertie perked up.

Sasha tilted her head slightly and placed her hand on the chin which was cue for the veteran to elaborate. “Deposit growth Sasha! Where is it? People are taking money out of bank deposits and doing SIPs and buying stocks and gold and property.” The veteran was on a roll. “If banks have no deposits, how will they lend? Game over.” He signed off with a flourish.

More here | If deposits are stuttering, how will banks manage the credit boom?

Bertie slumped back in his chair and, for the second time that week, thought of Mrs. Talwar. “Credit and deposit are two sides of the same coin,” she had said. “As long as you’re paying for property, gold, or equity through the banking system, it remains part of the bank deposit.” Bertie mused about whether Mrs. Talwar might consider a new career as a ‘market veteran.’

The consumer and the investor

As a consumer, Bertie is a man of strong likes and dislikes, but as an investor, he prides himself on trying anything new and trendy—be it pineapple pizza or dogecoin. In an otherwise deserted mall, Bertie noticed a small crowd inside a fast-fashion store. This chain has been a darling of growth investors, who have rewarded its stock with a triple-digit earnings multiple. Bertie the consumer didn’t care for fast fashion, but Bertie the investor was intrigued and seized the chance to do some ‘Feet on Street’ research.

The first thing he noticed was the queue outside the women’s trial room—on a Wednesday evening, no less. He wandered over to the men’s section and gave a couple of T-shirts a cursory inspection. They weren’t bad, he grudgingly admitted, especially for 300 bucks. Many had funky prints—cracked-open skulls, marijuana leaves, streaks of lightning—themes that Bertie assumed were trending with Gen Z. Some even sported motivational quotes. Bertie picked out a plain white tee and joined the checkout queue. After all, what’s a channel check without a purchase receipt?

Also read | ‘We’ve borrowed returns from the future and are currently ahead of fundamentals’

Back home, he discovered that the tee was plain only in the front. On the back was a picture of what Bertie thought was Hulk Hogan in a vest, with the words “Thanks but not thanks” emblazoned in red. The youth must be really digging this, thought investor Bertie, while consumer Bertie vowed he wouldn’t be caught dead in it.

(Bertie is a Mumbai-based fund manager whose compliance department wishes him to cough twice before speaking and then decide not to say it after all.)