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Christopher Nolan’s Dark Knight Rises has a villain who uses Batman’s fingerprints to execute trades through his broking account. Batman is the secret identity of billionaire Bruce Wayne, and this act completely wipe out his fortune. The feat is accomplished with the help of automatic weapons, motorcycles and an attack on the actual stock exchange building.
The last is like breaking into Google so that you can access someone’s Gmail account. Everybody knows that you can do it from anywhere. All you need is a computer and a password.
But knowledge about how the stock markets work, or even basic financial literacy, is a more scarce commodity than it should be, even in the real world. Educational institutions teach more about Newton’s laws, the reign of Alexander and writings of Shakespeare than they do about the basics of equities or fixed income.
Physics, history and literature all have their place in the curriculum. But so should subjects about money and how it works. A basic understanding of the stock market and financial instruments would be far more useful to most adults than algebra. They would probably be wealthier because of better asset allocation, and be less liable to be duped through inappropriate financial products or fall for ponzi schemes. Some of this is being done in schools, but more is needed.
The victims of every ponzi scheme are misled by outsized returns which would have raised a red flag for the financially literate. The Sen Commission which looked into the Saradha scam got applications from 1.7 million affected people.
However, one is yet to hear of a scam which preyed on people’s ignorance of trigonometry.
The bare-bones of financial literacy can be imparted very quickly. People could be taught about equity, debt, and how stock market or mutual funds work-all in a week.
Assume every graduate is made to do such a course before he gets his degree. News reports suggest that India produces around 5 million graduates a year. This means that such a program in six years could add 30 million to the number of financially literate people in India. This is more than the total number of demat accounts in the country after more than twenty years of liberalization.
Batman isn’t the only movie with a stock market blooper, one can even be found in that most famous of stock market movies-Wall Street.
The film has a line about Gordon Gekko shorting NASA after the shuttle Challenger exploded. But NASA is not publicly traded. One cannot buy and sell its shares in the same way that one can buy IBM, Reliance or SBI.
And while it is true that bourses allow you to bet on something going down in value, this particular line from the movie seems to suggest that the stock market can be used to short anything. Haven’t got your tax refund yet? Short the Income tax department. Did India just launch a mission to Mars? Go long on ISRO. Is your train late every day? Short the railways. If this was the case, people travelling on the Harbor Line in Mumbai would be the biggest bears on Dalal Street, and they would all be billionaires.
Sadly, this is not true. But more people should be able to understand why.
