In an earlier piece, I had hesitatingly speculated that the reason Basant decided to shut down the ‘Basant Top 10’ advisory service was because he was distraught at the vicious criticism over the failure of Hawkins Cookers.
That theory appears to be correct. Basant admits in the goodbye note that he was/is in a state of discomfort by the “mindless mudslinging” by a few “hiding behind the burkha of internet pseudo names”. He also complains against “people who just had a mischievous intent where one person created half a dozen identities and kept posting across the web”.
This is actually quite a surprising confession given Basant’s personality as a “rough and tough” person. Basant states in the note that he has “never backed away from an argument” and is “willing to argue with anyone on anything – anytime”.
So, it is surprising that Basant was so intimidated by the criticism of faceless persons over a chat site that he decided to take the ultimate step and play into their hands.
What makes the whole episode intriguing is that the ‘Basant Top 10’ service was, in Basant’s own words, raking in big money. Basant states that the service was “creating ripples”. He adds that he could have “doubled subscription rates” and retained “80% of my subscribers”. He also says that his subscribers “most of whom I have known for almost a decade continue to back me on this with full might and strength”. He emphasizes with a flourish that “At Basant’s Corner we made crores”. He also states that “no one closes down a business which is in its prime”.
So, who would shut down a gold mine like that just because some faceless persons over the internet make wild and baseless allegations?
Basant would know better than anyone else that stock failures are a normal part of an investors’ life. Criticism from disgruntled investors over failed stock picks is also perfectly normal. There is nothing in it to get “distraught” or to “lose sleep” over.
Basant also raises a grievance about his research reports being leaked out to the public by some unscrupulous subscribers. However, these problems of plagiarism and copyright infringements are also a normal part of our day to day life. The rampant piracy in software is an example of this. No software developer shuts down his business because his products get pirated. There are always a large number of law abiding consumers who will not succumb to the temptation of buying pirated stuff. In fact, Basant’s own continued success despite the alleged plagiarism is proof of this.
Basant also expresses his anguish at the jealousy that some people appear to have exhibited towards him. “The reputation and support that I have created is easily the subject matter of envy for many. It has disrupted thought processes all across” he says. However, it is no way to deal with allegedly jealous people that you give them what they are asking for on a platter by shutting down your source of success and their source of envy!
One allegation doing the rounds is that Basant may have sold off all or some of his holdings in Hawkins Cookers even while he was encouraging his subscribers and the public to buy it aggressively and that he is wary of adverse regulatory action in that behalf.
Basant acknowledges this allegation in his note and calls it “bizarre”. Basant hasn’t clarified whether he has in fact sold his shares or not but says that “At an opportune time I might show as to why I have got nothing to fear about”. He mysteriously adds that he is “unwilling to open my defence in front of all and sundry”.
Why Basant refers to a “defence” is not clear. Does it imply that Basant has in fact sold off the Hawkins’ shares? There is nothing wrong in it if Basant did so as a measure of portfolio balancing or because he found some other more attractive stock. It is best that he comes clean on it now rather than to wait for the “opportune time“.
Basant says in the note that he is not a “thick skinned hippopotamus”. However, he appears to be more sensitive than most people. Most people would have simply shrugged off the allegations and ignored it and gone on with their business as usual.
Prima facie, in closing down the ‘Basant Top 10’ service, Basant appears to have acted impulsively and in a knee-jerk manner. He has also played into the hands of his detractors. Maybe, if he had just turned off the internet and taken a brief holiday, he might not have taken the drastic decision that he did.