Not by numbers alone

The computer, and everything it represents and can do, is the god of all investment analysts. Without access to vast amounts of data, our beloved Excel sheets or the complex models that these create, we cannot imagine doing any financial analysis. And yet, these tools are relatively new, having become commonplace only during the 80s in the West and from about the mid-90s in India. I started my career at the dawn of computer-based analysis. Before that, people relied on a combination of manual calculations, intuition, and experience to make investment decisions. Analysts would pour over physical financial statements, using calculators and pen and paper to crunch numbers and identify trends. They would also rely heavily on their understanding of the market, the economy and the specific investments they were analysing. This process was time-consuming and often prone to human error. It required a keen eye for detail and a deep understanding of financial concepts. Analysts would spend hours, if not days, analysing a single investment before making or rejecting a recommendation. For mutual funds, things were doubly difficult in India. Even the basic data was hard to come by. When I started analysing funds, data arrived by fax for the first seven to eight years and had to be re-entered by hand. Of course, the scale was smaller since the number

This article was originally published on April 15, 2024.