Similar valuations, opposite outcomes

Here's an experiment you can try right now. Go to Value Research Online and pull up a listing of stocks in the Asset Management Companies category – these are mutual fund operators. Sort the list by market capitalisation in descending order. Now, in another browser tab, do the same with Brokerage Companies. The largest mutual fund operator is HDFC AMC, with market cap of about Rs 1.15 lakh crore. The largest brokerage is Billionbrains, which operates under the Groww brand and is worth almost as much. Groww was listed just days ago and famously doubled shortly afterwards. You can go down both lists and see that the remaining companies follow roughly similar patterns. Of course, the AMC list is much smaller and doesn't have the miscellaneous players that populate the bottom half of the brokerage list. Suggested read: Stop falling for the IPO trap A casual observer glancing at these two lists might think: yes, of course, both types of companies help people invest and make money. Similar businesses, similar valuations. But a deeper look reveals something rather different – an irony so stark it should make every retail investor pause and think.