This has got to be the most hilarious piece of crap I have ever heard in my life. I understand that Pakistani's act dumb when it comes to India, but this is taking it too far !!!
http://www.hotklix.com/?ref=content/152704
Take a look at this video to hear the Pakistan perspective on the Mumbai attacks !
Dec 1, 2008
Oh god, this is just so painfull...
It took me three days before I could get into any sort of a mood to type. The last week has been very sad. I was somehow feeling very depressed even though its the nth time there have been attacks on India this year. This attack is somehow looking different, say even compared to the attack on the Parliment, since it targets the very points that the emerging India takes pride in. The coordinated attack is so unlike the serial bombings (which were more of a sleuth attack) as it shows that we are helpless in every aspect. It also shows how easy is it for a person to walk into any place he wants and create panic there. It also shows how porous the borders are if a group of people could get into a speed boat and enter the ports so freely.
Power, Money and Vote bank (thus Religion) seem to be the only things that the neta's care about and Im feeling vulnerable that we are sitting in a country where there is no value to our lives. There is no solution in sight and even worse, no attempt at making the situation any better. And we are flanked by two neighbours, one of whom is on the way to crush us with their economic growth and progress and the other who is hell bent on jumping off the cliff while dragging us along with it.
More importantly, this attack brings in one major change, it will brand India as very unsafe for every foreigner; includes investors, business people, sports persons and tourists.
It is a sad and disgusting situation to be in...
In the meantime, one article caught my eye. I have cut and pasted the article here, take a look and you will realize that the politicians care about nothing and you will also realize why the new generation of leaders are not any different.
And then the Maharashtra CM taking along Ram Gopal Varma (RGV) to the site for a first hand inspection.
Aah, for crying out loud, is anyone listening to the country and what it needs ?
Power, Money and Vote bank (thus Religion) seem to be the only things that the neta's care about and Im feeling vulnerable that we are sitting in a country where there is no value to our lives. There is no solution in sight and even worse, no attempt at making the situation any better. And we are flanked by two neighbours, one of whom is on the way to crush us with their economic growth and progress and the other who is hell bent on jumping off the cliff while dragging us along with it.
More importantly, this attack brings in one major change, it will brand India as very unsafe for every foreigner; includes investors, business people, sports persons and tourists.
It is a sad and disgusting situation to be in...
In the meantime, one article caught my eye. I have cut and pasted the article here, take a look and you will realize that the politicians care about nothing and you will also realize why the new generation of leaders are not any different.
And then the Maharashtra CM taking along Ram Gopal Varma (RGV) to the site for a first hand inspection.
Aah, for crying out loud, is anyone listening to the country and what it needs ?
Oct 28, 2008
Stocks to buy in the Indian Stock market !
Its been some time since I put my foot, the whole of it into my mouth !!! So I thought this is a good time to do so by publishing online what stocks I follow and buy.
The markets have been trashed out of shape for a whole lot of reasons and stocks are at such mouth watering levels that I can no longer stay out of the market (For the record, I moved every last penny out of the markets at a Sensex level of 15,000 for a variety of reasons). Having ridden the market on the journey from a Sensex level of 6,000 to 21,000, it is almost crystal clear to me that this is probably the best time of the decade to make money, even if it takes 3 years to do so.
Im no expert in the stock markets, but I have been fairly successful over the last 10 years in making money from it (even though a few of my friends insist on calling me lucky rather than smart !). I have made all the common/silly mistakes in the past and still continue to do blunders that change my portfolio from being a fantastic one to a moderately succesfull one. In fact I always land up with one dud stock my list that I keep averaging and it ends up screwing me up.
Why am I saying all this before I come up with my list ? Because disclaimers do matter in this corporate world and I do not want my ass to be dragged out by some loser who claims that he lost money trying to follow my advice. I do not want anyone to blindly look at this list, assume it is a good list of stocks, buy them, lose money and then come kill me !!!
So here goes the list of stocks that I own as of Oct 20th :
1. Reliance Ind
2. Reliance Capital Ltd
3. Punj Lloyd Ltd
4. Adlab Films
5. Neyveli Lignites
6. Jaiprakash Associates Ltd
7. Relaince Petroleum Ltd
8. Radico Khaitan Ltd
9. Welspun-Gujarat Stah
10. Tata Teleservices (Mah)
11. Reliance Communications Ltd
12. Glenmark Pharma
13. Suzlon Energy Ltd
And a list of stocks that Im eying like a hawk, waiting to get the next salary so that I can buy them !
1. Mundra Port
2. ICICI Bank (Little doubtful)
3. TISCO (Little doubtful)
4. Bharti Airtel
5. Larsen and Toubro
6. SBI Bank
This is my personal selections and are in no way a indication of what you should buy or sell. Let us see how I do in a few months from now.
The markets have been trashed out of shape for a whole lot of reasons and stocks are at such mouth watering levels that I can no longer stay out of the market (For the record, I moved every last penny out of the markets at a Sensex level of 15,000 for a variety of reasons). Having ridden the market on the journey from a Sensex level of 6,000 to 21,000, it is almost crystal clear to me that this is probably the best time of the decade to make money, even if it takes 3 years to do so.
Im no expert in the stock markets, but I have been fairly successful over the last 10 years in making money from it (even though a few of my friends insist on calling me lucky rather than smart !). I have made all the common/silly mistakes in the past and still continue to do blunders that change my portfolio from being a fantastic one to a moderately succesfull one. In fact I always land up with one dud stock my list that I keep averaging and it ends up screwing me up.
Why am I saying all this before I come up with my list ? Because disclaimers do matter in this corporate world and I do not want my ass to be dragged out by some loser who claims that he lost money trying to follow my advice. I do not want anyone to blindly look at this list, assume it is a good list of stocks, buy them, lose money and then come kill me !!!
So here goes the list of stocks that I own as of Oct 20th :
1. Reliance Ind
2. Reliance Capital Ltd
3. Punj Lloyd Ltd
4. Adlab Films
5. Neyveli Lignites
6. Jaiprakash Associates Ltd
7. Relaince Petroleum Ltd
8. Radico Khaitan Ltd
9. Welspun-Gujarat Stah
10. Tata Teleservices (Mah)
11. Reliance Communications Ltd
12. Glenmark Pharma
13. Suzlon Energy Ltd
And a list of stocks that Im eying like a hawk, waiting to get the next salary so that I can buy them !
1. Mundra Port
2. ICICI Bank (Little doubtful)
3. TISCO (Little doubtful)
4. Bharti Airtel
5. Larsen and Toubro
6. SBI Bank
This is my personal selections and are in no way a indication of what you should buy or sell. Let us see how I do in a few months from now.
Oct 16, 2008
Why are the markets crashing - no technical jargon !!!
I have been getting a lot of friendly inquiries from friends on whether I can decode the crisis in the markets and explain it to them in plain English !!! The media has created such a ruckus along with the falling markets that everyone and anyone is suddenly worried sick of the economy, the markets, recession, their jobs, salaries and whatever else you can think of !
So what is happening ? I do not want to type a long explanation or bore you with technical explanations, but will try and explain the problem in plain English ! There are few issues that have built up over the last 10 or so years:
1. Banks have lent more money than they collected as deposits and spread their hands all over the world in the name of globalization !!! For example, banks in America borrowed money from banks in Japan at 1% interest, gave the money to people in India at 7% and pocketed the 6% difference. This worked till the currencies, especially the US dollar were stable. When the US$ started falling like crazy, the 6% profit turned into a 2% loss and suddenly, all banks started scrambling for money, thus leading to chaos.
2. Banks have lent money to people they should not have lent at all. This was the essence of the sub-prime crisis. People who earned low salaries and others with less than stable income were given loans at slightly higher rates to buy homes. When they could not pay back the EMI's, the banks had to pick up the house and sell it off. But by then, the houses had lost half their value as the housing markets were terribly down.
For example, I buy a house for $100,000 with a down payment of $5000. Since my job is not stable, the bank makes me pay a higher interest of 10% which I agree. After making payments for a year, I see that the housing rates have collapsed and now my house is worth just $50,000. So I stop paying the EMI's, the logic being I do not care about the $5000 I put as down payment, or the $6000 I paid as EMI all year. If I get out now, I lose $11,000. If I stay on in the house, I have lost $50,000 of the house value. So I let the bank take over my house.
The problem for the bank is that it has a $100,000 liability on its books against a property worth just $50,000. Multiply the problem with a few millions houses and suddenly, the bank's financial s are looking terrible and the stock markets are thrashing the bank stock !!!
3. Banks have lent money to each other by holding securities that have shaky fundamentals.
To take a example, the bank mentioned in point two wanted to raise money. So it sells bonds that are backed by its own name and offers 10% return on the bonds. Since the bank had run great for over 100 years, other banks and folks like you and me buy the bonds and hope to get the 10% return.
When the bank starts to ruin its books from point 2, the stock market thrashes the bank and suddenly the investors are worried and want to redeem the bonds, even if at a loss. Since the bank has no money to offer, its rating get thrashed and the stock gets battered even more, thus completing the cycle of downfall of the bank.
Some banks also raise money from other institutions by offering their own stock as collateral. If a institution lent money to the bank in our example and took the bank stock as collateral, the institution is now holding a security that is not worth the paper it was printed on. And along with the original bank that went down, the institution that lent money against the bank's stock is also going down !
Finance is built on trust, and suddenly that trust has been replaced by fear all over the world. That is the essence of the entire problem ! Banks everywhere in the world are not willing to lend money to other banks and they are not willing to take any kind of security that the companies are willing to offer. When there is no money in the system, everyone postpones their buying and investing decisions, thus leading to even lesser money in the markets.
And the problem gets deeper till it gets us to the shit hole that we are all in currently !!!
So what is happening ? I do not want to type a long explanation or bore you with technical explanations, but will try and explain the problem in plain English ! There are few issues that have built up over the last 10 or so years:
1. Banks have lent more money than they collected as deposits and spread their hands all over the world in the name of globalization !!! For example, banks in America borrowed money from banks in Japan at 1% interest, gave the money to people in India at 7% and pocketed the 6% difference. This worked till the currencies, especially the US dollar were stable. When the US$ started falling like crazy, the 6% profit turned into a 2% loss and suddenly, all banks started scrambling for money, thus leading to chaos.
2. Banks have lent money to people they should not have lent at all. This was the essence of the sub-prime crisis. People who earned low salaries and others with less than stable income were given loans at slightly higher rates to buy homes. When they could not pay back the EMI's, the banks had to pick up the house and sell it off. But by then, the houses had lost half their value as the housing markets were terribly down.
For example, I buy a house for $100,000 with a down payment of $5000. Since my job is not stable, the bank makes me pay a higher interest of 10% which I agree. After making payments for a year, I see that the housing rates have collapsed and now my house is worth just $50,000. So I stop paying the EMI's, the logic being I do not care about the $5000 I put as down payment, or the $6000 I paid as EMI all year. If I get out now, I lose $11,000. If I stay on in the house, I have lost $50,000 of the house value. So I let the bank take over my house.
The problem for the bank is that it has a $100,000 liability on its books against a property worth just $50,000. Multiply the problem with a few millions houses and suddenly, the bank's financial s are looking terrible and the stock markets are thrashing the bank stock !!!
3. Banks have lent money to each other by holding securities that have shaky fundamentals.
To take a example, the bank mentioned in point two wanted to raise money. So it sells bonds that are backed by its own name and offers 10% return on the bonds. Since the bank had run great for over 100 years, other banks and folks like you and me buy the bonds and hope to get the 10% return.
When the bank starts to ruin its books from point 2, the stock market thrashes the bank and suddenly the investors are worried and want to redeem the bonds, even if at a loss. Since the bank has no money to offer, its rating get thrashed and the stock gets battered even more, thus completing the cycle of downfall of the bank.
Some banks also raise money from other institutions by offering their own stock as collateral. If a institution lent money to the bank in our example and took the bank stock as collateral, the institution is now holding a security that is not worth the paper it was printed on. And along with the original bank that went down, the institution that lent money against the bank's stock is also going down !
Finance is built on trust, and suddenly that trust has been replaced by fear all over the world. That is the essence of the entire problem ! Banks everywhere in the world are not willing to lend money to other banks and they are not willing to take any kind of security that the companies are willing to offer. When there is no money in the system, everyone postpones their buying and investing decisions, thus leading to even lesser money in the markets.
And the problem gets deeper till it gets us to the shit hole that we are all in currently !!!
Long time since I blogged...
Aah, its been a long time since I blogged. Possibly the thrill of starting a new blog died on me ! To be more frank, I think more about writing now a days than I actually write ! A bad biker cuts me off on the road and on the rest of my drive home, Im thinking about how desperately I want to blog about bad driving and what all I want to mention in there. And by the time Im home, Im reasonably happy that I have a excellent article to write about in the blog next day and then I hit the next issue I want to blog about and start thinking about it !!!
Its a never ending story, hopefully all the thoughts will start coming down on the blog soon !
Its a never ending story, hopefully all the thoughts will start coming down on the blog soon !
Mar 26, 2008
Sell dollars stocks and buy India stocks !!!
Pursuant to my last note on why you should not hold onto stock options in the company you work with, I would like to present more compelling reasons !!!
When you sell stock options in a foreign company after holding them for any period of time, you have to pay a standard 33% tax on the proceeds. Take the money out when the price if reasonable, buy Indian stocks of good companies, hold them for a year and viola, the entire profits are your to keep and the Indian taxman will not ask for any part of that profits.
Long term capital gains on stocks listed in Indian exchanges are fully tax free. And there is no reason to believe that a Oracle, a Cisco, a Microsoft or a Adobe systems will do any better than a Reliance Industries, Tata Motors, State bank of India or Bharti Airtel. Indian companies are just starting to blossom and this is the best time to cash in on this boom.
And if you do not have the guts and the appetite to invest directly in India companies, go the mutual fund route. Pick up cap mutual funds like Reliance Vision and HDFC Equity fund and there is every chance that you will end up making a lot of money.
And nothing beats tax free money !!!
When you sell stock options in a foreign company after holding them for any period of time, you have to pay a standard 33% tax on the proceeds. Take the money out when the price if reasonable, buy Indian stocks of good companies, hold them for a year and viola, the entire profits are your to keep and the Indian taxman will not ask for any part of that profits.
Long term capital gains on stocks listed in Indian exchanges are fully tax free. And there is no reason to believe that a Oracle, a Cisco, a Microsoft or a Adobe systems will do any better than a Reliance Industries, Tata Motors, State bank of India or Bharti Airtel. Indian companies are just starting to blossom and this is the best time to cash in on this boom.
And if you do not have the guts and the appetite to invest directly in India companies, go the mutual fund route. Pick up cap mutual funds like Reliance Vision and HDFC Equity fund and there is every chance that you will end up making a lot of money.
And nothing beats tax free money !!!
Stock options and its pitfalls...
I currently have the privilege of working with a IT company in Bangalore that treats its Indian employee on equal terms with any employee across the world when it comes to stock options. In simple words, my company is very generous when it comes to handing out its stock valued in dollars to Indian employees.
On one hand, it seems like a great retirement kitty when you see your stocks vesting and adding upto thousands of dollars over time. The sheer thrill of seeing the portfolio in dollars is enough to keep many employees stuck to the company with a real hope of seeking early retirement. Its little wonder that I see more employees who are on the verge of completing ten years in this company than I have ever seen elsewhere.
So what is the pitfall that Im talking about in the headline. Its about greed and the fact that most people succumb to it with absolutely no idea of the risk they are taking. Its widely accepted that its never a good idea to keep too many eggs in the same basket. The basket might be very well made and very secure, but all it takes in one wrong move for the eggs to crack !
You have your job at stake in a certain company where your salary and career depends on the performance of the company. On top of this, you are given stock options that are valued pretty highly and form a substantial part of your overall package. The point to note is that these stocks options are all about paper money till you actually sell them and convert them to cold hard cash.
And guess what do many people do on top of holding onto stock options like their dear life ? They go and put their savings from the salary into the ESPP (Employee Stock Purchase Plan) program that many employers offer !!! The ESPP program gives you a guaranteed 15% return if you are diligent about selling the shares on the day you receice them. The catch word here is diligence. The problem is that most of us are not careful about this and just allow the ESPP stocks to accumulate in same portfolio with the hope for even more profits.
God willing, the company will keep going great guns and you can retire in a few years. But what if the basket does fall and all the eggs break in one shot ? So why on earth would you not diversify your holdings and make sure that if the company does take a turn for the worse, you still have something to cling onto ?
The trick is to make sure that you cash in on your stock options when they are actually of some real value and put the money in a different asset class immediately. This way, not only do you cash in on the market boom by owning stocks of good companies, but also save your ass when things go bad. If the company you work for goes down, you have money invested elsewhere and if that investment goes down, you hopefully still have the job and salary !!!
Diversification is the key to success in the financial world. The bad news is that there is not a single asset class in the world that is not prone to falls and fluctuations. The good news is that turbulent times in one sector will always be offset by another sector going up. A good example is the violent rise of gold prices this month even as the equity markets are crashing all over the world.
Net net, when you invest your hard earned money by spreading it across asset classes like stocks, Land & Gold; across different sectors & industries; across geographies & currencies, there is a good chance that at any given point in time, there will always be one asset class that will be going great guns and making money for you. And its easy to retire soon when you have some part of your savings always bringing in 25% returns !!!
On one hand, it seems like a great retirement kitty when you see your stocks vesting and adding upto thousands of dollars over time. The sheer thrill of seeing the portfolio in dollars is enough to keep many employees stuck to the company with a real hope of seeking early retirement. Its little wonder that I see more employees who are on the verge of completing ten years in this company than I have ever seen elsewhere.
So what is the pitfall that Im talking about in the headline. Its about greed and the fact that most people succumb to it with absolutely no idea of the risk they are taking. Its widely accepted that its never a good idea to keep too many eggs in the same basket. The basket might be very well made and very secure, but all it takes in one wrong move for the eggs to crack !
You have your job at stake in a certain company where your salary and career depends on the performance of the company. On top of this, you are given stock options that are valued pretty highly and form a substantial part of your overall package. The point to note is that these stocks options are all about paper money till you actually sell them and convert them to cold hard cash.
And guess what do many people do on top of holding onto stock options like their dear life ? They go and put their savings from the salary into the ESPP (Employee Stock Purchase Plan) program that many employers offer !!! The ESPP program gives you a guaranteed 15% return if you are diligent about selling the shares on the day you receice them. The catch word here is diligence. The problem is that most of us are not careful about this and just allow the ESPP stocks to accumulate in same portfolio with the hope for even more profits.
God willing, the company will keep going great guns and you can retire in a few years. But what if the basket does fall and all the eggs break in one shot ? So why on earth would you not diversify your holdings and make sure that if the company does take a turn for the worse, you still have something to cling onto ?
The trick is to make sure that you cash in on your stock options when they are actually of some real value and put the money in a different asset class immediately. This way, not only do you cash in on the market boom by owning stocks of good companies, but also save your ass when things go bad. If the company you work for goes down, you have money invested elsewhere and if that investment goes down, you hopefully still have the job and salary !!!
Diversification is the key to success in the financial world. The bad news is that there is not a single asset class in the world that is not prone to falls and fluctuations. The good news is that turbulent times in one sector will always be offset by another sector going up. A good example is the violent rise of gold prices this month even as the equity markets are crashing all over the world.
Net net, when you invest your hard earned money by spreading it across asset classes like stocks, Land & Gold; across different sectors & industries; across geographies & currencies, there is a good chance that at any given point in time, there will always be one asset class that will be going great guns and making money for you. And its easy to retire soon when you have some part of your savings always bringing in 25% returns !!!
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