From My Diary - Rupee Falling

I read a peice written by Amey ( who is in USA ) in our yahoo grup link. I found it interesting as I read the responses from Milind, Viju, Aditya etc, and I could not resist the temptation to voice my views also. Here it goes :

I wrote to him :

I am not an economist or a chartered accountant like milind and Nitin to comment on this issue with authority, but I feel if you had en cashed your traveller's cheques even when the dollar was hovering at about Rs 45 a dollar, probably you would have not lost any thing. The inflation over the year or two would eat away your 6 % appreciation. However, I feel some times, just laying back and let the investment hatch proves beneficial too.

It happened in my case. After leaving Ranbaxy I got about Rs 7 L , some time in 90s, from PF, Bonus, Gratuity etc. Meena ( My wife ) wanted to put the money in FDs and such other stupid instruments ( my opinion those days ) . But, I told her very confidently, Leave this issue to me. I will double the money in less than an year. Those were the days when Harshad Mehta Scam bubble had not burst. She listened to me for once, and has now been repenting for last 25 years. I too lost my authority in the bargain, because now I have to listen to her on all the matters, like a true Pati ( Husband ). Any ways, the investment became dust paper value, when the bubble burst. I , rather she ( thankfully she did not listen to me ) allowed the investment to hatch. One year back the value on paper for the same investment was Rs 30 L , but again a notional value,as we did not en cash / exit in time. Today again, the notional value has dropped down to Rs 15 L. But, now I have decided to wait for the bull run, which may come again in a year or two. I am in no hurry, as I need it only after I retire, or for Anupama's marriage in a couple of years. So, I have decided to let it hatch , like you did, because I feel that appreciation in 2 years will certainly be more than the inflation hike.

It is a different issue that if I had invested the same amount in some instruments which double in 5 / 6 years ( NSCs and Kisan Vikas Patra - those days ) and kept on reinvesting the appreciated investment again and again , probably the picture would have been different. So, a lot depends on your judgement that time.

So, The Moral of the story is:

Allow some PROCRASTINATION in some important matters.

Please read my blog - http:// nerdynandu.blogspot.com , for some views on investments today. Now I have become a consultant on such matters after burning my fingers ( joke )

From My Diary - Sons Of The Soil

It was surprising to note that thousands of aspirants for the railway jobs came to Kalyan, Thane, Dadar & VT from Bihar to appear for the written examinations in Mumbai. This is certainly a stage managed show by Lalu & his goons. How come majority of Biharis are only applying for jobs in the Railways ? I read a piece written by some one called Suresh on India Times or Rediff Mail that around 90,000 Biharis applied for the jobs last year and around 60, 000 got the jobs. Surprisingly none of the 50,000 from Mumbai got the jobs last year. He also mentioned that there was no notification about these examinations in Karnataka and Chennai last year. So, if it is true then Certainly the finger of doubt points towards Lalu and his goons in the Railways. Then it is but natural for the sons of the soil from Mumabi to raise their voice. Their cause appears to be genuine, However, the means adopted to achieve their goals is not at all correct in democracy. I do not subscribe to such means and such goondagardi. No one is authorised to take the law in his / her hands. The concerned aggrieved people should have approached the HR ministry or the Courts and should have brought a stay, if they felt that that a scam was breeding.

Nobody can deny anyone from his rights to chosse his place of work and settlement. Problem arises when no one from the soil is found suitable in examination, or before or during the personal inrviews. That is why there is a growing discontent amongst the sons of the soil in the country. Some have brought it to the surface, like in Mumabi, Chennai. Some take care of such issues in highly subtle manner. But that the regionalism is growing is not the fact that can or should be ignored. The Central Goverment & HR ministry should not turn away from this burning issue. There is a disconnect somewhere in the fabric of the nation that the politicians have not only failed to address, but have now perhaps started to exploit for their selfish gains. Yesterday Mrs Raut , Municipality Commissioner, Mumbai mentioned that the Maharashtra Government has also passed a notification which clearly gives preferences to the sons of the soil. I think many in the public sector undertakings like Railways, are either not aware about such notifications or intentionally they play foul and circumvent such rules. In fact it is such people who should be taken to task by the bosses, or by the courts. I feel a common principle should be adopted for many such issues. I have a few suggestions to make as under: The total number of vacancies should be allocated to all the states in proportion of the the population, like we have the number of MPs from each state . Notifications for all such jobs should appear in all local papers of each city / state and also in all leading national news papers, like it happens for jobs in armed forces. Alternatively, there should be a portal website created by each of the state government, and all such job opportunities should be posted there. A selection committee should be there to scrutinize all the applications in all public sector undertakings, Like the Selection Board Committee for cricket has representation from members of all regions. In fact the Public Service Commission should be entrusted with all such recruitments, at state and the central level. I am not so sure if they do so. In unskilled category , 60 - 70 % should be picked up from the domiciles of the state, of course on merit. In case of any short fall the vacancies could be declared open for people from other states. This or some thing similar happens in school and college admissions. Then why not apply it across the board even in jobs also. In skilled category the percentage could be 40 - 50 %, with similar rules as above. In Staff & Executive / Officer Cadre it could be pegged at 50 %. They should be given jobs in the state of their domicile There could be a fine tuning of this and many such suggestions coming from all corners. May be a high level commission could be appointed to look in to all such anomalies and give a report to the Government. The Government then should create a policy which would be then applicable uniformly through out the country. The HR ministry should take it up seriously and come out with some concrete solution rather than harping only on reservations for minorities. Certainly I do not subscribe to Reservations. What I propose is a Quota based system to address to all such issues.

From My Diary - Slump in the Market

I am not an economist, but I understand some of the issues like this one, yes but to a certain extent. The Tusnami of Economy has hit the US and has had its cascading effects in Europe, India, China, Japan & every other Developed and Developing Economy. Almost all the share indices have crumbled and are caught in the web of Bearish trends. Indian Pundits were shouting from the roof tops that our economy is in good shape and health, and that we would not be affected. How could we be insulated from such effects, when on one side we claim that the globe is shrinking and that all the countries are now intertwined with each others' fabric of economics ? I am sure that this crippling effect will continue for one and a half to two years. Many would have suffered very badly due to this avalanche. Nothing can be done now to wipe out the losses of investments made during the last 2 years or so. Probably, people who invested when the market was high, hoping that it would go up further, were caught unaware, as they did not exit in time. But how do we overcome this situation and bridge the gaps of losses made till date ? In my opinion there are couple of investment strategies which one should adopt, as under: Don't put all the eggs in one basket. Spend / Invest to suit your pockets. Don't take the route of loans for investments. Investment is real estate is always a best bet, but it has lot of risks. In case you can protect your investment then invest your money in real estate in a growing tier two or three city. Tier one cities will give you very high appreciation but then you need to invest higher amounts. FDs for 1 year terms and renewed each year for another year or two are a good proposition. Put approximately 30 - 40 % of the available balance funds in FDs. This should be your short term investment plan. Similarly Continue with your SIPs, if you have any, or take a few SIPs from this allocation. Pick up Gold or Silver on every Decline. again put approximately 30 - 40 % of the available balance funds in the bullion market. Put your left out balance, about 30 % in shares. Pick up the blue chips which have strong fundamentals , Low Debt to Equity Ratio, Good PE Ratio, and which are being traded at or around their 52 week low rates. Again pick up one or two scrips from each sector like, infrastructure ( Power, Communication, Cement & Steel ) , Pharma, FMCG, Banks etc. Stay away from Service Sector, BPOs, Airays, Software etc for a year or two. You should have the patience to lock the money for a period of 4 - 6 years for real handsome gains. Please do not wait for the market to bottom out, as you will never be able to guess that, pick up the shares in bits and pieces on every decline, now onwards. This route is for them who are prepared to take higher risks. In case you have a big heart then you can put higher percentage of your balance in shares. History has always been on the sides on the dare devils. But choice is yours. You may also pick up Mutual Funds , SIPs which are good and whose NAVs are very low and attractive. that way you get higher number of units in the same amount. This route is for people who do not have the ability to take higher risks, and are scared of direct entry in the market. I am sure your money will be safe and secure and will certainly grow.

From my Diary - Nano to Roll Out From Gujrat

Finally Tatas have decided to roll out their Nano from Sanand. So it switched over from Singur to Sanand and Tatas have switched their loyalty from Mamta to Modi. Probably there is some truth in what Mr. Ratan Tata said about the 2 Ms. One M is good and one was bad for the Tatas. This decision appears to have been taken purely on commercial and political terms. Thanks to the Modi Government and hidden influence of Mr. Advani. But the decision should and could have been different, if an objective analysis was done and following factors would have been considered: Availability of Land, with out any issues Availability of Water & Power Law & Order Situation Proximity to an International Air Port & a Port Threat perception of Terror & Communal disturbances Stability of Government & their Policies Regulatory Issues ( Pollution, Factory Inspectorate etc ) Availability of Skilled Labour & Staff ( Having experience from similar industry ) Proximity & Availability of Auto Ancillary Industry Hub Subsidies and Other Benefits

Then certainly Pune and not Sanand, would have been my choice if I was in Mr. Ravikant's shoes.