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Took a week off from work to rest, relax and recharge my batteries.  We are already into the 8th month of the year and i had yet to take a single leave this year.  Not to mention haven’t fallen sick for more than 18 odd months and (touch wood), would like that to remain that way for a long long time to come.  It means that i hadn’t been taking any break from work.

Work has been too tough and nerve wracking ever since i moved into the new department more than 5 months ago (ya, time flies), not to mention colleagues who are of no use to the team but somehow manage to survive at work inspite of doing nothing productive. Ya, life is a big bunch of surprises.  The ones who work are questioned when there is a lapse on their end, but some people just laze around at work and unashamedly take the salary at the end of the month and no one even bats an eyelid.

Anyways, over a period of time have steeled myself to ignore such characters and sideline them.  There are others who are enthusiastic about work and they are the ones who really encourage me to look forward to going back to work daily.

But this week off was a much needed one.  Have been doing nothing but having good home cooked food, having my regular post lunch naps, wandering aimlessly around the city, reading books on the couch and most importantly watching the financial markets melt the world over.  Watching this self inflicted wound by the US not only to itself but criminally exporting its problems to the worldwide economies is simply mind boggling to watch.  Not to mention morons like Alan Greenspan openly bragging that this debt ceiling is of no issue to the US as they can print as much dollars they want.  Now beat that.

The funniest part of the whole debt problem is the reaction from China which blasted the US for its uninhibited funding of its consumerism by debt.  But why is China so worried about the debt downgrade of the US from AAA to AA+ by S&P ?  Its because China holds more than a trillion dollars worth of US debt.  The more irony comes from the fact that just a few months ago, some so-called Chinese thinkers were threatening to dump dollars that China is holding in the form of its foreign reserves to show who the boss is.  Which makes one wonder, if China dumps the dollar, which moron in the world wants to buy it?  And if it dumps the dollar and the value of the dollar takes a nosedive further eroding the value of the reserves its holding, who is China threatening in the first place?  Its like cutting the nose to spite the face.  The whole fracas reminds me of the saying that i had posted sometime earlier in this blog….

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” – J Paul Getty

China today finds itself between the devil and the deep sea.  On one hand it needs to keep the yuan weaker by buying up all the dollars else the export oriented economy that China has carefully built up over the decades will collapse.  With thousands of riots happening countrywide, the Communist government doesn’t want another disaster on its hands.

And its not easy to make a complete turnaround of the economy from an exporting one to a local consumer led economy.  The transition takes years to happen. So, it keeps buying up dollars to keep its own currency cheaper and with the US dollar collapsing to newer lows, everyone is at their wits end trying to hold things together.

So, what to do now?  Nothing much..if you have money sit tight or start buying into blue chips in small tranches.  For the ones who sold off their equity holdings a few months earlier, i have nothing but admiration for your foresight.  For those who plan to sell during the collapse now, there is nothing more foolish decision than that.

Gold is scaling new heights daily as the US dollar loses its value.  Its gonna be a turbulent few months ahead.  Sit tight, there is much more trouble ahead.  Like the Oracle of Omaha, Warren Buffett once said…

“Its only when the tide goes out that you learn who has been swimming naked”

Pictures courtesy: Now Public, Guardian, wmpoweruser

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Somewhere in 2003, fed up of perennially running out of cash at the end of every month and just before the salary for the next month was to come in, i realised i had to do something drastic. Also the thought of not wanting to work till 55 or 60 years old (like everyone else) was always in the back of my mind.

I decided to not only save a small part of my salary but also start investing. Real estate was out of question as it required a bigger monetary commitment and i was loathe investing in land that could some day be encroached and i would need to run around the authorities and people in power to get them evicted.

The next best option was the stock market.  It didn’t require a huge upfront money and also because of Systematic Investment Plan (SIP), i could invest a small amount every month in the mutual funds.  Also because of demat, it was easy for me to buy small number of shares of the companies that i liked.  Since my knowledge of economics, finance and the stock market in general was a big zero, i had to educate myself.  I attended a few seminars, but at the end realised that they were nothing but big money making scams.

This is when i truly realized the power of the internet.  With some great help from Google uncle, i jumped headlong into an intense 12 month study of the stock markets. I searched for information like crazy on equities and mutual funds. By then i had more or less realised that i was going to concentrate primarily in the Indian stock markets.  A developing economy which
was consistently clocking above 7% growth every year and a huge market, i realised that if i could get in early, i could probably ride a 20-30 year long boom.

India was then just starting off.  The BSE Sensex was then around 4500 (it has since climbed to 21,000, then fell to 9000 odd and is now back to 19000). I remember reading an Indian business magazine that pointed to a target 8000 for BSE Sensex in a few months time.  I chuckled to myself at the audacity of that heading.  But still deep down in my heart somewhere I had the belief that we were looking at something spectacular that was about to happen.

Imagine a country of a billion people and with the economy clocking 7-8% annual growth in GDP, it was sure to hit a trillion dollars soon and if the rate of growth could be kept up, then the next trillion could come in 8-9 years.  Yes, there were and are lots of things that could derail the growth. Terrorism emanating from Pakistan being just one such issue. Poverty, rampant corruption (that has become a norm these days), a closed economy, religious and regional violence…many issues could be an impediment to India’s growth and thus hit my investments in the market.

But honestly, when you realise that you are in the pits, the only way to go is up.  I took the risk and opened a demat account.  Tata Consultancy Services (TCS) was getting listed on the Indian stock markets for the first time ever in 2004.  I applied for the IPO and was allotted a measly 7 shares at 850 rupees each.  I was disappointed at not having been allotted more. Nervethless,  i held on.  A few months later the stock hit 1400 rupees.  I sold off at almost 550 rupees profit per share.  I made more than 3800 rupees (not accounting for taxes) in a few months by investing in TCS.

I had tasted blood.

Target 2015 continues….

Above target picture courtesy: David Hawkins

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Attending the ISMS Lead Auditor course from today.  Course will run till Monday.  On the last day is the certification exam.  Hope i can pass.  Keeping my fingers crossed.

Work is too hectic.  Been more than a week into the new position.  Lots of responsibilities and lots to learn.  Challenging no doubt, but happy that Iam learning a lot.  Been stuck in the rut for some time now.  Took this leap of faith and till now, its been pretty satisfying.

The markets have been on a roller coaster.  Up one day and down the next 2 days.  Havent had time to look at my portfolio which has been red when i saw last week.  Not thinking much about it.  Bought some good companies (i believe) on the dips and i will now wait for the market to go up.  There are indications that it might go down further.  No worries.  Will wait for it to go up.

Meanwhile, the cricket world cup is in full flow.  India is now on the top of the table, but had just one challenging match (against England).  The match against South Africa this weekend will be the one to watch out for.

Meanwhile reading a lot of finance / investment books.   Am in the process of making changes to my career and life in general.  As and when significant changes happen, i will update here.  Till  then, let things drift.

There was a time when i had trouble reading one book.  Today, am simultaneously reading 4 books, 2 magazines and books related to the course iam attending.  Not to mention technical documents related to work.   I cant believe that i have time to do all that.  Wifey hasnt had any complaints that iam not spending time with her.  In the past few months, have gone to the Zoo, Bird Park, Marina Bay Sands, Singapore Science Center and a few other places with her.  More places here in Singapore to explore.  Wanted to go overseas for a holiday, but am waiting for some time for me to get settled into the new job responsibilities.

Time isnt a hindrance if one plans properly.  Earlier, i was too lethargic. This year of the rabbit has been too good for me already.  Hope the luck stays.  I need it.  Have a lot to achieve this year.

The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
- Robert Frost

A big thank you and wishes to all the women who have touched me in some way and been a part of my life.  Thanks a million.  Wishing the best on the centenary celebrations of the International Womens Day – 2011.

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What a change a few weeks can do in the life of a stock market.  At the begining of the year, there were predictions of the BSE Sensex reaching 24,000.  Post the battering that the markets have received in the past 2 odd weeks, it would be great if the markets can come back to 21,000 levels.

Of course nothing can be predicted about the future.  The market conditions might become better, the Egypt political crisis might be solved, the companies could come out with better results in the next few quarters, the government might get tough on graft and a few politicians & their crony businessmen might end up in jail.

BSE Sensex performance in the past 1 month (courtesy: Yahoo finance)

Meanwhile, some of the best blue chip stocks and companies with strong fundamentals have been beaten down 20-40%.  This is another of the great time for a fence sitter to invest.  I have done too.

Bought a few stocks of Sintex Industries, Punjab & Sind Bank, Kanoria Chemicals, Noida Toll Bridge and averaged out the badly battered stocks of  MIC Electronics & 3I Infotech.

At the end of last year sold off Suzlon Energy, Reliance Communications (my worst investment ever. I would never buy any Anil Ambani companies again) and Punj Lloyd (another laggard not only on the stock market, but also in business).   I had sold them off for a loss.  It would have been a bigger loss if i had held them on as all 3 of them have been beaten down very badly.

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Sold off some of the laggards like Suzlon, Reliance Communications (not sure how the 2G scam will hit this stock) and Punj Lloyd (holding on to a bit of the stock).

Bought 3I Infotech & Noida Toll Bridge for the first time. Increased my holdings in Graphite India & MIC Electronics.

With the 1:1 bonus shares issued by Dabur & TVS motors, the portfolio looks good

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