A load of crap from an idle brain

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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Work is hectic and continues apace with no respite. Havent taken a single leave this year; and we are almost at the end of 6 months of the year.   Will be taking a vacation in July or most probably August. Have learnt a lot in the past 3 odd months than what i have learnt over the past 2-3 years.

The one thing that i believe that i always lacked is the ability to chase people to get my things done.  This is something i have slowly started to work on.  Iam happy living in my own cocoon.  Takes time for me to open up and as a result, i have a small tight group of friends and for someone else to enter the group, it takes time.

But for some reason, i have seen people open up to me easily.  I dont need to know a person for long before they confess their intimate secrets to me.  Dunno if i give them some kind of comfort or is it something else.

Meanwhile for some strange reason, i have started believing that my days as an employee is coming to an end. Sooner or later i want to do my own thing.  This has been going round in my mind for long. But honestly, i cant figure out what is that one thing that i want to do.  If nothing, i want to take a break, finish the NCFM certifications and if possible get certified as a Financial Planner.  Later on, start my own consultancy or investment firm.  Also would love to learn more about trading, commodities and stuff.

If only i could make some time to pursue all these interests.

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1911 marked the beginning of 2 brands that no one would have believed to still be around 100 years later.  Two world wars, countless recessions and booms later, they still exist. And not exist at the fringes of the industry or in nostalgia of someone’s minds.  But active leaders in their respective markets.

My dad introduced me to the blue box of Nivea when i was in school.  3 decades later, i still use it.  Not only do i use their moisturizer, but body cream, chap stick and not to mention Nivea face wash. I love their soap too and wish that they come out with a shower soap soon so that i can use that.  Iam a complete Nivea person.

The other company IBM is considered the grandfather of computing.  Go here to see the wonderful site of IBM chronicling the 100 years of its history.  Some of the best innovations that have come out from the company, the website is a must read.

Laptops, PCs, Mainframes, Supercomputers, Messaging software, Webservers, Artificial Intelligence, Routing, Switching, Backend…you name it, IBM does it.

For many people believe that IBM is a pure IT company.  Not true. go to this website to read about the super work it does in the field of Biotechnology, Medicine, Space, Sports, Chemistry, Mathematics etc.

I started off my career working on IBM software, Lotus etc.  After having worked on competing products, you have to admit that there is something about the things that IBM makes that make them tick.  Afterall, to clock $100 billion revenues per year is no small feat.  At a time when companies with barely any revenue are quoted at 100 odd P/E on the stock markets, IBM’s stock is at a rock solid US$ 170 with a P/E ratio of about 14.

Here’s wishing many more decades of success for both companies.

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For the sake of the country’s pride, for the sake of the money its sucking in and for the sake of being nothing but a pain in the backside, its high time for the government of India to not only shut down Air India but to also arrest all the striking employees and throw them in a cell.

From being in debts of more than 40,000 rupees to employees sponging off the resources of the airlines by assigning even their grandchildren as dependents and mooching discounted airfares to having offices across the world where hardly anyone flies, Air India and Indian Airlines combine are nothing but a disgrace to the image of India.

What the striking Air India pilots don’t mention in their litany of complaints is how at a board meeting earlier this year they vehemently opposed any curbs on their royal privileges — “passages” or free return trip tickets for their family. And even refused to accept the private airline definition of “family”.

Unlike private airlines’ employees, who have restricted passages and specific definition of family to include only immediate members such as self, spouse, dependent children and parents, Air India’s definition is far more generous.

According to Air India, an employee’s family, entitled to travel free with him/her, includes: spouse, children, step-children, parents, brothers, sisters, sons-in-law, daughters-in-law and even grandchildren up to 12 years.

Even those who have retired are entitled to passages. “This has led to a situation where former Air India employees, currently employed with private airlines, avail passages on Air India,” said another executive.

Read the full article : Me, my family, my son-in-law: Pilots want a freebie parivar.

Iam someone who has borne the brunt of the whimsical attitude of the airline and have sworn off flying the so called national carrier for years.  Also make it a point to educate all friends and family not to fly Air India – Indian Airlines ever.

At a time when the private airlines are providing such good service and have proved that they can do well inspite of no support from the government, its an utter waste of money to spend even a single rupee to keep the pathetic airlines running.

The simple point that Air India is monstrously in debt and that it would be ridiculous to up already high salaries now seems to be one the government is unable to make forcefully enough.

Possibly the government’s culpability in bringing Air India to this pass makes it speak softly in argument. The merger was poorly thought out; and the decision by an empowered group of ministers in UPA 1 to take on additional debt to purchase a new fleet is now being seen for the folly it was. That decision was born of the misguided belief that the Centre has a duty to “revive” Air India, a mantra that has been repeated by one civil aviation minister after another. We now, post-reshuffle, have a new minister in charge, Vayalar Ravi. The last thing that he needs is to have this albatross around our necks for the foreseeable future. The wise move for Ravi would be to acknowledge that past decisions have dug Air India into a hole of mismanagement and debt — Rs 40,000 crore deep — from which there is no escaping. Wiping out Air India’s debt would cost several times more than the Centre spends on rural health annually. This is not an expenditure that a government can justify — especially on something in which the private sector has amply demonstrated its ability to satisfy the public’s needs. Instead of throwing good money after bad, the time has come to stand up and say: yes, Air India must be shut down.

Read the full Indian Express article editorial here.

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