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Thursday, December 29, 2011

Hope...

A Government made up of lawyers is arguing like a flock of birds while the country's governance goes to ground.A fear of accountability hangs like a shroud over our politicians and its ironic to see these champions of democrasy cower at the thought of opening up their accounts and personal finances to the public.

I have not been a big supporter of Anna Hazare yet am veering round to the view that without a shock our system will not move forward.The economy grew at 8% even without FDI in retail so we shall survive,what will not encourage investments is the huge list of pending projects across the country,the lack of direction in checking the huge wastage in the production to consumption  cycle etc

Giving reservation to tribals,muslims and sundry will not ensure advancement.Scheduled castes were given a 20% advantage in academic performance in which their marks were considered to be at par even when 20% lower.How many academics or administrators has it produced?

Giving subsidies has been the most visible and straight line method for the Government so that it can "show" what its doing for the people.Why do we Indians never see the long term benefits?As i write the Indian cricket team has collapsed against the aussies in melbourne,somehow it was always expected that they would not be able to measure up.

I hope the country as a whole can show a collective 'backbone' in 2012 and rather than try to make a circus be it in going green....a small matter of mixing 20% bio-fuel with diesel has not been agreed to by the Government and the oil marketing countries have a monopoly and all the bio-fuel can only to sold to them directly.The saving to the exchequer may be 3000 crore or less but the cost to the environment is immeasurable!

Haldia port is almost silted up,nothing being done.West Bengal is the only state in India that has snow clad mountains,sand beaches,India's largest river flowing through it,yet where is tourism?I once wrote a blog where i wished to see yachts in the Hooghly.I am sure that will remain a pipedream in 2012.

The roads have craters as big as those on the moon,so where are we after 60 years of Independence.Yet I have HOPE.Yet too I do not want this country to grow as per China model which does not care for cultural identities and the destruction of the environment.I do not think we could survive such a path.

Why think the Sky is the limit....when there are footprints on the Moon.

Wednesday, December 21, 2011

2011:The Year That Never Was and the Cycle of Life

I would like to forget this year in a rush.A lot of Indian Icons left us with unforgetable,watchable memories,a few songs,some great acts.....Jagjit Singh,Bhupen Hazarika,Dev Anand and a few like George Whitman,the one whom i never met but spent a hugely wonderful time surrounded by the musty,wet smell of old books in his Shakespeare and Company in Paris.

The Euro crisis did to equity markets what the Subprime issue couldn't do!Here in India we have learnt a few hard lessons that always lay somewhere over the horizon viz.without the 'Growth Story',India is simply a concoction of bad roads,corruption,economic imparity and a collection of states pulling in different directions?

The Arab Spring that brought so much hope is falling into bloodshed at the very same Tahrir square.Syria is killing itself.Iran doesnt know if the mullahs run the government or is it the politicians masquerading as mullahs?The Americans pulled out of Iraq but are threatening to walk into Iran.

China wants to control the internet,the Indian Ocean,every word that its own society writes or thinks.Its growth slowing,the mighty engine is looking for a landing that is neither soft or too hard at the moment.is the world in 2011 a more open,socially egalitarian place or are the old fault-lines window-dressed and presented as something new.

Coming back to Indian equities,I still believe that its a great time if you are an investor with approximately 150 largecap stocks hitting their lifetime lows.For a contrarian the infrastructure sector that has not performed for almost half a decade is a prime pick with some stocks at 30-40% below Book Value.The pressures of mindless expansion and borrowing through ECBs shows survival of the fittest at its best.

There are a lot of companies with good managements that made some bad decisions,will they be punished more than they have in this bear market?The jury is out there...

I would like to bore the reader with some quotes from Peter Lynch(he of One UP On Wall Street fame)

# You cant see the future through  a rearview mirror

"Whenever I am confronted with doubts and despair about the current Big Picture,I try to concentrate on  the Even Bigger Picture.The Even Bigger Picture is the one thats worth knowing about,if you want to be able to keep the faith in stocks"

So whatever issues I have mentioned will always be present in some form or the other.Its important to look at businesses that will grow,make money for the investor,pay bonuses or dividends,generate employment.

It is the Cycle of Life.


Monday, December 5, 2011

Is the World Round or Flat?

I have been reading a lot of articles over the weekend and the inference I can draw is quite puzzling.With modern technology and analytics.....where everything from the number of times we drink water to the choices that an unborn child will make can be predicted!

But truly,the World has become a more difficult place to predict.As the subprime crisis underlined,this Sovereign issue in Europe has highlighted.So Black Swans exist in the middle of so much data flow and number crunching?how could assets become toxic so quickly?systems that have so many checks and balances develop sudden stoppages?

In hindsight,it becomes easier to guess where things started to go wrong.Yet its still not clear what exactly went wrong in the first place.The same has happened this time around.

Its so much easier to pontificate on what is wrong with systems,politics,economy etc yet there are few efforts i see happening that try and read the sitaution and find a workable solution.In One week i have seen or read seven different 'experts" predict a recession and and some that said we are still some steps away from one and few who said that we are in the middle of one!

For me,the rise in inflation and high food prices on the ground,the general insecurity about jobs,the creation of few new jobs,the persistence of "shadow"employment(especially in Agriculture) means that Indians are having a hard time.

The Chinese wanted to curtail inflation,bring down the money growth in the economy and even they dont know if they will have a 'hard' or 'soft' landing!The Russians depend on their mineral exports and China on consuming those to produce growth through manufacturing.Is that an example of a Flat World.

The World has become a harder place to predict.Even with AI and all the numbers getting spewed out and talk of BRICS and emerging powers,come june the farmer in a typical Indian village waits for the Monsoon rains and the crops depend on that.The price on the wholesale market depends on the supply.The level of water in the rivers depends on the ice melt up in the Himalayan Glaciers.

How has technology impacted Change?