Chaitanya Patel

We are happy to share that the action month is now ON and it is amazing to see how 200+ people have chosen to participate in action month. It is amazing to see how a small group of people have got together to bring a shift in their financial world. Some of our readers saw action month as an opportunity to get into action, they have realized that ONLY action...

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It was sometime during late 1999 through early 2000, near the peak of the dot-com bubble, the legendary George Soros and his hedge-fund team were working on how to prepare for the inevitable sell-off in technology stocks.

The man in charge of Soros’ high profile technology funds was Stanley Druckenmiller – one of the best-performing hedge fund managers of all time, till date – and he was busy warning his team that the sell-off could be near and could be brutal.

As the markets soared further in March 2000, Druckenmiller was quoted as saying, “I don’t like this market. I think we should probably lighten up.” Soros himself would regularly warn his team that tech stocks were a bubble set to burst.

Despite this, when the sell-off finally did begin in mid-March 2000, Soros Fund Management wasn’t ready for it. His funds were still loaded with high-tech and biotech stocks. Just in five days, starting 15th March, Soros’s flagship Quantum Fund saw what had been a 2% year-to-date gain turn into an 11% loss. By the end of April, the Quantum Fund was down 22% since the start of the year, and the smaller Quota Fund was down 32%.

Post that, in April 2000, Soros said at a conference, “Maybe I don’t understand the market. Maybe the music has stopped, but people are still dancing.”

Same month, at another conference, Druckenmiller confessed, “It would have been nice to go out on top, like Michael Jordan. But I overplayed my hand.”

Here is how Druckenmiller summarized his experience of 2000 in an interview late last year (Nov. 2013) –

I bought the top of the tech market in March of 2000 [after quickly making money in the same space in mid-late 1999] in an emotional fit I had because I couldn’t stand the fact that it was going up so much and it violated every rule I learned in 25 years.

I bought the tech market very well in mid-1999 and sold everything out in January and was sitting pretty; and I had two internal managers who were making about 5% a day and I just couldn’t stand it. And I put billions of dollars in within hours of the top. And, boy, did I get killed the next couple months.

How to Get Killed at the Top, the Newton Way
Let’s cut across to the middle of 1720 in Great Britain. Sir Isaac Newton – the inventor of calculus (the branch of mathematics that describes change over time), and the man who framed the laws of motion and set physics on its modern trajectory, put a sizable chunk of his personal fortune into shares of the South Sea Company.

The company had then pursued a new and increasingly risky banking deal – and as insiders began to talk up the trading profits (that turned out fictitious) the company expected from another venture, the stock began to leap, starting January 1720.

The bubble burst that September. Newton lost 90% of his stake, which was a large portion of his total net worth.

Here is how MIT professor Thomas Levinson described Newton’s and South Sea’s antics in a 2009 article…

Newton…made his first investment in the South Sea issue early, in 1713, and held it for several years, marking a modest paper profit. He held on through early 1720…That got the desired result, a sudden leap in stock prices. Starting at £128 in January, the price for South Sea securities rose to £175 in February and then £330 in March.

…Newton sold in April, content with his (quite spectacular) gains to date. But then, between April and June, share prices tripled, reaching over £1,000…which is precisely when he could stand it no longer.

Having “lost” two-thirds of his potential gain, Newton bought again at the very top and bought more after a slight decline in July.

The South Sea stock price held up through August 1720, and then the bubble led by over-expectations of huge returns was pricked in September.

…South Sea share prices collapsed to roughly their pre-bubble level. Newton’s losses totalled as much as £20,000, between $4 million and $5 million in 21st century terms…It was a terrific blow for Newton.

Most people get in during rising markets, or when bubbles are building up because they desire to earn money fast because they are envious of seeing others doing so.

“If he could make money fast in stocks,” one would normally ask during such times, “So why couldn’t I?”

If geniuses like Druckenmiller and Newton couldn’t stand to watch as others made money, and they carried on with full knowledge that they were purely speculating (re-read Druckenmiller’s confession mentioned above), what chance do we non-geniuses have to survive a bubble and its subsequent and certain burst?

The Real Tragedy of Our Life
Charlie Munger says…

If you are comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what? Someone will always be getting richer faster than you. This is not a tragedy.

You see, the real tragedy of our life is not that someone else is getting richer or healthier than us, but that he is getting there faster than us.

Another tragedy is that when we fall into this comparison trap, it’s hard to stop.

Look at fund managers. Most of them have similar stocks in their portfolios, and most still claim to have the skills to outperform others.

Read stock forums. Most of them are filled with the noise of people comparing their portfolios with others’.

Why do you think any mention of “5 stocks to buy” or “best stocks to buy now” raises your brain’s antennae? This is because you want to compare those best stocks to your existing portfolio and buy whatever you don’t have already.

This habit of unintelligently buying things because someone else is making fast money on them comes to the fore when the markets have been rising for some time.

Here is what Citigroup’s boss Chuck Prince said to a newspaper in July 2007, shortly before the subprime bubble burst…

When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.

So, even as people know that things are not right around them, they keep dancing to the bubble’s music because everyone else is dancing and making merry.

After all, not dancing to the rising market’s tune is same as underperforming. Isn’t it terrible to sit quietly, doing nothing, when some people are predicting the Sensex to touch six-figures soon, and others are dancing to their tunes? Of course, it’s terrible!

But if you can’t ignore and avoid the temptation that comes from watching other people get rich due to a sharp rise in stock prices, it’s best to know sooner than later that that’s often a path to destruction.

You can “get killed”, like Druckenmiller in 2000 and Newton 280 years prior to that.

Of course, like Druckenmiller did so perfectly, no one can predict when the sell-off is near and how bad it could get, but it’s very important to learn from what Druckenmiller didn’t do – listen to his gut instead of following the herd.

That, I believe, is one of the best lessons you can learn on how and why not to speculate, especially when all others are speculating.

Getting Rich Vs Staying Rich
Morgan Housel of Collaborative Fund has written a wonderful article on getting rich versus staying rich, where he suggested how getting rich can be the biggest impediment to staying rich…

It goes like this. The more successful you are at something, the more convinced you become that you’re doing it right. The more convinced you are that you’re doing it right, the less open you are to change. The less open you are to change, the more likely you are to tripping in a world that changes all the time.

There are a million ways to get rich. But there’s only one way to stay rich: Humility, often to the point of paranoia. The irony is that few things squash humility like getting rich in the first place.

A couple of years ago, I attended a lecture from the legendary Howard Marks, where he talked about these points on the subject of ‘humility’ –

• Very few investors have the nerve to say, “I don’t know.” But that’s how you build integrity in your investment process.
• If you start with “I don’t know,” then you are unlikely to act so boldly as to get into trouble.
• Our business is full of people who got famous for being right once in a row.
• One of the reasons why the future is unknowable is randomness. Events often fail to materialize as we think they should. Improbable things happen all the time.
• Anytime you think you know something others don’t, you should examine the basis. Ask yourself – Who doesn’t know better? Why should I be privy to exceptional information? How do I know this that nobody else knows? Am I really that smart, or am I just wrong? Am I certain that I am right and everyone else is wrong? If it’s an advice from some else, ask – Why would somebody give me potentially valuable information? And why would he give it to me? And why is he still working for a living if he knows the future so well? I am always skeptical of people who will tell you the future for five dollars.
• The concept of market efficiency – that price of each asset accurately reflects its underlying intrinsic value, or that the market price is fair – must not be ignored. You can know something and it’s possible to know more than others. But the going in presumption should be that everybody is well-informed, and if you think you know something they don’t, you should be able to express the reason for that. It’s not easy because everyone is trying just as hard as you are.

In dealing with a complex adaptive system that the stock market is, humility is your best protection. Being tentative in your decision making, changing your mind when the facts change, diversifying adequately and not going around boasting about your recent successes are all signs of such humility.

However, when we’re repeatedly or massively successful – like Druckenmiller and Newton – we’re tempted to believe that we’ve found the formula for success and are no longer subject to human fallibility. This is devastating, especially in a world that is continually changing, and where every right idea is eventually the wrong one.

Beware the Madness
After the South Sea disaster, Newton could not bear to hear the phrase “South Sea” mentioned in his presence. But just once he admitted that while he knew how to predict the motions of the cosmos, he could not calculate the madness of the people.

We still can’t, so please be very careful.

The post The Risks of Speculating During Rising Markets appeared first on Safal Niveshak.

Start with a $1 investment that doubles in value year.

1) Sell the investment at the end of the year, pay the tax and reinvest the proceeds.

Do the same thing every year for twenty years.

End up with $25,200 clear profit.

(OR)

2) Don’t sell anything.

At the end of twenty years, end up with $692,000 after-tax profit.

I got the above data from the below tweet:

https://twitter.com/awealthofcs/status/542520113933864960

How much difference buying right and sitting tight pays instead of frequently churning the portfolio?

Buy right. Sit tight for long time. Power of patience would bestow the amazing effect of compounding.

This is not a financial post, just a happiness post. If you assume happiness has a lot of financial implications, you are right. If you are happy, you will be rich. Read it again. If you are happy, YOU will be rich – the reverse is not true always!!

So to be happy you need to KNOW THE following:

– there is somebody out there who loves you. Unconditionally. Connect with that person.

What does this person do? this person is around you when you need them. They advise you in a way that you will accept (unlike Subramoney.com who is blunt and on your face!), will never, ever, ever tell you ‘see I told you so’ instead will say ‘see my communication skills were so poor that I could not convince you, it is my fault’. Will take punches from you, will continue to hold your hand. Will be with you when you need, when you are angry, when you are moody. Will not mind you not picking up calls, ignoring smses, ignoring wassup messages,….and protect you from some abrasive elements in society. IF YOU DO NOT HAVE SUCH A PERSON IN YOUR LIFE, go and seek. Could be a friend, sibling, spouse, – but a friend is best. Sometimes you do not want to tell the spouse certain things

– there is NOBODY out there keep a tab on your mistakes, evil thoughts, etc. accumulating it to throw it at you when you are feeling low. ONLY PERSON who does it is YOU. YOURSELF. Just stop doing it.

– to be loved, you need not have net worth. Just self worth. Which we all have.

– you cannot please all the people you are connected on FB. To me only about 10 matter a lot. 50 matter at all. The other 3800 – we do not care a damn either way. I am just being polite in accepting FB’s misuse of the word ‘friend’.

– if somebody keeps track of my posts, sayings, etc. I feel sorry for them, not for myself. I feel honored at being tracked. One day it might be useful when I write my memoirs.

-sometimes I will hurt the people I love. Mostly unintentionally. Almost always unintentionally, but hey that is life. I will also apologize – if they do not accept the apologies, I know they will not matter post that. Sad, but will live with that. Has not happened so far, hope it does not matter.

– when you hurt someone you love, the world does not end. Really, it does not end.

– you should not respect or like a person because he/she is in a good position.

– be aware of people who throw money around to buy respect and love. Suddenly they think they own you.

-Money is like salt. You need it. An excess does not help at all.

this is a money blog so I had to write about money! Happiness has nothing to do with money.

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There are just too many reasons why people over spend..let me give you a list of what I have seen and what I think….

1. Going with the wrong crowd: Get your going out crowd right. If you are a vegetarian tea drinking person, chances are you will over spend going out with a group which has non vegetarians and guys n gals who booze. This is one of the voluntary (or non voluntary) type of over spending.

2. Impressing a girl friend or wife: Impressing a girl friend is something that men do regularly – but some guys carry on with this habit even after marriage! the longer it lasts, the more it hurts.

3. Impressing friends, colleagues, business partners: Trying to impress people by choosing more expensive locales, expensive wine, food, …well it goes on.

4. Giving lavish gifts – again so that the person carries tales about this to others and says nice things about them. This is a kind of a craving for love.

5. Spending money is like a feeling of love – did Madona not say this line? scratch, scratch…you will find it.

6. Because they cannot tell their friends that they cannot afford it.

7. ‘I got a Rs. 8940 Income tax refund’ – hey dude you had paid excess tax…it is YOUR OWN MONEY coming back to you. Gimme a break.

8. When a person’s Income falls, he/she is not able to adjust to lower levels. So they fool themselves saying ‘things will now improve’ so they are telling their friends, relatives, OWN MIND, that they can afford it.

9. ‘Come on Subra…I run a big business, my factory has 33 workers, my office has 14 people working…Do not tell me I cannot eat once in a while to Leela for a drink’ – hey dude your cash flow …yuck..yes people live up to a false image. Employees accept that post retirement their expenses will fall, but professionals do such things…

10. Cannot say ‘I cannot afford it’ or say No, you do not deserve it….Many a times it is buying love  by  giving gifts. Maslow was right…remember that guy ?

11. Proving self worth: sometimes it feels good to wear a Rs. 200,000 suit, a Rs. 55,000 Pen and a Rs. 14,000 shoe. Just for some people, sometimes. Actually does not work for the real rich.

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Credit cards issued by Reserve Bank of India Yes, that’s the latest trick fraudsters are using to dupe people. This article covers how people were duped in the name of RBI credit card. What are the various kinds credit card frauds? How India has stringent measures to avoid  frauds, What precautions you can take to avoid the fraud?

How were people duped :Modus operandi of RBI Credit Card Fraud

Person is sent a credit card which allows withdrawal of money up to a certain limit from a bank account (usually a small sum). Thus people are convinced that the credit card works. The fraudster then gets the victim to deposit a huge sum of money in the same bank account. Once victim deposits the money the card stops working. After that the holder of the card or victim does not hear from the fraudster.

Please note that the Reserve Bank as India’s central bank, does not carry out any business with an individual, not for bank accounts(saving, current) cards(credit card, debit card) , online banking services or giving funds in foreign exchange or any other form of banking services.  

In recent years, the Reserve Bank has been target of many such scams. Fake Reserve Bank website for online transactions (RBI warns about Fake Website in its Name) , Luring members of public to secure their bank accounts against such frauds by asking them to share the bank account details, including user id/password, through an email or by clicking on a link given in email. ( RBI cautions Public Not to respond to Phishing Mail sent in its Name ). Such fictitious offers are also made in the name of other public institutions, such as, International Monetary Fund (IMF), Income Tax authorities, Customs authorities or public figures like Governor, Dr. Raghuram Rajan or other senior RBI officials. Others common scams are winning a lottery without participating in, transferring inheritance money for some transfer charges (Nigerian scam), job offer etc. Our article Phishing emails Online Scams talks about such scams in detail.

Falling prey to such offers can result in compromising one’s own crucial personal information that may be misused to cause direct financial and other loss. People  in their own interest, should refrain from responding to such offers in any manner. Rather, they should immediately lodge a complaint with Cyber Crime branch of the Police

What the incidence level of card frauds in India is and whether it is alarming?

Unlike in United States, England and other countires where the frauds are reported as part of the legal and regulatory mandate, in India, there is no legislation to make frauds available in the public domain. Card scheme companies also do not publish data. Some statistics   As per WorkshiponcardFrauds During February 2013 in the Indian Parliament, Minister of State for Finance reported 8322 positive cases of fraud related to cards and internet banking during calendar year 2012 involving Rs 53 crore.In some cases you just can’t believe the reported figures. Checkout,  In February 2013, in Times of India, Mumbai 17 phishing cases, 47 cases of credit card frauds were noted from 2010 to 2012(and  the annual crime statistics on the Mumbai police website was in single-digits).  Though there aren’t any official figures  card fraud is rising. Let’s see what are kinds of card frauds.

Kind of Card Frauds

Credit card frauds is where one uses other’s cards to purchase goods or services or funds while using other’s card fraudulently.

How You Can Get Conned

• Phishing or Spoofing: You get e-mails that  appear to have sent by an institution you deal with such as  banks, e-commerce websites. Some ask for verification of credit card or bank account data, or a date of birth. When you reply, thieves use the precious data.
• Vishing & Smishing: Phishing via phone-calls or SMS. You get a call from someone pretending to be your bank exec with an offer or for verification . The calls are just like from bank.
• Skimming: Obtaining a person’s card details swiping a card using a card copier to copy the details contained in its magnetic strip. Often this happens with cooperations of  people handling cash at shops, restaurants.
• Carding: Carding is the process to verify the authenticity of the stolen data of the credit cards. Thieves first use it  for a small purchase. If it is successful  it is  used for big amounts.
• Cloning: Creating duplicate cards by using inexpensive technology which is easily available. These cards are then used for transactions or online.

India and Stringent measures to avoid credit card fraud

In India, according to the credit card contracts, the card-issuing company isn’t liable for any fraudulent transaction unless the customer files a report immediately. Once card holder reports  and blocks the car, he is no longer liable. Prevention is better than cure, acting on this principle, RBI has come up with stringent norms.

Using credit cards online has become more secure after the Reserve Bank of India added another security layer in addition to credit card details, an independent password. The RBI has made it mandatory to validate offline credit card payments in India with a PIN (personal identification number) and online Indian payments with an OTP (one-time password) to be generated by SMS on the mobile phone. An OTP gets sent to phone within seconds of the SMS request and is valid for a single use, to be made within 10-30 minutes.  There is however difference in Indian and foreign payment gateways. Such websites do not require such security measures even for payments made from India. What this means is that if you purchase a book on Amazon.in you would have to enter CVV number and also have to get OTP but on Amazon.com no OTP autentication is required.

Other stringent norms are:

• Restriction of card to domestic usage  for customers who have not used their cards internationally
• Converting  existing cards to EMV chip cards , for customers who have used their cards internationally. EMV stands for Europay, MasterCard and Visa. EMV cards have a small, metallic square in front of the card which is actually a computer chip. The reason why these cards are safer than magnetic strip card is because  the magnetic stripes contain predefined data which does not change. But whenever you use  EMV card for payment, unique transaction code is created by chip which cannot be used again. These cards are not swiped but  are inserted  into a slot (technically called card dipping) for credit card transactions
• For international usage of credit cards, setting up of  threshold limits based on risk profile and usage of customer.

What you can do avoid credit Card fraud

• Access your bank account on a personal device
• Select complex passwords, which can not be easily guessed. change them frequently; use different passwords for different accounts
• Do not write your passwords Or PIN (especially on back of pin) or share them; don’t save them on computers that many can access
• Go to the URL manually instead of clicking on a link in an email
• Ensure that websites where you give personal information have URL starting with https:// (have SSL encryption)  and  a lock icon.
• Use the virtual keypad to enter card number and other details
• Log out of sites before closing the browser window
• Register for Verified by Visa or MasterCard Secure programme.While using this card a phrase will be displayed and another password will be asked.
• Banks also provide a temporary one-time virtual credit card.
• Don’t provide financial information in response to calls or e-mails
• Use your credit card at trusted stores only not at every retail store that you visit.
• Try to ensure that credit card is swiped in front of you. If this is not possible, use cash instead.
• Install an anti-phishing software on your computer /mobile especially if you carry out online transactions
• Monitoring your bank account online or your bank statements regularly and of course choosing the right credit card
• Going for cards which offer security features  For example American Express offers  a range of security features  for maximum protection against credit card fraud such as personal security keys, pre-purchase verification, irregular Account Activity Alerts & automatic time-outs when online banking
• Register Your mobile number  with credit card company so that every time a transaction is completed you receive an SMS.

Related Articles:

• What happens when credit card is swiped?
• Credit Card Fees and Charges
• Credit Card Debt
• Credit Card Payment Calculator
• Cyber Crime : Credit Card Fraud,Bank Account Hacked
• CIBIL CIR : Account and Negative Factors.
• FAQ regarding CIR report

There is always threat of credit card frauds. However, you can take some precautions to avoid those.  If it seems too good to be true, it probably is. Have you been a victim of credit card fraud? If yes how? How do you avoid credit card fraud?

So who owns the responsibility of the rape case that happened Uber cab? For sure, it is not Uber and the company cannot be held liable for this.

Their terms and conditions clearly state they can’t be held responsible for anything that happens between the driver (the third party) and the passenger.

“UBER WILL NOT PARTICIPATE IN DISPUTES BETWEEN YOU AND A THIRD PARTY PROVIDER. BY USING THE SERVICES, YOU ACKNOWLEDGE THAT YOU MAY BE EXPOSED TO SITUATIONS INVOLVING THIRD PARTY PROVIDERS THAT ARE POTENTIALLY UNSAFE, OFFENSIVE, HARMFUL TO MINORS, OR OTHERWISE OBJECTIONABLE, AND THAT USE OF THIRD PARTY PROVIDERS ARRANGED OR SCHEDULED USING THE SERVICES IS AT YOUR OWN RISK AND JUDGMENT. UBER SHALL NOT HAVE ANY LIABILITY ARISING FROM OR IN ANY WAY RELATED TO YOUR TRANSACTIONS OR RELATIONSHIP WITH THIRD PARTY PROVIDERS.”

We looked at T&Cs of Indian startups / companies and here is how it reads (emphasis is ours).

Olacabs : Terms and Conditions

All vehicles registered with the Company are continuously tracked using GPS for security reasons only. It is expressly made clear to you hereby that the Company does not own any taxis nor does it directly or indirectly employ any drivers for the taxis. Taxis and drivers are all supplied by third parties and the Company disclaims any and all liability in respect of the drivers and the taxis alike.

The Company shall not be liable for any conduct of the drivers of the taxis. However, the Company encourgaes you to notify it of any complaints that you may have against the driver of any taxi that you may have hired using the Company’s Services. [link]

TaxiForSure : Terms and Conditions

No clear policies regarding TPSPs (third party service providers).

However, under no circumstance accepts liability in connection with and/or arising from the transportation services provided by the TPSP or any acts, action, behaviour, conduct, and/or negligence on the part of the TPSP. Any complaints about the transportation services provided by the TPSP should therefore be submitted to TFS for escalation to the TPSP [link].

MeruCabs : Terms & Conditions

Please note that we are not responsible for the behaviour, actions or inactions of drivers of taxis, quality of cab which you may use (through us or otherwise). Any Contract for the provision of taxi services is between you and the driver and not us and we simply provide a platform to introduce drivers and passengers.[link]

So essentially, when you book an Ola, a TaxiForSure, Uber or Meru – you are booking a brand and NOT a service.

Nobody owns up for driver’s misconduct!

Nobody owns anything that happens in the cab.

If anything happens, they will ONLY act as a mediator and surely NOT own the situation.

Nobody cares as long as they have your $$s.

Cool ?

Raises an important question : What business are companies like Ola/TFS/Uber etc are in? Branding or Service?

SpiceJet has been in the news lately. Crude prices have fallen but the carrier seems to be still quite deep in the bad stuff. The airline’s stock has fallen hugely lately, and while there seemed to be a recovery of sorts, the stock again tanked 13% on Friday.

There’s stories abound, of the airline’s problems. The DGCA (the airline regulator) has cancelled 186 slots of the airline, disallowed it from taking bookings from flights beyond a month, and asked it to pay salary dues of employees within 10 days. Spicejet also had to refute that it was put on “cash and carry” basis by AAI, which would have meant no credit period for it’s fuel needs and that the airline would need to pony up cash for fuel upfront.

They’ve also asked the airline to prepare a plan of how it will pay vendors Rs. 1600 cr.

The auditors have mentioned that there are serious problems:

…the company has incurred a net loss of Rs.

Uber CEO, Travis Kalanick has published an official statement on the Delhi rape case

“We will work with the government to establish clear background checks currently absent in their commercial transportation licensing programs. We will also partner closely with the groups who are leading the way on women’s safety here in New Delhi and around the country and invest in technology advances to help make New Delhi a safer city for women.” [blogpost]

The problem with Uber is very fundamental in nature : The company is just looking at tick marking the legal rules.

First, it’s not about New Delhi. This can happen anywhere. You can’t localize these serious problems and run away by taking a higher position (“to help make <blah city> a safer city for women.”).

Secondly, Uber’s driver onboarding is totally fucked. Here is how:

1. There is NO background check of driver. The background check is only for the owner. 

Normally, an owner owns 3-5 car, and hire 5-6 people in shifts. Drivers sometime hand over cabs to other drivers/share cabs as they are highly incentivized to keep the show vehicles running (you get Rs. 1,000 if you do more than 10 trips).

Customers, on the other hand trust Uber (and similar companies) assuming that the drivers are checked for criminal offence. In fact, security is and SHOULD BE the least of worry.

But in case of most of the online cab companies, safety seems to be the last priority and is mostly used as a marketing tool.

In case of other operators like Olacabs, the phone is fit in the fleet itself.

In the case of Uber, it is at driver’s whims and fancies. There is no call center / support number to reach out to incase an untoward incident happens. That is, a faceless and contacless organization!

3. Uber pooling is a JOKE on security.

There is no verification of user!!

You can pool & get robbed (or whatever) anytime by anybody.

Ofcourse, one can’t blame Uber for all – a large part of blame lies with the government and lack of policies on background checks (lack of online/central repository).

But having said that, technology is meant to improve our lives and CANNOT be the vehicle for us to compromise our lives in the name of ‘convenience’.

To Uber and others, it’s time to get human and own up. You are charging a premium in the name of ‘safety’ and that’s just a fucking eyewash.

– Read : A Look at T&C Of Indian Cab Operators.

For now, you are better off buying your own car!

Just received a copy of ‘My Money Book’ – For a long and happy journey called life. This is an Exide Life Insurance publication and is meant to be a diary of your assets and liabilities.

Such a book could also be called ‘a hand over book’.  Let me just explain what this book is supposed to do from a software point of view.

If you were writing code for a software program you would like to document what the BA said, and why that particular code was being written in that format. Exactly if a company was ISO compliant it would also document all its actions and processes.

Unfortunately human beings do things differently under force – we maintain records because the government asks us to.

We do not maintain personal records because there is nobody asking us to. Imagine if you are an Indian and you are travelling to New York. At the airport you have a stroke. Nobody knows you except by seeing your passport…then the process starts..they have no clue on what to do.

Ditto for finances. Once you die your wife starts putting things together. I could write a book on what some of my clients have gone through putting things together.

This attempt by Exide Life Insurance is a good first step in that direction. Here is a book that can keep track of all your finances – bank account, mutual funds, life insurance, loans, mortgages – the works. This could be more than useful for the surviving spouse. In fact it should be made mandatory for people to maintain records in a particular format.

Many Chartered Accountants insist on making a balance sheet – so at least people have a fair picture of what you own and what you owe. HOWEVER the details like folio number, no. of units, beneficiary’s name, etc. can be found ONLY in the ‘My Money Book’.

In short it is a useful book – however I do think that a lot, lot more can be added, an E version launched. Once that is done, it could even be printed and attached to a will.

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RBI policy review on December 2’nd made it abundantly clear that we would be entering the softening of interest rate phase from early next year. It also mentioned that future policy reviews would be consistent with the same (i.e.) we are entering a lower interest rate regime.

RBI also aims for a long term inflation rate of 4% with real interest rate being around 1.5%. This implies over the medium term of next 3 years or so, the deposit rates may even settle around 5.5% to 6%.

In the last few days, SBI, HDFC Bank, ICICI Bank etc. have started cutting deposit rates. HDFC Bank has mentioned yesterday that even lending rates would start coming down from March.

In Nineties, due to high inflation, a fixed deposit rate of around 12% was normal. Even provident funds used to give such rates. I remember my father getting around 15% from his Sundaram Finance deposits.

During last one decade, 8% became the new normal. Twelve and fifteen percent became a history of the past. As the country grows, focus of both RBI and government is on lower inflation and interest rates. The new normal for interest rate in this decade may become 6% over the course of next couple of years. Eight percent may become a history.

If you rely on fixed deposits for your sustenance, a fall from around 9% interest rate to 6% interest rate would mean that loss of one third of your income in next couple of years. The most difficult situation in your financial life can be when expense keeps increasing and your income keeps falling.

We’ve been advocating keeping only emergency fund in fixed deposits and invest the rest in MIPs (Monthly Income Plans) and generate a fixed income through SWP (Systematic Withdrawal Plan) option.

Based on the long term track record, MIPs are capable of giving around 2% better than fixed deposits. During interest rate falling scenario, like the one we are having now, MIPs deliver excellent returns.

During last one year, the G-Sec yield has dropped around 100 bps (basis points) or 1%. As you are aware, when interest rate falls bonds rally. Equity market also did well. So the last one year return of many good MIPs is around 20%. Yes you read it right, it is 20%. Due to expected fall in rates, for next 3 years, we expect MIPs to provide returns in mid to higher teens. There is no guarantee. This is based on our reading of the situation.

On one hand you are going to get lesser rate of return in fixed deposits when you go for renewal in future. On the other hand, MIPs are going to give you higher benefits due to the same falling interest rate. Not only that as equity market is also expected to do well, it would be icing on the cake in providing better returns. So which one you should choose? FD or MIP?

So my suggestion for you is to keep only any contingency fund in fixed deposits. The rest may be invested in MIPs. Please note that when you invest in MIPs, you should keep in mind an investment tenure of not less than 5 years. Or in a favourable scenario like this, at least 3 years. Anything less than 3 years, it is better to continue with fixed deposits itself.

I hope this is not an overdose of what to do in a bull market…and I hope that the market remains bullish till it reaches 100,000 on the sensex or at least 36,000 as touted by another media expert. I do not believe both these figures, but then I am a cynic, ain’t I ?

Here are some more tips on how to invest in a bull market:

1. Be prepared for a bull run: Most people want a bull run, but panic on the first signs of a bull run! Imagine if you were in the market at 2800 index. Would you have been thrilled about DOUBLING your money and bailed out at 6000? and watched the market go to 21000?

Similarly if you have been in the markets from the beginning of say 2013 or even Dec 2013, what will you do? After all 21k has changed to 28k! What happens if you sell out at 32k and then the market reaches 43k in 2 years time?

2. NOBODY KNOWS anybody who knows anybody who can time the market perfectly every time: Such a guy would have a portfolio far, far better than Warren Buffett and we know he is lionised, is he not?

3. What the market does is NOT AT ALL IMPORTANT – see what YOUR portfolio is doing. Significantly see how the individual scrips in your portfolio are behaving, not the aggregate. Aggregates do not matter….

4. Be very careful about your Asset Allocation: If you have decided that you should be in equities only to the extent of 55%, STICK TO THAT figure IMMATERIAL of whether the market is in a bull market or bear market. YOU WILL HAVE TO SELL EQUITIES and buy bonds in a bull market. You know your numbers, right?

5. There are many phases in a bull market – your portfolio has to have that strategic tweak – whether to buy Mid caps, large caps or even cash. Understand carefully, the stages of a bull market are not easy to spot.

6. When you have money, keep buying – we are investors we invest. In a rising bull market this can look sensible. In a falling market it can look stupid, so be alert.

7. When everybody is bullish on certain idea – it might be a good idea to take some money off the table…hey control your fear, greed, regret and pride….again your call.

8. Meditation helps. Do remember in a bull market, you attract (law of attraction) bullish stories (Confirmatory bias) so discount what you like and seek the nay sayers. Talk to them, read what the leftists have to say. Close your eyes and think ‘what if Mamta were to be the deputy PM….hmm…come down to earth…

More tips?

arre implement this first….

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This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

With its first divestment candidate this financial year, the government today fixed Rs. 83 as the base floor price for SAIL offer for sale (OFS) which is scheduled to be carried out on the stock exchanges tomorrow. Targeting Rs. 43,425 crore in divestment proceeds this fiscal year, the government has decided to sell its 5% stake in the company i.e. 20.65 crore shares.

At Rs. 83 a share, it seems that the government will be able to raise a minimum of Rs. 1,714 crore from this sale. Currently, the government holds about 80% stake in the company.

Before we consider the factors to decide whether we should invest in this OFS or not, lets first check the basic details of this offer.

Shares on Sale - The government will be selling 20,65,26,264 shares in the offer for sale, out of which 10% shares i.e. 2,06,52,626 shares have been reserved for the retail investors.

Offer Price - Share price of SAIL closed at Rs. 85.25 on the NSE today. The government has fixed Rs. 83 as the floor price in the OFS, which is a discount of 2.64% to its closing price. The floor price of Rs. 83 was disclosed by the government after market hours today. So, the market will react to this price in the trading hours tomorrow.

5% Discount for the Retail Investors - The company has decided to offer a discount of 5% to the retail investors. This discount will be offered on the price at which the company allots its shares to the retail investors.

Time Period - SAIL OFS will remain open for a single day only and that too, during the trading hours of the stock exchanges. You’ll get to know the status of your bids by 6 p.m. and if successful, you’ll get the shares allotted by the designated stock exchange on T+1 basis.

Once bidding starts, you can check the bidding status on the National Stock Exchange as well as on the Bombay Stock Exchange.

How does an OFS process work?

If you are investing in an OFS for the first time and want to know more about the process, here is the link to check the details about it. If you have any query regarding the process, please share it here, I’ll try to respond to it as soon as possible.

How to invest?

You need to contact your broker to know how it is facilitating the bidding process. I think most of the broking firms must be providing the investment facility through their online platforms. If you don’t have access to the online platform, you should contact the customer care department of your broker and get the bid placed through telephonic confirmation.

Should you invest in SAIL OFS?

I think it is not the best of the times for a company like SAIL to hit the capital markets. On one hand, global commodity prices including steel are on a steady decline as a result of falling demand and on the other hand, the pace of supply is expected to steadily go up in the next few years. So, these companies will continue to face pricing pressure in the absence of a demand pick-up.

As far as the financials are concerned, I think for a public sector company like SAIL, it doesn’t make sense to deeply study its financials and try to gauge its value based on certain financial ratios like price-equity ratio etc. I am saying this as firstly it is a government controlled company and secondly, it is into a cyclical industry.

The fortunes of companies like SAIL depend on various factors like economic health of the country, pace of industrial activity, global commodity prices and how well it is managed by the government and its officers.

In March 2013, the government sold its 5% stake in SAIL at a price of Rs. 63.07 per share. At Rs. 83 a share, the current government is seeking 32% premium to the last OFS price. I think the current price of Rs. 83 is fair and I expect around 35-40% returns from my investment in SAIL in the next 18-24 months. However, with positive economic environment, returns could also surprise on a positive side.

THIS IS A HUMOR COLUMN.  THIS IS A HUMOR COLUMN. THIS IS A HUMOR COLUMN. THIS IS A HUMOR COLUMN.

Please not this is a column taking a punt at the WORST thing that has happened for the common investor / saver: too many blogs run by too many jerks who do not understand insurance – life or general but are here to sell. This is one such spoof.

It is also taking a punt at the 545,644 people who are being funded by various people to do ‘financial education’ – and ‘financial inclusion’ – the latest 2 jokes in the BFSI space. Very crowded doing more damage.

If Toyota were to conduct a ‘How to buy a car’ seminar, you do not honestly expect them to come to an honest conclusion that “Honda City is the best car in the country for you to buy”, right? then why do you expect that to happen in the BFSI space? hmm…i do not know too, come let us search for an answer…

When you look for term life insurance, bloggers like www.subramoney.com, www.capitalmind.com etc. ask you to buy the cheapest term insurance, that is wrong. This is how you should go about buying term life insurance:

1. What is the Claim Settlement Ratio: IF you were to see only ONE condition in a term life insurance, you must see this. Let us assume that for our shortlisting purposes we use 95% as the cut off, only 3 companies meet our criteria:

LiC, Icici and Hdfc (you can go to the IRDA site and see the numbers, but rest assured other companies do not fit into the criteria, believe me)

THIS IS A HUMOR COLUMN.

2. Online vs Buying through an agent: IF you are not a very active person you may not go for your medical check up promptly, you may fill up the form honestly, you may mention about your parent’s illness, you may tell them you smoke 16 cigarettes a day – all this will increase your costs. So it is better to let a guy come to your house to fill up the form – after all it is so convenient – you just need to sign the form in a few places. So going through an agent makes more sense. It is albeit a little more expensive, but a tad bit. Does it really matter? After all he will even pay your first premium. Is that not great? No online platform will ever, ever do it for you.

THIS IS A HUMOR COLUMN.

3. History of the Company: Make no mistake in Insurance longevity is very very important: “Historically in India it has been proved that companies with a track record of more than 50 years also have a Claim Settlement Ratio of 97% or more” – amazing empirical evidence. So selecting a company with a history of about 55 years or more DRAMATICALLY improves your chances of the claim being settled.

THIS IS A HUMOR COLUMN.

4. In the earlier quoted survey we also found that if the starting letter of the company from whom you are buying life insurance starts with the letter ‘L’  the chances of your claim getting settled are higher. After all Life and Life insurance both start with the letter L – what an amazing coincidence. Even as I write this, I am getting goose bumps. Are you not?

THIS IS A HUMOR COLUMN.

5. Do not visit websites: Yesterday I bought a Sony power bank for Rs. 4990. I was getting it online – MI- for Rs. 898. Why did I choose to buy a Sony in a shop like Reliance Digital? Simple, warranty. And I wanted to be safe about my phone and other equipment. So be careful about what you are choosing. See offline is better, I told you. Always.

THIS IS A HUMOR COLUMN.

6. Cost / Premium: For a rich man like you on a CTC in excess of Rs. 80L does it really matter? Honestly, I found Max Life Insurance and Hdfc Life Insurance to be cheaper than LIC, but again..see rule number 3 and 4 – do you dare risk your family not getting paid? After all like I told you – will you have peace of mind with companies at least 55 years old.

So make your choice carefully. Choose a company starting with the letter L and having a history of 55 years and with a CSR (no no not Corporate Social Responsibility – today CSR is about keeping India clean after making ti dirty) but CSR means Claim Settlement Ratio.

More than 99% of the people who read this post automatically short listed LiC.

What an awesome coincidence. Please like this post and tweet it as much as possible, I am passionate about financial literacy and I want to be of help to society.

PS: Hdfc and Max rejected my wife’s application to become an agent. Even knowing some of the top management people in both these companies did nt help. They said YOU are married to the wrong cynic. Touche’.

THIS IS A HUMOR COLUMN.

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From a humble calculator repair shop to a successful antivirus company, Katkar brothers have come a long way!

Quick Heal Technologies, founded by the duo in 1993, sells antivirus products to SMEs. Before starting up Quick Heal, Kailash served as a maintenance engineer at Data Star Electronics. When Kailash’s younger brother Sanjay Katkar came up with a highly reviewed project on Computer viruses during his post grad, he encouraged him to take a step further by diversifying their core capabilities into the creation and development of antivirus solutions.

In many ways, Quick Heal is a case study in marketing and distributing in the Indian market. Creating marketing strategies and reworking on operational strengths to build a dedicated Research and Development center and a strong ground-support team that now spans over 30 cities in India (and 60 countries).

Have your dose of inspiration from Quick Heal story, as shared at UnPluggd – India’s biggest startup conference.

- Attend the next UNPLUGGD (Sat/December 6th)

» Join UnPluggd Facebook group for updates.

[Guest article by Santosh Panda, founder of Explara. Santosh earlier shared "Of Comfortable Corporate Life, Failures And Being An Entrepreneur" on his startup journey so far.]

One loss gave birth to a cash cow

My father had a day job in a Bank yet he ventured with 2 more partners to start a transport business (a truck goods delivery services to start with) in 1984. With a severe loss & accident; we lost lakh of rupees (a lakh rupee was big deal even now). This had a deep impact on us.

During the same time, we used to keep a cow for our home need. My father then shifted his attention to turn this 1 cow shed to one of Odisha’s district finest small-scale dairy firm! I thought to share this journey.

Scaling Desi Cow

We had a small ‘desi cow’ (Indian cow) which are less costlier than other high breed of cows, need almost no maintenance and at the same time, they produce fairly less milk. They are popular in villages and semi-urban areas as preferred small investment startups!

Now the transport business had gone for a toss, my father thought how about ‘scaling’ this desi cow setup to a mid-sized dairy firm! Initially, he got 1 more cow and we started getting around 7 ltrs of milk in the morning. This got us 2 ltr for our own home needs and 5 ltrs were sold in neighborhood & to some of father’s bank colleagues.

Sell The Right Milk

We invested in these 2 cows with proper care, good and veterinary healthcare. This improved their heath but their overall contribution to milk production was still fairly less. As our customers tasted milk and shared word of mouth that “Bank Panda’s” dairy firm milk is pure milk, more customers approached us.

My father had an ethics policy number 1: Not to add water in the milk. Though the demand was pouring in, we ensured we follow the ethics. We couldn’t serve the demand and in fact we used to tell these additional customers to go to nearest competitor dairy firm to buy!

Predictable Milk Production vs. Exponential Milk Production : Devise your biz model

During this time, my father used to get good inputs from veterinary doctors & staffs that certain desi cow are fairly stable in their growth, lifespan and contribution to milk production. Hence, we should mix foreign cows like Holstein cows (cows from Holland) with our Indian cows and manage a balanced dairy firm and growth of it. FYI, Holstein cows are highest production dairy animals.

That was a good advice but what happened thereafter almost changed our destiny. We got a Holstein cow, increased the milk production along with our existing cows. But the Holstein cow was very aggressive in nature, also needed different setups. For instance, Holstein cows need much rich processed food, their shelter needs to be open aired and they also need much concrete & proper drainage system.

We had to invest & build another shelter for this Holstein cows. We got a Holstein cow and figured that the cost of this cow was much higher vs. what we planned as milk production. First loss hit us.

Spot The Cash Cows

My father was searching for a cow via various agencies, middleman in various nearby villages & cities. One fine day, he went out and got a Holstein cow. Usually our firm servants bring them by letting the cow walk for miles after miles crossing several villages to my place. But this time my father went with them and while bringing the cow, he realized that the cow is so thin & weak that she had to be brought in a truck with utmost care.

When she arrived in our home, we were amazed to see such a thin Holstein cow papa had got (usually Holstein cows are fat & beautiful). I remember watching this cow struggle to even eat her first lunch in our home. We were not sure but my father was damn sure that he spotted a great cow.

With 3 months of extreme care, food and love, this cow went on to become the best cow in my district (Ganjam, Odisha) for next several years! She won awards after award and every veterinary doctor gave example about her as how a cow should be taken care. She was producing so much milk that we almost ruled the major supply in our customer segment.

But beyond this, we were known for timely milk distribution, pure milk and extreme customer care.

Enjoy The Journey & Be Thankful to Cows

The cows were like a family! We now had achieved a fairly stable set with Indian cows and Holstein cow to manage our growth, mixed their balanced milk production so we can manage supply-demand and unpredictability scenarios. We made some losses too in wrong selections but overall we enjoyed the journey, hard work and the money.

Pay it Forward

This contributed to our overall living, funding my engineering study and also much needed fund for my career shift to computing.

I am sincerely carrying forward some of the philosophies, customer serving learning from my father’s dairy firm to my startup.

We are back with Action Month ! … You may be high on knowledge, but check if action is missing in your financial life or not ? If thats the case, action month will be of great help to you.  We invite you to see Action month as an opportunity for you to get into action. Action month is a group campaign where you can choose to be a part...

The post Join Action Month – Take-up 30 Day Challenge to complete your Life & Health Insurance (Download E-BOOK) appeared first on Jagoinvestor - Personal Finance Blog.

Americans do things in style. So whether it is getting into a financial debt trap, chapter 11 bankruptcy claims, or living far beyond their means, they have a term for all of that. Like subprime. Like lending $700,000 to a person earning $ 17,000 per annum. They create products like “interest only”, “balloon repayments” or “increasing mortgage” – it does not matter!

One such term they have created is Lifestyle creep.

Life style creep is increasing your life style slowly without even realizing that it is killing your ability to save and invest. So shifting from public transport to private transport (OMG Subra you STILL travel by local train and bus, I wonder how you are able to do it?).

Shifting from a udipi (coffee Rs. 20) to Let’s do Starbucks (Rs.140), or multiplexes for movies, taking the corporate habit of J class flying to your own private life, …there are a million things. This is not just inflation, it is inflation + lifestyle creep.

Another variation of  lifestyle creep?

It is about people increasing their standard of living with temporary income – thus not being able to maintain it when the income suddenly disappears -Lifestyle creep is particularly a problem to those individuals approaching retirement. People, a few years before retirement are typically in their peak earning years, but at the same time many of their earlier expenses, such as paying off a mortgage, or raising a family have vanished. Suddenly with a new found surplus of cash, some people use it to buy more expensive cars, more expensive vacations or possibly a bigger home.

Since the goal in retirement is to maintain the lifestyle enjoyed in the last few years before retirement, these retirees require more funds to support their new, more lavish lifestyles. Unfortunately, they don’t have the resources to do this because they spent their surplus cash flow.

This is somewhat akin to the ant and the grasshopper story – the advice somebody can give them is “if you were singing during the summer, go and dance in the winter”.

So suddenly you have people who have “upped” their lifestyle with temporary income (come on, you knew it will end on the day you retire) and now they can now wonder how to continue this “temporary addictions”!

here is a nice article by CA Arvind Rao…

http://www.business-standard.com/article/pf/spare-a-thought-for-lifestyle-inflation-114112900712_1.html

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Is brown bread or brown rice is a healthier choice?  In a bid to stay healthy we turn to supermarket shelves lined with the latest health foods. Hence there is an increasing and ever-growing demand for healthier (and more expensive) options like whole-wheat, multi grain,ragi oatmeal versions of bread,be it as sandwiches,or maggi or idli. For our generation the healthy breads are an acquired taste but better late than never.  However, how many of us really understand these health products? Do we read the labels and ingredients on them and if you do, how much of it do you really understand? Regular white bread,is high in gluten and starch,whole-wheat and multi-grain versions are higher in fibre and other nutrients like vitamins and minerals. Given all of this, it would make sense to switch to brown bread or multigrain right ? What about diet soda or zero calorie drink. Let’s find out.

Brown Bread vs White Bread

Bread is a naturally low-fat food, rich in complex carbohydrates.  Milling wheat into white flour removes the outer bran coat and wheatgerm, losing most of the goodness(minerals and vitamins) in the process. Thus eating the unrefined wheat or rice or sugar is healthier as it retains the minerals and vitamins that are present in the outer bran or husk. While whole-wheat is made out of atta,multi-grain bread is a mix of five or seven types of grains,including jowar,barley,nachni,oat etc. Similarly,oat bread is made out of oatmeal.Of course,there has to be a percentage of maida in these breads as well to hold the structure together. The food expert uses a GI scale called the Glycemic index (GI value) to measure the quickness in which a particular food, once eaten, turns into glucose in the blood. The higher the GI value, the more harm to your body’s metabolism; leading to obesity and all manner of ageing-related diseases. The GI value of brown bread is less than the GI value of white bread.

 So Is Brown Bread Good. Unfortunately not.

• A slice of brown or whole wheat bread is thicker and denser, compared to white bread. So it has more calories than white bread.
• Just like everything that glitters is not gold,every brown bread is not the same as whole-wheat bread.Brown bread, however, could be wholemeal or white flour coloured brown with caramel or a bit of jaggery or molasses in the bread. You will need to check the flour details on the label.
• In whole-wheat you don’t get a lot of leavening, it has a grainy texture, and it doesn’t expand as much as Maida, and doesn’t bounce back as easily when squeezed. It spoils easily, because the oils in wheat-germ go rancid pretty fast. More preservatives are added to improve the shelf life. Emulsifiers are added to improve its texture. It means extra chemicals go into you bodies.
• The fibre that you are supposedly getting from whole wheat bread is negligible as compared to the chemicals and emulsifiers that you are ingesting. You would rather get that fiber from your vegetables, fruits or salad. Let’s go back to what we learnt in school. There are five basic food groups -Energy givers or carbohydrates, building blocks or proteins, essential fats, vitamins and minerals. Each food item is divided into one of these groups depending on what it is the best source of. Thus, wheat, rich or carbohydrates(carbs) are primarily energy givers  and are eaten so that the body gets enough fuel to carry out all its daily metabolic processes and any physical activity during the day. Carbs are not the main source of vitamins and minerals that group is mainly composed of fruits and vegetables that are the power house of the essential anti-oxidants and minerals. So, the question is, Why are we then searching for minerals in a food item that is not its source?‘. Yes, whole wheat atta over maida or brown rice over polished white rice does have more manganese, selenium and magnesium, but I can get all of this and a hundred times more nutrition from just an apple. Why search for a needle in a haystack when the search begins and ends in a simple fruit. 
  

Brown Sugar vs White Sugar, Brown Egss

Same with sugar and eggs. Well, the calorie count of one gram of sugar  brown or white is identical and other than calories sugar gives us nothing else. Yes, brown sugar may give you a bit more minerals be cause it is unrefined cane sugar, but this doesn’t earn it any extra brownie points.The nutritional value is not dependent on the colour of the egg. It is the colour of the hen that lays the egg that decides its colour! White feathered hens lay white eggs and red-feathered hens lay brown eggs.

Diet Soda or Zero Calorie Drink

But I drink diet soda, With no calories or sugar, said a friend when we went out for lunch. When taken at face value, diet soda seems like a health-conscious choice. It saves you the  calories you’d find in a sugary soft drink while still satisfying your urge. But Diet sodas are carbonated beverages, instead of sugar, they are sweetened with artificial sweeteners. Diet doesn’t mean calorie-free. The caloric amount is small enough for beverage companies to list as no calorie (lesser than five calories per serving), but artificial sweeteners breaks down in the body into chemicals which generate calories. Not only is diet soda NOT helping you lose weight, it has countless negative effects on your health.

At the end of the day, both Diet Coke and Coke Zero are processed products and come packed with chemical preservatives and additives, the calories may be zero but so are the nutrients. It’s just the taste you get, no vitamins or minerals.  When you know you’re not consuming any liquid calories, it might be easier to justify that double cheeseburger or extra slice of pizza

Akshay Kumar’s fitness ideas

Akshay Kumar, 47, is by one of the fittest man in the film industry. He leads an extremely disciplined life and is a fitness freak. Yet, after working out for the past 32 years, he admits that he still does not have more than 4-6 abs. And that is because he has never resorted to any short cuts for building his body, as he believes in building a strong healthy, long-term body.  Some of his tips from the article Akshay Kumar: After 32 years of working out, (though he eats brown rice) are as given below. One of the reason I am mentioning this article is because when we had gone out for lunch and our friend bought diet coke and brown bread sandwich, discussion started with this article on Akshay Kumar.

Today, it has become a joke to take enhancers, powders, shakes or steroids. What about those days when you used to have whole milk, vegetables, sweet potatoes and brown rice and eat meat if you were a non-vegetarian? The muscles used to build up and be there forever.Get out of eating that processed food. Don’t fall prey to American marketing. Whatever your mother makes at home is the best.

I don’t eat after 6.30-7 pm in the evening. You need to ideally eat by 7 pm, so that you have given the body four hours to digest so that the stomach gets complete time to rest along with the body when you sleep. Even if you can’t exercise, walk everyday and eat by 7 pm and see how it will change your life.

There are no short cuts to building your body. Now they just want to pump up their muscles in three months. That cannot be done without resorting to many artificial and harmful things I.know training is hard, muscles hurt and goals take longer to reach, but when you are training naturally that is the best way. What people are doing is cheating and getting you sucked into a multi-billion dollar franchise where they are teaching you how to build a fake body. I have friends and people in my industry, who are going crazy and people following them, as it is the easy way out. But there is no substitute for hard work.

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• Teach Kids about Expenses :One needs to pay for basic requirements Food, Clothes and House
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Do we need to discriminate based on colour even in food?. You spend extra money on whole wheat bread and you’re positive you’ll enjoy a low glycemic index, nutritional fibers, and generally better health. The fact is, the vast majority of breads are just slight variations, a little colouring here, a sprinkling of seeds there, of the same extremely unhealthy processed bread. Do your research and read your labels for the choice that’s right for you. Let us all be happy, guilt-free and enjoy the bread. in limited quantities. Save calories, save money. 

Why are we not able to learn from our own mistakes?

Why is it so tempting to push all our difficult task to a virtuous tomorrow but indulge ourselves just for today?

Why we do not understand the power of small numbers?

Cognitive Dissonance. Heard this before?

Well there can be examples to answer this. Well  CD is when you tell yourself a lie, but you want to tell your mind that you are being correct. It is a funny way of silencing your conscience when you prioritize wrong things. You do not want to be a bad boy, do you? At least your mind does not want you to, so you tell yourself a series of lies to JUSTIFY A WRONG.

Let us say, you (like me) are trying to lose weight, and one of the culprits you have identified is white sugar (and related empty calories like bread, biscuit, chocolates, ..literally anything that is packaged and branded)..your mind cannot say “Dammit I do not care, I will eat white sugar” . The super ego WILL NOT ALLOW this to happen. So the ‘Idd’ which is craving for sugar has to make a series of suggestions that the ego can accept.

So, it has to be:

“Today was stressful, I must have a Coffee – and I will add brown sugar – it is not as bad.”

” I know sugar is poison, FROM TOMORROW I will go off sugar”.

So the mind is at ease, and you can now have your sugar kick. Happiness all around. So that one extra cup of coffee (which can actually not do much harm)..becomes one in a series of 2 you had today, yesterday,…etc. – this adds up to about 600 cups in a year with 2 teaspoons of sugar….and wow that is a couple of kilos around your waist .

Now apply this to investing.

Learning from Subramoney.com:

1. I must invest at least Rs. 25,000 per month in equities, because I am young and have a nice surplus which is sleeping in the bank.

2. Subra says I should not buy stocks, because for me to beat the indices or a good fund like Franklin India Blue Chip, I Pru discovery or even a balanced fund like Hdfc Prudence is IMPOSSIBLE over a long period of time.

3. I should have started the SIP about 25 months ago when I stumbled on his site.

Actually what happened:

Procrastination. Now what do you tell your mind / how do you justify:

1. My father does not like equities – so I am also scared – but this is packaged as “I may need the money anytime – just in case”

2. I work in an IT company which helps some brokerage houses, I can get information from them and invest in direct equities, I can beat the market. (CD at its peak)

3. Subra himself does direct equity (completely supporting the IDD, Superego cannot argue against facts)

4. This is a bad month I will start investing next month.

5. Shankar Sharma says the market will fall, I will start my SIP when the index comes down to 22,000.

I could just go on and on. I am sure you are getting the drift , are you not?

So if you are starting your investing today because I urged you , ping me on Facebook…or leave a message here…and I will give you my terribly under utilised code

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I had an extended email conversation last month with a respected economist (who wishes to remain anonymous) about whether governments of oil importing countries should hedge oil price. While there is a decent literature on oil price hedging by oil exporters (for example, this IMF Working Paper of 2001), there does not seem to be much on oil importers. So we ended up more or less debating this from first principles. The conversation helped clarify my thinking, and this blog post summarizes my current views on this issue.

I think that hedging oil price risk does not make much sense for the government of an oil importer for several reasons:

1. Oil imports are usually not a very large fraction of GDP; by contrast oil exports are often a major chunk of GDP for a large exporter. For most countries, oil price risk is just one among many different macroeconomic shocks that can hit the country. Just as for a company, equity capital is the best hedge against general business risks, for a country, external reserves and fiscal capacity are the best hedges against general macroeconomic shocks.
2. For a country, the really important strategic risk relating to oil is a supply disruption (embargo for example) and this can be hedged only with physical stocks (like the US strategic oil reserve).
3. A country is an amorphous entity. Probably, it is the government that will do the hedge, and private players that would consume the oil. Who pays for the hedge and who benefits from it? Does the government want the private players to get the correct price signal? Does it want to subsidize the private sector? If it is the private players who are consuming oil, why don’t we let them hedge the risk themselves?
4. Futures markets may not provide sufficient depth, flexibility and liquidity to absorb a large importer’s hedging needs. The total open interest in ICE Brent futures is roughly equal to India’s annual crude import.

Frankly, I think it makes sense for the government to hedge oil price risk only if it is running an administered price regime. In this case, we can analyse its hedging like a corporate hedging program. The administered price regime makes the government short oil (it is contracted to sell oil to the private sector at the administered price), and then it makes sense to hedge the fiscal cost by buying oil futures to offset its short position.

But an administered price regime is not a good idea. Even if, for the moment, one accepts the dubious proposition that rapid industrialization requires strategic under pricing of key inputs (labour, capital or energy), we only get an argument for energy price subsidies not for energy price stabilization. The political pressure for short term price stabilization comes from the presence of a large number of vocal consumers (think single truck owners for example) who have large exposures to crude price risk but do not have access to hedging markets. If we accept that the elasticity of demand for crude is near zero in the short term (though it may be pretty high in the long term), then unhedged entities with large crude exposures will find it difficult to tide through the short term during which they cannot reduce demand. They can be expected to be very vocal about their difficulties. The solution is to make futures markets more accessible to small and mid size companies, unincorporated businesses and even self employed individuals who need such hedges. This is what India has done by opening up futures markets to all including individuals. Most individuals might not need these markets (financial savings are the best hedge against most risks for individuals who are not in business). But it is easier to open up the markets to all than to impose complex documentation requirements that restrict access. Easy hedging eliminates the political need for administered energy prices.

With free energy pricing in place, the most sensible hedge for governments is a huge stack of foreign exchange reserves and a large pool of oil under the ground in a strategic reserve.