Investment Advice update

The World Economy is in doldrums. Europe is on the verge of a meltdown, and with a couple of Countries likely to be kicked out of the European Union, it is likely that the Common Market and Currency model will be buried for good. But the falling Euro has strengthened the US Dollar, which in reality should be in deep trouble. Regarding India, the current fall in inflation and currency appreciation looks to be manipulated in view of the UP and other State Elections. I get a bad feeling that double digit inflation will be back with a bang once the elections are over. The prognosis is not very good for the next 2-3 years.

So, where should you invest, assuming you have money to invest?

Equity -  Stay away from Equity till 2014. The Government is in a comatose situation and is likely to be so in the near future. Wait for the next government to move in. But the flip side is that good scrips with long term potential are undervalued currently, and it might be a good time to invest in it, and sell after 3 years. Do not, do not get into short term trading, at any cost.

Debt Instruments - Interest rates are high and has reached its peak. Park your money in Debt instruments like FD for any duration of 6 to 18 months. The rates are only likely to go down.

Mutual Funds - As a rule No, but with a caveat. Good sector specific MFs can be looked into. Stay off realty/infrastructure funds. Stick to simple SIP on select sectors, like Gold.

Gold - With Dollar strengthening, Gold is not likely to appreciate much, and Gold prices are on the higher side. I hate to say this, but stay away from Gold, though you wont lose if you invest in it, but wont gain much either.

Land - Land is an asset backed investment. Buy in small quantity with an aim to sell off by 2014. As I adviced earlier, spread your land investment. Avoid big cities. Invest in semi urban / rural areas. Limit your exposure.

Buildings - Never.

Yourself - Got surplus cash? Invest in yourself. Spend some money on upgrading your skill sets, so that you are ready when the next boom cycle begins. And you never thought of investing in yourself as an option, did you? This is the best time. Programs are cheap, and people have spare time.

Lawlessness

The Salman Rushdie incident was quite in the expected lines. An election is due in a State having a sizeable Muslim population, the National Governing Party desperate to scrap for every single seat it can get to showcase the 'vote catching ability' of its leader to be, Forward Hindu votes not significant, the Hindu OBC votes aligned with one of its rival Samajwadi Party, and the Dalits firmly behind Mayawatis BSP, Christian vote insignificant, a Central Government that has nothing to boast of, the only thing that could be harvested is the Muslim vote. Hence, the collusion with Muslim fundamentalists to ask for a ban on Rushdie visiting India, on a two decade old issue, which even, Iran (the originator of the Fatwa against Rushdie), has forgotten long long ago.

Another expected response is from the so called secular, liberated intellectuals who jump in with their candle lights and fiery speeches whenever they 'think' the freedom of speech is jeopardised. But this 'freedom of speech' as far as they are concerned is only when Hindu's object to anything defamatory written or said about them, but never extended to when Muslims or Christians, ask for a ban. Thus the expected response was exactly as expected - No response!. The Arundhathi Roys, Mahesh Bhatts, Girish Karnards, Aruna Roys have all gone hiding.

It was really amusing to read the articles in newspapers and watch debates on TV. Every sentence against ban on Rushdie was unfairly hyphenated with the M F Hussain issue. Both of them apparently insulted religious sentiments - Rushdie by writing about Prophet Mohammed and Hussain by painting Hindu Goddesses in a deregatory manner. But the parallel ends there.

Rushdie was virtually threatened and browbeated by the Government, and asked to stay out of India. Even his speech via video was banned. This was Government sponsored ban. The authors who read from his banned book in the Lit Festival were hounded out.

As against this M F Hussain absconded on his own to Qatar, not having the guts to face the Legal system in India. There were hundreds of cases filed against him, which was strictly in accordance with the law, and the right of every citizen who feels insulted by the painter. True, there were hundreds of cases. The popular refrain was that the 90 year old man would have to run from court to court for the rest of his life. This is pure humbug. He had the right to ask the Courts to club all similar cases into a single case and fight it, which he should have. Instead, he ran away like a common criminal. There was a non bailable arrest warrant against him. And our Government, instead of asking the Indian Embassy in Qatar to revoke his passport, and extradite him back to India, soft footed and encouraged him to settle down abroad, and finally take a Qatari citizenship, thus facilitating him to break the law of the land!!.

Thus the two cases cannot be hyphenated. In the case of Rushdie, Government colluded with the complainants and ensured he did not enter India or speak over video, but in the case of M F Husain, the Government sided with the peretrator of the offence, Husain, and allowed him to break the law at will. The Government responses were as different as chalk and cheese.

The Muslims, if they were offended by Rushdie, could have approached the Courts and have a decree passed that withdrew his People of Indian Origin status, that enables him to enter and exit India freely, and also to proceed against him legally for offending their sentiments. But they knew they dont have a leg to stand on, as the Case would have been inadmissible, since the incident happened 25 years ago, and Rushdie has visited India many times since.

Heck, it was never the Muslims who objected to it. The fundamental clerics played right into the hands of Congress, who used them as a pawn to get political mileage. The Congress was upto its old games - divide and rule. And the loser is the ordinary Muslims, who are again viewed as anti progressive, when in reality they dont care one way or other about Rushdie. So much the pity.

Now my take on this. I am for freedom of expression, but with restraint. Any freedom comes with many responsibilities. If you abuse the freedom, then you have to expect retribution. But the recourse to hurt sentiments lie in getting the violator punished by a Court of law. And in India, it takes a quarter of a century to get a guy convicted. So we are back to the root cause - poor legal system and delay in delivering justice. If people like M F Hussain, Rushdie, Arundhathi Roy et al will know that they can be behind bars in less than 2 years, with no special facility inside the jail, then they are likely to think twice before they put pen or brush on paper. What we have now is lawlessness.

Every person is entitled to get Neethi and Nyayam

The latest controversy over the Army Chief V K Singh approaching the Supreme Court to rectify his Birth Date has aroused extreme reactions amongst the people.

I find it amusing that many berate him for going to the Court at all to amend his Birth Date and in his words 'to protect his honour'.

Somehow, as a nation, we dont seem to believe in individual rights, and a person's option to take the perfectly justified judicial recourse for a solution to his grievance. V K Singh has all the rights to approcah the Court - frankly, that is what the Courts are for, in the first place. And why one should confuse his filing a case to protect his rights, should be clubbed with the 'honour' of the nation and morale of the army is besides me.

I am sure V K Singh going to the Court will have no impact on his performance as an Army Chief nor on his interactions with the Ministry - why should it? Any professional can have a disagreement but can work without affecting his productivity. I  have difference of opinions with my Board of Directors and Colleagues on many issues, but we carry on gamely, putting the particular issue aside.

We, in India, seem to think that going to the Court against someone is an offense and something undesirable. It is not so. Neethi and Nyayam are ingrained in our culture. Every single person should get both Neethi and Nyayam - and that includes the Chief of Army Staff.

Creating leaders for tomorrow

One of the understated features of Gurukulavasa based education was the judgement and care shown by the Guru before upgrading the skills of his students. Special skills that can be used to harm others, like advanced archery or swordsmanship, was imparted only after ensuring that the student has attained sufficient maturity and responsibility to use it only for the good of others and not otherwise. Thus an Arjuna was trained in special asthras which was denied to a Dussasana. Thus, there was a clear incentive for the student to be ethical.

This is lacking in our educational system. In schools and colleges, all the students are treated alike, irrespective of their ethical standards. The knowledge imparted is same. I cannot understand why schools cannot recognise good students showing great promise both on the character front and on the education front, by grouping them into one section and put under the best teachers or even perhaps expose them to eminent people from various walks of life. This way, the best students are motivated, others have someting to aspire for, and the school helps create a generation of future leaders, who not only have special skills but greater exposure, are ethical and ensured to put their knowledge to the betterment of the fellow countrymen.

Remembering a great son of Bharath

On the occasion of the 150th Birth Anniversary of Swami Vivekanda (Oh yes! Our 'Secular' Government has forgotten him as his Hindu identity doesn't suit its political needs. Have you seen any event or government sponsored program on the great man's 150th birthday. I bet you don't), I am reproducing his Chicago Speech addressing the World Parliament of Religions on September 11, 1893, (The highlightings are mine)

Sisters and Brothers of America,

It fills my heart with joy unspeakable to rise in response to the warm and cordial welcome which you have given us. I thank you in the name of the most ancient order of monks in the world; I thank you in the name of the mother of religions, and I thank you in the name of millions and millions of Hindu people of all classes and sects.

My thanks, also, to some of the speakers on this platform who, referring to the delegates from the Orient, have told you that these men from far-off nations may well claim the honor of bearing to different lands the idea of toleration. I am proud to belong to a religion which has taught the world both tolerance and universal acceptance. We believe not only in universal toleration, but we accept all religions as true. I am proud to belong to a nation which has sheltered the persecuted and the refugees of all religions and all nations of the earth. I am proud to tell you that we have gathered in our bosom the purest remnant of the Israelites, who came to Southern India and took refuge with us in the very year in which their holy temple was shattered to pieces by Roman tyranny. I am proud to belong to the religion which has sheltered and is still fostering the remnant of the grand Zoroastrian nation. I will quote to you, brethren, a few lines from a hymn which I remember to have repeated from my earliest boyhood, which is every day repeated by millions of human beings: "As the different streams having their sources in different paths which men take through different tendencies, various though they appear, crooked or straight, all lead to Thee."

The present convention, which is one of the most august assemblies ever held, is in itself a vindication, a declaration to the world of the wonderful doctrine preached in the Gita: "Whosoever comes to Me, through whatsoever form, I reach him; all men are struggling through paths which in the end lead to me." Sectarianism, bigotry, and its horrible descendant, fanaticism, have long possessed this beautiful earth. They have filled the earth with violence, drenched it often and often with human blood, destroyed civilization and sent whole nations to despair. Had it not been for these horrible demons, human society would be far more advanced than it is now. But their time is come; and I fervently hope that the bell that tolled this morning in honor of this convention may be the death-knell of all fanaticism, of all persecutions with the sword or with the pen, and of all uncharitable feelings between persons wending their way to the same goal.

The World's Parliament of Religions has become an accomplished fact, and the merciful Father has helped those who labored to bring it into existence, and crowned with success their most unselfish labor.

My thanks to those noble souls whose large hearts and love of truth first dreamed this wonderful dream and then realized it. My thanks to the shower of liberal sentiments that has overflowed this platform. My thanks to this enlightened audience for their uniform kindness to me and for their appreciation of every thought that tends to smooth the friction of religions. A few jarring notes were heard from time to time in this harmony. My special thanks to them, for they have, by their striking contrast, made general harmony the sweeter.

Much has been said of the common ground of religious unity. I am not going just now to venture my own theory. But if any one here hopes that this unity will come by the triumph of any one of the religions and the destruction of the others, to him I say, "Brother, yours is an impossible hope." Do I wish that the Christian would become Hindu? God forbid. Do I wish that the Hindu or Buddhist would become Christian? God forbid.

The seed is put in the ground, and earth and air and water are placed around it. Does the seed become the earth, or the air, or the water? No. It becomes a plant. It develops after the law of its own growth, assimilates the air, the earth, and the water, converts them into plant substance, and grows into a plant.

Similar is the case with religion. The Christian is not to become a Hindu or a Buddhist, nor a Hindu or a Buddhist to become a Christian. But each must assimilate the spirit of the others and yet preserve his individuality and grow according to his own law of growth.

If the Parliament of Religions has shown anything to the world, it is this: It has proved to the world that holiness, purity and charity are not the exclusive possessions of any church in the world, and that every system has produced men and women of the most exalted character. In the face of this evidence, if anybody dreams of the exclusive survival of his own religion and the destruction of the others, I pity him from the bottom of my heart, and point out to him that upon the banner of every religion will soon be written in spite of resistance: "Help and not fight," "Assimilation and not Destruction," "Harmony and Peace and not Dissension."

More than a Century later, Swami Vivekananda's thoughts still hold good, and more so.

Let us salute one of the greatest sons of Bharath!

And the Mahabharath Awards go to............................

I was engrossed in typing an official mail last night, when there was a tap on my shoulder. With a jerk, I turned around and found to my relief that it was my dear friend Budhirakshasan, who has been out of touch with me for more than a couple of months now.

"Hello BR, Happy New Year"

"Swamy. How have you been keeping"

"Am fine BR. Tell me what is hot in Delhi"

"Grrrr... Swamy ........You are pulling my leg........It is damn cold in Delhi"

"Err.......I am not talking about the weather............but am out of touch with Delhi news since you disappeared"

"Ha........Swamy........You know the Republic Day is a fortnight away, and it is time to announce the National Awards"

"Will Sachin get the Bharath Ratna?", I asked the million dollar question.

"Poor guy. He would have, if India had done well in Australia. The popular mood is against Cricketers currently and the Con Government do not want to go against it. All Makens effort have come to nought"

"Then who gets BR.........you?"

"Me? Are you out of your ****ing mind Swamy"

"He he............Bharath Ratna is BR and you are BudhiRakshasan, BR"

"Hmmmmmmm.......trying to be funny eh?...........I know the UPA Government is crazy, but even they are not that crazy......But Manmohan Singh...................."

"What? MMS to get BR?"- I was so agitated I almost fell down.

"Relax Swamy. I know how you feel. He is not getting BR, but he is being given another award"

"Whew" (I wiped my brow). "So is he getting Padma Vibhushan?"

"No no. We have only Mahabharath Awards from this year.He is getting the "Dhritharashtra Award""

"Eh?"

"For seeing no evil, hearing no evil and supporting his corrupt kaurava ministers till the end"

"Umm....... "Shikhandi Award" would have been more apt

"You have a point there Swamy", BR was quite appreciative for once.

"How about the other awards BR?"

"Sakuni Award goes jointly to Kapil Sibal and Abhishek Manu Singhvi for trying to discredit Anna Hazare and ensuring Lokpal never saw the light of the day"

"The Uthara Kumaran Award goes to the Rahul Gandhi for running away from every single issue without joining the battle"

"Gandhari Award goes to Sonia Gandhi for being silent and turning a blind eye to the misdeeds of all around her"

"The Draupadi Award goes jointly to Jayalalitha and Mamata Bannerjee for their tenacity and perseverence"

"The Dussasana Award goes to P Chidambaram for his crackdown on Baba Ramdev that led to the death (killing) of  Rajbala"

"The Jayadratha Award goes to Sharad Pawar for being publically humilated with a slap"

"And.........................................."

"Thanks BR. I have heard enough for a day. My head is spinning"

"Yadha yadha hi Dharmasya................................Sambhavami Yuge Yuge" - saying thus BR vanished

One Minute Extra!!

Certain things stay in your mind. One such is from the Arthur Hailey Classic 'Airport'. Joe Patroni, the maverick Head of Maintanance of Transworld Airlines, is tasked with removing an Aircraft stalled on the runway three zero, stuck in ice. Time was running out for him, as another aircraft, which has had a mid air explosion of bomb wants the runway desperately. Joe has been told that if he is unable to extract the Aircraft by a specified time, he has to quit when the Tower tells him to do so, and the Snow movers and Ploughs will take over and push the Aircraft aside, thus damaging it beyond repair. Joe, who loves Aircrafts, and looks upon them as Engineering marvels, just couldn't digest that an Aircraft could be pushed aside using Snow movers and Bulldozers.

Joe knew he was running out of time. Three previous attempts to get the Aircraft unstuck has come to nought.  He would have loved another hour of shovelling around the tyres. This time, he gets into the cockpit, with an Assistant named Ingram. He starts the Engine and gives full power, trying to shake loose the Aircraft, to no avail. He had almost reached 70% power, and with the Aircraft still stuck, the vibration was unbearable. Then the Tower tells him to quit and evacuate the Aircraft, meaning the Ploughs will move in. Joe disregards the instruction. The Tower is frantic, and Ingram reminds him of the Towers instructions. Joe looks at him, chewing an unlit Cigar, and grins telling him ' Son, can't hear a thing. Let us go for broke", and as an aside to himself  says "When those **** s in the Tower tells you that you have run out of time, there is always one minute extra". He goes on to give full power, and the Aircraft gets unstuck, making him a hero, despite the Tower and the Airport Manager Mel Bakersfield seething with rage at his disobedience. But as Mel thinks to himself  'I can get Joe into trouble for disobeying Tower's orders, but no one in his right mind will question such success'. And one more legend is added to Joe Patroni ( I am quoting the lines from memory, having read these a couple of decades back).

Though the one minute extra available has been in the back of my mind all these years, I realized its value only when I restarted playing Tennis after a quarter century. I have a Coach who is a good task master and with his help I have reconstructed both my backhand and forehand, no mean achievement. And he always asks me to wait a bit and not to rush the shot. I went back to the one minute extra of Joe, and decided that I will wait 3 seconds extra before hitting the shot. The results were remarkable. I cut down on unforced errors and have really added sting to my shots.

Is it like that at work and life too?  Are we rushing things? Should we just take a step back, reflect on issues impartially and then take a decision? I have always been a spontaneous decision maker and have not regreted it. But I am just wondering whether I should take that one minute extra! At least, I want to give it a try. So should you.

Iruttu kondu otta adakkuka

There is a saying in Malayalam "Iruttu kondu otta adakkuka", which means "blocking a hole with darkness", which serves no purpose other than to camouflage the defect, while the core issue of closing a hole remains unsolved.

The Indian stock market has been facing a major crisis of confidence. This is reflected in the falling stock indices. The root cause is the policy paralysis at the Government level, the Global economic prospects, the downgrade of projected growth of Indian economy, the runaway inflation, rising fiscal deficit which means Government investments in economy in the near future will be severely curtailed, and a general feeling of despondency amongst the investors.

India took the FII route in early days of reform to attract overseas capital, while China opted for the FDI route. The FDI is more permanent as an investment, while the ills of focusing on FII is there for all to see. Firstly, it encouraged Black Money to be routed back to India through the Mauritius route, but more importantly we witnessed a flight of capital at the first signs of Global economic crisis, as witnessed in 2008.

The Global economy is in a much worse state than it was in 2008. Then it was only a few financial institutions that were affected, but now dozens of countries are in serious trouble, and some of them major consumers, and 'developed'. The recovery is going to be painfully slow.

The Government is going one step ahead in its idiocy and allowing Foreign investors and individuals to invest in Indian Stock Market. If the FIIs are not keen to invest in India, what makes the Government think individual investor will? Even if some were to do so, they are likely to take the money out more quickly than the FIIs in case of any negative indicators flashing.

Like many decisions of this lame duck UPA II government, this one also tries to pull wool over the eyes of the citizens without any intention to create long term benefit for them.

This is what I meant by saying at the beginning, 'Iruttu kondu otta adakkuka'

Some Economy related thoughts

The year just gone by hasn't been great for India, economically. The Government obviously gets blamed when things go wrong, and it did go horribly wrong last year. That is par for the course, because the Government is quick to accept credit when the economy does well.

Though, it is easy to blame the Government for the mess the economy is in, the fact is that our economy runs on auto pilot and is not very dependent on Government initiatives. Services constitute 55-60% of the GDP and this sector is by and large independant of Government interventions. Inflation was in double digit throughout the year, but this normally should be good news for the Corporate Sector, as in the short term, inflation means addtional revenue.

So why did the economy become sluggish. Global economic situation is very bad. USA is in trouble, as the sins of 2007 are fast catching up. Eurozone is in a melt down. Japan is still recovering from the Tsunami and Earthquake, and even Chinese economy is splitting at seams. There is hardly any demand for our products and services, and with internal consumption sluggish, due to higher interest rates and inflation, and with Government not willing to make any bold (or even routine) initiatives, the Corporates lost confidence. The current crisis is more of crisis of confidence than a crisis of economics.

The Government can think of stimulus to increase the demand. Allowing the Rupee to devalue by not intervening is one option. This would make Indian goods and services cheaper, boosting demand. Agreed imports will become dearer, but that can be compensated by supporting CAPEX importers with soft loans. Investment in the Agricultural sector will have a direct impact on stimulating the local demand. Sector specific easing of loans can be made available to select manufacturing sectors, that are critical to the growth. While it is tempting to suggest reduction of interest rates, one has to keep in mind its impact on inflation. But since an increase in interest rates did not contain inflation, one really wonders whether a decrease in interest rates will have a negative impact on inflation. One has to wait and see.

In short, have confidence in our Corporates and people, show that you are taking meaningful actions in a calibrated way, and you will have the economy up and running again.

This is assuming that the economy was performing purely due to internal competencies in the past. I had always suspected that the black money pouring in through the Mauritius route as FII was more responsible for Indian economy doing well in the past, than because of strong fundamentals.

Ohm shanthi shanthi shanthi

For all my readers

Ohm santhirasthu
Ohm pushtirasthu
Ohm tustirasthu
Oham vrudhirasthu
Ohm ayushyamasthu
Ohm arogyamasthu
Ohm dhanadhanyasamruthirasthu

Ohm shanthi shanthi shanthi!!!