Category: Links

This has been a rather depressing week with bad news flowing in from all directions and that started with Kapil Sibal asking Google, Facebook, Microsoft and Yahoo! to screen user content and stop objectionable content from appearing on their websites.

This is ridiculous of course and will never see the light of day, but unfortunately, FDI in multi – brand retail has been killed and I guess we will have to wait for a crisis till this issue is raised again. The best thing I read about this was Bloomberg’s article titled Wal-Mart battles with Marx’s ghost in India. 

This week also saw the UID project getting derailed, but cheer up it’s just 550 crores or so down the drain! Nothing compared to the 30,000 crore or so that will go down the drain in Air India’s bailout.

The third thing that got derailed this week was allowing 49% FDI in Insurance.

This coupled with a weak rupee, widening trade deficit, high fiscal deficit and slowing growth makes beyondbrics ask if India is in crisis yet.

Yet is probably the operative word there, and the way things are going you get a feeling that it’s only a question of when and not if.

Jim O’Neill – the Goldman Sachs economist who coined the term BRIC said this week that India has been the most disappointing of the 4 countries, and here is what he had to say.

All four countries have become bigger (economies) than I said they were going to be, even Russia. However there are important structural issues about all four and as we go into the 10-year anniversary, in some ways India is the most disappointing

That’s it for this week!

The Smithsonian blog talks about the amazing possibilities that Microsoft’s Kinect presents. I was amazed when I first saw Kinect in action, and if they really come up with one that can recognize facial expressions, and read your lips – that will be quite incredible!

The ideas discussed in that post are quite exciting and I quite like the thought of not having to fiddle with a TV remote control and just wave my hands and control the TV from a distance.

The way technology is evolving – it doesn’t sound like a far fetched idea at all.

Ajay Shah has a great post on the frequently asked questions on the rupee, very relevant and informative, especially given the massive action in the Rupee exchange rate these days. This is a good post for anyone interested in the topic and also lays out in good detail why the government can’t just wave a wand and bring the exchange rate down.

Another excellent post – this one on explaining the European debt crisis with 8 simple graphs. This one does the best job of explaining the crisis in a way that’s easy to understand and holistic.

More on Europe, the NYT has a great article titled European Crisis in Plain English that explains a lot of the complex things going on there in simple words.

Together, these two articles go a long way in building an understanding of the European situation.

The markets have been bad this year, and I think most people have seen much worse returns than the indices, and that’s true for hedge funds also. Economist reports that while S&P fell 3.8% year to date – the average hedge fund has fallen about 9%.

Business Standard reports on the huge cash mountain that India Inc is sitting on.

Finally, Hemant on how mutual funds are taxed.

Enjoy your weekend!

Warren Buffett’s interview is easily the highlight of this week. There were several wow moments there, but let me just talk about a couple of them here.

First is when Buffett talks about owning 5.5% of IBM and says that he has never spoken to the leadership at IBM – and that IBM will come to know of his ownership through this interview!

That’s pretty amazing and is consistent with his investments in the past. It emphasizes that you don’t need access to the management or have any knowledge of a company’s affairs outside of what’s available in the public domain to make successful investments.

Secondly, he said something very insightful when asked about how he processes all the uncertainty that exists today. Here is what he said.

BUFFETT: The world’s always uncertain. The world was uncertain on December 6th, 1941, we just didn’t know it. The world was uncertain on October 18th, 1987, you know, we just didn’t know it. The world was uncertain on September 10th, 2001, we just didn’t know it. The world—there’s always uncertainty. Now the question is, what do you do with your money? And if you—the one thing is if you leave it in your pocket, it’ll become worth less—not worthless—worth less over time. That’s certain—that’s almost certain. You can put it in bonds and then you can get a certain 2 percent for 10 years and that’s almost certain to be less than the decline and the purchasing power. You can put it in farms and the farms will probably keep growing corn and soybeans and they’ll grow it whether, you know, whether Italy has trouble tomorrow or not. It’s very interesting to me, if you own a farm and somebody said, you know, Italy’s got problems. Do you sell your farm tomorrow?

The way most people talk about the economic situation is exactly opposite of this but when you think about things in this light – that makes it a lot easier for you to process information without getting into panics and hold on to your stocks a lot longer than you otherwise would have.

On to other things – MoneySights declared that they were removing all charges and becoming free for the users. I know there were a couple of questions about this in the Suggest a Topic section so there has certainly been interest in their platform among readers here.

The finance ministry has given the nod to FDI in multi brand retail. Allowing big foreign players like Walmart in the Indian retail space will be a great thing. It will lower costs for the consumers, farmers should get better prices because big retailers will be able to cut middle men and better infrastructure should lead to significantly reduced wastage of food. I think this is great news and a step in the positive direction.

Not all news is good though – Macquarie has cut its India growth forecast to under 7% for the next fiscal.

Beyondbrics has a chart that shows the ratio of internet users and total population in the BRIC nations. India has the lowest penetration.

There has been a lot of noise about the heated Chinese real estate market and according to government statistics house prices fell 0.15% month on month in the 70 cities that they monitor.

Finally, the whole story of Ramayana in this incredible infographic.

Enjoy your weekend!

First up, Hemant has started a relatively low cost mutual fund advisory service where he will examine your mutual fund portfolio and also give you suggestions on new funds. Quite a few people write to me with a list of their mutual funds and ask what I think of them, and while I don’t have the bandwidth or the expertise to evaluate your funds, this service might be of interest to you.

Next, is this amazing video about a 3D printed car – they printed out the frame of the car and it looks pretty impressive. I’m truly in awe with what 3D printing can do, and this is surely going to be a big wave in the future.

Another interesting video I saw this week was of the improved Sony robot – Asimo – pretty slick what this cute fellow can do.

On to something totally different now – WSJ had this fascinating story about these two Russian tycoons embroiled in a court case.

Equally fascinating was this story on the largest venture capital firm in the world  – I had never heard of this firm, and it was quite good education for me.

Europe is of course the big news these days and this story titled Italy’s turn to spook the world does a good job as a primer to what the Italian debt problem is all about, and why it is such a big deal.

Closer home – this fascinating article from Pakistan’s perspective on trade with India.

At home, BS writes about the government’s problem with revenues this year in this article titled about the other fiscal half.

India’s Chief Economic Adviser is interviewed about 5 books he likes.

Finally, some light humor: ultimate rejection rejection letter.

Enjoy your weekend!

Pakistan has spoken about giving India Most Favored Nation (MFN) status, and Ajay Shah has written a post with a fairly optimistic assessment of the situation.

While I don’t share his optimism there were a few new things I learned there and the post throws good light on the role that Dubai plays in India – Pakistan trade.

You know that RBI has deregulated the savings account rate, and banks have already started offering higher rates on savings account – China has observed this move and has a list of things that they can learn from this move. However, these are all things that they should learn to avoid!

Transparency International has released their new Bribe Payers Index for 2011. Netherlands is perceived to be the least corrupt, US is at number 10, India is 19, China is 27 and Russia is 28.

I don’t think there is a single developed country which has a corruption problem, and yet economists sometimes talk of corruption and bribes greasing the economy.

Singapore is number 8 on that list, and they were happy to see their unemployment rate fall unexpectedly this week.

Finally, Scott Adams writes about how stressful it is to be the least successful person in your reference group, and how changing his reference group and doing something that he was the best in within his reference group helped him .

That’s it for this week – enjoy your weekend!

Let’s start this week’s links with Felix Salmon’s post about an unusual thing (at least to me) that happened this week – a Twitter fight – between a fund manager and a CNBC host.

Here is an excerpt from Salmon’s post:

As a general rule, it’s not a good idea to take investment advice from people who appear on CNBC a lot. CNBC Is a marketing platform: fund managers love being on there because it increases their visibility and the chances that people will want to invest with them. Think of it as a dumbed-down, glossy version of Seeking Alpha. But do you really need to be invested with the kind of people who are trolling for customers by appearing on CNBC? I don’t think so.

I quite agree with this because what makes good TV or sells a lot newspapers, magazines, or page-views is often at odds with sound advice that is usually boring and dull.

To add to that, I haven’t come across anyone so far who can predict the market with any reasonable accuracy which most of these pundits try to do. Things like Twitter and blogs make it quite easy to do a fact check on what these pundits said a few months ago and how the market behaved, but even then not many people bother to do that.

Predictions by most people is just an extension of the current situation – when gold was rising, and stocks were falling – they said that it will continue to behave that way in the future also. Now, when stocks have started to rise – the same people are talking about buying into stocks and getting “cautiously optimistic”.

It’s your money and it’s up to you to do the fact checking and figure out who to listen to and who to ignore.

Moving on, the Psy Fi blog has a huge list of behavioral biases and it wasn’t really hard for me to think of one example of each of them that I have experienced myself while reading the post.

Ranjan writes about a decade of the life insurance industry in India.

While RBI expects Indian inflation to level in the months to come, China has already seen some relief from pork prices coming down.

NYT has this excellent graphic on the inter linkages between European debt.

Forbes comes up with a new list of richest Indians. (FE link)

Finally, Japan creates the world’s first flying spherical robot!

Enjoy your weekend!

First up, researchers at MIT find that some of the highest levels of sunlight can be found in the Himalayas and that the cool climate makes the solar panels more energy efficient as well. This is quite contrary to thinking about solar panels in the scorching deserts, and I found the idea quite new and interesting.

Scott Adams writes that you are what you learn, and regardless of whether you agree with the idea philosophically, it’s a good principle to live by. Be on the lookout to learn new things, and combined with a good work ethic – you’re sure to be rewarded.

The Psy Fi blog on the secret to a healthy and wealthy life. A simple thing that sounds very reasonable.

Hemant writes about timing the market or time in the market.

Finally, US considers a bill that could give a visa to foreigners who buy real estate worth more than $500,000 or roughly Rs. 2.50 crores.

That’s it for this week – enjoy your weekend!

Edited: There was an error which showed the real estate amount as 500 million instead of 500,000.

Hemant wrote about being penny wise and pound foolish, and the example he took in his article completely amazed me. I re-read what he wrote twice to make sure that I understood it correctly, and even before writing this here I went to the site to double check whether I made a mistake in understanding what he said.

Apparently there was this lady who commented there saying her husband lost Rs. 7 lacs in day trading, but one of her questions to Hemant was how she could save the commission that’s paid to a mutual fund agent!

I don’t mean to be overly critical of anyone but if someone is in this kind of a situation and if that’s the type of questions they are asking – then they are in serious need of good advice, and should seek help before blowing off more of their money.

Moving on, the stock market has seen incredible volatility in the past few weeks, and the sudden up-move in the past few weeks has surprised a lot of people including me.

On 23rd September the Sensex had fallen by about 700 points, and since that time the Sensex is up by 700 odd points or so.

That’s hardly any movement at all – but what a heartburn it has given people! Along with the volatility – the Occupy Wall Street movement has also garnered a lot of attention and at least I’m quite surprised by how resilient this movement has been.

I really liked this one piece on the movement – Socialism on Wall Street, and quite agree with the conclusion that capitalism is the best economic system to date.

Nouriel Roubini is looking for sellers for his loss making firm, and for a change this was something that didn’t surprise me. If you keep predicting the same thing – you’re bound to be right some day, and while that may earn TV appearances and fame – it quite certainly doesn’t earn consistent profits.

Seshu shared this great website that helps you find fixed deposit rates, and it looks like it’s quite a useful little tool.

Finally a very good post about customer segmentation, and when it makes sense to fire some of your customers.

Enjoy your weekend!

The big news this week is of course the passing away of Steve Jobs, and what a loss it has been. I’ve always felt that doing just one of the several things he did in his life like co-founding Apple, starting up NeXT, leading Pixar, coming back to Apple and not only rescue it from bankruptcy but make it the most valuable company in the world (albiet briefly), have his name on more than 300 patents, or fight Pancreatic cancer for 7 years would have been great – but that one man achieved all of this is truly extra-ordinary.

A lot has already been said and I will link to the one post that I think eloquently summed up the most important contribution Jobs will have on the world, and include this beautiful tribute created by Jonathan Mak of the Polytechnic University, Hong Kong in here.

I had seen this picture earlier, but it’s only now when my wife told me to look at it correctly that I saw his face in the picture. What a beautiful tribute truly befitting the man.

Even Microsoft had their flags at half mast to honor the man.

In other news, Mr. Narayana Murthy spoke about encouraging entrepreneurship as a way to fighting corruption. I had never thought of it that way, but I totally agree with it, and also think that encouraging entrepreneurship will improve India’s situation in every way.

Moving on, there was this great article by the Federal Reserve Bank of New York about how well or rather how badly the market processes noise versus news. They took an example of an internet goof and the impact it had on United Airline’s stock price a few years. Very good read.

Hemant on critical illness insurance, and finally, I know that the market is down, and some of you have lost money, but please don’t go and steal 50 foot steel bridges – the risk outweighs the return.

Enjoy your weekend!

Let’s start out with a new product that was launched by Manish and Nandish of JagoInvestor last week.

They have launched a financial e-plan that will cover a wide variety of topics and is meant to provide direction to people to manage their finances.

They have priced it at Rs. 5,000 and are offering a Rs. 1,000 discount when you use this discount code “30DAYPLAN007”.

Please head over to their site to learn more about this plan, and evaluate if it fits the bill for you.

Next up, here is an interview that Warren Buffett did today, and while there are many things of note there, by far the most interesting thing is that Buffett says we are not in a double dip recession, and that this is a recovery. There aren’t a lot of people saying that right now, and for everyone’s sake – I hope it’s Buffett who is right.

On to some marketing wisdom now – that too from a Giant Robot Dinosaur! This is one heck of a marketing post – I have never read anything like this before, and it’s definitely worth your time and thought!

Marketing is always a smooth transition to annoying bugs, and where there are bugs, there are insecticides – but this one is solar – yes –

Back to money – Kiran has a post on Indian bank exposures to financial and retail sector, and Hemant has a post on critical illness insurance.

One last link – but promise me you won’t turn green with envy – Taiwan is giving away free WiFi internet at over 2,500 locations, and they call internet a Digital Right!

This quote from the article really amazed me:

“People feel welcome when they visit government agencies and get a cup of tea from civil servants. Now the government is offering free wireless services that I think will make people feel more welcome,” he said at the Presidential Office.

That’s it for this week, enjoy your weekend!