We Have Shot Ourselves in the Foot!

Last few weeks have been a mix of key news for India as far as am concerned.

The list of news is as follows

1. Launch of XOLO X900 by Lava
2. Google Measures Web speeds around the world
3. Deepak Parekhs interview with Shereen Bhan

What is so special about these news, well read on to find that out.

The first one is special because XOLO X900 is the first phone in the world to have an Intel chip , the Intel Atom Z2460 SoC chip inside it. All phones in the world run on chips made by UK company ARM . The XOLO is the first foray by Intel into mobile market and guess what it has been developed in conjuction with LAVA , an indian company. Although not the biggest mobile market in the world but this news shows the importance of the Indian market in the minds of worlds big corporation.

You can read all about the phone - 

http://www.gsmarena.com/intel_medfield_based_lava_xolo_x900_launched_in_india-news-4118.php

If you are smiling having read that, you have just had a pre mature good news , as the bad news is just to follow suit.

The second news that i heard was about a project that google carried out to compare internet speeds in many countries in the world. To be precise 50 countries.

The result was surprising. 

The top speed achieved in desktop/laptop based internet speed was in Slovak republic and the best speed in mobile internet was in Chile .

I was searching for the name that i was most interested in the list " India". Well India did not score well to enter the top ten countries in either list.

Did we then come in the top twenty , the answer was a big NO . The internet speeds were so poor that we came in the bottom ten in both the categories.

Reading the news i felt appalled .  Read full story below.

http://go.bloomberg.com/tech-blog/2012-04-19-whos-fastest-google-measures-web-speeds-around-the-world/

If that was not enough , the shocker came from the man whom i have always considered as the flag bearer of Indian corporations the most respected business man in Indian and world circles - Mr Deepak Parekh.

In an interview with CNBC TV18 , Mr Parekh lashed out at the indian government for not being able to push through reforms.

He also made two alarming references

1 Foreign Investors , companies inclusive are reluctant to invest in India , due to unfavourable investment climate

2 Two years ago , India was the darling of the board rooms of world corporations, now we are not on their radar.

That should shock any one who is even remotely interested and wants India to grow and become the torch bearer of the world economy for the ensuing economic periods.

Mr Parekh neatly summarized - " We Have Shot Ourselves in Foot" .

Watch the video here .

http://www.moneycontrol.com/video/economy/govts-7-75-growth-target-over-ambitious-deepak-parekh_693652.html?utm_source=Article_Vid

The Excerpts of the interview here

http://www.moneycontrol.com/news/economy/govts-7-75-growth-target-over-ambitious-deepak-parekh_693652-2.html

Apart from the above , There has also been a new book called " Breakout Nations" by Ruchir Sharma ,  head of Emerging Market Equities and Global Macro at Morgan Stanley Investment Management.

In the book , Mr Sharma has been too pessimistic about India and its growth prospects , in general he has been pessimistic about whole of the BRIC countries.

Right from Retrospective taxes for which Vodafone is going to take India to court, through to the latest thoughts from key business leaders, there isn't any room for India Shining!

We seem to have risen meteorically and now find ourselves fading away .

Doesn't make for a good reading .

Hope things get better over the coming months & years.

Itunes University - The Unsung "I" Hero

Anything "i" these days is a winner whether it is Ipod, Iphone, Ipad or the new Ipad . The line of products from Apple has always been a winner and path breaking. 

Having said that , there is one product in the apple line up which i have come to use in the last year, its been a winner as far as am i concerned and what i like the most is not so much as its features but more its contents.

Am speaking about the unsung hero " The Itunes University" aka " Itunes U" 

The Itunes U is embedded within itunes and is part of the Apple's drive into education. 

It contains numerous educational material and in some cases full course lineups from some of of the worlds most premier institute, some of the ones i know of are listed below.

• Wharton Business School
• Yale University
• INSEAD Business School
• HEC Paris
• Oxbridge University ( Oxford & Cambridge are fondly called Oxbridge University)
• SDA BOCCONI

These are just a handful of universities which have a presence in Itunes U . Looking at the list of universities, they go from A-Z , starting with Aberdeen University to Zeppelin Universitat

If that is not enough , the course list is even larger, there are plethora of subjects covered in Itunes U , some of them are

• Business
• Engineering
• Fine Arts
• Mathematics
• Fine Arts
• Social Sciences
• Health & Medicine

The best part is most of these courses are free to download, for example i have downloaded the following courses 

• 2011 , Financial Markets Course - Yale University - by Prof Robert Shiller
• Moon An Introduction - Open University

This is just to name a few. These courses are actual courses thought at the university & the videos of these courses , their actual course curriculum along with term exams are loaded in Itunes U . 

Listening to a Ivy League professor without actually being on the programme is just such a pleasure. Of course not to miss, we can start, stop and listen to these lectures when ever we need . Isn't that cool!

Earlier this morning i saw a guest lecture by Stephen Schwarzmann founder of one of the most successful private equity firm " The Blackstone Group" .

There are a number of other course videos that i have downloaded for viewing later.

So far this year, i have put Itunes university to a good use and would recommend this to anyone.

All you need it access to Itunes - " Who These days doesn't have access to one" & you are ready to access the courses.

In my view , its blindingly obvious that its a good thing to disseminate knowledge one way or the other . I personally think it would make knowledge to flow easily and it is a good thing for the society.

Now if you ask me would this reduce poverty in this world ? Maybe not , but this could very well be a proof of concept for a much bigger thing that could be executed using Internet as the backbone which in the years to come might be a catalyst to reduce poverty.

Am sure most of you all would agree with that. 

Oh by the way there is a Itunes U app if you are interested . Hope you enjoyed this post. Have a great week ahead.

Investing Uncomplicated - I Wish !

It's a wish that's been every investors wish for long. 

Should ones money work hard? obvious answer " yes" but question is how to make it work ? " Invest it and make it work" quite simple. If you think its that simple , probably you are the next whiz .

I wouldn't consider myself an active investor however over the last few months I have been spending lot of my time understanding which products to invest and its not only for me but the aim was to understand and see if i can pass on the knowledge - Strictly not Financial Advising but just information.

Given that we live in the Internet age creates one of the many problem , I.e. information overload. 

When I kicked off my preparation it was hard to navigate through the maze of information. Sitting like a lame duck, I just couldn't get to grips with what I wanted to do. 

First question on my mind , which product/s to invest in? 

With this question in mind , I scouted for various information to help me out. Starting the information barrage was the age old adage " don't put all your eggs in one basket" holds good in investing as well , simply said that "Diversification" is king! Which seemed to be a fair call, but over diversify one tends to loose more than gain.

This now complicated things a step further , diversify but how and what? 

Further mining and understanding led me to a phrase " Risk Appetite & Profile" I.e. investing and it's residual components are dependent on individual circumstances and ability to assume risk. 

That sounded about right , everything in this world is driven predominantly by personal preferences & situations , so investing should be no different. 

Meticulously I sat down to prepare on what I needed to invest in & made some rough notes on products which might help. 

1 Equities 

2 Bonds 

3 Funds 

4 Commodities 

5 Real Estate 

 OK, that was a good start, what should I consider per product came next. 

Equities 

Investing in this asset class has been made simple by the advent of demat form of holding the shares and online trading . Shouldn't this been simple then to dive in and put your money in ? Well if only it was well simple. Here I called upon my better half's assistance , being masters in finance, I had asked her for assistance. 

Her first question , which broker do you want to trade with ? Aghast I asked why would that matter , she simply said service & commission. I was becoming tired by now, however with further encouragement and the need to understand I plodded on . 

Working through enormous amount of paper work , we finally chose a big financial house offering brokerage services. 

Next came the stocks to choose . I was by now loosing patience . My better half poured over few companies we choose , she came up with various numbers . 

• P/E 
• EPS 
• CEPS 
• ROCE 
• Dividend Yield 
• Management Value Add
• Business Outlook
• Sector Outlook
• Economy Outlook on sector operation outside home country

Combined with the above , we had one more ingredient to add " Instinct" to it to make the concoction before choosing some of the stocks. Phew , that was just a kick off.

Didn't bother getting into understanding Fundamental or Technical analysis in detail. 

 Fixed Income 

Our fixed income market is still shallow , although IDBI has launched its samriddhi web portal for retail bonds,but one cannot trade all government securities in question , at the time of our investigation, there were only handful of securities on offer . The corporate bond market is even more shallow, making it extremely hard to invest directly. This Asset class is my favourite but we had to skip this altogether

 Funds 

This was an absolute monster with plethora of choices .

With opening up of the markets , we now had options to invest in

1. Mutual Funds
2. OEIC
3. SICAVs
4. Investment Trusts
5. Fund of Funds

There were numerous literature's about the fund industry and the underlying intricacies .

Difficulty was which one to choose , this has now been left open as we are still studying the market.

The place we have started at the moment is the BSE Morningstar website , which has been launched by BSE as a part of the investor education series .

One thing which i did learn was TER - Total Expense Ratio of a fund can actually diminish returns, am still trying to comprehend what this means in real terms and make my mind up.

In the mean time i have been pouring over a book about exchange traded funds , understanding the nuances of this latest piece of financial engineering pioneered by American Stock Exchange just around the turn of 2000's.

A clear indicator seem to be the fact the mutual funds and investment trusts perform poorly compared to  ETF's and fund managers add to the overall cost of managing the funds.

If that was not enough , ETF's have their own pit falls i.e. one has to understand how the index tracker or the ETF is constructed, if its physical replication then the tracking error could be minimal but if its sample sized based creation then the tracking error could magnify and diminish returns. If its a swap based tracker or a ETF then the return could be guaranteed but it could well mean that there is a counterparty risk.

Oh my god why doesn't some one make it simple...

Commodities

An Inflation busting asset as its often called, commodity is seen as a the darling i.e. queen of all assets . Its predominantly driven by supply demand factors err that's strictly not true.

The question on commodity investing is 

1 Do i invest in physical commodity

2 Do i invest in a commodity mutual fund

3 Do i invest in Exchange Traded Commodity 

My research has so far pointed to ETC because its much easier to invest without the necessity to actually worry about holding the physical asset.

Real Estate

Still Researching on this sector but looks very likely i'll drop this all together .

Not to rule out fixed deposits which might be safe haven

Oh i forgot the big daddies " Income Tax" & " Capital Gains tax " 

Well that's complicated enough for now !

Most of the countries in the world both developed and emerging markets have taken steps to step-up investor education programme , having said that there are still a lot of unknowns .