Well things didn't work out at the new beta site and I've now moved to wordpress after quite a bit of testing. Here's the new URL http://indiainvestor.wordpress.com/
All my posting would be done out there under a new name "India Investor" as unfortunately the sub-domain India Investing wasn't available there.
Saturday, August 11, 2007
Thursday, October 13, 2005
India Investing
For some time now I've been contemplating on building a portal where people other than me can contribute articles and share their investment ideas.
Essentially a portal where people can share investment ideas, not lofty sales pitches from salesmen.
I've been working on it for a while and you can see the beta of the website at http://indiainvesting.amieo.com
I'm hoping for contributions from members of the RichDad Club... and other investors.
If you'd like to contribute to the site feel free to drop me a note.
Essentially a portal where people can share investment ideas, not lofty sales pitches from salesmen.
I've been working on it for a while and you can see the beta of the website at http://indiainvesting.amieo.com
I'm hoping for contributions from members of the RichDad Club... and other investors.
If you'd like to contribute to the site feel free to drop me a note.
Monday, July 25, 2005
Buying gold coins in India
A couple of weeks back I started investigating at various shops in Mumbai on the price of gold and the transaction cost incurred etc. in purchasing gold coins. I thought I'd share my experiences for everyones benefit.
I first talked to a friend of my wife's who works at a banks bullion department. His words of advise were to purchase from some popular jewellery store notably, Tribhovandas Bhimji Javeri(TBZ) as he said the bank rates of gold are typicall much higher than the actual cost of gold. So promptly I went down to TBZ. What I wanted to purchase was gold coins in denominations of 10gms and 5 gms.
So here's the deal;
Gold coins are charged for in the following way. An X sum is the current gold price and a Y sum for making the gold coins. I looked up the gold price for the day and went down to TBZ. The price was around 6150 for 10gms. One thing to note is that gold price keeps fluctuating thru out the day. Just like prices of scripts in the stock market. However I was told at TBZ that the price of gold was 6400 now that was a huge difference in the current price compared to the price being quoted. I verified by calling a jeweller friend of ours. Interestingly TBZ quoted a coin making charge of approximately Rs. 60 initially, which after negotiation they came down to about Rs. 35. I had no clue that one can bargain on making charges but as usual I did bargain and was pleasantly surprised.
Did I buy gold there, well no cause their price of gold was too high.
Next stop was Ghanasingh which is on Linking road. Here the price of gold quoted was around 6150 but strangely the making charges were quoted at approximately Rs200. My jaw almost fell to the ground. They were charging the same making charges as are prevalent for high end jewellery.
Well this certainly wasn't working out. Next stop I visited an old childhood friend of mine who had a relatively smaller jewellery store. He quoted prices close to the gold price of around 6150 + a meagre Rs. 30-35 for making the coins, this certainly seemed much more reasonable.
Incidentally all the jewellers suggested that one should buy bars of gold instead of coins as the making charges are much lesser. I however had a facination for coins which is fast changing :-)
One more aspect of buying gold I realised was the 1% charged as a service or transaction or sales tax. I forget which one, but just keep that in mind while purchasing gold.
Well the overall experience was overwhelming indeed. But it was a great learning experience about the nuances of buying gold. Especially for a person like me who doesn't really like the color of gold.
Interestingly I heard different versions on the standardisation of gold. Gold comes in two broad quality categories.
1. 22 Carat or 99.5 % purity
2. 24 Carat or 99.99 % purity (also known as pure gold)
(Incidentally, I later discovered that there are more such categories)
However what I found strangely there seems to be no overall certifying authority for gold. That was certainly strange to know about. There is however an agency (Bureau of Indian Standards -BIS) which supposedly is a standard. I'm searching for more information regarding that.
Interestingly I briefly inquired about the value of precious stones. Gold seems to be a better bet in terms of retaining value than precious stones... I frankly however need to do more research on this.
I would surely like to hear about experiences others might have had. It will surely help increase my financial intelligence.
Sanjay Shetty
I first talked to a friend of my wife's who works at a banks bullion department. His words of advise were to purchase from some popular jewellery store notably, Tribhovandas Bhimji Javeri(TBZ) as he said the bank rates of gold are typicall much higher than the actual cost of gold. So promptly I went down to TBZ. What I wanted to purchase was gold coins in denominations of 10gms and 5 gms.
So here's the deal;
Gold coins are charged for in the following way. An X sum is the current gold price and a Y sum for making the gold coins. I looked up the gold price for the day and went down to TBZ. The price was around 6150 for 10gms. One thing to note is that gold price keeps fluctuating thru out the day. Just like prices of scripts in the stock market. However I was told at TBZ that the price of gold was 6400 now that was a huge difference in the current price compared to the price being quoted. I verified by calling a jeweller friend of ours. Interestingly TBZ quoted a coin making charge of approximately Rs. 60 initially, which after negotiation they came down to about Rs. 35. I had no clue that one can bargain on making charges but as usual I did bargain and was pleasantly surprised.
Did I buy gold there, well no cause their price of gold was too high.
Next stop was Ghanasingh which is on Linking road. Here the price of gold quoted was around 6150 but strangely the making charges were quoted at approximately Rs200. My jaw almost fell to the ground. They were charging the same making charges as are prevalent for high end jewellery.
Well this certainly wasn't working out. Next stop I visited an old childhood friend of mine who had a relatively smaller jewellery store. He quoted prices close to the gold price of around 6150 + a meagre Rs. 30-35 for making the coins, this certainly seemed much more reasonable.
Incidentally all the jewellers suggested that one should buy bars of gold instead of coins as the making charges are much lesser. I however had a facination for coins which is fast changing :-)
One more aspect of buying gold I realised was the 1% charged as a service or transaction or sales tax. I forget which one, but just keep that in mind while purchasing gold.
Well the overall experience was overwhelming indeed. But it was a great learning experience about the nuances of buying gold. Especially for a person like me who doesn't really like the color of gold.
Interestingly I heard different versions on the standardisation of gold. Gold comes in two broad quality categories.
1. 22 Carat or 99.5 % purity
2. 24 Carat or 99.99 % purity (also known as pure gold)
(Incidentally, I later discovered that there are more such categories)
However what I found strangely there seems to be no overall certifying authority for gold. That was certainly strange to know about. There is however an agency (Bureau of Indian Standards -BIS) which supposedly is a standard. I'm searching for more information regarding that.
Interestingly I briefly inquired about the value of precious stones. Gold seems to be a better bet in terms of retaining value than precious stones... I frankly however need to do more research on this.
I would surely like to hear about experiences others might have had. It will surely help increase my financial intelligence.
Sanjay Shetty
Wednesday, July 06, 2005
When to book profits?
A recent interview of a mutual fund manager on a TV channel threw up an interesting question from an investor who had called in.
The caller said he had made a handsome return on an earlier mutual fund investment. He wanted to know whether he should book his profits.
Pat came the reply of the mutual fund manager. No stay invested for the long term. If you don't require the money now why book profit.
I was quite taken aback by this reply. Some questions which came to mind,
what happens if when the investor(caller) wishes to book profits the market isn't doing great?
why shouldn't he book profits now when he is making handsome profits?
I conculded the reply given by the mutual fund manager is just the standard sales pitch given by them(mutual funds) to all people. Stay invested for the long term, always...
Frankly giving a reply to the callers question is kind of difficult cause one doesn't know the exact nature of the investment. i.e. the quantity of money invested, the amount of profits he's making etc. But going by the callers statement that he's making handsome returns, common sense would be to book profits.
Infact the best investment advisors say, that before getting into an investment one needs to decide, the profit/loss target which one is ready to accept and then stick to it.
For e.g. if you think that you're going to be happy with a 40% return; when your investment reaches that stage, BOOK profits. Don't wait hope and pray that you will get more.
Moreover don't be disappointed if that investment in time yeilds a higher return. Be happy that your investment has met your target. Greed is often the reason for one's downfall. Quite a few investors who've made handsome gains in their investments often are left high and dry when situations reverse and end up in a loss... waiting for that further upmove in markets and their profits.
Well let me add that sometimes one might be in a situation where circumstances have changed in a very favorable way, at that stage it might make sense to set a further higher target and wait for that. But most of the times it makes most sense to book profits when one's targets are met.
Sanjay Shetty.
The caller said he had made a handsome return on an earlier mutual fund investment. He wanted to know whether he should book his profits.
Pat came the reply of the mutual fund manager. No stay invested for the long term. If you don't require the money now why book profit.
I was quite taken aback by this reply. Some questions which came to mind,
what happens if when the investor(caller) wishes to book profits the market isn't doing great?
why shouldn't he book profits now when he is making handsome profits?
I conculded the reply given by the mutual fund manager is just the standard sales pitch given by them(mutual funds) to all people. Stay invested for the long term, always...
Frankly giving a reply to the callers question is kind of difficult cause one doesn't know the exact nature of the investment. i.e. the quantity of money invested, the amount of profits he's making etc. But going by the callers statement that he's making handsome returns, common sense would be to book profits.
Infact the best investment advisors say, that before getting into an investment one needs to decide, the profit/loss target which one is ready to accept and then stick to it.
For e.g. if you think that you're going to be happy with a 40% return; when your investment reaches that stage, BOOK profits. Don't wait hope and pray that you will get more.
Moreover don't be disappointed if that investment in time yeilds a higher return. Be happy that your investment has met your target. Greed is often the reason for one's downfall. Quite a few investors who've made handsome gains in their investments often are left high and dry when situations reverse and end up in a loss... waiting for that further upmove in markets and their profits.
Well let me add that sometimes one might be in a situation where circumstances have changed in a very favorable way, at that stage it might make sense to set a further higher target and wait for that. But most of the times it makes most sense to book profits when one's targets are met.
Sanjay Shetty.
Thursday, June 30, 2005
Liquidity and the dollar crisis.
The Indian finance ministry and the RBI launched the Market Stabilisation scheme in March 2004 to stem the flow of excess liquidity into the economy due to the build-up of foreign exchange reserves.
According the the Hindu Business Line :
"During the current fiscal, an aggregate amount of Rs 1,12,000 crore has been "sucked out" from the market so far under MSS, which includes Rs 25,000 crore through dated securities, Rs 21,000 crore from 364-day T-bills and Rs 66,000 crore by way of 91-day bills."
The above quote is from an article dated 8th of March 2005.
Amazingly today the Economic times reported that the government will be releasing 13,751 crore of liquidity into the money market. Why are they doing that at a stage when amazing amount of foreign exchange is entering the stock markets in India and in various investments?
From the looks of the above it's apparent that massive steps are being taken by the government to manage the excesses in foreign exhchange which it has been accumulating.
Based on what Robert Kiyosaki had mentioned on his Rich Dad Website and what a friend Vishal at the Richdad-Mumbai club and me were discussing a couple of days ago I decided to read the book the Dollar Crisis.
It explains how world over countries are struggling due to excessive liquidity i.e. tons of excess foreign exchange or high powered money entering their countries.
A typical reaction to high powered money entering any economy is sudden increases/bubbles in stock markets, real estates and almost everything...
Is India, a country which is considered to be managed by shrewd and closely monitoring financial experts (currently our Prime Minister Dr. Manmohan Singh and P.C. Chidambaram are considered to be top financial wizards) currently facing what is known as a Dollar Crisis?
Just yesterday, Deepak Parikh chairman of HDFC said that property prices in quite a few areas in the country are very high and un-sustainable. A similar boom is is currently underway in the United states as well.
Now one might say that Indian companies are doing good and hence the market is going up. Well yes our companies are doing well, and this in turn is earning good foreign exchange and building up our reserves. Thereby creating more liquidity. But is the stock market's current high of 7000+ justifiable? Frankly who knows :-) maybe it will be at 8000 or more a couple of months later and I might think that is the tipping point?
One thing though is extremely clear, Excessive liquidity is indeed causing these bubbles.
Sanjay Shetty
According the the Hindu Business Line :
"During the current fiscal, an aggregate amount of Rs 1,12,000 crore has been "sucked out" from the market so far under MSS, which includes Rs 25,000 crore through dated securities, Rs 21,000 crore from 364-day T-bills and Rs 66,000 crore by way of 91-day bills."
The above quote is from an article dated 8th of March 2005.
Amazingly today the Economic times reported that the government will be releasing 13,751 crore of liquidity into the money market. Why are they doing that at a stage when amazing amount of foreign exchange is entering the stock markets in India and in various investments?
From the looks of the above it's apparent that massive steps are being taken by the government to manage the excesses in foreign exhchange which it has been accumulating.
Based on what Robert Kiyosaki had mentioned on his Rich Dad Website and what a friend Vishal at the Richdad-Mumbai club and me were discussing a couple of days ago I decided to read the book the Dollar Crisis.
It explains how world over countries are struggling due to excessive liquidity i.e. tons of excess foreign exchange or high powered money entering their countries.
A typical reaction to high powered money entering any economy is sudden increases/bubbles in stock markets, real estates and almost everything...
Is India, a country which is considered to be managed by shrewd and closely monitoring financial experts (currently our Prime Minister Dr. Manmohan Singh and P.C. Chidambaram are considered to be top financial wizards) currently facing what is known as a Dollar Crisis?
Just yesterday, Deepak Parikh chairman of HDFC said that property prices in quite a few areas in the country are very high and un-sustainable. A similar boom is is currently underway in the United states as well.
Now one might say that Indian companies are doing good and hence the market is going up. Well yes our companies are doing well, and this in turn is earning good foreign exchange and building up our reserves. Thereby creating more liquidity. But is the stock market's current high of 7000+ justifiable? Frankly who knows :-) maybe it will be at 8000 or more a couple of months later and I might think that is the tipping point?
One thing though is extremely clear, Excessive liquidity is indeed causing these bubbles.
Sanjay Shetty
Tuesday, June 28, 2005
Investing in India - Economic Survey
I've been hunting around for some official data on the state of affairs in India. Especially from a financial/economic perspective. My concern basically being on the high's reached in the stock market, real estate, commodities almost everything. Incidentally the stock market dipped a 100 points today.
A good source of information is the Economic Survey 2004-2005 made available by the Ministry of Finance, Government of India. http://indiabudget.nic.in/es2004-05/esmain.htm
I found some good information our here, especially the Statistical Tables.
Giving data on among a host of interesting items... things such as:
India's Share in World Exports by Commodity Divisions and Groups
Foreign Exchange Reserves
Exports Imports and Trade Balance
An interesting observation I made was that we seem to be steadily increasing our foreign currency assets almost at a rate 30% per annum over the past 4-5 years.
It's extremely interesting to read the data here, it really helps to get a better picture of the scenario in India.
Unfortunately it didn't tell me exactly what I required in terms of the financial health of the India... my search continues, I will update, once I get more solid data or am able to do a more detailed analysis.
-Sanjay Shetty
A good source of information is the Economic Survey 2004-2005 made available by the Ministry of Finance, Government of India. http://indiabudget.nic.in/es2004-05/esmain.htm
I found some good information our here, especially the Statistical Tables.
Giving data on among a host of interesting items... things such as:
India's Share in World Exports by Commodity Divisions and Groups
Foreign Exchange Reserves
Exports Imports and Trade Balance
An interesting observation I made was that we seem to be steadily increasing our foreign currency assets almost at a rate 30% per annum over the past 4-5 years.
It's extremely interesting to read the data here, it really helps to get a better picture of the scenario in India.
Unfortunately it didn't tell me exactly what I required in terms of the financial health of the India... my search continues, I will update, once I get more solid data or am able to do a more detailed analysis.
-Sanjay Shetty
Monday, June 27, 2005
Demographics
One of the key trends to watch for while evaluating and researching investments is demographics. Robert Kiyosaki specifically mentions this in his book "Who took my money".
An interesting piece of information I picked out recently is the popluation of the earth currently at 6.5 billion inhabitants. The interesting part of this is that more than half of them live in just six countries. This six most populus being - China, India, USA, Indonesia, Brazil and Pakistan. Collectively they have between them 3.3. billion people.
Another interesting tidbit is that life expectancy in Japan is longest at 82 years, followed by Iceland and Switzerland at 80.
Overall it seems population growth has slowed down but it seems the numbers will rise to between 9-10 billion by 2050.
Ok now why is demographics important.
Well as one knows there are 3 basic investment classes:
Business
Real Estate
Paper Assets
Out of these one of the key factors affecting Real Estate is demographics. Before buying a property for investment purposes it's a good idea to know the demographics of the location.
Well India is definitely high on the list in terms of the no. of people.
Infact as I mentioned in one of my earlier blogs real estate in India seems to be on an incredible high. I'll update the blog with more info. I'm currently looking for demographic data specifically with respect to Mumbai. If you're reading this an have information on some accurate sources of current data, do let me know.
Sanjay Shetty
An interesting piece of information I picked out recently is the popluation of the earth currently at 6.5 billion inhabitants. The interesting part of this is that more than half of them live in just six countries. This six most populus being - China, India, USA, Indonesia, Brazil and Pakistan. Collectively they have between them 3.3. billion people.
Another interesting tidbit is that life expectancy in Japan is longest at 82 years, followed by Iceland and Switzerland at 80.
Overall it seems population growth has slowed down but it seems the numbers will rise to between 9-10 billion by 2050.
Ok now why is demographics important.
Well as one knows there are 3 basic investment classes:
Business
Real Estate
Paper Assets
Out of these one of the key factors affecting Real Estate is demographics. Before buying a property for investment purposes it's a good idea to know the demographics of the location.
Well India is definitely high on the list in terms of the no. of people.
Infact as I mentioned in one of my earlier blogs real estate in India seems to be on an incredible high. I'll update the blog with more info. I'm currently looking for demographic data specifically with respect to Mumbai. If you're reading this an have information on some accurate sources of current data, do let me know.
Sanjay Shetty
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