At what cost?

We make choices everyday, some with due consideration some impulsively. Choices decide the course of our journey and we realise which road we are on only after coverung a great distance. Then we start thinking: Am I achieving what I had set out to? Were the sacrifices I made to come here worth it? Do I really want this at the price I paid for it? Many a times either we don't realise how much we pay for something or we don't anticipate what price we will have to pay in the future

This is the theme of the movie "Life in a Metro". We work long hours just to earn few more Rupees for our family, but do we realise that our family requires more time than money? What happens when the spouse can't fulfill their emotional needs from each other? (Shilpa and Kay Kay).
The "at whatever cost" attitude makes us commit so many crimes, but only when the consequences are reflected in our personal life do we realise that the "cost" was just too high. (Sharman and Kangna-what a babe).
The movie also narrates the oft repeated story of "waiting a bit more for the perfect thing". One can always invest more time and achieve more but the law of diminishing returns always holds and one should not expect "beyong a point". (Konkana and Irfan).

So, all in all the movie makes us sit back and think about what we are running after and what we are leaving behind.

PS: Shilpa has one of the best figures in Bollywood. The pic is the first on my blog which tilts towards beinf termed erotic

Open up (Notebook)

Friends, after witnessing a lot of fights, some sensible (Bhute Vs Thite) and others just for the sake (Bhute Vs Bhise), I have finally migrated to Linux.
And guess what, I have made my recently purchased Compaq notebook totally open. It has only one OS and it is Kubuntu. Now the three of us Bhute (Ubuntu), Bhise (Xubuntu) included have Ubuntu with each enjoying his flavour of the Desktop.
The migration has been made possible after I learnt Solaris on joining Siemens.
I would like to thank Bhute for spending his time on me and help me migrate to the open world - I myself feel free. Though the change has been sudden and I don't have my old ways to fall back on, I am navigating the open world by RTFM.
Both my notebook and me will take some time to stabilise with the new OS. This would be the time of maximum learning. Also, I feel fully confident of using the net for more purposes as Linux is free of malice. So, the next step would be to configure my personal financial software and use it to track my investment portfolio online.

As for the lady in the pic, I simply can't see her marrying to Salman. It is difficult to accept. But, I have always maintained that man should always accept the truth and I have had the strength till this point in my life.

So, adhering to the principle of accepting the truth and conronting relaity head on, read the piece of article on this link http://valueresearchonline.com/story/storyview.asp?str=9903 and send in your comments.

Humko Deewana kar gayee

Heard in the news today morning that Salman and Katrina are getting married.

This is the saddest day of my life. I have seen Katrina movies sitting alone in the theatre and now....

How the hell can she marry a man of her father's age. Forget that, how can she marry somebody who crushed people under his car and doesn't care about it?

Any volunteers for Jehad against Salman?

A new Beginning

Dear Friends, we have now started earning money and saving for the future is part of earning a living. Our wants are unlimited and the means to satisfy them are limited.
But, good financial planning can make our life easy. Financial planning not only helps maximise the power of money, but also saves us from shocks and crises when we need the money not to satisy our want but need.
I would like to share with some of my knowledge and learnings which I have gained through my passion for the financial markets. I am starting a series with the first article dealing with investment options.

INVESTMENT BASICS

Definition: Part of the income set aside today to create higher value/purchasing power tomorrow.

Investment options:
1. Debt:
a) An investment instrument that gives non-negative returns.
b) Generally safer with low-moderate returns.
c) Available instruments:
i. National Saving Certificates (Post Office)
ii. Public and Employee provident funds
iii. Bank Fixed Deposits.
iv. Government and corporate Bonds (direct purchase)
v. Debt mutual funds (indirect bond purchase)
d) What returns may be expected?
Historically, till about 1998 (since socialist eras) interest rates were about 15-18%. Then came the phase of low interest rates: 8-9 %. Again, the interest rates have started moving upwards closer to 10%.
e) The first three instruments need very less deliberation from the investor, though investment in other debt instruments requires knowledge.
2. Equity:
Definition: Direct or indirect ownership stake in a company.
a) The chances of returns are in both directions ie positive as well as negative.
b) Equities are riskier and need careful active investment.
c) Higher the risk taken, higher the potential (not actual) returns.
d) What returns may be expected?
In the last 5 years ie since Jan 2002, top mutual funds have returned 50% annually ie Rs. 100 would have become Rs. 760.
But, there are market crashes which could wipe out the entire money eg the 2001 tech bubble where lot of companies lost all their value. The recent May 2006 crash where lot of companies lost 60-70% share price. One can take the examples of the 1929 or the 1969 US market crash. Thus, it also depends on the shares that one purchases.
There are phases in the stock markets, where the prices go nowhere eg Indian markets were in the 3000-4000 range between 2001 and 2003.
3. Bullion (Gold, Silver):
a) Jewelery is not an investment but an adornment.
b) Gold/silver having very less correlation to the stock markets is used to spread the risk of the portfolio.
c) Returns are generally low and it is used as a hedge against downslide.
4. Enterprising Assets (Timber, Commodities, Real Estate):
a) The house you stay in (single house) is not an investment, but a necessity.
b) Buying these assets to be considered to diversify your investments.
c) What returns may be expected?
Since 1960 till 2000, the best performing asset has been timber with 6% annualized returns.

Summary Matrix

Investment Risk Potential Return Volatility Liquidity
Debt Low-moderat e Low-moderate Low-moderate Low-moderate
Equity Moderate-high Moderate-high Moderate-high High
Bullion Low-moderate Low-moderate Low-moderate Moderate-high


INVESTMENT STRATEGY:
1. Investments are made to satisfy needs which may range from funding education (of self or children), marriage, house/car purchase, retirement corpus. Hence, an investor must start with a well defined need (ie set a target).
2. The different needs are to be satisfied at different times and hence the investment time period is different. This provides a guideline. For example, if you have to purchase a house in the next 3 months, you won't park those funds in equity as if the stock prices decrease, you will not be able to buy the house.
3. The investor should decide her risk-tolerance capacity ie who are her dependents and how badly she requires the invested money. If the investor has dependents (old parents, spouse/children who have to be supported) she cannot take too much risk.
4. The investor should then assess her risk taking capability ie how would she feel if her money decreases by 20% in 1 month: will she panic?

5. Thus, depending on the need (or aim), time, risk tolerance capacity, a strategic plan must be prepared to allocate the available funds for investment into the various asset classes. The risk-return (likely) scenarios of asset classes differ ( also with time) and the investment plan may be effectively implemented by investing fractional parts in the various asset classes.
6. A low-risk portfolio would consist more of debt than of equity and a more aggressive one the exact opposite.
7. The overall returns do not depend so much on the individual instruments (20%) as on asset allocation (80%). Thus, asset allocation is the key to achieve sustainable returns and to manage risk.


Definitions:
1. Asset: Something which you would be proud of passing to the next generation
2. Hedge: Strategy used to minimise the impact of a risk
3. Liquidity: Ease of converting the asset to cash.

Confessions of a sinner

You may consider this as some kind of a postscript to my 'Ab toh Zinda Hoon' blog-entry.
After travelling in the company bus for the past couple of months, I now had to travel in train again on Saturday. Thinking that the trains would be relatively empty, I chose this mode of transport over road. But, then my calculations had gone wrong and I could clearly see that I would remain standing on Kandivli station for an hour before I could board any train.
A thought suddenly struck me, why not travel in 1st class till Malad and catch the starting train at 8.35 am? I would be travelling in 1st class for just one stopover and then get back to 2nd class. I don't know whether it was a big sin travelling in the compartment I was not entitled to. My circumstances dictated my actions. Can't decide who the bigger sinner is; me or the railway planning authorities who forced me to do such a thing?
Is there anything like right or wrong? Or the fact that I ensured because of my travelling 1st class, I didn't put anybody in inconvenience. (I was standing at the door without occupying anybody alse's place)