http://www.moneycontrol.com/india/news/cnbc-tv18-comments/excess-liquidity-intoxicated-realty-sector-deepak-parekh/405643
Anyone watching realty sector in Bangalore, Chennai and other metro cities of India know this truth.Even DINKS(Double Income No Kids) category would keep shuddering at the cost of home prices even though they were in high paying sectors like IT.The realty builders were so arrogant in Bangalore , that one of my friends told me, when he was planning to buy a flat 3 years ago,the builder raised the rate by 10% on weekends when they heard RBI had dropped its interest rates!
Builders like Mantri,Shobha and Purva built huge flat complexes having nearly 200-800 flats and priced each flat at 80lakhs cost(and that was the minimum price for a single unit).Imagine finding nearly 5000 people shelling out 80 lakhs in Bangalore.Did they conduct a market survey before deciding on such prices? even after shelling out such prices, a buyer needs to pay more like registration charges, water and electricity connection bills,vat,service tax etc
Instaed of decreasing the prices, the builders are now trying to postpone their loans to banks or trying to resolve the issue through QIP etc.It will not make much of a dent unless the consumer starts buying and for that, the builders have to decrease their prices.10-20% does not matter and has no effect.It should be atleast 50% now!
I am surprised that Parekh also makes fun of nano housing!
Monday, July 13, 2009
Tuesday, July 7, 2009
A New Era For Stocks
A very nice article in Yahoo
To summarize, be careful on equities in the near term.I think instead of (100-your current age) allocation in equities, it is better to put 85% in safe instruments and take risk with 15%
As I expected, the budget had nothing much to offer. With the growing fiscal deficit, i did not think the tax rates would be brought down much.I also expected the infrastructure spending and disinvestment of public companies to be on the higher side.It was a disappointment.
The Indian markets crashes a lot as they expected a lot in the budget.If the market crashes below 12K etc, i think it is a good time to re-enter in a small way.
To summarize, be careful on equities in the near term.I think instead of (100-your current age) allocation in equities, it is better to put 85% in safe instruments and take risk with 15%
As I expected, the budget had nothing much to offer. With the growing fiscal deficit, i did not think the tax rates would be brought down much.I also expected the infrastructure spending and disinvestment of public companies to be on the higher side.It was a disappointment.
The Indian markets crashes a lot as they expected a lot in the budget.If the market crashes below 12K etc, i think it is a good time to re-enter in a small way.
Monday, June 29, 2009
Small is Beautiful
Another good article by Dhirendra Kumar of VaueResearchOnline.com
Please read the article here. It has loads of advice for non-professional investors.
Some important points
Please read the article here. It has loads of advice for non-professional investors.
Some important points
- In personal investments, the solution is not to do a lot, but to do only the minimum possible.
- investing in the minimum possible number of securities and by taking the fewest possible actions.
- You should keep all the money that you might possibly need for at least the next five-to-seven years in a safe fixed-income investment.
- Longer term investments should be invested in a small number -- three to four -- of conservatively run equity funds with a good track record.
- The investments in equity should be gradual
- Make a liberal estimate of how much money your family will need if you should fail to wake up tomorrow morning and buy the cheapest term insurance you can find. Do diversify your insurance across LIC and two private insurers
Monday, June 22, 2009
Comments on stock markets
I think Indian stock markets have started retracing their steps.Dhirendra Kumar , writes in valueresearchonline.com that volatality is high.
Dow jones also seems to have struck an invisible barrier and keeps going down or just stalling.The recent World Bank report saying that economic growth will contract more than expected this year will cause the markets to go down more.
Curiously, i saw an ad last week in Bangalore Times Of India newspaper from a big builder saying that as stock markets have risen , the property prices are also going to go up and hence better start booking your flats! what a hypocrisy! Head of LIC MF gave an interview to Business Line of Hindu saying that property prices will not go down any longer.
I take a totally opposite view.In my view, the property prices in cities like Bangalore have risen up so high that they have to stay the same or come down even more.Even software engineers who are primarily blamed for rising property prices cannot take a risk with such prices as their jobs are not assured.So, i guess that the current prices will either stay stable or come down for another 2-3 years.
Dow jones also seems to have struck an invisible barrier and keeps going down or just stalling.The recent World Bank report saying that economic growth will contract more than expected this year will cause the markets to go down more.
Curiously, i saw an ad last week in Bangalore Times Of India newspaper from a big builder saying that as stock markets have risen , the property prices are also going to go up and hence better start booking your flats! what a hypocrisy! Head of LIC MF gave an interview to Business Line of Hindu saying that property prices will not go down any longer.
I take a totally opposite view.In my view, the property prices in cities like Bangalore have risen up so high that they have to stay the same or come down even more.Even software engineers who are primarily blamed for rising property prices cannot take a risk with such prices as their jobs are not assured.So, i guess that the current prices will either stay stable or come down for another 2-3 years.
Oracle vs Sap
http://www.bloomberg.com/apps/news?pid=20601085&sid=a012K7CVKerA
Seems SAP is losing business to Oracle. Larry's strategy of buying a whole lot of small(and sometimes big) companies have helped Oracle to provide a diverse set of products to their customers.
For e.g. the upcoming Oracle Fusion Middleware 11g is supposed to have a lot of applications, some of which are provided free of cost.If any customer starts using a free product like say Oracle Discoverer, a ad-hoc query and BI tool and starts to like it, he/she is not going to buy any specific best of breed applications from other 3rd party vendors.
The maintenance for such applications are covered in the maintenance contract for the whole application suite and hence it is cost effective for companies not to buy new specific best of breed products from other companies.
Seems SAP is losing business to Oracle. Larry's strategy of buying a whole lot of small(and sometimes big) companies have helped Oracle to provide a diverse set of products to their customers.
For e.g. the upcoming Oracle Fusion Middleware 11g is supposed to have a lot of applications, some of which are provided free of cost.If any customer starts using a free product like say Oracle Discoverer, a ad-hoc query and BI tool and starts to like it, he/she is not going to buy any specific best of breed applications from other 3rd party vendors.
The maintenance for such applications are covered in the maintenance contract for the whole application suite and hence it is cost effective for companies not to buy new specific best of breed products from other companies.
Wednesday, June 10, 2009
Stock market thoughts
Stock markets have gone up by nearly 1000 points today and yesterday! I think i will take some dud MF's out of my portfolio using this opportunity.
Will concentrate on a diverse portfolio of MFs but will try to restrict the number of MFs to 5-6.
Only problems is that I do not know whether to reinvest the money in equities.I do feel that the market is overvalued now and will have a major correction within a year.
Will concentrate on a diverse portfolio of MFs but will try to restrict the number of MFs to 5-6.
Only problems is that I do not know whether to reinvest the money in equities.I do feel that the market is overvalued now and will have a major correction within a year.
Budget 2009 thoughts
Read in recent OutlookMoney article that if the Govt of India sells 10% of its stake in Nifty, it can rake in Rs60,000Crore.If it extends this to BSE 200, it can make 100,000CroreRs.
This seems to be one more way for GOI to make money to spend for infrastructure development as the fiscal deficit in India is becoming bigger.This way might be opted if it can't afford another stimulus.
If the GOI does indeed sell stocks to make money, it will try to sell it at higher amounts in which case, it would be good for it if stock markets go up!
We have to await the budget to see what is the direction of our policy makers.I think there might be some dis investment of PSUs announced and more concentration on building infrastructure.
This seems to be one more way for GOI to make money to spend for infrastructure development as the fiscal deficit in India is becoming bigger.This way might be opted if it can't afford another stimulus.
If the GOI does indeed sell stocks to make money, it will try to sell it at higher amounts in which case, it would be good for it if stock markets go up!
We have to await the budget to see what is the direction of our policy makers.I think there might be some dis investment of PSUs announced and more concentration on building infrastructure.
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