Pay through Nose

A litre petrol in India would have cost us 25-30 Rupees, have been there no tax implications i.e. if we consider basic cost of petrol as 25 Indian rupees then 35 rupees approximately are the taxes and duties imposed on the poor fuel because of which it is available @ 60 Rupees a litre in retail market.


Even today the Base price of petrol is between 25-30 rupees added to which are taxes like Excise duty, Education Tax, Dealer commission, VAT, Crude Oil Custom duty, Petrol Custom duty etc, Which means we are paying effectively for 2 litres of petrol and getting 1 instead. You might have heard about buy 2 get 1 free but this one is strange and is one of its kind pay for 2 get only 1

With a recent hike of 3 rupees, the poor petrol is now costing @ 60 rupees in some of the metros; well it’s not shocking but was anticipated since the day government decided not to regulate the pricing, which implicitly gives authority to the oil marketing companies to decide upon the pricing at which the products can be made available in the market. Petrol got orphan letting marketing companies to drive it. Strange…!!! “Driving force getting driven”

Since last few weeks the entire machinery was struggling to tame the inflation to a single digit figure, Kudos!!! They achieved it recently….!!!. But the recent hike will definitely push it back to two figures. Petrol is not singled out from oil based products; instead oil marketing companies are eyeing to hike prices for Kerosene, diesel and LPG. Now as all these components have weightage in whole price index they will push the inflation.

Petrol has a weight of 0.88 per cent, while diesel has a weightage of over two per cent in the Wholesale Price Index, on the basis of which inflation is calculated and if the prices of petrol and diesel rises, inflation is bound to rise, LPG cylinder would add addition 0.2-0.3 per cent to the kitty, taking all together we can assume an increase of 1% approx in the inflation figures.

Protest, special comments and concern on the price hike has started pouring in and will gain some more momentum in a day or two once people start feeling the pinch of price hike.

I was wondering what will be the pricing of petrol once the crude oil touch the pre meltdown level i.e. 150 $ a barrel, definitely you can expect petrol costing @ 500 rupees a litre, Pray to God; it should not happen, that’s what we can do as individuals at this point of time

Image source: indianbuzzblog.blogspot.com

Ripple effect

In my earlier article (Way Out!)I have expressed that it will take some time for the realty sector to come out of the blues and with each passing day things will become tougher for everyone in the market be it developers or prospective buyers. Real estate companies and upcoming projects will be subject to stringent regulatory checks and controls. On the other end financial institutes has raised the bar for margin money to 20% from 15% earlier, which means the prospective buyers need to shell out additional 5% margin on their purchase.

Discovery of loan scam will have ripple effect and will trigger many events perpetually.

Prima-facie it is learnt that post discovery the real estate prices will decline which in turn will trigger margin calls for the developers who has placed that land banks as collateral. Developers, who have borrowed money by placing land/ project as collateral, will have to replenish margins that have fallen due to correction in overall property prices.

Real estate developers will be forced to borrow money at high cost or place more property as collateral to fill-up the lost margin. Developers will rope in money by inviting investment as a part of fixed maturity plan (FD’s) and might offer interest rates which will be obviously higher to other financial institutes. But possibility of raising funds through this route is also tougher as Real estate developers fixed maturity plan are finding few takers post meltdown and recent scam headlines have further dampened the already difficult fund raising efforts by them.

Apprehension, difficult to answer in a very immediate term, one has to wait and watch to see the market reacting, Developers will definitely explore Fixed maturity plans deposit route for funds raising by offering good interest rates. Investors who love to pursue risk can definitely explore the option as risk reward ratio will be lucrative but simultaneously should not forget to read the ratings given by rating agencies before investing.

Traffic Park

“I’m short tempered, impatient for the result” these are the known drawbacks which I’m trying to improve upon since years but the underlying fact is that one can’t change his/her nature rather improve it, and improvement is always a possibility.

It has been almost a month since my kid is requesting, to lend him my lapi; as he wanted to write down a story, but for no good reasons I was deferring. Yesterday he might have again developed zeal to write the story and decided to approach me. In normal case we adults instruct our children not to speak in between when some elderly person are talking, we also instruct them that if something is urgent they should interrupt the discussion in a polite way and seek permission to speak.

As generally kids are smart and obedient to follow parent’s instruction he interrupted the discussion politely and tried to whisper his interest in my ears.

I was annoyed; annoyed like anything. I couldn’t take whispering in right way.

I yelled at him.

I screamed....!!! tell me what’s that????, what do you want????

Broken in tears this young chap…!!! And was inconsolable.

He didn’t expected this rude response from his dad, He couldn’t speak, his face turned red and tears started rolling on his face, While weeping he couldn’t express what he intend to say and there was no connection between the words he uttered, but the only words which I could understand were “Story and computer”.

I realized my mistake that my behavior was not at all human; I apologized him, kissed him on his face and handed over the computer. He with his tiny fingers started typing his story, The last drop of his tears hanged outside his eyelids and dried away with the heat of excitement. His small palm was too short to cover the keypad, hopping from one button to another with his little two-three fingers, asking me to spell a lot of words, he narrated his story in an WordPad which goes as below.

Traffic park

“at my school in the morning we had gone for traffic park to learn some traffic sign .the sign where like this no entry, bumper, Turn. we enjoy were much one of my friend . got hart then we sit in the bus. go school back this is the wonderful day”

After reading his story and expression I realized his anxiety and curiosity was genuine and I should not have behaved like that. I appreciated his work, kissed him many times and tried to make him understand a new code of instruction “Do not whisper” Parents will be parents and they will always keep on instructing their wards

Image source: nevcoeducation.com

Way Out!

How the loan scam discovery will shape up the realty market in the future, will it be a win-win proposition in the market and how the common man should read in between the lines; these are some of the apprehension which can’t be answered in a very immediate term instead one has to wait and watch to see the market reacting.

The loan scam was busted with the allegation that few private institutes have benefited some real-estate players by compromising stringent procedure of funding and providing funding to real-estate players in return of monetary benefits. The day since this loan scam was busted the stocks of funding companies whose names was involved in the scam and the real estate player are bleeding. Stocks even breached there year low’s since the discovery came to the light.

Well there is mixed reaction from the market regarding property prices projections for days to come. With every passing day new names and new ways of misappropriation are getting exposed including writing off of bad debts and malpractices. I anticipate some new imposition from government in a very immediate term, to curb malpractices in future transactions. This will lead to tougher financing guidelines resulting liquidity crunch to real estate developers which in turn will slowdown there upcoming projects.

It is also learnt that Real estate developers are having an outstanding obligations tuning to 25,000 Crore rupees to honor, for which they can’t look back at market. Tough time for real estate companies doesn’t ends here, the Public offers which were in the pipeline to hit the market are taken a back as there is a subdued interest on investor in real estate stocks post scam, Investors are in a pause mode and it seems that real estate sector has suddenly lost its shine.

In this entire development the developers are bleeding and to honor there existing obligation they may take a decision of reducing the price for there completed and upcoming projects as well

On the same time projects with clean image will beg a premium for there upcoming and completed projects, scarcity of the new projects and premium from these developers will push the prices.

In nutshell how the market will react to this development is not very certain and if you are thinking for a dream house of yours I will suggest you to watch the situation and then take an informed decision.

Image source: princetonrealestatehomes.com

All in the name of education !!

It has been few months since the landmark discussion of “Education as a fundamental Right” came into force. Policy makers thought that Education and access to education should be for everyone and there is a necessity to declare as fundamental right. Policy makers thought that if children are nurtured and equipped with right education then, India’s future as a strong and prosperous country is secure and only education can change the face of India’s tomorrow.

Central and state Governments joined hands and left no stone unturned in launching and adhering to the new directive, initiatives were taken to ensure that no child is deprived of his fundamental right. Right from recruiting teachers (both on temporary and permanent basis), offering good pay structure as an incentive for getting posted in rural areas, Mid day meal for students and kids attending the school, freebies etc.

Apart from government schooling machinery, all private institutes were summoned for implementing the new directive. The new directives/ norms and standard stats that; All schools have to prescribe to norms and standards laid out in the Act within 3 years, failing to which they will not be allowed to function. Schools have to apply for recognition, failure to which will attract penalty of Rs 1 lakh and further functioning will be liable for 10,000 INR penalties per day.

It will be also mandatory for private schools to enroll children from weaker sections and disadvantaged communities to the extent of 25% of their enrolment. Selection of group of children will be based on simple random selection and no seats of this 25% quota can be left vacant. Children from weaker and disadvantaged communities have to be treated on par with all the other children in the school.

“Right to education” gives a sort of relief to all the patriotic souls, but on the same time raises eyebrows about the exorbitant fee charged by the private schooling institute. Private schools charge heavily under various heads be it admission fee, imprest money or caution money. I remember my good school and college days, my yearly college fees used to be less than today’s kinder garten monthly fees. I’m not telling a 50 years old story it’s hardly 10 years back proposition. Even though if I add inflationary parameters to it still it will be lower.

I wish and pray to government machinery to device some mechanism to put a upper ceiling in the fee structure. One amazing thing which I came across was a 40,000 INR deposit as caution money in the school. Didn’t get the logic....???? what assets does the school has worth 40,000 which they feel is endangered....???? against which they are looking for a collateral, Hope that this is getting heard and addressed by someone.

Image source: michaeljackson-art.com, exposenewspaper.com, willourworld.com

Inclusive growth

We as a nation boast on robust economic growth but isn’t’ our growth superficial and peripheral or have we achieved an all Inclusive growth

Economic Growth

Wealth of High net worth individuals soared drastically even though we have not fully recovered from the downturn. With economy knocking 8-10% growth rate rich yet got richer but contrary life has not changed much for a big chunk of peoples for whom the struggle for bread& butter is a never ending battle.

Unemployment

Villagers seeking better life; migrate to the cities, adding inorganic element to the growth of cities; in form of slums and load on the resources like potable water, energy, housing, sanitation and transportation. Unavailability of accommodation results in slums wherein many people share the resources, life in such slums is really harrowing and living condition extremely difficult.

Gender equality

Many of the unemployed migrated workers work on pity jobs like construction sites carrying all sorts of head load and with there children play around the site. Nursing mother taking out time in between to feed there babies and such breaks results in lower pay scale as compared to there counterparts males. Moreover women are seen as physically weaker then men and compromises on wages as compared to men.

Socio economic

Gap between rich and poor is widening, we boast on increased number of millionaires on y-o-y basis; implicitly we mean that in increase in number of poor on y-o-y basis. One side we have plush residential complexes with all the amenities and lavishness; also we have people who stay on pavement, huts on the other side, striving to meet there ends meet

Infrastructure

Overcrowded cities with denizens having higher disposable income putting a lot of load on infrastructure. Rapidly growing cities attracts lot number of people to participate in the growth story and be a part of growth as a result of which cities are running short of roads, portable water, power and hygiene, demand of power, water is constantly increasing and we are always in deficit to meet the demands.

Conclusions: Looking at this I think that the numbers can be indicators for the external world to show that we are not only alive but are growing; but these numbers do not justify growth in its entirety and are not all inclusive.

Image Source: economic-growth.info

Why food inflation!!

This being a vicious circle, difficult to find the start and end but as far as I think, IT Sector was the instrumental in rewriting the growth story of India Inc. It all started in late 80 with the growth saga of Information Technology sector; this sector started attracting the talent from the core industries, high profit margin/cash rich IT companies could leverage double, quadruple salary expectations for the experienced recruits. There were never like before demand of engineering graduates all across the country and existing machinery of colleges were not sufficient to meet the industry demand.

To meet the demand of engineering graduates, education sector started to grow as an industry in it and in the past decades ample number of engineering colleges mushroomed across the country. Now this industry is producing engineering graduates more than what they are required globally; this is my assumption.

High salary packages of IT industry apparently pressurized other sector to revise their base packages and to preserve brain drain, manufacturing and service sector followed the suite and offered good package and perquisites to their employees. The salary of the Entire private sector companies got revived and IT sector was an instrumental and trend setter for revival of the salaries for the entire India Inc. High salaries increased the leverages in terms of disposable income and people started spending on their wants.

Young graduates getting hefty packages started spending lavishly; there was spurt in demand for luxurious commodities, housing, food and clothing. As they were spending heavily and buying something or other, the related industries which were the net producers went for a head spin profits and thus the entire value chain started making money, money got mobilizing and started exchanging hands and in turn everyone getting a pie of the transaction.

Money and trend started mobilizing towards other cities and now this euphoria is all over the country; you find people with ample disposable income and lavish expenditure. Increased disposable income also pushed the demand of investment, the handful avenues everyone short listed being gold, housing and equity and the money started flowing. The soaring profits of these sector pulled many investor and money in turn; henceforth more money started flowing in the system.

Of all the favorite investment avenues, the Only demand which I believe will be hampering in long turn will be the bizarre demand of Housing, as equity and gold is something virtual and not much to do with a common man, but housing demand is something which is a basic need and “not a want” and unprecedented demand of housing will further push the prices of all commodities in the entire value chain.

To meet the unprecedented demand of housing sector agricultural land is getting sacrificed, agricultural land is rapidly winding up, though there are norms for not using agricultural land for housing purposes but hardly does it comply. In the past I have seen catchments of land which were used for agricultural purposes, lying vacant for few years and then emerging as residential colonies.

India is rapidly growing in population and so is the demand for housing, but if we keep on losing agricultural land in lieu of residential projects than the expected agricultural output will never be able to meet the demand of growing population and the commodities prices will be always inflated.

Now whom should we blame for the any of the inflation? Is it High Industry packages, aspirations or desire to fulfill the wants?

Images source : smartgrowth.bc.ca

Number Port-un-ability

If you are fed up with your existing mobile service provider and wanted to switch to a more competitive service provider who is better in terms of tariff and network coverage, then you have to wait for the dawn of the New Year. No way I’m Exaggerating. The mobile number portability (MNP) is in pipeline from last few years and every time missing the deadline with a substantial margin and topped up with a new deadline.

This reminds me of a dialogue of a famous Bolloywood movie “Tareekh pe Tareekh” means deferment after deferment. After much of deferment it is learnt that finally it is going to be implemented from 25^th Nov-2010 starting from the state of Haryana. However it is also learnt that the MNP will be implement in rest of country in a phased manner, schedule for which is yet to decided and disclosed; means that there is wait for new Tareekh by the rest of the country.

MNP in state of Haryana will be a case study in itself, and the outcome will decide the fate of MNP in rest of the country. The state might have been chosen strategically as in principal it is a small state and doesn’t rank among the top in terms of subscriber base, population and mobile phones.

Let’s keep our fingers crossed for the successful implementation of MNP in the state of Haryana, as there has been a lot of delay due to non-preparedness by the operators, technical glitches and what not. Service provider themselves were not and are not in sync with the idea of number portability as they think that there customer base will shift to their competitors and will erode their bottom lines.

Whatever may be the reason, with MNP in place competition will be fierce and customer retention would be a mirkier business in days to come, while on the other hand customer will have an ease to switch the service provider at free will and go for lucrative options.

The hidden message being that bottom line of telecom operator will be eroded and one should not invest into the sector until the stock prices bottom outs and guidelines are announced for the year to come.

All that will shine is Silver!

An ounce of Gold is priced around 60 times to that of silver and you will be surprised to learn that silver is having better utility as compared to gold and there are less stocks of silver as compared to gold. With above facts in place the prices of gold Vis-à-vis silver do not compliment the real facts, I believe that the opportunity existing with silver are immense and no other commodity can be as much profitable as silver in years to come.

There are three interesting fact to compliment my though process,

1) There are not much dedicated mines for extracting silver the way there are mines for gold, coal, diamonds etc. Silver is an outcome of the mining activities happening globally for various reasons and not much of term as silver mines exist, which implies that if we wanted to increase the production of Silver suddenly we simply can’t.

2) Silver will be more profitable as compared to gold in the longer run because, Silver now a days is finding wider industrial application right from batteries, electric appliance, glass tint, pharmaceuticals etc; to catalyst to many reactions. Silver used in any of the industrial application is difficult to recover unlike Gold which can be recovered from the ornaments.

3) Today globally the silver inventory is around 250 million ounces and most of which is tied up and unavailable, today the silver inventory are lowest of last 200 years. Industrial requirement of silver is around 900 million ounces a year, and Mining and recycling fall short of providing the necessary silver.

Looking at this facts, silver outlook seems brighter but will it outshine gold is a debatable question and can only be answered in the time to come, but looking at the facts and figure Bull Run in silver will continue.

Image source: thesculpturewebsite.co.uk

Trail of ego

I along with few of my colleagues happened to visit a top rated hotel in a city as we were expecting some guest and we had planned for a meeting post lunch. We just gathered in the lobby and were planning the next course of action when a strange incident occurred.

I saw a person approaching us; well dressed and presentable, dragging his travel trolley towards the exit. The hotel being a top rated; and such hotel boasts on big lobbies; there was enough space and the person could have easily managed himself towards the exit.

Reluctant enough was the person; he desired to make his own way and wanted to push us aside, He didn;t like us standing on his way. “Excuse Me” uttered this gentleman. The words coated with Proud, superiority complex, sense of achievement and excellence. We made a pass for the gentleman. This made me think that should the gentleman at all behave like this and what is the reason behind his cloud 9 status.

Few of the reason which I could quickly count on; he drives a vehicle which rarely any of us can drive, he can drive it at an unimaginable speed, the vehicle that he drives itself is very costly and possessing such vehicle is a dream for common man and reality only for few big corporate, his vehicle has hardly any obstacles during the journey and most of the time it is smooth ride. He has a liberty to push his vehicle run to its full capacity during the journey.

But my understanding goes a little bit different, he can’t drive a car in congested traffic better because he drives his vehicle in no traffic area and on top of that all the traffic management is someone else responsibility. He can’t keep patience in Road traffic congestion because he is not habitual of facing that. He can’t drive a car better because he is habitual of driving the vehicle a few kilometers and rest of the time it is auto driven.

No matter how fast and how high he flies but in reality he needs some ground to ground. Professionally one can achieve new highs but until n unless he has surroundings clouds of ego, superiority and proud he could not shine.

Image source: aircrashobserver.com

Let them be Kids !!

If you are happy parent and have a school going ward; even to a kindergarten then you must have been a part of parent’s teachers meet. I don’t know what to take away from such meeting, but as per books it is mandatory to attend such meetings. Of course there are some funny memories which you can recall later and rejoice.

I remember my good school days; the term “Parent’s teacher meet” was an alien term; it’s not that my parents never visited my school, but on the contrary they were called very often; for all bad reason. The time were not fixed for such meeting as the teachers and principal couldn’t predict the time as to when I will do some mischief or bash somebody.

Anyways now as I’m a parent and time has changed, I’m now an actor of the term parent’s teacher meet. I generally don’t like to attend the meeting for many reason the first being that I’m confident on the school where my ward is enrolled, I’m confident that they are taking good care of my kid and imparting good education and learning to him. Also I don’t want to interfere in the schooling machinery as I’ve a faith on the system. My only concern is that my kids should not exceed the limits of mischief, they should not bash-up there classmates and should behave properly.

But in spite of my trust and belief the school is very rigid and they want the parents to visit the meetings and listen to them. Some parents enjoy this interaction but I really don’t.

Some of the interesting observation of such meets are, Parents suggesting to increase the school timings as they wanted there kids to be stationed in the school for as long as possible. There excuse being that if they reach home early they watch TV, so it’s better to be in school. I didn’t understand whose is the parent here “school” or the “biological parent”, who has more responsibility to align there time and activities.

On the contrary, we as adults always wanted lesser working hours to have some social activities aligned. We seldom think about the pain of waking up early in the morning, getting ready for the school with rucksack of books when the morning still has the shade of darkness.

I wanted my kids to be at home early as I expect them to take a quick nap and rush to extra curricular activities.

I wonder about those parents who were suggesting teachers for more home assignments as kids finish off there job early and play later on. They don’t want there kids to play too much.

I on the contrary wanted no home assignments from school as I believe that all the schooling must be done in school and home should be left for relations, bonding, taking rest, entertainment, cultural and extracurricular activities.

Parents even sharing eating, sleeping habits of there wards and what not, I though that it is all irrelevant to the context given and parents are expecting too much from schools, they should allow kids to be kids and they should understand there responsibilities and expectations of a child.

Let them be Kids.. Let them know how to exercise his/her rights and let education be a stepping stone to achieve the goals.

Image source: cartoonstock.com

Welter - Shelter

Working on the deadline for my house hunt which was really very short (11^th oct-2010 to 13^th oct-2010 ), I overstretched myself in terms of efforts to honor the deadline and finally I was able to zero in one residential complex. I communicated with the developer, paid them the token by 12^th Night itself and the deal was struck though the other formalities pertaining to loan, house selection/ allocation and other legal procedure was pending. As it was already getting late for the day, so we thought of exploring them by tomorrow.

The very next day i.e. 13^th I reached the site to work on the pending issue, but was surprised to learn that they were reluctant to offer me the price which they had committed hardly 5 days back. I was taken aback as I have already paid them the token amount and they were not willing to honor their own commitment, I communicated with their head office even but all in vain.

I was worried about the token as they may even confiscate the entire token money or might deduct some statutory charges as I was filing for the return of the deposit. But thank God the HO people were genuine enough to refund my entire money without any ifs and but.

If it would have been other case I would have fight for the honor of words but unfortunately I couldn’t; specially in this case. As the real estate developers are really big & influential people and one should not really mess around with those people. I don’t know whether I missed my deadline or honored it but the fact is that I own a house for a day virtually but didn’t own it really.

Image source: totalmortgage.com

Day Dream.

I’m a dreamer…!!! A day dreamer….!!! Like to create air castle….!!!

I not only make air castle but I also work hard to give them a reality. On 11^th Oct-2010 I aspire to own a house and deadline being 13^th Oct which coincidently is my B’day. To decide and zero in for purchasing a house is generally very time consuming and people take months and sometimes years to decide and zero in on something.

But the deadline I have set for myself is 2 working days i.e. 48 hours. Today till 12^th Oct at this point of time I haven’t seen any of the houses, direction, locality not have I finalized on the budgets and neither checked the balance of my so called saving account which internally I admit is only the expense account.

I’m staying in the most happening city of India since last eight year but I never thought of purchasing a house, I never thought of purchasing one because I though that life is like a journey and one need to keep on moving. I didn’t want to struck myself and commit to; I didn’t wanted to have any financial liability and obligation, I wanted to be free, free like a bird who can open the full span of wings and can fly at his wish.

There was one more intuition which supported my decision; that being that the moment I think of settling out here; I will meet with some radical changes. I was bit worried about those changes as intuition didn’t helped me in understanding that whether the changes will in my control or beyond my control. If the changes are beyond my control then I will be in an utter mess; financial obligation will turn me down to rubbles.

I don’t know whether by tomorrow I will be able to zero in on something or not because the deadline is really very short term. But it is sure that I’m looking for some radical changes and I wanted those changes to be in controlled manner.

image source: www.psdeluxe.com

Drive!! So that you are not driven

I don’t want to buy car, I want to buy cars….!!!

I don’t want to buy house, I want to buy houses…!! Hey wait…!!! Don’t interpret it to the houses we live in. I’m talking about the business houses.

To accomplish great things, we must not only act, but also dream; not only plan, but also believe. We know how to schedule, plan and execute and many of us successfully do so, but what happens to the dream, that navigates us like a North-star. Dream is nothing but a vision in corporate statements - the final goal of your entity. “There is nothing like a dream to create a future" Says Victor Hugo

With the above set of ambitions I’m clear with myself that I want to become Giant, "big" is not the right word here. But things are not falling in the proper place and leading to frustration. I remember that once an astrologer has told me that I can’t make everything happen because of my planetary positions do not support my “hyper” ambitions.

This incident refreshed the memories of a great ruler; who wanted to rule the world and the palmist denying any such possibility. He just took out his knife and draws a new line in his palm which according to the palmist was mandatory to rule the world.

I didn’t intend to do because I never intend to rule the world; neither have I known which lines I’m going to draw. But I could very well understand the frustration which the ruler might be having, because if the ambitions are high and if one is not able to make them happen then depression and dejection are bound to happen.

Until and unless one spreads the wings, one will not have an idea of how far he can fly. Ambitions are essential for everyone; without ambitions life will be boring, monotonous and uninteresting in the world. Here living is not enough; one need to achieve something to make one’s life interesting and worthy. Ambition is the driving force in life. Ambition drives some mad, but it helps some to achieve their goals.

So the ideology being "Drive!! So that you are not driven".

How?

FII participation till August-2010 was more than 60,000 Crore and The current year's figures participation is just closer to the all-time high of $17.6 billion, recorded in 2007, just before the markets crashed because of a global recession.

The memories of 2007-08 are still fresh, when the FII participated heavily till a point of time and then suddenly started withdrawing. Last year the net inflow of FII was around 83400 Crore which will has been already breached and if the momentum is upbeat 1, 00,000 Crore is what the anticipated, with 2 active months to go for the current year ending.

Reliance Industries which is having the highest weight on the bourses was 1100 + when we were trading 10% below the current indexes level, since then the stock has depreciated by almost 10% but the market has gained 10%. There are other stocks also, for whom the prices observed the same trend.

In the mean time everything has escalated to newer highs right from real estate, petro products, commodities and what not. Real estate is booming like never before, the rates are more as standardized and there seems to be active lobby of builder community to jack up the prices. In areas around the city you have a standard rate of INR 18000 Square yrd. And more you move towards the city and within the city the prices are as high as 65000 square yrd.

The prices of residential scheme rise with each passing day, as if there is no tomorrow, I don’t know what is signifies but “Everything can’t go parallel”, that’s what I believe. If one sector is performing well other has to be compensate to maintain equilibrium. If all the traded commodities are scaling up then does it means there is enough demand in the market? Well I don’t think so. This is a fictitious situation created by market players.

I don’t know how to deal with this but the proposition all around doesn’t seems very competitive

Image source: vpmath.wikispaces.com

Stop at Nothing

Each passing day market is breaching new records and attaining new highs. The indices have already crossed the resistance level and are very close to the magical marks, with the future contract already crossed that magical mark as they are getting traded at a premium as compared to the cash price.

All traders and investors are speeches and clueless about the rally, the only people who are expressing there comment are the market analysts; according to them there is still a lot of steam left in the market and market will scale to new highs.

If you ask me about the reason of the current rally, I don’t find any concrete reasons, happenings, news that might have contributed to this rally. The only factor for the rally is FII. If we see the contribution of FII’S, FII’s pumped Rs 83,400 Crore into the domestic equities in 2009, but started exiting in early 2010. And the remaining trend for the year is as below,

Month	Net Position	Net amount
January	Sellers	-500 Crore
Feb	Buyers	1,216 Crore
March	Buyers	19,928 Crore
April	Buyers	9,361 Crore
May	Buyers	586 Crore
June	Buyers	27,125 Crore
July
August	Buyers	11,687 Crore
Total	Buyer	60,477 Crore

Analysts believe that the Indian market is likely to attract more inflow from overseas in medium to long-term investments, as they see higher return from emerging economies. This means we do expect more money getting into the stock market, which means that 24,000 level for Sensex and 6300 for Nifty is not far away.

In between the DII's are net sellers only also the mutual fund houses are registering heavy redeemption of the funds as investors are of a opinion that the market has already gain it;s all time high and might see correction in days to come.

Image source : thehindu.com

Wake up.. Bears!!

A strategy which I’ve adopted and rigorously followed in major of my decision is “Plan for the best and, be prepared for worst”. Even through the project management experience I have learnt that “If anything is to go wrong it will”. So the plan should be to achieve the goal, but simultaneously followed up by a backup plan or a contingent plan.

In the recent, I was having a conservative outlook towards the market as there was a lot of uncertainty regarding the direction to which Indian market were heading. I was having more of bearish feeling then bullish and that’s the reason my short positions were predominant and were hedged with less long position.

As a part of my strategy every time when market touched new highs I exited my long positions while holding the short positions in anticipation of a correction. Each time market made new ,there were no clues of market correcting; on top of that, exiting my long position increased my risk exposures, I again took few long, to hedge any upside and again the same story got repeated.

I was more of bearish because of the global events from last few days were not so encouraging, as/such as Japan continues to face the deflationary situation as the yen became stronger against the United States dollar at about 83 units, a 20 years high level, another news from Ohio which states about new policy enforcing a ban on outsourcing of all IT and back-office projects to India by government departments. Which in turn is bad news for IT companies as this decision is anticipated to have a ripple effect of other states decisions and may follow the same league.

Instead, all news got discounted by the market and the upside continues, with each passing day my sentiments are turning to be bullish now. But I’m sure that the moment I switch my positions from bearish to bullish, the market will change its direction and I will be left in utter mess.

Down trend which is known as bearish trend is far from sight, I feel that Bears has gone for the process of hibernation; but actually bears do not actually hibernate they fall into a deep sleep called torpor. Even bears living in warm climates do not undergo torpor, but like all bears, they sleep a lot. I’m sure that the bears will weak up and empower the bulls and we will see some correction in days to come.

Because; if anything is to go wrong it will.

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