Over the last 2 days I heard a few stories. Quite stunning, I should say – either I am too old or the newer generation of people think completely differently from what I think. Let me narrate them.
The first is a fine example of why the Americans are in a financial mess. There is this [...]
For many investors “mutual fund form” means one single page that your Relationship Manager / IFA thrusts in front of you while you invest, correct? That is not so. A mutual fund form means a 30 page document – called “Key Information Memorandum” – this itself is an abridged version of the “Offer Document”. Of [...]
Cash Reserve Ratio (CRR) is a regulatory reserve requirement under section 42(1) of the Reserve Bank of India Act, 1934 which is to be maintained as CASH or CURRENT ACCOUNT balances with Reserve Bank of India, along with gold by all Scheduled Commercial Banks as a percentage of its Net Demand and Time Liabilities (NDTL).
The [...]
RBI fixes SLR (statutory liquidity ratio) from time to time – currently it is at 25%. RBI requires banks to maintain 25% of Net Demand and Time Liabilities (NDTL) which is to be maintained on daily basis by investment in cash (other than CRR) and unencumbered prescribed Central and State Government securities, Treasury bills, [...]
Money market is described as the market where short term debt is dealt with. Thus financial instruments which can be quickly turned to cash is dealt with in the Money Market. Short term normally means holding period of < 1 year. The asset should be very liquid – ease [...]
We are in the midst of an economic slowdown for sure. The west is down to growth rates of 0 and 1% per annum. Dropping oil prices will mean Sovereign Funds will have lesser monies to spend, and IT companies will also bring in lesser revenues.
When the going gets tough, the tough go shopping! So [...]
Financial markets do what all markets do – price discovery. Fish markets find the price of fish, gold markets the price of gold, job markets determine your salary. The price of money means the financial markets mobilize savings into investments – and channel them for various uses. It determines the prices of bonds, equities, warrants, [...]
Continuing my post of 23rd (yesterday) ..remember the fundamentals. How much money you make is a function of how well you manage your money. Remember what Warren Buffet said about “financial derivatives” – he called them “weapons of mass destruction”.
If bankers, merchant bankers and others are being bailed out – do [...]
I did not know it would be so difficult to sound simple and uncomplicated. Many people have been mailing me, smsing me, calling me with questions is “What should I do, NOW ?
The operative word is NOW. If you have been a long term investor you have seen the resilience of the equity markets over [...]
There is no single or fixed location or exchange where debt market participants transact. Also very sadly small investors have no role to play. Which means as a lay investor you can invest in equities (far more difficult to understand) but cannot invest in debt markets (easier to understand).
Dealings are done over phone, and confirmed [...]