How does a fund scheme get launched – rather why? Simply because the sales force has never been trained. The only way distributors (all shapes and sizes) could sell was by saying ‘Here is an NFO, available AT PAR…so buy it’. What was unsaid was ‘I get 4% commission, an ad in my newsletter and a trip to South Africa’. The CEO was happy to go to the press and say ‘We collected X amount of money’. And there was a booze party and everybody was happy.

Some fund houses resisted launching schemes just because others were launching, but some succumbed. Hdfc and Templeton are two fund houses who resist temptation for a long time. However they too succumb. Templeton was perhaps the last fund house to launch a ‘Technology’ fund, Hdfc launched an ‘Infrastructure’ fund – giving up their avowed principle of ‘NO focused /thematic funds’.

Why is everybody launching a Gold fund? Easy to get SEBI approval. Not too many questions – imagine launching a ‘Value’ fund. Not many fund managers understand what such funds are supposed to do – and VERY difficult to explain in the prospectus. Also it is the flavor of the month – and easy to tackle pressure from the sales guys – ‘We do not have a gold fund – only that sells in this market’.

More importantly all these funds are EXPENSIVE – you pay 2.5% as costs for holding GOLD. This is plunder. Historically gold gives about 8% return – and if you pay 33% of your TOTAL EARNING as charges, I would love to be an amc shareholder rather than an unit holder. So Gold is really Gold for the amc. And as prices keep going up, you make more money by doing nothing.

Mr. Sinor we need about 42 schemes in Gold so that distributors can mis-sell. And then we can crib about the distributors. Fund houses which already have / are launching a Gold scheme are: Kotak, Uti, Benchmark, Reliance, Quantum, SBI, Axis, Tata (of course!!), DSP Blackrock, Birla, I Pru, Hdfc…..30 more to go. Quite a joke.

They perhaps give into sales pressure and do launch it. Historically when all fund houses finish launching the sector crashes or at least starts giving bad returns. I remember seeing 2-3 corrupt / incompetent fund managers plundering their Tech portfolios – for obvious reasons I cannot name them. At least in Gold these fund managers (Oh…they are still around and in very senior positions)..cannot plunder the schemes except by charging 2.5%.

All that glitters may not be gold. I need to finish this post soon – somebody is calling me for a concall on GOLD . What a coincidence

http://blogs.forbes.com/greatspeculations/2010/07/23/gold-etfs-and-the-manipulation-game/

OMG did i write this? Shamelessly i have done a cut and paste…and wish I had written it…the nos. and the incidents could have been here or there…but the spirit is completely what I think, believe and act. I guess it helped that my Dad provided for a lot of ‘luxuries’ when we were kids – regular vacations, air travel, eating out, gadgets – cameras, music equipment, etc……what goes as ‘luxuries’ so here it is:

” My cell phone doesn’t let me watch streaming internet video.
I don’t own a pair of pants that cost more than $40 – and most cost less than $10.
We don’t have a flat panel television – we’re still using my old CRT one from my college years.
The back bumper of my truck has rust on it.
I don’t throw out socks until they have holes in them.
We use old t-shirts for rags.
I make my own laundry detergent because the store stuff is overpriced. (no I do not do this)

Some people might look down their noses at us for these things. I don’t mind.

I’ll wave to them as they leave for their high-stress job while I sit in my office in my pajamas and write.
I’ll think about them for a moment as I load up the kids for a day trip to the science center.
I’ll thoroughly enjoy the time I spend working – and when I don’t enjoy it, I’ll get up and do something else.
I’ll talk to my wife and tell her that if she wants to spend a few years being a stay-at-home parent, we can make it work.
I’ll spend the late afternoon playing soccer in the backyard with my son instead of de-stressing in front of the television.

Those are trades I’ll always make.

Thankfully it did not take me a long time to let go of the need to keep up some sort of false appearance of perfection in my life. I never had to have the latest, shiniest gadgets. Luckily my wife is also like that. I never worried constantly about the appearance of success.

Yet, in the end, the people I was really jealous of were the ones doing interesting things with their lives. The person I admired the most (and still do) are Swami Vivekananda and Jagadguru Shankaracharya of Kanchi. Then came Krishna Premi with his Ramayana telling skills.

I might admire the gadgets and the beautiful house (and I’m still envious of them in a lot of ways), but I was truly envious of the people doing exactly what they wanted to be doing.However I am technically challenged and am not willing to put in 1/100th the effort of my sister to maintain the size of house she maintains. Seriously you should be willing to pay the price of the things that you desire – I am not willing to pay the price.

I envied the people who could make their own hours and follow their own muse. I was happy spending ‘Quality’ time with my daughter. Now I think she does not miss me – her friends are far more important. It was not so when she was 5!

Those were the things I most valued – and most wanted. Now my priorities may be changing again…let us see..watch this space.

What I learned along the way was that I had to make a choice between keeping up some sort of pretense of material success or going after the things I most wanted in life. I realized that there’s always something else material to want, some way to feel inadequate because someone else has better stuff, and some way to puff myself up because I have a shinier thing than someone else.

Once I framed things in that context, the choices became easier. Instead of making sure all of our linens matched, we just used them until they were worn. Instead of insisting on the latest and greatest gadgets, I would just get a freebie cell phone and use my gadgets until they didn’t work any more. I didn’t worry about the rusty bumper too much and I didn’t panic and start throwing money around when my kids spilled a bit of juice on the couch.

My stress level went down. Plus, I found that suddenly I had more financial and time resources than I ever imagined. I used both of those resources to my advantage, applying them both to the things I most wanted in life.

Yes, my truck has a rusty bumper and some people might raise their noses at it while they drive by in their Lexus. I’ll watch them go by, off to their stressful job, then I’ll go inside and do the things I’ve wanted to do all of my life.

Sounds like a good trade to me. What say?

of course when you are on your own..once in a while you get a mail like this:

http://colorsandflavors.blogspot.com/2010/07/50-books-at-twist-n-tales.html

Dr. Balamurali Krishna (he has all the awards other than the Bharat Ratna) is one such person. He has done very little formal education. However he has given more than 75,000 recitals can sing in more than a dozen languages, can play any musical instrument…quite amazing.

One more person like this is ‘Krishna Premi’ – again not much formal education, can speak more than a dozen languages, has read the Ramayana in all the Indian languages in which it is written…

both of them have a huge fan following. Here is a website by another unconventional guy…read on…

Can you imagine there being a man who does not own a car, cribs and cringes about using public transport (too expensive) ..but has seen upwards of 142 countries of the world?

Welcome to the world of getting your priorities right…

read about him…http://chrisguillebeau.com

Obviously you will stay away from equities, and put all your money in gold or real estate, correct?

Well that is what is happening to the poor American investor.

The stock markets in the US have returned -0.5% (nominal terms) – and obviously much worse in real terms.

Cut to the Indian scenario. Over the last 10 years the Indian equity markets have returned 20% + dividends on the sensex – thanks to the low starting point in 2001. Obviously gold has done better than debt markets, real estate in certain locations have done well – and since there is no trustworthy index you cannot say what has happened in INdia in real estate.

So today the Indian investor laughs at debt products, is convinced that equities will give 20% cagr, and gold will at least double over the next 2-3 years,….etc. etc. Why does this happen?

Well that is the recency effect. You think tomorrow will look exactly like today….well it does not always happen.

What to do?

Let us take just 2 examples…from the big man – Warren Buffet himself.

1. Diversification is for mediocre people: If you do not know what you are doing, you need to diversify. So there are some people who think they should buy 4-5 stocks and ‘hope’ that they beat the index and do well. This is quite a joke. WB in another context says ‘do indexing’.

If you are not in the same class as Warren Buffet or a Rakesh J, or a Vallabh Bhansali, or a Uday Kotak….please index your portfolio. These are investors par excellence, and many of their deals are stunning. It does not mean if you buy L&T, HUL, SBI, and TCS every month you can create a great ‘focused’ portfolio. Check your basics, folks.

2. Value buying: If you do not understand value investing (by the way all investing is value investing – it is a matter of time horizon) there is a great chance that you will hit value traps, and get pulled down.

3. Rule no. 1 is : Do not lose money and Rule no. 2 is Remember Rule no. 1: Fantastic rules, but like all WB rules this is over sensibly long periods of time, and AFTER CONSIDERING the time value of money. So if you bought some shit share for Rs. 500 in 2002 and sell it off in 2012 for Rs. 500 and think you have understood Buffet, please stop laughing all the way to the bank . Your banker who charged you ‘demat holding charges’ for the past 10 years is already laughing.

Read on this lovely article http://www.fool.com/investing/general/2010/05/18/10-quotes-from-one-of-the-greatest-investment-book.aspx?source=ifesitlnk0000001&lidx=1

Let us see the Indian cricket team currently playing in Sri Lanka. The top players like Dhoni, Sehwag, Yuvraj, Zaheer get paid a couple of crores a year for playing cricket for India. However they get about 8-10 crores AT LEAST for playing in the T 20 tamasha called IPL.

If the total income of say a Dhoni or a Yuvraj is say Rs. 50-60 crores, playing cricket for India is fetching them only 3-4% of their total income.

However to earn the other 50+ crores they have to be in the team. If they are dropped for poor performance then the amount (endorsement) will go down. So they play in a few matches and then claim they are ill. For eg., Yuvraj may not have wanted to play in the team AND risk being dropped. Now he will not play any more matches in Sri Lanka. If 95% of your income is SAFE, chances are you will play with the same lackadaisikal approach.

Forget the first rank title which we hold now for a long time, this is perhaps the worst bowling attack India (not sure whether any test playing country had a worse bowling attack EVER)  could ever produce The bowlers will surely take 20 Sri Lankan wickets in the series – not in any one test!

the Jagad is my guru! It is really true. When you start teaching / try to teach you realise that there is a lot of learning. One big international big ticket professor (who teaches in some of the best colleges) told me ‘True teaching happens only till class 3 or 4, after that teachers are busy OBSTRUCTING learning’. I hope I do not do that in my class (no i do not want feedback!!).

here is a nice post you must need. It is about being a teacher!

http://madhukarshukla.blogspot.com/2008/02/on-being-teacher.html

You must have heard in many lectures or read in some philosophy books that building expectations is the worst thing a person can do. It leads to disappointment….well here is a real life case.

One girl at least a decade junior to us – maybe even 15 years junior to us had joined his office after doing a one-year MBA. It was her first job and his 3rd job and he became a mentor.  She learnt the job well did independent sales calls and was generally doing well. She was married to a rich Gujarati boy (she was also a Gujarati and it was a kind of arranged marriage) but was doing nothing with his life. He was supposed to be doing some business which was not doing well. So my friend called him and counselled him…and got him a decent entreprenurial kind of a job in the financial services industry.

Today she is well off (they always were rich but had little cash flow) with a good job, 2 kids in school….etc.

When my friend called her (about 3 years back and after a very long gap) she said..”please do not call”.  Her explanation was ‘her husband did not like anybody calling’ . The fact that my friend remembered it showed how much it hurt.

The hurt comes from the EXPECTATION that if you ‘help’ somebody (she may not even have seen it as help).

So if you do help, DO NOT expect a thanks. If you have expectations, DO NOT HELP -charge a fee or just shrug. Both are good tension free options. If you get paid you do not want a thanks (as long as the cheque goes through), if that person does not wish to pay, YOU KNOW your help is worthless to them.

Why offer? If you give something free, do not expect anything in return.

cycling, swimming, running, jumping, mountaineering,….well you can run the Mumbai (Standard Chartered Bank, Procam) marathon.

do not know how to register? well here is the link. Could not convince my MIND that I could do the 42 km…so again for the nth time you will see me doing the 21 km hope fully under  2hrs 44 minutes.

 Link for Stanchart Mumbai Marathon. http://procamrunning.in/scmm/Registration/applicationmodes.php 

Funny how we think of healthy living – and believe doctors (and the process food industry) who tell us that wheat bread, wheat pasta, …are all good for us. Why they even tell us that coconut oil is bad. Hmm….there is a huge connection between doctors and the process food industry. Like between Financial Planners who get paid trips to Goa, Egypt, Hongkong, South Africa, or Switzerland (depending on which product they recommend and what portions of it!!).

See this website..http://www.boycottmcds.com/ 

ps: it could just be a sham of a website trying to collect hits, I have no clue. Also if you own shares of McD do not sell it or even worse go short on the shares. It is a good well managed company and people are accustomed to go there for a fill. It will make money so what if it spreads some disease? I hate cancer but like my dividends from ITC…

it also has an ad for a weight reduction plan. It is interesting…it helps if you are on FB, makes it a little easier. Personally my fb connection is Subramanyam Shyam.