Mahesh › Comments

"When a system is well designed you can use it without even realizing the complexity of the technology behind it. This is true of the Zipcar car sharing service." - Mahesh from Bookmarklet

"The crisis invited a forceful government entry into several of capitalism’s inner sanctums, such as banking, American carmaking and the commercial-paper market. Mr El-Erian worries that the state may overstay its welcome. In addition, national exchequers may start to feel some measure of the fiscal strain now hobbling California. America’s Treasury, in particular, must demonstrate that it is still a “responsible shepherd of other countries’ savings”. The notion of a “new" - Mahesh from Bookmarklet

"Prediction: By May, 2010, the housing market will be in the throws of a severe double dip decline and housing sales will fall dramatically. Foreclosures will rise significantly. Bankruptcies of national home builders and related building and construction companies, who simply cannot hold on any longer, will sharply rise." - Mahesh from Bookmarklet

"CIBIL has started providing individuals with their credit information reports. Here’s why it makes sense for you to know what it's all about" - Mahesh from Bookmarklet

"It’s not easy being a celebrity. For one thing, they’re rarely if ever paragons of perfection. Take MJ for instance. Despite raking in billions of dollars throughout his career, he was found to have racked up nearly $500 billion in debt when he died suddenly at 50. The musical genius had pursued an extravagant lifestyle, spending millions on toys and antiques and building a private amusement park called Neverland. Part of that was funded by loans which he had to reportedly refinance in 2006 to head off insolvency." - Mahesh from Bookmarklet

"We are how we shop. And how we shop is a function of our past, our collective history as a nation, our economics past and present. This is what makes us difficult to predict, the reason why we do not follow the formula. Consumer research in India unravelled that we buy in smaller lots, because our past economic life has not allowed us higher levels of disposable income. We buy around our festivals, because that’s part of how we celebrate. We buy as a family, because shopping is an outing, an avenue of entertainment, not a chore." - Mahesh from Bookmarklet

"The long bond repurchases are complete, and there is not much cash left for agencies and mortgage-backed purchase programs. We know when things don't look right. In early 2000, it was the Internet bubble. Anyone thinking rationally could see, earnings versus prices of Internet stocks did not add up. More recently, we could all see the free credit environment leading up to 2007. When the baristas at Starbucks are getting hundreds of thousands of dollars in loans with no money down, something has to be wrong. Anyone paying attention saw the opportunity to reap significant rewards from these two simple observations. Now, there is a third opportunity." - Mahesh from Bookmarklet

"The market is an unimportant, artificial system, says Vinod Khosla, founder of Khosla Ventures, and he encourages entrepreneurs and thinkers to stop paying attention to its crests and troughs. Though the Dow may be down, what's far more important is the flow of user demand, which historically, says Khosla, always remains constant, and is a far greater indicator of long-term success." - Mahesh from Bookmarklet

"“OUR future history will be more determined by our position on the Pacific facing China than by our position on the Atlantic facing Europe,” said the American president as he contemplated the extraordinary commercial opportunities that were opening up in Asia. More than a hundred years after Theodore Roosevelt made this prediction, American leaders are again looking across the Pacific to determine their own country’s future, and that of the rest of the world. Rather later than Roosevelt expected, China has become an inescapable part of it." - Mahesh from Bookmarklet

"AT ONE stage it all seemed to be working, even if it appeared a little surreal. China, a developing country, lent vast amounts of money to wealthy America to feed its spending habit. Americans spent the money on Chinese-made goods, sending the dollars back to China, which lent them to America again. But now many talk of a decoupling of the two economies. Niall Ferguson, a Harvard historian who, only a couple of years ago, popularised the term “Chimerica” for the symbiosis between the two, now says it is a marriage headed for the rocks." - Mahesh from Bookmarklet

Add So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world's largest holder). That's 16,267,000 pounds. At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.a comment - Mahesh from Bookmarklet

"A Case Of The Hidden Price" - Mahesh from Bookmarklet

"Chang argues that inconsistencies in Chinese official statistics — like the surging numbers for car sales but flat statistics for gasoline consumption — indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth." - Mahesh from Bookmarklet

http://www.politico.com/news... - Mahesh from Bookmarklet

"Buy high, sell low, buy again, sell again, exit fully, buy again after the rally… that’s how funds behave. A novel analysis by Debashis Basu and Swapnil Suvarna" - Mahesh from Bookmarklet

In an exclusive interview with Moneylife, Nilesh Shah, deputy managing director, ICICI Prudential AMC, gives his perspective on the current market rally and where the markets are headed. Moneylife presents the final part in a three-part series of the interview. - Mahesh from Bookmarklet

"Brands have a choice of two strategies. One, they can offer the same delectable taste that comes from the right blend of cocoa butter, cocoa powder, sugar and milk at the same price but reduce the weight of each piece and change the packaging in ways you and I won’t notice. Basically, compromise on the wrappings and trappings but not on taste and price." - Mahesh from Bookmarklet

"I was always a reasonably good student so I took up chartered accountancy. In January 1985, I completed my CA. I told my father I wanted to go to the stock market. My father reacted by telling me not to ask him or any of his friends for money. He, however, told me that I could live in the house in Mumbai and that if I did not do well in the market I could always earn my livelihood as chartered accountant. This sense of security really drove me in life." - Mahesh from Bookmarklet

"One year later, one of the key excesses that led our consumer-based economy into an historic downturn is being abused in the exact same way that got us $147-a-barrel oil last summer. Worse, many in the media are again getting the facts wrong on oil prices and demand—as if the oil and gasoline price explosion of 2005-2008 never happened—as one look at last week's oil report will verify." - Mahesh from Bookmarklet

""Over any 20-year period in history, in any market, an equity portfolio has outperformed a fixed-income portfolio," one reader recently emailed me. "Warren Buffett believes in this rule as well," he added, referring to Mr. Buffett's bullish selling of long-term put options on the Standard & Poor's 500-stock index in recent years. (Selling those puts will be profitable if U.S. stocks go up over the next decade or so.)" - Mahesh from Bookmarklet

"Beside investing regularly in equities, invest when no one wants to even listen to the word equity." - Mahesh from Bookmarklet

"Let me give you an example of how American auto manufacturers have not done an effective job at reverse innovation. Companies like Ford brought their global automobile platforms into India, thereby, becoming niche players in the premium segment. After all, only 5% of the Indian population can afford a Rs10 lakh ($20,000) car! In 2009, Tata Motors launched the Tata Nano -- the Rs1 lakh ($2,000) people's car. Multinational companies have to find a 10% solution to capture the full potential in urban India and a 1% solution to capture rural India. That is to say, if a product was to sell for $100 in US, a similar solution is needed for urban India at $10 and for rural India at $1. This is because of the income gap between US and India. The per capita income in India is about $1,000, whereas per capita income in US is about $50,000. That is why one needs the Tata Nano type of solutions to unlock new markets in India. The Tata Nano is targeted at the non-consumers of automobiles in India... more... - Mahesh from Bookmarklet

"Like other countries the world over, India is facing a slowdown. One solution offered by economists is to create jobs, boost confidence and fuel consumer spending. The target for such activity is not the cities, however. "In view of contracting global demand, we have to focus on domestic consumption by primarily stimulating growth in the rural areas," acting finance minister Pranab Mukherjee noted during a recent press interview. Ajay Gupta, founder and CEO of ruralnaukri.com, has focused on jobs in the rural sector for several years now. (Naukri can be roughly translated from Hindi as "jobs" or "employment.") Gupta graduated from the G.B. Pant University of Agriculture and Technology, holds a post-graduate degree from the Institute of Rural Management Anand (IRMA), and received a PhD from the Delhi School of Economics. Initially, he entered the corporate sector -- 10 years in the corporate social responsibility (CSR) arena and five years in business development. He then tried to... more... - Mahesh from Bookmarklet

"A few years ago, a job portal for rural India would have been unthinkable. Internet penetration was extremely low -- even today, there are only 12.8 million Internet subscribers among the country's 1.2 billion people, according to the Internet Service Providers Association of India. What's more, a study by market research firm IMRB International found that there were 45.3 million active Internet users as of September 2008, of which 42 million were urban. Even given a growth rate of 30%, the rural numbers wouldn't look very exciting today. Yet several rural job portals have been launched over recent years. At the forefront was ruralnaukri.com, which began in 2001 by advertising job opportunities at corporate and non-governmental organizations in rural areas (see "Ruralnaukri.com's Ajay Gupta: 'Rural Jobs Can Provide Momentum to the Wheel of the Economy'"). Its founder and CEO, Ajay Gupta, more recently went on to launch villagenaukri.com for village youth looking for jobs in urban areas." - Mahesh from Bookmarklet

""You can boost any kind of asset by printing money. What then happens, you can print money whether physically with a printing press or electronically, what you don`t really control are the long term consequences of the money printing, Faber told Bloomberg." - Mahesh from Bookmarklet

"The current market entered a long term secular bear market in 2000, and as history shows us, this will last at least until 2010, probably longer. As demonstrated above, during secular bear markets, the market trades in vicious cyclical bull and bear markets. Therefore, you have to be careful in the stocks you buy and be ready to sell them quickly should the market turn against you. Pull backs or cyclical bear markets will present opportunities to take new positions once they have run their course. It is also important to find value situations and play the hot sectors. We will need to be defensive in our positions and for those who are willing to take the risk, we may want to take some short positions." - Mahesh from Bookmarklet

"As he told the global shipping newspaper Lloyd's List only last week: 'You have a contraction of oil demand, you have a falling world economy and you have a contraction of financing capabilities - and at the same time as a lot of new ships are being delivered.'" - Mahesh from Bookmarklet

"Brain and behavior studies clearly show that when information is scarce and threats seem imminent, people often stop listening to their own logic and look to see what others are doing." - Mahesh from Bookmarklet

"William Ramsey, an executive at Blue Chip Stamps, stood in the office of Robert Flaherty as they both awaited a call. Moments earlier, Flaherty had attempted to persuade Warren Buffett, majority owner of Blue Chip Stamps, to consider purchasing See’s Candy, a popular West Coast candy maker. Buffett turned them down—up until then, he was used to buying boring businesses on the cheap: banks, textile mills and insurance companies. Ramsey however, thought See’s was a great buy, and desperately tried to get Buffett back on the phone. Their secretary finally got hold of Buffett at his home in Omaha. He had reviewed the numbers, and liked what he saw." - Mahesh from Bookmarklet

"Fundamentally, there are two ways to increase sales: (1) Expand the brand, or (2) Expand the brand’s market share. Most companies focus on the first way, expanding the brand. While this might seem to work in the short term, expanding the brand will eventually weaken the brand and leave it in worse shape than before the process began." - Mahesh from Bookmarklet