Tuesday, October 30, 2007
Tampa, down 10.1%;
Detroit, down 9.3%:
San Diego, down 8.3%;
Phoenix, down 8%;
Miami, down 7.8%;
Las Vegas, down 7.6%;
Washington, D.C., down 7.2%;
Los Angeles, down 5.7%;
San Francisco, down 4.2%;
Cleveland, down 4.1%;
Minneapolis, down 4%;
New York, down 3.8%;
Boston, down 3.6%;
Chicago, down 1.3%;
Denver, down 0.4%;
Dallas, up 0.5%;
Atlanta, up 0.8%;
Portland, Ore., up 2.8%;
Charlotte, up 5.6%;
and Seattle, up 5.7%.
For Detailed Report click
Fall in home prices
Monday, October 01, 2007
Table contains some leading stocks from UBRICM. (United States, Brazil,Russia,Inida,China & Mexico). I have created this based on my ROI analyis on these leading countries. Thats 84% ROI over a period of 1 year. (ofcourse, its a post analysis and not a fortune teller).
Interesting thing is ROI shooted from 67% to 84% in just 5 trading days. This portfolio will bring decent fortune for medium to long term investors. All are listed in US Stock Market
U-BRIC-M thats the new acronym which I have coined for this portfolio. Whats your say on U-BRIC-M?
Friday, September 21, 2007
Why buy a home when you can rent one?
It’s obvious, isn’t it—if you pay rent for years, you’ll have nothing to show for it in the end, but if you used that money to pay home loan instalments instead, you would be creating an asset. This was the question Tarun Banerjee was pondering. But he couldn’t shake off the suspicion that the truth may be more complicated. Tarun, aged 37, is a senior-level financial services professional, married with two kids. He’s had his eye on a threebedroom flat in South Delhi, costing Rs 60 lakh. He would need to pay Rs 10 lakh up front, and borrow the remaining Rs 50 lakh. The 20-year equated monthly instalment (EMI) for the loan worked out to Rs 51,610 per month. Tarun wasn’t worried about the EMI, though—he could afford it. But he wanted to do a spot of number crunching. So we did a comparison of how Tarun would fare if he bought the flat, and if he rented it.
THE BUYING SCENARIO
Most people consider buying a house because of the tax breaks: the interest component of the EMI, up to Rs 1.5 lakh, is exempt from income tax. The maximum you can save in the highest income tax bracket (33.99%) is Rs 51,000. As for the principal, the tax benefit under Section 80C of the Income Tax Act is lost if, like Tarun, you pay the principal from your Provident Fund and insurance.
Also, since Tarun would take a loan of Rs 50 lakh, he would need life insurance, to protect his family from liability in case anything happened to him. We suggest two term insurance plans of Rs 25 lakh each, for which he would pay an annual premium of Rs 9,000 for each. Why two policies? Because 15 years into the loan period, the amount pending repayment would be Rs 25 lakh. If he bought a policy each of 14 and 20 years’ duration, he would need only one policy from the 15th year.
The net cash flow (tax savings on the Rs 1.5 lakh deduction, minus insurance charges) would be invested in diversified equity mutual funds, and would grow to Rs 26.78 lakh in 20 years, assuming the mutual funds give a tax-free return at a compounded annual growth rate (CAGR) of 12% (a reasonable assumption, as equity has given 16% returns over a 26-year period, and the future looks even better)
I assumed a year-on-year growth of about eight per cent in the property value. Tarun was shocked: “Doesn’t it grow by 30-40 % year on year?” I explained my reasoning. If property grew at that rate, this property would be worth Rs 2.23 crore in just five years! Now, if you want to sell, there should be buyers, right? If someone was going to rely on loans to buy property, they may have to borrow Rs 2 crore, and fork out an EMI of Rs 2 lakh. Not many people can afford that. Salaries are growing on an average at the rate of 10-15 % a year, so rising incomes cannot take care of that. The explosive growth of the past three or four years is unlikely to occur again in the future. Some exceptional mutual funds have given returns of 800-1000 % over a five-year period, but that, too, is going to be difficult to replicate (this is why I reckon a 12% CAGR for mutual funds). Historically, too, property has grown at a sedate, single-digit rate. An 8% return thus seems realistic over a 20-year period. In fact, after deducting 0.5% for society charges, property tax, and so on, net growth would be around 7.5%. The property is likely to be worth Rs 2.55 crore after 20 years. The total corpus then would be Rs 2.82 crore. Tarun was underwhelmed.
THE RENT SCENARIO
What if he were to rent the same flat? The rental norm for prime residential property is 6% per year of the property value, so let’s assume that figure throughout the 20-year period, although it’s more likely to be less than 6%. Anyhow, we reckon Tarun would pay Rs 3.6 lakh as rent in the first year, with 5% annual increases in subsequent years. Since he could afford an EMI of Rs 51,640, he can easily afford this rent. The amount available after rent is invested in a mutual fund. At 12% CAGR, this would yield Rs 97 lakh in 20 years. Plus, we would put the Rs 10 lakh that Tarun would have paid up front to buy the flat in a mutual fund. This would grow to Rs 96.46 lakh after 20 years. Add to this the tax saving that Tarun would claim on rent. The tax-exempt amount would follow the one-in-three formula: either 50% of the basic rent declared by Tarun’s employer, or 10% of rent above the basic, or the actual house rent allowance . It is reasonable to assume Tarun would claim a deduction of 75% of total rent paid. The tax saved would also be invested in a mutual fund, and would amount to Rs.1.03 crore in 20 years. So the total cash flow is Rs 2.96 crore. The comparison The final corpus in both cases is not too different, right? Renting would leave Tarun with Rs 14 lakh more than buying his own place. Now, some might argue that comparing a cash flow with real estate is like comparing apples and oranges. So let’s see what happens if the whole corpus is converted to cash. If he bought the flat, Tarun would pay Rs 10 lakh as long-term capital gains tax. If he rented, he would pay not tax. So renting actually leaves him with Rs 24 lakh more. If we tweaked some numbers , the situation would still not be vastly different. The last I heard from Tarun’s wife, he was still looking at properties—to rent!
(The writer is chief financial planner, Ladder 7 Financial Advisories)
Thursday, September 20, 2007
Last 2 months Performance of Indian IT companies due to INR appreciation and $ depreciation.
Sensex increased by 5% in last 2 months, where as BSE IT index dropped 11.41 %.
INR is expected to appreciate further in near future. Its time to exit IT Stocks.
Exponential Growth in IT Service Sector in terms of ROI wont be possible...
It may not attract more investors any more....
Tuesday, May 29, 2007
Wednesday, May 09, 2007
Sivaji - The Boss! Celebrations Started, Enjoy!!!
Yes, Indian Film Industry is eagerly waiting Reason? It's release of Rajni’s latest movie Sivaji.
Rajnikant's Remuneration = 2 * Remuneration of (Amitabh + Abhishek + Hrithik + Aamir + Shah Rukh). Releasing worldwide in 27 countries on same day with about 2900 theatres. (Earlier Record - Krish in 14 countries in 1200 theatres).
India-2200 theatres, China-211 theatres, Japan-130 theatres, Singapore, Malaysia, Hong Kong-100 theatres, Saudi Countries-100 theatres, USA-80 theatres, UK-70 theatres and this release is only behind Casino Royale which is released in 36 countries in 3200 theatres.
Rajnikant's Remuneration in his last 3 movies:
Baba 20 crores Chandramukhi 25+ crores Sivaji 40+ crores.
Rajnikant is only behind Jackie Chan in terms of remuneration in Asia.
1. Out of all the shankar movies this is the costliest. 68% of expenses he Spent for location and surprisingly 12% to graphics!!!! 8% to salary (Excluding of rajini) 8% for costumes 2% for a.r.rahman and other Techincians, and the balance 2% wastages
2. First time in tamil movie amitabh is joining with rajini... As guest Role.(becos of his convienence two days shooting has arranged in pune.!!
3. Similarly Malayam superstar mamooty and telugu megastar chiranjeevi are also acting in this movie for only one scene
4. Sivaji movie has sold already to Kerala for 6 crores,(all-time high)-the Luckiest person who got distribution is our actor vineeth
5. All time high in andhra pradesh-17 crores (sleepless night for all top hero's of Andhra)
6. All time high in karnataka 9 crores (the luckiest person who got distribution is our kannada hero ravichandran
7. The most expected and very big competition is going in tamil nadu, as per the latest information the final fight between sun-tv and reliance for around 80 crores including of satelitte/dvd/ audio rights
8. International rights for 100 US million dollars for 9 locations / countries including of dvd rights. Fight is going between "ayangaran" of canada and pyramid of india
9. AVM production announced they will give 25% profit to the charity (Sivaji Foundation) if the movie touch silver jubilee
10. First time in the history of rajini movie, he himself given interview, as this movie will be great success, courtesy times magazine.
11. As per the cover story of no:1 Japanese magazine called "tosho" has mentioned this movie has crossed the expectation of the holly wood movie of "casino royale" and the second highest paid actor in asia is our one and only super star Rajinkanth next to Jackie Chan .
12. Also the "tosho" magazine revealed the total revenue for AVM production, if the movie successfully runs for 50 days in southern region will be around 430 crores. First time this movie is going to be dubbed in local language of Turkey, Hausa, gonga (tribal language of south Africa) and kshinola (tribal Language of Argentina)
Ranjikant donated around 160 cores for charity (old age homes and orphanages) other than the trust he runs whose maintenance is around 17crores per annum.Rajnikanth to build hospital according to the reliable sources, super star Rajnikanth has bought eight acres of land at Ponneri (outskirts of Chennai), and propose to construct a hospital for the poor and needy, as well as to build a school there. Rajnikanth and his fans associations are known for their work towards social causes. Recently there was news that Rajnikanth sent in messengers along with help to those who crossed shores from Sri lanka to Rameswaram. Talks are that Latha Rajnikanth might take care of the proposed hospital and the school project at Ponneri. Latha Rajnikanth is running successfully "The Ashram" school in Chennai, also managing the Dhaya Foundation
Mini Biography :
Shivaji Rao Gaekwad (Rajnikanth) was born on December 12, 1949 in Karnataka. He was a bus conductor during which time he reportedly caught the fancy of the bus travellers with his mannerisms and style of issuing tickets and blowing the whistle and so on. Looking to become an actor, he moved to Chennai and joined the film institute. It was here that he caught the eye of K. Balachander, a director known for introducing talented, new faces into the tamil film industry. Balachander gave him a small role - as the no-good husband of Srividya - in Aboorva Raagangal and the rest, as they say, is history. Rajnikanth soon graduated to playing villains and his style, swagger and casually unique brand of villainy vowed the movie-going public. Be it the sadistic husband of Sujatha in Avargal or the wolf in sheep's clothing in Moondru Mudichu or the lust-filled village rowdy in Bharathiraja's 16 Vayadhinile, Rajnikanth was the villain the people loved to hate.From here, it was a small step for Rajni, playing the anti-hero and finally, the hero in Bhairavi. Rajnikanth firmly captured the vacant, action-hero slot in tamil movies with a series of movies where he routinely bashed up the bad guys who had done him injustice in one way or the other. Once in a while he did movies like Aarulirundhu Arubadhu Varai or Johny which gave us glimpses of his acting potential. But action was what the fans expected from a Rajni movie and action was what he gave them. He has been superstar for the past 25 years.
Friday, May 04, 2007
LOS ANGELES (Reuters) - Shares of Yahoo Inc. (YHOO.O: Quote, Profile, Research soared as much as 19 percent to their highest level in nearly a year on Friday after two newspaper reports said the company and Microsoft Corp. (MSFT.O: Quote, Profile, Research were in preliminary merger talks to take on common foe Google Inc. (GOOG.O: Quote, Profile, Research
But the stock pulled back after contradictory reports said the two companies may work out a joint venture or another form of cooperation that would stop short of a full merger. A source close to the situation confirmed that any talks had cooled.
The Wall Street Journal initially said on Friday that the two companies had engaged in merger talks in recent months, but it said later that those talks were no longer active.
The paper, which put a price tag of $50 billion on a Yahoo takeover, said discussions continue between the two companies.
Yahoo's market value shot to $45 billion from $38 billion before the report. Microsoft is valued at a little more than $300 billion. Both companies declined to comment.
"It's been talked about for a long time, ever since Google came into the picture. I can't imagine a more perfect deal," said Peter Lobravico, vice president of risk arbitrage sales/trading at brokerage Wall Street Access.
Monday, April 09, 2007
1 Dollar value is 42.87 INR, Rupee is gaining against Dollar in recent couple of months.
This will have an effect on all IT biggies quarter results
Who ever want to try Options trading, then its a good time for buying some PUT options on IT stocks.
When Market Stock value is expected to go down, then trade on PUT options.
Also happen to see the list of most active contracts in http://nseindia.com PE is topping the list than CE. Its a sign for market to go down......Go for PUT Options
Who ever wants to buy stocks in direct market then wait for an expected drop after quarter results. Buy IT stocks when it goes low after quarter results.
Disclaimer : Author dont hold any put options currently !
Sunday, April 08, 2007
Seeni >> Arasa, did you hear Sivaji Songs..
Arasan >> No ma, heard that Sivaji Songs came out pretty good...send me the link
Listened to sivaji songs, Overall ARR has done a decent job. I liked the song Oru Kudai Sunlight very much....Its a copy of famous english song though !
Oru Kudai Sunlight - chance-say illai...Started Imagining how rajini would have danced for this!!! man this song rocks and gonna rock across Tamil Nadu for sure
Sivaji - Oru Kudai Sunlight
Athiradi song is also very good, Excitement to watch Sivaji movie is increasing day by day ! Awaiting for the movie to get released, planning for first day first show here @ Chicago :)-
Thursday, March 29, 2007
Looks like IT stocks are hit badly because of dollar value, it would be wise to invest on IT stocks now. IT stocks are expected to drop further by 10-12%. Buy IT stock at low and sell after 3 months.
Tuesday, February 27, 2007
Currently I am undergoing sleepless nights at Seattle. A Stressful day and driving back home in a bumper to bumper traffic, it sucks.
I was drowsy while driving back home from office. Thank god it was safe reach. Glad that I am not staying far from my office.
Sleepless Nights, that’s weird to me. Well the reason for that is 2 fold, one side extended off shore calls J (good part) and other hand stress at job (bad part). I need to restore back to my normal sleep hours. While driving, if I get sleep then most of the time I used to pull over to the shoulder and sleep for some time and then resume driving. Folks, hope you might have come across few sleepy drive, you are open to share your drowsy drive on highways :)-
Friday, January 12, 2007
With an estimated current net worth of around US$46 billion, he is ranked by Forbes as the second-richest person in the world, behind only Microsoft co-founder Bill Gates.
Woodrow Wilson High School, Washington D.C. in 1947
The Wharton School, University of Pennsylvania, 1947-1949
B.S. University of Nebraska, 1950
M.S. in Economics, Columbia University, in 1951.
1951-1954 Buffett-Falk & Co., Omaha - Investment Salesman
1954-1956 Graham-Newman Corp., New York - Securities Analyst
1956-1969 Buffett Partnership, Ltd., Omaha - General Partner
1970-Present Berkshire Hathaway Inc, Omaha - Chairman, CEO
1943: (13 years old)
Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.
1945: (15 years old)
In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.
1950: (20 years old)
Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.
During this time, Buffett also pledged to the Alpha Sigma Phi fraternity. He is still active today, donating every year to the fraternity.
1951: (21 years old)
Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO's headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.
Buffett graduated from Columbia and wanted to work on Wall Street. Buffett offered to work for Graham for free but Graham refused. He purchased a Texaco gas station as a side investment, but that venture did not work out as well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, "Investment Principles." The average age of the students he taught was more than twice his own.
1952: (22 years old)
Buffett married Susan Thompson.
1954: (24 years old)
Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.
Susan had her second child, Howard Graham Buffett.
1956: (26 years old)
Benjamin Graham retired and folded up his partnership.
Buffett's personal savings are now over $140,000.
Buffett returned home to Omaha and created Buffett Associates, Ltd., an investment partnership.
1957: (27 years old)
Buffett had three partnerships operating the entire year.
Buffett purchased a five-bedroom, stucco house on Farnam Street for $31,500.
Susan was about to have her third child.
1958: (28 years old)
Buffett had five partnerships operating the entire year.
1959: (29 years old)
Buffett had six partnerships operating the entire year.
Buffett was introduced to Charlie Munger.
1960: (30 years old)
Buffett had seven partnerships operating the entire year.
Buffett asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.
1961: (31 years old)
Buffett had seven partnerships operating the entire year.
The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships' assets.
Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at "minus $20" per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing.
Buffett reveals that he earned a spot on the board of Sanborn.
1962: (32 years old)
Buffett's partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett.
Buffett merges all partnerships into one partnership.
Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share.
1965: (35 years old)
When Buffett's partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).
Buffett took control of Berkshire Hathaway at the board meeting and named a new President, Ken Chace, to run the company.
1966: (36 years old)
Buffett closes the partnership to new money.
Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”
In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn, and Co, a privately owned Baltimore department store.
1967: (37 years old)
Berkshire paid out its first and only dividend of 10 cents.
1969: (39 years old)
Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.
1970: (40 years old)
As chairman of Berkshire Hathaway, began writing his now-famous annual letters to shareholders.
1973: (43 years old)
Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.
1979: (49 years old)
Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.
Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.
1988: (58 years old)
Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.
2002: (72 years old)
Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.
2006: (75 years old)
Buffett announced in June that he would give away more than 80%, or about $37 billion, of his $44 billion fortune to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.
2007: (76 Years old)
In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.
 Personal life
Buffett married Susan Thompson in 1952. They had three children, Susie, Howard, and Peter. The couple began living separately in 1977, though they remained married until her death in July 2004. His daughter Susie lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc.
On his 76th birthday Buffett married his longtime companion, Astrid Menks, who had lived with him since his wife's departure. Interestingly, it was Susan Buffett who arranged for the two to meet before she left Omaha to pursue her singing career. All three were close, and holiday cards to friends were signed "Warren, Susie and Astrid" (as per Roger Lowenstein's book, Buffett: The Making of an American Capitalist). Susan Buffett briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.
Buffett is an avid player of the card game bridge. He has said that he spends 12 hours a week playing bridge. He often plays with Bill Gates.
In 2006, he sponsored a bridge match for the Buffett Cup. In this event, modeled on the Ryder Cup in golf (and held immediately before it and in the same city), a team of twelve bridge players from the United States took on twelve Europeans.
Buffett likes to eat at Gorat's Steak House in Omaha, where he always purchases a T-bone steak (cooked rare), a double order of hash browns, and Cherry Coke. He used to drive a 2001 Lincoln Town Car which he auctioned on eBay to raise money for Girls Inc. He currently drives a Cadillac DTS.
Warren Buffett is currently working on an animated series with DiC Entertainment chief Andy Heyward. According to information presented by Buffett at the Berkshire Hathaway annual meeting on May 6, 2006, the series will feature Buffett and Munger in roles and the series will teach children healthy financial habits for life. Cartoon drawings of Buffett and Munger were displayed throughout the events during the weekend and the special movie before the meeting began was in animation form by Heyward.
One of the reasons he left the Wharton School at University of Pennsylvania is because he believed he knew more than the professors.
In December 2006 it was reported that Mr. Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own car. However, in May 2007 Richard Santulli, CEO and Chairman of NetJets, stated on the Nightly Business Report that Mr. Buffett now uses a cell phone, however he still does not use email.
He plays the ukulele.
He has described himself as an agnostic.
Wednesday, January 10, 2007
World is Flat, what it means to me as an individual? Skim through this blog and pour your comments if it really makes some sense. (Simple Arithmetic)
Initially I was analyzing 2006 global market trend in order to write a counter blog for my earlier blog “Global Market Phenomena”. But as an outcome of analysis I got better investment ideas.
The following are the ROI from known influencing global market indices for the year 2006.
Most of us know there was a global downtrend during May -June 06. The following is an interesting statistics.
(Global Down Trend - Sorted in order of 2006 H1 ROI)Here comes the recovery of indices after the historical global fall.
(Global Recovery and Up Trend - Sorted in order of 2006 H2 ROI)
Based on above statistics, it crystal clear that China is out performing in emerging markets. Even during global down trend, china didn’t get affected much. A closer look on the above chart infers that china market trend is unique and totally different from other countries. Except China, rest of the market followed the similar pattern of rise and fall.
India, Mexico and Brazil are successor emerging market next to china.
Now back to main topic, World Is Flat? Whether the playing field is really becoming flat for a person like me? It looks like even a person like me can play a wise game in this flattened field.
Let me try something during 2007. I would like to have my own portfolio which has a mix of promising stocks from leading emerging market like China, India, Mexico and Brazil etc.
I dont know whether there is a way to do this ?!
Portfolio with diversified global markets, that’s sounds interesting and exciting, isn’t?
I don’t know whether my wish will come true, Lets C :)- !!!!!!
Even Impossible spells I’M Possible.
Happy Investing :)-