They had been married for sixty years. They were far from rich, but in very good health, due largely to her insistence that they both eat healthy foods and exercise every day. But their good health didn’t help them when their plane crashed. At the Pearly Gates, St. Peter led them to a beautiful mansion, furnished in gold and fine silks, with a fully stocked kitchen, and a waterfall in the master bath. They gasped in astonishment. “Welcome to Heaven. This will be your home for eternity.”
The man asked, “How much will this cost?”
“Why, nothing,” St. Peter replied. “This is your heavenly reward. And see that championship golf course out your back window? It’s included, too; you can play as much as you want, for free.”
He also showed them the clubhouse, the pool, the lavish meals of every cuisine imaginable. “This is Heaven. Everything is free for you to enjoy.”
The old man glanced nervously at his wife and then asked, “But where are the low fat, low cholesterol foods, the decaffeinated tea, the…”
St. Peter interrupted. “That’s the best part,” he said. “You can eat and drink as much as you like, of anything you like, and you’ll never get fat or sick. This is Heaven!”
“No gym to work out at?”
“Only if you want to.”
“No testing my sugar or blood pressure or…”
“Never again. Here you just enjoy yourself.” The old man glared at his wife and said, “You and your damned bran muffins! We could have been here twenty years ago!”


Kinna sona thenu…

Kinna sona thenu rab ne banaya,

Dil kare wekda rawan….

Kinna sona thenu rab ne banaya


India’s WPI

If you did not knew, India is possibly the only significant country in the world which uses WPI (wholesale price index) instead of CPI (consumer price index) to calculate inflation. And this is the reason why inflation figures do not have much relevance for a common man.

Let me first explain what are the individual constituents of WPI.



One of the main objectives of a prudent investor is not only to get good returns on his/her investment, but also an ability to manage risks and exposure. That is why if you look at the portfolio of a seasoned investor, you will often find it to contain:

1) FD: one third to half of the portfolio… fixed returns, almost zero risk.
1) Blue chip shares (long term investment… medium risk, decent returns.. should constitute bulk of the equities you hold)
3) Mutual funds (unless it is an exotic, esoteric sector fund, it can be treated as a blue chip)
4) proceeds from IPOs: low returns (primarily due to high level of over-subscription and low allotments), low risks (unless you apply in all tom dicks and harry)
5) Short term investment: Any investment based on the short term market conditions.. usually made with a day/week time frame horizon… high risk but fabulous returns (it usually constitutes bulk of the portfolio for a trader)

Debentures is another exotic financial instrument which people can invest in. Unfortunately Indian debenture market is underdeveloped and hence very few people know about this low risk, moderate returns long term investment instruments. Hence I am writing this post. These are basically low interest rate unsecured bonds issued by companies which upon maturity could be optionally converted to fully paid shares.
More information about this instrument can be obtained at wiki

What does an investor gains:
1) Low risk: all said an done these can be treated as a fixed interest rate instruments. So even if the company stock price is not doing well (but the company is not bankrupt), you won’t lose your invested amount.
2) Stock linked gains: On the maturity date, you will have an option to convert them into equity (at a fixed price determined on the date of issue) In a hypothetical case, suppose the issuing company stock appreciates by 25% p.a. So potentially the stock would rise 3 folds over 5 years. So the investors can pocket the difference 🙂 for an additional gain at the time of maturity.
3) Liquidity: Although they are not very actively traded, but unlike FDs you can sell them in the stock exchange whenever you need to money without attracting any foreclosure penalty.

1) Unlike an RBI controlled bank, you are entrusting your money with an unregulated company. So if the company goes under, you risk to lose your entire investment.
2) Low interest rate: Since most companies are bullish about their stocks, almost all of these debentures have a very low coupon rate. So if the stock is not doing very well, even though you do not lose your investment, the inflation would potentially eat into its purchasing power.
3) Long gestation period: For all practical purposes, these are like bonds.. hence are not advised for individuals looking for a quick buck.

Why companies issue them:
1) Low interest rate: Because of this, debentures usually translates as the cheapest source of capital.
2) Because of the convertibility, the company is able to move these funds from debt to equity portion of the balance sheet and hence improve the leverage (debt to equity ratio).
3) Reward the investors: In most of the cases, the debentures are issued to the existing stock holders and promoters and not through an open offer. However, outsiders are permitted to buy them from the secondary market.

Here are some warrants/debentures I could find:
Bajaj Auto Finance Ltd.
Dalmia Cement (Bharat) Ltd.
Deepak Nitrite Ltd.
Kirloskar Ferrous Industries Ltd.
Orbit Corporation Ltd.
Sardar Sarovar Narmada Nigam Ltd.
Titan Industries Ltd.
Trent Ltd.

Since I do not have any exposure to debentures, If you looking to invest in them… contact your financial adviser. I know Indian Hotels intended to issue them a month ago, but I am not sure about its status.



P1080854 Follow the Road to Autumn

Do Patte Patjhad Ke, Pedon Se Utre The
Pedon Ki Shakhon Se Utre The
Phir Utne Mausam Guzre Woh Patte Do Bechaare
Woh Patte Dil Dil Dil The Woh Dil The Dil Dil The..


Toilet Robbery

My bladder always wants to torture me in new innovative ways. Till yesterday, it always got an urge for a micturition whenever there are no public toilets in sight, but today it crossed its limit. Like those sadistic girls who like to tease guys, my bladder had this urge just in front of a public toilet.. the catch was, the facility owners had locked the urinal. (it was 11am which is hardly an odd hour)

So here I was, trying to tame my bladder and thinking of 1 logical reason why anybody would like to keep a stinky toilet under lock and key? Like any other guy in that situation, the only sane explanation I could come up with was that there exists a band of armed bandits which specializes in stealing the stench from public toilets. Hence the authorities had to beef up security at such places.

What do you think could be the reason?

BTW: you might also like my PHD grade thesis on Urinals.

and some jokes about urinals:


Where do babies come from?

This nice cartoon explains where and how


Indian Bankruptcy laws

I have been hearing again and again of people driven to suicide by loan collectors or in this peculiar news, defaulters killing their bankers.

But have you noticed one thing in common among all these defaulters…. NONE of them had filed for bankruptcy….WHY?

In a business losing money does not mean that you had embezzled funds.
80% of the business fail due to cash flow problems and those can be over come by talking to bankers to extend the loan, or with the help of a short term loan from friends and family.
rest of the business usually failed as a result of non conducive market scenario and is part of the learning process.

I agree that in traditional societies like India, being fired from the job or failure in your latest venture makes you the center of the town gossip… but who cares about the world… you have responsibility towards your family, your kids and killing yourself/banker does not solve the problem.
Try talking to your banker to extend the loan tenure, sell off some of the assets and see if you start over again… if you still cannot.. then don’t be shy, ask for help… you will be surprised to know it coming from unlikeliest of the places. Friends and family might help you because they know you are a good man. More often then not acquaintance often pinch in. Often its a pure business deal, where they pump in money in return of sale of assets/partnership… sometimes they do it because they have faith in your business skills and they know that this is a temporary phase.. in future you will not only succeed, but will be gratitudeous.

If nothing works, then don’t start your evasive tactics… Declare bankruptcy, take the assistance of the law and discharge your loans and live life honorably.

India has bankruptcy laws dating as old as 1874… and today’s law clearly demarcates the business/company’s assets from the personal assets… it distinguishes between the assets of the family and your assets and has all the features that allows you to write-off the loan once and for all and start again. Once you start the bankruptcy proceedings, the bank will audit you, you might be asked to visit the court/negotiation table a couple of times… but can no longer harass for the dues…

Lastly a quote from Rich Dad, Poor Dad
“Being Broke is temporary, but being poor is eternal”



Benefits of Stock Market

Lets go with the benefit that a well developed stock market brings to the country, economy, businessmen, investors and common man.

1) Helping the economy grow:
Developing nations need more capital to fund the new projects, set up plans and to grow and expand the operations. A well developed stock market like India encourages the promoters to tap the stock market for these much needed funds.
This is the reason why a lot of companies tap the primary market during the bull run.

2) Banks do not like risk:
A banker is a guy who lends you an umbrella on a fine sunny day, but takes it back the moment clouds appear on the horizon.
However investors are known to be much more patient and show overwhelming support to good enterprises which are in distress.

3) Corporate governance (Keeps businesses in check):
Stock market ruthlessly punish the rogues.
The market and analysts often demand a higher standards of efficiency and management than what the Governments can even dream of asking via laws.
These days the stock holders even force the companies to take CSR, and morals more seriously than what their B-Schools would have taught.
eg: Recently the investors of Berkshire Hathaway forced Warren Buffet to sell his stake in PetroChina because of its alleged links with the atrocities in Darfur.

4) Curb Corruption.
Stock holders wants records, audits and paper trail of every transaction. They stay away from companies which deal in grey market for these companies tend to make the promoters richer at the cost of the investors. Hence stock markets makes a friendly environment to do business in.

5) Reward Ingenuity:
Gone are the days when the revenues and profits increased by a fixed predictable percentage every year. In a knowledge based economy, the best companies do not think about capturing 1-2% more of the market share, but creating a whole new market. The only way to value these companies is the stock market… for the companies are many times more than their book value.

6) Mobilizing the savings:
It gives a common man to relax and let his investments work for him.

7) Redistribution of wealth:
Everybody knows the age old sage: Money attracts money.
A common man like you and me cannot hope to start a whole new industry and reap the benefits, but through stock markets, we can definitely become a partner 🙂

Now for every buyer, there needs to be a seller. And FII with their deep pockets and risk appetite fill exactly this void. They enhance the liquidity of the stock market, they have developed the market so much that its almost impossible for a punter/group to do large scale manipulations.
Hence, Even though I agree that government should check the PN (participatory notes) and check them for laundering, I strongly oppose those people who think FIIs should be kicked out completely.


15 POSCO employees held captive

We always think that Afghanistan, Iraq are dangerous places to do business with, but looks like India is even worse. Last month Reliance Fresh had to shut down its stores in Uttar Pradesh and Orissa because the mobs ransacked the stores and the police/Mayavati sides with the arsonists.
Yesterday in a replay of the last month’s incident, the mob in Orissa abducted in 2 separate incidents first 4 POSCO officials, and then 11 contractors trying to build a bridge there.
Luckily, unlike Graham Stewart Stains (an Australian missionary) these guys were not burnt alive.

Why has our country been reduced to an Anarchy?