Common man and Inflation

With the food inflation touching the high of 14.4% for last week of 2010. Do the common man has to really worry about inflation? Do the Govt can really control the inflation? Is it justified to say Inflation is high at 10%? This were a few questions revolving in my mind.

1.Do the common man has to really worry about inflation? I felt why should a common man worry about rising Inflation rather he should think how he can really earn better and beat the inflationary effect on his Income.It has been the trend for the prices to rise at regular intervals otherwise salaries would have never gone up from Rs 500 to Rs 50000 from 30 yrs back from now.

So the common man should demand for higher wages for his services, business man should demand higher prices for his produce and beat the inflation this way our economy is structured with the demand and supply gaps.

2. Do the govt can really control the prices? No not really since the measures on the monetary tightening will only have adverse effects on the economy in the long run and only increase in production can help to certain extent. The economy or the inflation is co-related to the demand and supply gaps. And it is driven by the public depending on the supplies of the given product.

The inflation is again driven by all of us by demanding higher for our produce or for our services or urge to spend more as per increasing income levels, which creates a demand supply mismatch.

3.Is it really justified to say that Inflation is high at 10%? not really since the inflation is co-related to the demand and produce it cannot be kept under control.Since we are ready to pay any price to acquire the same product its cost is increased. Simply it proves we have more money to buy the same product at a higher cost.

For example if a house is sold at the 10 times of the quoted price then it shows that there is a demand for that house where inflation can be 500% due to lesser supply. In the long run it is good for the economy since the earnings of our employees will match up with International peers which will help us to attract better talent for us rather than losing it to the developed nations.

So all of us should demand for higher pay packet for our services then only we can beat the inflation since No govt has been able to get the inflation to a nil. And if they would have also got it to the nil then salary of a avg employee would have remained at Rs 500 rather than 50k.

So there will be gradual increase in the income as per the inflation and if you are able to get a double increase in your pay packet compared to inflation then you are succesful and would not be fearful of any inflationary effect.

So cheer up earn more and spend more is the funda and compete with the internatinal peers...

Oil at 100$ a minor abberation

Oil is expected to touch a high of 100$ and even some predictions that it will cross above 100$ to reach 120$ and leading to the all time of high of 150$.

But the concern is can the world afford the oil prices above 100$ to continue to grow. The answer is NO. If it cannot then the oil prices has to come down and it will happen. Oil may stage a march towards 100$ but will shy away from the three digit figure and expected to trade in the range of 75$ to 90$.

The current oil prices is supported by the growth in the economies of various countries but will not cross 100$ since the prices are not driven by only demand it is also the effect of the bubble created.

Another factor which will keep the oil prices under check is the strong focus of many countries towards advancing in the renewable energy specially the Solar and wind energy which are available in abundant.So don't be panicked it is the trend of any commodity to rise and fall as per the demand and also the speculation by marketeers.Do write in your views on the above topic.

FDI in retail

I have been reading in various news papers and journals regarding pros and cons of allowing FDI in retail sector. With many views supporting as well as opposing the FDI in retail in India have been written. But I don't see any reason why govt has to call for so much discussion on a subject which is widely accepted as a way of retailing across many successful developed countries.

Still I would like to join the panel and share my view point on the subject. I am a customer of organized and as well as unorganized sector of the Indian retail pyramid and I strongly feel that the sector should be opened up for FDI. Before I put in the reasons for supporting the same let me make everybody understand that there is no comparison and competition between a Small Kirana and a big departmental store. Since both have there own unique markets and expertise to operate.

Without getting into the detailing for supporting the same let me just put a few important points for why it should be allowed.

1. First and the foremost reason for allowing FDI in retail is to support the economy with more tax revenues for the govt in the form of Income and other sales tax from the earlings of the retailers and the consumers.

Around 9 out of a total 10 times when I bought a product from a local retailer I have never been given a proper receipt for the purchases I made at a shop by which the traders evade sales tax as well as personal Income tax to be paid to the govt here by earning a black money, were as a salaried class employee can never do. This itself is enough to cover our all types of deficits in the system and reduce tax brackets across various income levels which again will encourage public to pay tax without evading it.

2.This will directly help the farmers since the bigger companies with their deep pockets and stronger control over businesses help farmers to cultivate and produce better at a minimal cost resulting in a win win situation for both farmers and the retailer as well as to the customers.

3. This will reduce the hoarding and black marketing by intermediaries like traders and wholesalers who only drive the prices higher. And also this are the people who have stronger nexus with bureaucrats and politicians in creating a bubble of price and making money for themselves.

4. Also one of the major reason to allow FDI is it will help employment across the cities , towns and villages with the same or lesser physical work they put in. Currently this labour is employed in the markets working under harsh conditions at the place of work with a very low pay. This will also result in employment for rural youth other than the agriculture. Over all it helps in driving the economy at the grass root level of the country.

These were few reasons few positives to start with and I am sure people have many negatives but I would say let us give a philip to it and address any issues if we face in the future. As far as foriegn companies as a competition to indian counterparts , they will have there own challenges in a country like our to face with where our companies far better than they are.

So I am confident that we will gain across all the societies and help farmers and consumers as well.

One important suggestion always demand for a tax receipt for every product you buy in the market be it for Rs 1/- or 100/- believe me it will help you , me and the country. If any shop owner refuses to give one simple change the shop and also recommend your friends to buy from a shop where the receipt is given.

So practice it and do write in your feedback and views if any on the above subject.

Band Baaja Baraat.

Band baaja baraat is a movie worth watching with a good piece of acting by Ranveer and Anushka. Its on the lines of Rocket Singh, Badmaash company to start a business with an idea and they succeed as well. Anushka has an idea to start her own business of wedding planner which she does after both of them leave the place where they used to work to start there own business.

Its a story about how wedding planner idea turns out for them to open Shaadi Mubaraak, organisers of complete wedding. While executing small wedding they grow slowly and build there brand with the sincere hardwork. But after executing a big wedding successfully they fall in love. Later they have a fight after that they separate there businesses and Ranveer opens new firm.

But later business requirement brings them together and also goes to make there relationship strong and as well grow there business. well that is the end of the story..

My rating would be 3.5 out of 5. with a worth watch tag to it. Do you give in feedback after watching the movie.

The onion politics

It has always been a enjoying journey to watch our politicians give statements and retract next day , then again present it with a twisted and crafted way expressing views. Surely we all as citizens of India has to learn a new language to understand and then digest the language and communication of our Politicians.

This time the topic of the day was Onion prices one side blaming the wrong economic policies of govt , another blaming a few ministers , some body pointing the nails on the nexus between the traders and the politicians in the mandis. In the mist of debate the audience watching the program started enjoying the show in the curiosity to find actually who is driving the prices rather than finding a solution to it. This is the drama which is played on tv channels and people watch it without any solution.

On a day when the country is struggling to suvive with incomes falling and expenses rising our politicians are busy trying hard to hide behind a shadow to save themselves from being caught in the corruption acts.

Wah rey India laage thera kuch honey wala bhi hai...........do write in your opinion on the same.

Midcap Shares

With the recent correction in the markets has created a panic selling in many of the well known midcap company shares which led to fall of prices anywhere in the range of 20% to 50%. This is happening due to the fear factor which remained in the retail investors mind after the 2008 fall of midcaps which corrected to levels of upto 80%.

In the sectors like real estate , power , capital goods , auto ancillary makers and few other financial midcap names have taken a quite a beating on there chins but for the intelligent investors this is the time to look into the names of such companies where he has done his research and was waiting to buy at right prices. Buy into the businesses who have strong focused managements and who have showed there performance in the recent slow down.

Also this happens to be the good time to pick up few good names from each sector at right price since we are entering into the last qtr of FY 2010-11 the investments in equities will kick of from the retail investors to save tax. With Mutual Funds promoting many tax saving schemes maximum investments are expected to be driven into the markets.

It is always proven that quality midcaps have made good wealth for the investors in comparison to the large caps. So invest in midcaps in current correction and benefit from fast recoveries leading to better returns in short term of 3 to 6 months strongly driven by tax saving investments into mutual funds , LIC and also capture budget hungama...

To recommend a few shares to buy are Marg in construction, Gayatri Projects in civil infrastructre, Indiabulls Power and NHPC in power , Indiabulls financials in general and housing finance, Suashish diamonds in diamonds manufacturers and exporters, Bartronics in RFID technology, Infotech Enterperises in IT and software, GVK power and infra and many more .

so invest and wait for 20% to 50% gains and sell it and make a quick buck so happy investing.

Time to buy good companies.

With the BSE sensex dropping below 20k its time to re-look at the portfoilio and churn as per the progress of the sectors and select good businesses at right prices.

Indian markets have progressed at a decent speed comparatively to the Asian peers but now it is time for the intelligent investors to sell out those weaker businesses or assets which can be washed away with the fall in the markets, at the same time also decide to book profits in the good companies which are giving you gains anywhere in the range of 20% to 100%.

Also it is important to buy newer scripts and businesses which are having good future prospects with a perspective in mind for a period of 1 year. Since while your scripts which have reached its peak will get adjusted towards lower side the newer businesses will support your portfolio.

Now it is a big question what to buy and what not to buy, this is the time you start thinking as a consumer and decide what is the items you will decide to buy in your next 6 months and why you should buy that? Then look at the good managements whom you have confidence that they will do good job for your company It is as simple that whom you want to hire for job to be done at your place. Then look at the price have a target and the add it to your portfolio.

Another way is look at the companies from the aspect of technology, environment, resources availability and other reasons which will drive the prices of shares. Also if you are confident of a

business or a company due to certain reasons you understand it better then just don't listen to anybody or don't worry about the cost of share just invest and project the reasons for your confidence. If you are successful then it is the time that you need to know that you have become financial advisor for yourself which is the biggest asset for any investor.

So go for a kill and believe in yourself rather than me. BEST OF LUCK and do write in your feedback on the above post.

Shares , Stocks and Retail Investors

In this era of very high liqidity flowing from FII's and Institutional investors which has taken the Indian Share Market to its three year peak again the retail investor is stuck out of the rally the indian markets have seen.

It has been the trend were all the so called equity advisors keep telling the retail crowd the market is at its peak but the market never stops moving up and when they say the market is in over sold trritory the market continues to fall. So is it the market behaves in opposite of what they predict or the retail investors are misguided with bad intentions of making money for themselves and their so called high wealth clients.

The Retail investors are in a dillema of being profitable or being a loser in the market.So here I guide you with a few points to note before venture out in jungles to catch a Tiger on the advice of a old man sitting in the bushes.

Let me first tell you nobody wants to make money for you but many wants to take money out of your pocket. So whenever you listen to any advice from any member even from your own family think on the points how you can lose than how you can gain. since this will let you know the correct price to be paid to buy that Tiger.

So here I mean the first step is to pay correct price for buying a share of a company as per its valuations. The best way to do that is compare the share of 5 companies for there business prospects, management turnover, profits , and other factors like (Govt regulations, geographic prescense and so on).

1. Business :- It is very important to know the business you are buying and how the prospects of that business in your eyes are. What you observe in your day to day life. Since if a customer is no more using x product then it is no meaning buying the shares of that company at the lowest share price also since it will deppreciate its profits and wealth of investors slowly and steadily as it progresses with time.

2.Management:-
Secondly it is very important to know with whom you are going to run your company in terms of their understnading of the Business, their experience in delivering results rather than just speaking in projections and reports. Backgrownd of the promoter holder since these are the people who takes decisions for your business to progress and if they are faulty or without good intentions or inexperinced or effected by personal rivalry or no innovative attitude will steadily make their company decline along with the wrong decisions they take. So however good the business may be they will make losses due to the wrong business decisions executed. due to which you are also going to suffer.

3. Turnover: Thirdly it is important to know how big is the sales of the enterprise you are buying. In some cases if the turnover is small there is a risk of business falling apart due to un-controllable sequesces arising out of that area of business or client or changes in the market and also it is dangerous to buy very big business trunover where you don't see any way for it to increase further and also carries the risk of declining sales gradually due to cut throat competion and other factors.

4.Profits:- Profits is the most important factor for anybody to start a business so even after looking into all the above parameters your final objective should be to understand the profitability of a company or its business model. Since no company can withstand its efforts without gaining profits. Its something like a employee is working without salary which cannot continue for long. So find out how the companies profits are generated and how it can be effected positively or negatively due to the external factors in future.

Profits is one factor if you are able predict properly and your wealth making ability will be very high even if markets go down your share price will not.

Regulations, Geographic presense etc:-

Even though the regulations and the geographic effect on the business is litlle un-predictable it is always better to read and understand the history of the market they operate in since partly it can be repeated. Regulations are one thing due to which the businesses closed and companies wind up due to sudden changes in regulations could impact companies profits due to which they go in red or even some times close the operations of that busniess.

To give a little idea of the bussiness which can be looked for future even if the markets are high are
Power sector:-

Due to shortage of power the states will be compelled to buy the commodity at a high price as well and demand will never reduce by the way the usage is driven from local consumption. But this sector is highly volatile to govt regulations on pricing. Specially the renewable energy has good future since many countries wants to get tag of producing green energy to gain carbon credits. And the companies operating in this field which are better bet are Suzlon in renewable sources of power, Indiabulls Power for Power etc..

Technology:-

Even though this sector is at high valuations I would predict better future for this area of bussiness since no field or company can progress without the latest and advanced technology. And the public is ready to pay higher price for better comforts arising out of innovation and creativity. This will just drive the profits of this sector.

Will be regularly updating on more such opportunities do write in your feedback about your understanding of the above post.

Start Something New

Hi guys on this day I have started to blog since somebody gave a advice to share my thoughts , Views , Ideas and any other suggestions cropping in my mind. I found the Idea good so I accepted.

With a aim to share my life, experiences and other posts which may help you in your life I have taken oath to start and write on this blog.

So join me on Imad's Blog where you will find posts on daily life, city news and gupshup , views on political tamasha, financial advice, ideas on shares and other investments oh! let me first complete these promises..... then let's take your opinion.