Wednesday, April 27, 2011

This time it's different - Is it Gold this time?

“Our research makes clear that to achieve true diversification an allocation to an outright position in gold provides benefits that cannot be replicated simply by investing in a wider commodities basket,” says Juan Carlos Artigas, investment research manager at the World Gold Council (WGC). “Gold should be viewed as a separate, distinct asset class, and a foundation to a well diversified investment portfolio,” Artigas says.
Well, I do not know much about future price of anything. It is impossible for me to predict the future, except that I know what date it will be tomorrow or even the day after or the next week or the next year.
However, what I know is a little bit of history and what some sages have said in the past.
The statements mentioned in the first paragraph remind me of the words of the investment sage, Sir John Templeton. He said, "The four most dangerous words in investing are: 'this time it's different.'"
The exact words are not used above, but they sound quite like, "This time it’s different.”

Friday, April 15, 2011

Cricket World Cup semi-final at Mohali

For many, it was surprising to see Sonia Gandhi and Rahul Gandhi going into the crowd during the Cricket World Cup Semi-Final at Mohali. Well, it definitely was for me. We are not used to seeing our precious national assets – our politicians – exposed to such a massive risk of going out in the open. 

Were they not afraid of a terrorist attack? Or like the theme of DLF IPL ads, “sara India bandh hoga”, did the terrorists also took an off day to watch the India – Pakistan cricket match? Well, that also raises another trivial question. If he terrorists had taken an off day, did the politicians know about it? Did our intelligence know about it?

Let us come back to the main point.

Were Rahul Gandhi and Sonia Gandhi not afraid of terrorist attacks or by anyone else? If one goes by the newspaper reports or what the friends present at Mohali shared, Chandigarh and Mohali had turned into forts. There were massive security arrangements – almost warlike. It is this arrangement that brought out the bravery in the Gandhis and they could easily roam around among public. 

As a citizen of this country, I wonder if such security can be replicated for the country. Is it possible that all the citizens of this country roam around within their own country without worrying about their lives? Someone may argue that it is the humongous BCCI with its vast financial resources that such a security arrangement was possible. I think the Indian Government Budget could be larger than BCCI budget. If not, the Government would be better off collecting taxes from cricket games. 

Someone said, it was not BCCI or the ICC that paid for the security, but it was the Home Department of the Government that took the tab. Wow, I would love to be ICC. Here is one of the richest sports’ bodies organising an event, where the Government mobilises massive security arrangement to ensure success of the event and tax on the ICC’s income is waived by the same Government. 

What is happening? Is this a case of siphoning of funds? In order to understand the meaning of siphoning of funds, I looked up various resources. The meaning of this phrase was explained very well in one of RBI’s circulars regarding “wilful defaulters and action thereagainst”. The same is reproduced below:
Siphoning of funds, referred to at para 3(c) above, should be construed to occur if any funds borrowed from banks / FIs are utilised for purposes un-related to the operations of the borrower, to the detriment of the financial health of the entity or of the lender. The decision as to whether a particular instance amounts to siphoning of funds would have to be a judgement of the lenders based on objective facts and circumstances of the case.

As can be seen from this definition, the Government money is meant to provide certain basic facilities to the citizens, including security. If the money is spent on security cover for a cricket match, what should it be called? 

Can a Chandigarh be repeated for the whole country? I hope the answer is yes – not just in context of the article, but also in another matter – Chandigarh is an organised city.

N.B.: Chandigarh and Mohali turned into forts with tight security arrangements and avoided any attack from anyone. In Mumbai, there is an area called “Fort”, which could be easily attacked by a handful of terrorists. Is this what they call irony?

Spitting on Mumbai roads

News in Times of India, Mumbai edition today: “Road-naming tops our corporators’ wish-list”. Are people expressing their anger when they spit on the roads?