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* The best way to succeed in life is to act on the advice we give to others…
* When was the last time you did something for the first time? The lesser this interval, the nearer you are to another success.
* For all your days prepare
And meet things ever alike
When you are the anvil, bear
When you are the hammer, strike
* No problem can withstand the power of sustained creative thought.
* There are no mistakes made in life, there are only lessons learnt.
* The greatest discovery of any generation is that a human being can alter his life by altering his attitude.
* Everyone thinks of changing the world, but no one thinks of changing himself.
* Be the change you want to see in this world.
* Determine never to be idle. It is wonderful how much may be done if we are always doing.
* 20 years from now you will be more disappointed by the things you didnt do than by the ones you did.
* Have confidence that if you have done a little thing well, you can do a bigger thing well too.
* Do what you know best, if you are a runner, run.. If you are a bell, ring.
* Worry is the misuse of imagination.
* Instead of thinking where you are, think about where you want to be. It takes 20 years of smart work to become an overnight success.
* When we put a limit on what we want to do, we also put a limit on what we can do.
* Either I will find a way or I will make one.
* Your day goes the way the corners of your mouth turn.
* We dont know who we are until we see what we can do.
* Dont go through life, grow through life.
* Its time to start living the life we have imagined.
* No matter what our age or condition is, there are still untapped potentials within us and new beauty waiting to be born.
* The only aging process is the erosion of dreams.
* Cherish your yesterdays, dream your tomorrows, but live your todays!
* Our self image and our habits go together. Change one and the other will be changed automatically.
* Make you life a mission, not an intermission.
* The world is what we think it is. If we can change our thoughts, we can change the world.
* What happens to a man is less significant than what happens within him.
* Nothing is good or bad, but it is our thinking which makes it so.
* Happiness is a present attitude, not a future condition.
* Believe that you have it, and you have it.
* The best way to succeed in life is to act on the advice we give to others…
* When was the last time you did something for the first time? The lesser this interval, the nearer you are to another success.
* For all your days prepare
And meet things ever alike
When you are the anvil, bear
When you are the hammer, strike
* No problem can withstand the power of sustained creative thought.
* There are no mistakes made in life, there are only lessons learnt.
* The greatest discovery of any generation is that a human being can alter his life by altering his attitude.
* Everyone thinks of changing the world, but no one thinks of changing himself.
* Be the change you want to see in this world.
* Determine never to be idle. It is wonderful how much may be done if we are always doing.
* 20 years from now you will be more disappointed by the things you didnt do than by the ones you did.
* Have confidence that if you have done a little thing well, you can do a bigger thing well too.
* Do what you know best, if you are a runner, run.. If you are a bell, ring.
* Worry is the misuse of imagination.
* Instead of thinking where you are, think about where you want to be. It takes 20 years of smart work to become an overnight success.
* When we put a limit on what we want to do, we also put a limit on what we can do.
* Either I will find a way or I will make one.
* Your day goes the way the corners of your mouth turn.
* We dont know who we are until we see what we can do.
* Dont go through life, grow through life.
* Its time to start living the life we have imagined.
* No matter what our age or condition is, there are still untapped potentials within us and new beauty waiting to be born.
* The only aging process is the erosion of dreams.
* Cherish your yesterdays, dream your tomorrows, but live your todays!
* Our self image and our habits go together. Change one and the other will be changed automatically.
* Make you life a mission, not an intermission.
* The world is what we think it is. If we can change our thoughts, we can change the world.
* What happens to a man is less significant than what happens within him.
* Nothing is good or bad, but it is our thinking which makes it so.
* Happiness is a present attitude, not a future condition.
* Believe that you have it, and you have it.
* Art of life is a constant readjustment to our surroundings.
* Thoughts lead to purpose, purposes to action, actions form habits, habits decide our character and character fixes our destiny.
* Failure is a temporary change in direction to set you straight towards the path of success.
* Nothing in life is to be feared, it is only to be understood.
* Tough times dont last, while tough people do.
* True success is overcoming the fear of being unsuccessful.
* Become addicted to constant and never-ending self improvement.
* How wonderful it is that nobody need wait a single moment before starting to improve the world.
* Those who are lifting the world upward and onward are those who encourage more than criticize.
* Use whatever talents you possess. The woods would be very silent if no birds sang, except those that sing best.
* If you cannot find peace within yourself, you will never find it anywhere.
* They can conquer who believe they can.
* You will rise by lifting others.
* Your mind will give back exactly what you put into it.
* The fault finder will find faults even in a paradise.
* The measure of life is not its duration, but its donation.
* Being happy is one of the ways of being wise.
* The positive thinker sees the invisible, feels the intangible, and achieves the impossible.
* We can accomplish many more if we did not think of them as impossible.
* Do a little more each day than you think you possibly can.
* There is no such thing as an insignificant improvement.
* The man with confidence in himself, gains the confidence of others.
* You will only go as far as you can think you can go.
* He whose face gives no light shall never become a star.
* The biggest mistake of all is to avoid situations in which you might make a mistake.
* It takes courage to grow up and turn out to be who you really are.
* Genius is the product of enthusiasm.
* Confidence in nonsense is requirement for the creative process.
* Optimists do not wait for improvement, they achieve it.
* We must always change, renew, rejuvenate ourselves, else we harden and weaken.
* Use the word “impossible” with great caution.
* Never discourage anyone, who continually makes progress, no matter how slow.
* Two men look out through the same bars, one sees the mud and one the stars.
* Trust your hopes, not your fears.
* Whether a glass is half-full or half-empty depends on the attitude of the person looking at it.
* There is a better way to do everything you do, find it.
* Be a believer first, to become an achiever.
* Things don’t turn up in this world, unless somebody turns them up.
* Promote yourself without demoting others.
* A positive attitude is not a destination, its a way of life.
* Above all, challenge yourself. You may well surprise yourself at what strengths you have, what you can accomplish.
* When you are though changing, you are though.
* Never trouble another for what you can do for yourself.
* You begin to achieve when you begin to believe.
* It is not the situation that matters, but your reaction to the situation.
* A man who has to be convinced before he acts, is not a man of action.
* Things turn out the best for the people who make the best of the way things turn out.
* Our aspirations are our possibilities.
* The difference between a successful person and others is not a lack of knowledge, but a lack of will.
* We cant direct the winds, but we can adjust the sails.
* If you really want to be happy, nobody can stop you.
* Life is a collection of experiments, the more experiments you make, the better.
* One cannot control the length of his life, but he can have something to say about its width and depth.
* Ability is what you are capable of doing. Motivation determines what you do. Attitude determines how well you do it.
* In the long run, a person hits at only what he aimed at.
* The way to overcome shyness is to become so wrapped up in something that you forget to be afraid.
* We are what we think we are. All that we are arises with our own thoughts. With our thoughts we make the world.
* Praise loudly, blame softly
* The poor man is not he who is without money, but he who is without a dream.
* There is only one corner if the universe you can be certain of improving, and thats your own self.
* Never put off till tomorrow what you can do today
* A problem is a chance for you to do your best
* The harder you fall, the higher you bounce
* Reputation is what people think you are…
Personality is what you seem to be….
Character is what you really are…..
* “Do not undermine your worth by comparing yourself with others. It is because we are different that each of us is special”.
* “Action may not always bring happiness,
But there is no happiness without action” -Benjamin Disraeli
* “Happiness is a choice that requires efforts at times”
* “The grand essentials of happiness are: something to do, something to love, and something to hope for” - Allan K. Chalmers
* “When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has opened for us. ” - Helen Keller
* “Go confidently in the direction of your dreams. Live the life you have imagined.” - Henry David Thoreau
* “Don’t let life discourage you; everyone who got where he is had to begin where he was” - Richard L. Evans
* “We can try to avoid making choices by doing nothing, but even that is a decision” - Gary Collins
* “Today’s beautiful moments are Tomorrow’s beautiful memories.”
* “There are no shortcuts to any place worth going.”
* “The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenges and controversy” - Martin Luther King Jr.
* “Life is the first gift, Love is the second and Understanding is the third”
* “Don’t grieve that your roses have thorns. Rejoice instead that your thorns have roses!”
* “Success is how high you bounce when you hit bottom”
* “Its not how you fall, but how you pick yourself up again”
* “The heights by great men reached and kept were not achieved by sudden flight, but they, while their companions slept, were toiling upwards in the night”
* “Love is true when it comes from the heart, not from the mouth” - Aristotle
* “To have joy one must share it. Happiness was born twin.” - Lord Byron
* “Success is not the result of a spontaneous combustion. You must first set yourself on fire” - Fred Shero
* “Do not set your goals by what other people deem important. Only you know what is best for you…”
* “He who dares wins”
* Laugh and the world laughs with you; cry and you cry alone. - Horace
* “Do not be afraid to give up the good to go for the great” - Kenny Rogers
* “There is no scarcity of opportunity to make a living at what you love; there is always a scarcity of resolve to make it happen.”- Wayne Dyer
* “For every minute you are angry, you lose 60 seconds of happiness.” - Ralph Waldo Emerson
* “Liars need good memories”
* “Life is the greatest bargain; we get it for nothing”
* “Between the great things that we cannot do and the small things that we do not do, we end up doing nothing. Little drops of water make a mighty ocean”
* “You learn swimming by swimming only. There is no shortcut for success”
* “Do not let life slip through your fingers by living in the past or by living for the future. By living your life one day at a time, you live all the days of your life”
* “I cried for boots until I saw a man who had no legs”
* “As a rule, Man is a fool
When it’s hot he wants it cool
When it’s cool he wants it hot
Always wanting what is not”
* “Life is a unique exam of its kind in the sense that we face the exams first and learn lessons later.”
* “Treat a person as he is and he remains as he is, treat the same person as he could be and he will become what he should be.”
* “A reasonable person is the one who adapts himself to the world. An un-reasonable person is the one who keeps trying to adapt the rest of the world to suit himself.”
* “God helps only those who help themselves.”
* “When you lose, do not lose the lesson.”
* “I love you not for whom you are, but for who I am when I am by your side.”
* “No person deserves your tears, and the one who deserves won’t make you cry.”
* “The worst way to miss someone is to be seated by his/her side and to know that you’ll never have him/her.”
* “Never stop smiling, not even when you are sad, someone might fall in love with your smile.”
* “You may only be a person in this world, but for someone, you’re the world.”
* “Don’t spend time with someone who doesn’t care spending it with you.”
* “May be GOD wants you to meet many wrong people before you meet the right one, so when this happens, you’ll be thankful.”
* “Don’t struggle so much, best things happen when unexpected.”
* “Do not give up when there is still something to give. Nothing is really over until the moment you stop trying. It is a fragile thread that binds us to each other.”
* “When everything is coming your way, you’re in the wrong lane.”
* “Look deep, deep into nature and then you will understand everything better” - Albert Einstein
* “Man is the only animal who eats even when he is not hungry”
* “Don’t live to eat, eat to live”
* “When the going gets tough, the tough get the going”
RIL AGM
Tuesday, September 23, 2008
Monday, September 22, 2008
Remember the following points when investing in the market:-
1)Sentiments change overnight as people are emotional.
2)If analysis really workd all the time market would have become very boring.They are interesting because we cannot predict human behaviour.
3)When you get information on a stock find out if market already knows it.Know your level ofinformation ladder.
4)Life is never fair.You may find incompetent people being highly successful.Dont feel bad,they are reaping the rewards of their past karma,lolz……
5)You cannot get investment opportunities everyday.5-6 of them in a quarter would be great.
6)Patience is always rewarded.The law of firm is applicable in walks of life.
7)Control your emotions.Do not follow the herd blindly.
8)You never miss the buss in the markets.If you have the money opportunities would always come.Preserve your money and don't forget "cash is the king".
9)Bear markets offer better investment opportunities than bull markets.
10)Avoid margin trading.You are only enriching your broker.Ask your margin trading friends how they are treated in the present market situation.
11)Derivatines are good hedging instruments.Unfortunately they are used as speculative instruments.They only enrich the intermediary at the expense of the investor.Avoid them.
2)If analysis really workd all the time market would have become very boring.They are interesting because we cannot predict human behaviour.
3)When you get information on a stock find out if market already knows it.Know your level ofinformation ladder.
4)Life is never fair.You may find incompetent people being highly successful.Dont feel bad,they are reaping the rewards of their past karma,lolz……
5)You cannot get investment opportunities everyday.5-6 of them in a quarter would be great.
6)Patience is always rewarded.The law of firm is applicable in walks of life.
7)Control your emotions.Do not follow the herd blindly.
8)You never miss the buss in the markets.If you have the money opportunities would always come.Preserve your money and don't forget "cash is the king".
9)Bear markets offer better investment opportunities than bull markets.
10)Avoid margin trading.You are only enriching your broker.Ask your margin trading friends how they are treated in the present market situation.
11)Derivatines are good hedging instruments.Unfortunately they are used as speculative instruments.They only enrich the intermediary at the expense of the investor.Avoid them.
Thursday, September 18, 2008
WHO WILL GO DOWN NEXT?
“Who is next?” That seems to be the biggest question and the reason for the extraordinary uncertainty prevailing in the world financial markets. Clearly the US Govt coming to the rescue of AIG did not help recoup the sentiments and the fear psychosis continued till the mid morning, after which the Asian markets and the Indian markets staged a recovery. For India, the Finance Minister coming out and assuring that India need not panic and going on record to state that Indian banks, especially the PSU banks had virtually no exposure to Lehman helped bolster the sentiments. Mr.Chidambaram stated that the Govt would be going ahead with its reform process and expected the Indian economy to grow at around 8%. Dalal Street felt assured and banking stocks were the first to recover.
Prior to this assurance from the Finance Minister, the moods remained despondent and all eyes were on developments unfolding in USA. The market has now learnt to read the signs and based on yesterday’s market data, it has emerged that Morgan Stanley was a major seller on Dalal Street. Morgan Stanley Mauritius Company, the company through which Morgan Stanley trades in India, executed block deals through P-Note transfers. It sold stocks worth Rs.871 crore. It sold 25.51 lakh shares of United Spirits at Rs.1,328 per share which was entirely purchased by Goldman Sachs. It sold 57.47 lakh shares of Pantaloon Retail at Rs 359 per share and this was purchased by Deutsche Securities Mauritius. It sold stocks of Educomp (5.32 lakh shares); Jindal saw (17.72 lakh shares); Subhash Projects (8.1 lakh shares) and all these were also purchased by Deutsche Securities Mauritius. It also sold Opto Circuits (7.53 lakh shares) to JF Eastern Smaller Companies Fund and Gujarat NRE Coke (18.31 lakh shares).
Morgan has totally invested Rs.11,200 crore in Indian stocks and this sell off yesterday, indicates that it has sold off around 8.5% of its total holdings. But the point to be noted here is that for every sale, there has been another FII buying, everyone is not just selling and running off. Doesn’t this mean that some well-to-do FIIs (a rare breed today!) are still favourably disposed towards India?
This is exactly what happened before Bear Stearns publicly announced that it was in irreversible trouble and ditto with Lehman too. These FIIs had started selling in bulk their holdings in the Indian markets, a few days before going bankrupt, trying to shore-up as much liquidity as possible. The name of Goldman Sachs also seems to keep popping up and keeping a close tab on the trades would indicate whether it too has started selling.
News on the street is that Morgan has sent out an SOS and is looking for a suitor. The one name which is coming in is of Wachovia, the fourth largest bank of USA.
Washington Mutual is also stated to be in trouble and JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co are expected to bid for parts of USA’s biggest savings and loan company. The perception on the street is that such deals which would help bail out troubled institutions would help revive some confidence back into the world markets.
The markets also started recovering on news that UK’s troubled bank – HBOS would be bailed out by Lloyds TBS for $22.2 billion. HBOS, based in Edinburgh is the largest provider of home loans in UK. There is some sense of belief that banks and institutions which could go phut, would be bought over and might not go the Lehman way. That is the only shred of optimism on the streets now. Plus of course the fact that all that is bad will happen in this week, we cannot go down any more. The big banks going bust would mean that smaller ones would also go down but this is probably the fag end of the entire sub-prime mortgage crisis.
From here, in a fortnight from now, Wall Street would never be the same and the entire world financial scene would have undergone a monumental change, liquidity pressure would be very high, and accessing capital would be a major issue and yet, with the markets being in such an oversold position, there would be smart short rallies once rebuilding starts.
Prior to this assurance from the Finance Minister, the moods remained despondent and all eyes were on developments unfolding in USA. The market has now learnt to read the signs and based on yesterday’s market data, it has emerged that Morgan Stanley was a major seller on Dalal Street. Morgan Stanley Mauritius Company, the company through which Morgan Stanley trades in India, executed block deals through P-Note transfers. It sold stocks worth Rs.871 crore. It sold 25.51 lakh shares of United Spirits at Rs.1,328 per share which was entirely purchased by Goldman Sachs. It sold 57.47 lakh shares of Pantaloon Retail at Rs 359 per share and this was purchased by Deutsche Securities Mauritius. It sold stocks of Educomp (5.32 lakh shares); Jindal saw (17.72 lakh shares); Subhash Projects (8.1 lakh shares) and all these were also purchased by Deutsche Securities Mauritius. It also sold Opto Circuits (7.53 lakh shares) to JF Eastern Smaller Companies Fund and Gujarat NRE Coke (18.31 lakh shares).
Morgan has totally invested Rs.11,200 crore in Indian stocks and this sell off yesterday, indicates that it has sold off around 8.5% of its total holdings. But the point to be noted here is that for every sale, there has been another FII buying, everyone is not just selling and running off. Doesn’t this mean that some well-to-do FIIs (a rare breed today!) are still favourably disposed towards India?
This is exactly what happened before Bear Stearns publicly announced that it was in irreversible trouble and ditto with Lehman too. These FIIs had started selling in bulk their holdings in the Indian markets, a few days before going bankrupt, trying to shore-up as much liquidity as possible. The name of Goldman Sachs also seems to keep popping up and keeping a close tab on the trades would indicate whether it too has started selling.
News on the street is that Morgan has sent out an SOS and is looking for a suitor. The one name which is coming in is of Wachovia, the fourth largest bank of USA.
Washington Mutual is also stated to be in trouble and JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co are expected to bid for parts of USA’s biggest savings and loan company. The perception on the street is that such deals which would help bail out troubled institutions would help revive some confidence back into the world markets.
The markets also started recovering on news that UK’s troubled bank – HBOS would be bailed out by Lloyds TBS for $22.2 billion. HBOS, based in Edinburgh is the largest provider of home loans in UK. There is some sense of belief that banks and institutions which could go phut, would be bought over and might not go the Lehman way. That is the only shred of optimism on the streets now. Plus of course the fact that all that is bad will happen in this week, we cannot go down any more. The big banks going bust would mean that smaller ones would also go down but this is probably the fag end of the entire sub-prime mortgage crisis.
From here, in a fortnight from now, Wall Street would never be the same and the entire world financial scene would have undergone a monumental change, liquidity pressure would be very high, and accessing capital would be a major issue and yet, with the markets being in such an oversold position, there would be smart short rallies once rebuilding starts.
Tuesday, September 16, 2008
Lehman brother holdings
Even before for impact of the write-off at Lehman had begun, the company, through its various Indian companies had started offloading its stocks. After all it wanted to garner as much funds as possible from all ends and given its exposure to India, it decided to offload its stakes here. This sell off was a clear indication was that the company was desperate to liquidate its assets and anything and everything worth anything was being sold.
Over the past few days, it has sold off its entire stake in Amtek Auto, Amtek India, Cranes Software International Fedders Lloyd Corporation, NIIT Ltd, Northgate Technologies, Mastek, Triveni Enineering and Prajay Engineers Syndicate. But what has been good news for India is that there have been buyers for every share it has sold. Its stake in Mastek and Triveni Engineering was purchased by Nalanda India Fund. It sold off its stake in Cranes Software, Fedders Lloyd and NIIT to Deutsche Securities Mauritius through block deals.
Though it managed to offload shares to the tune of almost Rs.175 crore over the past few days, it continues to hold stakes in some of the following companies:
Spice Communication – 1.33%
Spice Mobile – 4.41%
Edelweiss Capital – 1.80%
Dhampur Sugar – 4.32%
Emkay Global – 4.05%
Champagne Indane – 1.55%
Consolidated Construction Consortium – 1.36%
IOL Netcom – 3.60%
Tulip Telecom – 2.80%
Orbit Corporation – 4.82%
PSL Ltd – 2.30%
Pioneer Embroideries – 3.23%
Development Credit Bank – 3.04%
Anant Raj Industries – 1.82%
West Coast Paper Mills – 5.79%
IVRCL Infra – 1.20%
Over the past few days, it has sold off its entire stake in Amtek Auto, Amtek India, Cranes Software International Fedders Lloyd Corporation, NIIT Ltd, Northgate Technologies, Mastek, Triveni Enineering and Prajay Engineers Syndicate. But what has been good news for India is that there have been buyers for every share it has sold. Its stake in Mastek and Triveni Engineering was purchased by Nalanda India Fund. It sold off its stake in Cranes Software, Fedders Lloyd and NIIT to Deutsche Securities Mauritius through block deals.
Though it managed to offload shares to the tune of almost Rs.175 crore over the past few days, it continues to hold stakes in some of the following companies:
Spice Communication – 1.33%
Spice Mobile – 4.41%
Edelweiss Capital – 1.80%
Dhampur Sugar – 4.32%
Emkay Global – 4.05%
Champagne Indane – 1.55%
Consolidated Construction Consortium – 1.36%
IOL Netcom – 3.60%
Tulip Telecom – 2.80%
Orbit Corporation – 4.82%
PSL Ltd – 2.30%
Pioneer Embroideries – 3.23%
Development Credit Bank – 3.04%
Anant Raj Industries – 1.82%
West Coast Paper Mills – 5.79%
IVRCL Infra – 1.20%
Saturday, September 13, 2008
ASSET BUBBLE -EXPLANATION
THIS IS THE STORY BEHIND US CRISIS
Here's a very interesting anecdote that describes how an "asset bubble"
builds up and what are its consequences.
Read it even if it confuses you a bit...things will be clear as you reach the end....
ANCEDOTE -
Once there was a little island country. The land of this country was the
tiny island itself. The total money in circulation was 2 dollar as there
were only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B
and C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now each
own 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country and
land is non produceable asset, its value must definitely go up. So, he
borrowed 1 dollar from A and together with his own 1 dollar, he bought the
land from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,
his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regretted
selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar
from B and and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to
C.
As a result, A now owned a piece of land that is worth 3 dollar. But since
he owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the
land. So he bought the land from A for 4 dollar. The payment is by borrowing
2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His net
asset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2
dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has only
one piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,
what if the land price stop going up, how could B repay my loan. There is
only 2 dollar in circulation, I think after all the land that B owns is
worth at most 1 dollar only."
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar
coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned
which he thought worth 4 dollar is now 1 dollar. His net asset become -1
dollar.
C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset
is still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country ?
Of course, before the bubble burst B thought his land worth 4 dollar.
Actually, right before the collapse, the net asset of the country was 6
dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2
dollar bad debt to B but in return he acquired the land which is worth 1
dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset
is 0 dollar. ( B lost everything ) C got no choice but end up with a land
worth only 1 dollar (C lost one dollar) The net asset of the country = 3
dollar.
************ ****End of the story******* ********* ********* **
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to one
another is also building up.
(2) This story of the island is a close system whereby there is no other
country and hence no foreign debt. The worth of the asset can only be
calculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning the
land's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows
having the land or extending loan to others are the loser. The asset could
shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece
of land but refrain to take part in the game. At the end of the day, he will
neither win nor lose. But he will see the value of his money or land go up
and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is
worthwhile to borrow money (like A ) and take part in the game. But you must
know when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Here's a very interesting anecdote that describes how an "asset bubble"
builds up and what are its consequences.
Read it even if it confuses you a bit...things will be clear as you reach the end....
ANCEDOTE -
Once there was a little island country. The land of this country was the
tiny island itself. The total money in circulation was 2 dollar as there
were only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B
and C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now each
own 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country and
land is non produceable asset, its value must definitely go up. So, he
borrowed 1 dollar from A and together with his own 1 dollar, he bought the
land from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,
his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regretted
selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar
from B and and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to
C.
As a result, A now owned a piece of land that is worth 3 dollar. But since
he owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the
land. So he bought the land from A for 4 dollar. The payment is by borrowing
2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His net
asset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2
dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has only
one piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,
what if the land price stop going up, how could B repay my loan. There is
only 2 dollar in circulation, I think after all the land that B owns is
worth at most 1 dollar only."
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar
coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned
which he thought worth 4 dollar is now 1 dollar. His net asset become -1
dollar.
C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset
is still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country ?
Of course, before the bubble burst B thought his land worth 4 dollar.
Actually, right before the collapse, the net asset of the country was 6
dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2
dollar bad debt to B but in return he acquired the land which is worth 1
dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset
is 0 dollar. ( B lost everything ) C got no choice but end up with a land
worth only 1 dollar (C lost one dollar) The net asset of the country = 3
dollar.
************ ****End of the story******* ********* ********* **
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to one
another is also building up.
(2) This story of the island is a close system whereby there is no other
country and hence no foreign debt. The worth of the asset can only be
calculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning the
land's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows
having the land or extending loan to others are the loser. The asset could
shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece
of land but refrain to take part in the game. At the end of the day, he will
neither win nor lose. But he will see the value of his money or land go up
and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is
worthwhile to borrow money (like A ) and take part in the game. But you must
know when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Wednesday, September 3, 2008
RIL – RNRL GAS DISPUTE – BROTHERS-IN-ARMS
Reliance Industries Ltd. (RIL) K. G. Basin gas supply dispute with Reliance Natural Resources Ltd. (RNRL) being heard by a Division Bench in Bombay High Court, took a new turn, when one of the judge on the Bench, Justice Mr. J. N. Patel, asked, why the brothers in dispute could not approach their mother Mrs. Kokilaben Ambani to settle dispute, as the dispute over gas supply between the two corporate entities is one that might affect the economy.
In reply to this, Mr. Ram Jethamalani, counsel for RNRL said, Mr. Anil Ambani was ready to meet his elder brother “any time any place” in reply to which counsel for Mukesh Ambani controlled RIL, Mr. Milind Sathe, said the request would be conveyed to his client and that he would have to revert on the matter.
In a similar effort, Justice A V Mohta, while passing its 151 page order on 15th October 07, had asked RIL and RNRL to renegotiate the gas supply pact, as earlier agreement of 12th January 2006, which is being disputed now by RNRL in the court, being prejudicial to its interest and referred as Gas Supply Master Agreement (GSMA), was against the Ambani Family Settlement. Justice Mohta gave both parties, four months to renegotiate the deal and restrained RIL to enter into gas supply deal with a third party, till the period is over. Justice Mohta, also upheld the validity of the Ambani Family Settlement, that divided the Reliance Group between both the brothers.
However, both the brothers were unable to reach on any settlement and the matter came again to Bombay High Court in the middle of February 2008, for hearing and final settlement.
In last 15 days, lawyers of both the sides have argued the matter and RIL counsel has referred the family settlement of 18th June 2005 as a “ghost agreement” which is not binding on RIL. However, RNRL counsel has relied on “Doctrine of Identification” and said that if Mukesh Ambani knows the agreement, the entire company knows about it and this principle is well recognized by the Indian Courts as well. He even said that Mukesh Ambani should be criminally prosecuted for breach of trust and forgery and RIL should be asked to fork out $ 17 billion in cash, if it fails to honour its commitment to supply gas to RNRL. He has also agreed that RNRL would not be trading in gas, if it is received from RIL, inspite of their Dadri Power Plant is not ready for operations. Trading in gas was otherwise also prohibited in the settlement.
Strangely, the stand of RNRL seems to have softened on 21st August, in Bombay High Court where they have seen taking varying and contradictory stands in the matter. Firstly, RNRL asked that they should be permitted to trade in gas for three years and after that it can be used for its own power plants. Secondly, they said, Anil Ambani is prepared to sit alone with Mukesh Ambani and with Kokilaben Ambani alongwith Industry Experts or Judiciary to settle the matter. Thirdly, they have also stated that they are prepared to share the cost of gas exploration with RIL. Fourthly, they said that they could not get ready with its plants for lack of bankable gas sales purchase agreement with RIL. Lastly, the counsel of RNRL also objected strongly to the stand of government counsel that RIL – NTPC is not having a concluded agreement and said that government is taking side of RIL, instead of PSU NTPC. This is inspite of the fact that, RNRL is supposed to get 12 mmscmd of additional gas from RIL, if RIL – NTPC contract falls.
In the recent political development, it was felt that ADAG would be having an advantage in getting various matters settled in its favour. However, failure to join with MTN by R-Com has been seen as a big defeat of ADAG and now it is said that Samajwadi Party, which was perceived to be close to ADAG is not showing much eagerness to favour ADAG by displeasing the RIL group. This has probably lead to a change in stance of RNRL in the court, inspite of the fact that single judge bench has upheld the family settlement and has also restrained RIL from entering into third party gas supply agreements.
One may also conclude that the judgement of the Ambani’s mother seems to carry more weight than the judiciary and even the judiciary has to knock the door of motherhood to get a judgement in the matter for which they are unable to decide.
With the gas production expected from K G Basin by October 08, it has become utmost essential to settle the matter in the larger interests of the country including fertiliser and power plants and millions of households those who would be using the K G Basin Gas. Even, this would bring down our dependency on imported crude and gas and would improve our self-reliance on gas production. To remind, K G Basin is capable to produce equivalent quantity of gas now being produced in the entire country, which is about 90 mmscmd.
Matter has now been adjourned to 1st September by Bombay High Court but it looks difficult that by that time, both the brothers would have been to amicably settle this dispute. Maybe, intervention of mother and miracle of spiritual guru, who had earlier helped in settling matters, may help yet again this time.
But one may say that RNRL seems to be losing its legal grip on the matter, which is now going more in favour of RIL.
In reply to this, Mr. Ram Jethamalani, counsel for RNRL said, Mr. Anil Ambani was ready to meet his elder brother “any time any place” in reply to which counsel for Mukesh Ambani controlled RIL, Mr. Milind Sathe, said the request would be conveyed to his client and that he would have to revert on the matter.
In a similar effort, Justice A V Mohta, while passing its 151 page order on 15th October 07, had asked RIL and RNRL to renegotiate the gas supply pact, as earlier agreement of 12th January 2006, which is being disputed now by RNRL in the court, being prejudicial to its interest and referred as Gas Supply Master Agreement (GSMA), was against the Ambani Family Settlement. Justice Mohta gave both parties, four months to renegotiate the deal and restrained RIL to enter into gas supply deal with a third party, till the period is over. Justice Mohta, also upheld the validity of the Ambani Family Settlement, that divided the Reliance Group between both the brothers.
However, both the brothers were unable to reach on any settlement and the matter came again to Bombay High Court in the middle of February 2008, for hearing and final settlement.
In last 15 days, lawyers of both the sides have argued the matter and RIL counsel has referred the family settlement of 18th June 2005 as a “ghost agreement” which is not binding on RIL. However, RNRL counsel has relied on “Doctrine of Identification” and said that if Mukesh Ambani knows the agreement, the entire company knows about it and this principle is well recognized by the Indian Courts as well. He even said that Mukesh Ambani should be criminally prosecuted for breach of trust and forgery and RIL should be asked to fork out $ 17 billion in cash, if it fails to honour its commitment to supply gas to RNRL. He has also agreed that RNRL would not be trading in gas, if it is received from RIL, inspite of their Dadri Power Plant is not ready for operations. Trading in gas was otherwise also prohibited in the settlement.
Strangely, the stand of RNRL seems to have softened on 21st August, in Bombay High Court where they have seen taking varying and contradictory stands in the matter. Firstly, RNRL asked that they should be permitted to trade in gas for three years and after that it can be used for its own power plants. Secondly, they said, Anil Ambani is prepared to sit alone with Mukesh Ambani and with Kokilaben Ambani alongwith Industry Experts or Judiciary to settle the matter. Thirdly, they have also stated that they are prepared to share the cost of gas exploration with RIL. Fourthly, they said that they could not get ready with its plants for lack of bankable gas sales purchase agreement with RIL. Lastly, the counsel of RNRL also objected strongly to the stand of government counsel that RIL – NTPC is not having a concluded agreement and said that government is taking side of RIL, instead of PSU NTPC. This is inspite of the fact that, RNRL is supposed to get 12 mmscmd of additional gas from RIL, if RIL – NTPC contract falls.
In the recent political development, it was felt that ADAG would be having an advantage in getting various matters settled in its favour. However, failure to join with MTN by R-Com has been seen as a big defeat of ADAG and now it is said that Samajwadi Party, which was perceived to be close to ADAG is not showing much eagerness to favour ADAG by displeasing the RIL group. This has probably lead to a change in stance of RNRL in the court, inspite of the fact that single judge bench has upheld the family settlement and has also restrained RIL from entering into third party gas supply agreements.
One may also conclude that the judgement of the Ambani’s mother seems to carry more weight than the judiciary and even the judiciary has to knock the door of motherhood to get a judgement in the matter for which they are unable to decide.
With the gas production expected from K G Basin by October 08, it has become utmost essential to settle the matter in the larger interests of the country including fertiliser and power plants and millions of households those who would be using the K G Basin Gas. Even, this would bring down our dependency on imported crude and gas and would improve our self-reliance on gas production. To remind, K G Basin is capable to produce equivalent quantity of gas now being produced in the entire country, which is about 90 mmscmd.
Matter has now been adjourned to 1st September by Bombay High Court but it looks difficult that by that time, both the brothers would have been to amicably settle this dispute. Maybe, intervention of mother and miracle of spiritual guru, who had earlier helped in settling matters, may help yet again this time.
But one may say that RNRL seems to be losing its legal grip on the matter, which is now going more in favour of RIL.
THE POLITICS OF POWER, NOT A “NANO” ISSUE
Dark clouds of gloom seem to be looming large over the state of West Bengal. Making use of a situation for political mileage is what politics is all about but putting the entire future of the state in jeopardy, tarnishing its reputation beyond repair, taking the progress of the state back by over four decades, would all this come under “political gain”?
Trinamool Congress chief, Mamta Banerjee, is using the Tata Motors Singur project to garner the votes which the Left in West Bengal is fast losing. By “fighting” for the cause of the farmers and the tribals, Mamta Banerjee is trying to regain her foothold back into power, securing a place for herself when the assembly elections come calling soon. For her, this is a great political card to play but for the state, it is a huge loss of face.
Ratan Tata has threatened to pull out of Singur if the situation continues as it does right now. And despite having invested around Rs.1,500 crore in the project, these are not empty threats. Ratan Tata has earlier proven that he means what he says- he pulled out of the airport project with Singapore Airlines in Bangalore and that also was a hi-profile project. Here the capital investment is substantial, yet how can employees go to work everyday under police protection?
The Tata’s are one of the most credible industrial houses of India. If they today pull out of the West Bengal, what would then be the fate of the others? If Tata does pull out, it would be a big blow to West Bengal. In the era of Subodh Banerjee, labour unrest and strikes had become so rampant that industries moved out of the state and since then, West Bengal is amongst the least favoured states for investment and not surprisingly, is also amongst the least “industrialized” states in India, with very high unemployment. Its agricultural output has gone up substantial yet that is not enough to provide employment and progress. Tata Motors Nano project was set to change this entire perception and the general feeling was if Tata’s can put up shop there, why can’t we? The completion of this project would have marked a return of West Bengal into being the industrial hub it was in the earlier days. But this entire episode has blighted the reputation of the state all over again and people are now questioning what made Ratan Tata decide on West Bengal at all?
The current government led by Buddhadeb Bhattacharjee has realised its folly and has been welcoming one and all with open arms. Industrialisation has been number one on its agenda. But this spearheading of Mamta Banerjee has left the Left looking “anti farmer” and it is on this that Mamta is hoping to win her elections.
Mamta might win but for the state and for entire India, this would be a big loss. The disparity in state wise growth will now only widen. There is no way in which Tata would be able to deliver the Nano as promised by Diwali. Tata captured the imagination of the entire world and globally, people had started thinking that India would soon become the automotive hub of the world. Yes, world over, there is an ongoing battle between industrialization and farmers land being used for this purpose. But here, right now, things have turned ugly.
The other states are now all urging Ratan Tata to relocate to their state. All have promised the red carpet treatment. Maharashtra was the first state to welcome Ratan Tata but then, even in Maharashtra, where will the 1,000 acres of land come from? If West Bengal has a Mamta Banerjee, we have a Narayan Rane too.
When politics seeps into industry, the signs are not healthy. And right now, it seems to have permeated like gangrene all over. The affected part would have to be amputated but hopefully, the politics is amputated and not the industry. Or else, death is certain.
Trinamool Congress chief, Mamta Banerjee, is using the Tata Motors Singur project to garner the votes which the Left in West Bengal is fast losing. By “fighting” for the cause of the farmers and the tribals, Mamta Banerjee is trying to regain her foothold back into power, securing a place for herself when the assembly elections come calling soon. For her, this is a great political card to play but for the state, it is a huge loss of face.
Ratan Tata has threatened to pull out of Singur if the situation continues as it does right now. And despite having invested around Rs.1,500 crore in the project, these are not empty threats. Ratan Tata has earlier proven that he means what he says- he pulled out of the airport project with Singapore Airlines in Bangalore and that also was a hi-profile project. Here the capital investment is substantial, yet how can employees go to work everyday under police protection?
The Tata’s are one of the most credible industrial houses of India. If they today pull out of the West Bengal, what would then be the fate of the others? If Tata does pull out, it would be a big blow to West Bengal. In the era of Subodh Banerjee, labour unrest and strikes had become so rampant that industries moved out of the state and since then, West Bengal is amongst the least favoured states for investment and not surprisingly, is also amongst the least “industrialized” states in India, with very high unemployment. Its agricultural output has gone up substantial yet that is not enough to provide employment and progress. Tata Motors Nano project was set to change this entire perception and the general feeling was if Tata’s can put up shop there, why can’t we? The completion of this project would have marked a return of West Bengal into being the industrial hub it was in the earlier days. But this entire episode has blighted the reputation of the state all over again and people are now questioning what made Ratan Tata decide on West Bengal at all?
The current government led by Buddhadeb Bhattacharjee has realised its folly and has been welcoming one and all with open arms. Industrialisation has been number one on its agenda. But this spearheading of Mamta Banerjee has left the Left looking “anti farmer” and it is on this that Mamta is hoping to win her elections.
Mamta might win but for the state and for entire India, this would be a big loss. The disparity in state wise growth will now only widen. There is no way in which Tata would be able to deliver the Nano as promised by Diwali. Tata captured the imagination of the entire world and globally, people had started thinking that India would soon become the automotive hub of the world. Yes, world over, there is an ongoing battle between industrialization and farmers land being used for this purpose. But here, right now, things have turned ugly.
The other states are now all urging Ratan Tata to relocate to their state. All have promised the red carpet treatment. Maharashtra was the first state to welcome Ratan Tata but then, even in Maharashtra, where will the 1,000 acres of land come from? If West Bengal has a Mamta Banerjee, we have a Narayan Rane too.
When politics seeps into industry, the signs are not healthy. And right now, it seems to have permeated like gangrene all over. The affected part would have to be amputated but hopefully, the politics is amputated and not the industry. Or else, death is certain.
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