And they call it Freedom

The Indian constitution has listed seven rights, one of which is right to freedom. Although I am against the idea of democracy altogether, but for the time being I will not talk about it. I will just like to write about the Right to Freedom which is a fundermental right of citizens of India.

By definition:
Right to freedom includes freedom of speech and expression, assembly, association or union or cooperatives, movement, residence, and right to practice any profession or occupation (some of these rights are subject to security of the State, friendly relations with foreign countries, public order, decency or morality), right to life and liberty, right to education, protection in respect to conviction in offences and protection against arrest and detention in certain cases.

First of all, I find the definition flawed in itself. I don't think anyone has the authority to grant freedom to someone else. Now, even if you grant a right to freedom, there can be no exception to it. Freedom doesnot come with any chains or chuches. It is absolute. Freedom is the independence to do anything one wishes, whatever be the consequences. Obviously, absolute freedom can be disastrous because world is full of psychopaths and anti-social elements. But this doesnot changes the definition of freedom. If you grant freedom to someone, you can't put conditions on it. Freedom, if not absolute, cannot be called freedom. It can be anything but it.

So now, even if you can't grant unquestioning freedom, atleast fulfill what you claim to grant. You say one has freedom of speech provided it doesnot infringe the National security. But then you ban individuals from Social Media sites like Twitter and Facebook for instance. You ban people from protesting peacefully. Again, not that I care too much about the protests as they almost all go in
vain and are fruitless means of fulfilling ones demands. But even then, if one wishes to protest and feels that by protesting and rallying like this, he will get what he wants, then why block him. Why is he locked behind the bars for a peaceful procession. Aren't they trespassing the rights they have granted themselves?

Right to freedom cannot be granted by anyone. No one has the authority to grant this particular right to anyone else. Be it the government or parents. One is born with it and if it is compromised in any sense then one must fight till he dies for it. Because if you are not free, then life is worthless.


My inspiration for writing this article is the song 'Aazaadiyaan' from the movie Udaan.

I - FREE

In continuation of the previous article I talked about different dimensions of independence. Now I'd proceed further with the concept of financial independence which I consider to be the most important from the perspective of an individuals ego. 
Financial independence is the ability to live a healthy life fulfilled with the basic necessities without any financial help from any other human being or institution. 
I always find it acceptable and rather valid, the comparison of human beings with jungle animals. I find plausible the similarities between the two. The animals take care of their young ones, teach them to earn their food and the art of sustainability during their early ages. In the same was a human being is taught, throughout his childhood and adolescence to try becoming capable of earning a living and sustaining in this world. However after a certain age, when the young ones are able enough, the adult animals leave them to sustain on their own. 
My motive of showing such a contrast might be clear. If not, let me help you. Human beings are also animal-like in most respects. So, if one fine day, when an adult animal sets free the young one, isn't it possible and also natural for human beings to follow suite. Is it not the way human are meant to live. 
Well, what i am describing here might be unorthodox and not many will like my idea, I know. People will argue about man being a social animal. Social, i am unable to understand it enough. 
The point I want to state is- Once an individual starts earning, he/she should start preparing to be financially independent. From the day he/she earns their first wage/profit, they should begin their journey towards independence. If the goal is not reached by the time you retire(if at all you wish to retire ever) then alas, you have never achieved this one kind of independence ever. But, again I'd like to say what I had already said earlier (in my last article): During the process of being financially independent, one must not forget his duties and responsibilities. 
I'd further discuss about the same in my next article where I'd talk about real life practices to be followed to achieve this goal- Financial Independence-the most important one for an individual's ego.        

Independence

This article has been written keeping in mind the retired individuals. I am going to discuss a different dimention of independence and not the usual kind of independence as we have always perceived it to be. Independence is the most importance criteria of an individuals existence. I have always beleived in independent living and I think most of us do. But what is independence is what we fail to define. Some say we are independent because India is no longer ruled by Britishers while others have a completly different conception of independence where they live in jungles independent of any other human being's intervention. Well, my definition of independence is rather closer to the latter's conception of independence than former's.
Independence to me is the capablity of an individual to live without the help of another individual in any from what so ever. Here I'd like to further explain that help from others is different from the exchange or trade of values or materials such that both the parties benefit. Help is done without selfish motive but trade is done for mutual benefit. So being independent essentially means that you are not helped by others but trade and exchange of benefits is taking place for mutual benefit. Independence is not limited to Financial independence but has more parameters as Emotional, Social and Spiritual. I'd explain these in my next articles.
Being independent means to be ready to face the worst nightmares alone. It means to have the confidence and capability to live independently without any other human beings intervention. The point I want to state here is that if there comes a day when an individual has no family, no friend to give him a shoulder, he should not be heart-broken, instead he should prepare himself, everyday of his life for such an eventuality. He should always be ready for the day when everyone else would relinquish him and he has to live all by himself. He shuold prepare himself for the day when he need not depend on any other individual for his existence. When that day is achieved, I'll say that he has achieved independence.
But there is another side of it that I'd like to point out. In the process of being independent, one must not relinquis his duties and responsiblities rather he himself must help others dependent on him to attain independence. I'd restate that independence is the most important criteria of one's existence and should not be compromised at any cost.

Prepare your own Retirement Plan

The retirement planning industry is starting to get matured in India or well it has already matured enough with the presence of more than 10 players which offer umpteen products related to retirement planning or pension funds. What surprises me is that how did an industry flourish in a field where none is needed. Yes, precisely none is needed. 

Before getting into the details I would first like to brief about the functioning of these funds:

You pay monthly installments for years till you retire and after retirement they pay back the money. There are two modes of payments offered: 

1) They pay a lump-sum amount after your retirement or 

2) They pay small amounts till you die depending upon the terms and conditions.

The main reason I am writing this article is to make you aware that the preposterous funds like pension and retirement planning funds are not required and unnecessary. Are not we self-sufficient in planning for our own retirement. How can some third person plan for our retirement better than ourselves.

Keeping apart the theoretical part, lets move on to the practical application.
I'll show you how these funds are not actually more profitable then a Fixed Deposit.
Let me explain with the help of a real life example:

There is a fund which asks for 4K/month till your retirement and pays back 1Crore at the time of your retirement. So for investing in this fund for 40 years, you'll have invested approx. 20 lakhs and will get 1Crore in return. Well, looks fair enough. Isn't it?    

Lets check it out: 

Investing 4K/month @ 10%/annum for 40 years compounded annually will give you: 

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2Crore 68Lakhs 31Thousand 8Hundred and ninety rupees.

So in fact you loose more than 1 Crore rupees.

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This was an ideal scenario which never exists. Taking a practical scenario:

Investing 4K/month @ 10%/annum for 32 years compounded annually will give you:

1Crore 2Lakhs 6Thousand 8hundred and 88 rupees.

You lose more than 2Lakhs.
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I have taken the interest as compounded annually but actually it is compounded quarterly. So the interest amount will be further more. Also most of the time the rate of interest offered in not 10% but around 9.75%. So the effect will be negated. But the facts and figures are before you. 

Further there are other risks related to investing in such schemes and until we read the offer document completely and miss out few important clauses, these risks will persist. Some of these funds have market based risks which can never be eliminated. And after all aren't we smart enough to plan for our own retirement.

Equity investments and trading

Introduction

The primary reason people enter into equity trading is because of its potential to offer huge returns and rewards. Even I was drawn into it for the same reason. It looks all shiny and glittery. But all this shine and glitter comes at a cost known as RISK. Most of the time traders (and not investors) enter market with a short term perspective which has enormous risks associated with it. The only way to avoid or at least marginalize the risk is to research exhaustively and play it smart.

My experience

I am a novice to first-hand equity investing, having just six months of experience but I have been following the stock markets and some specific stocks since the last four to five years. I slowly started to develop my knowledge and expertise in this field by reading newspaper (Economic Times and Financial Express) and books (CFA course material) and of course the internet which is undoubtedly the most informative source.

My strategy

I am a kind of trader who believes in inter-day and medium-term investments and very rarely will I involve in intraday trade. Here are some strategies I apply :

1) Look out for undervalued shares (Value Investing):

Sometimes the markets are not efficient in itself and a stock may be undervalued by the market. So I try to find out such undervalued stocks by looking at the past one year graphs and financial ratios. The information is easily available on hdfcsec.com and others other websites. The comparison of last one year price range and current price of the stock provides valuable information about it. It can be interpreted differently by different people, however while interpreting one must take note of the prevailing market conditions corresponding to the particular value of stock at that time. Eg. When the market (Sensex or Nifty) is at its years highest point and a stock of ABC company is trading at its years lowest levels then there is a possibility that the stock is undervalued.

2) Look out for news and announcements

Reading newspaper and online news reports can provide important information about a company's operations. Lookout for news of mergers and acquisitions, about commissioning of new production facility set-up and other important developments. Now in this respect one must keep in mind that not every merger/acquisition will result in a positive return or increase in price of stock. Here I'd like to share an experience with you. Once, around two years ago, I read in The Economic Times that SAIL is going to set up some new plants in tho locations and the profits are expected to rise etc. etc... The very same day I bought its shares at 220/share. And today the price is howering at 80/share. So this means I had not researched properly about the stock and had invested in vain and had to pay the price.

3)Comparing financial ratios of company with other competitors

Financial ratios of a company like Leverage ratios, solvency ratios etc. are very useful in determining the position of a company and ability to pay debts. Comparing these ratios and other financial statements like balance sheets, profit-loss statements with other peers can help in taking a smart decision for investing in a stock. However, studying and understanding these ratios require some patience but I assure you that once you start understanding them, it will be very useful.

4) Insider information

Insider information is the information provided by some management level employee of a company. It may be about a news about a new deal or merger or takeover of some other company and has not yet been made public. Obtaining such information is very difficult but if obtained from some reliable source, believe me, it can work wonders.

5) Future prospects and expectations from the company

Expectations about sales growth and global scenario. Foresight about how the sales of the company are going to be affected can be helpful.

Conclusion

Trading in equity is considered in of the riskiest business but also it is the business which can bring you from rags to riches in the matter of months (if not days). The strategies followed by any investor cannot be fool proof and should be subjected to continuous evolution. Net theories and practices should be developed, iterated and reiterated. Older theories which have proven wrong should be discarded or modified according to individuals discretion. There is no thumb-rule which can be applied to equity trading for booking profits. Portfolio should be built in such a way such that the risk is minimized and profit maximized. Cheers !!!

Should India Inc. be apprehensive about a Double - dip yet?

Not much seems to be going right at the moment for India Inc. as such. Be it the value of rupee against dollar or the industrial production growth rate. The stock-market seems to be taking a dive, although the slope doesn't seems to be as steep as the last one. Among this tumult we find the government passing The Food Security Bill amidst the tight fiscal situation. We have news about EU nations on the verge of default which further aggravates the condition. The interest rates are doing no good to the economy than the inflation. Everyone seems to have tightened their fists at the moment, be it the governments or corporates.

I believe this is what should not be happening in the economy. Cutting the costs and spending will exacerbate the situation and will lead to the development of a vicious cycle which might further lead to a double-dip indeed. The market already seems to have stagnated due to the above mentioned reasons and now if we cut the costs/spending then cash will be further sucked out from circulation. The market needs to be eased  by adding surpluses to increase liquidity which can be achieved by lowering the interest rates. Although this might hamper the inflation a bit but in the long run it would be advantageous, I believe. Radical measures should be taken by the government and industries as well to regain the lost faith of investors (both local and foreign). There is light at the end of the tunnel, but length of the tunnel cannot be estimated as yet.
 

First Day at Polaris Software Lab . Hyderabad

Today was my first day of the job at Polaris in Hydearabad. We(my friends of college and myself) are provided temporary residance in a company Guest -house for 15 days.
A cab has been arranged for us to pick us up from the guest house to the company location. In the morning at eight a cab (more precisely a Maruti Alto) picked us up for a small ten minutes drive to the office building. So we reached the company office building more called "The Capital". "The Capital" is a five storie tall and is spread over an area of about 20-25 thousand sq. feet. It is situated between a number of skyscrapers of companies like Microsoft, ICICI, Wipro etc. which makes it look small. But the architecture of our building is, i must admit, much better than any of those.
We were provided visitors' pass to enter the building as it was our first day and hence the enployee pass were not yet ready. The loddy of building was beautifully designed and also had a small indoor garden which accentuated its beauty.
After waiting for a few minutes in the lobby, we were led to a conference room for the commencement of the indduction program. The room was trepizoidal shaped and could accomodate about 30 people at a time. Here we were provided with a joining kit (which had a number of forms to be filled-up and signed), a diary and a heavy -duty book called the Polaris Language Book. So after filling-up the forms we headed for lunch at the cafeterium. Well, the building has in all 3 cafeteria which serve various types of veg-biryanis and few chinese dishes, but then again the rates were nominal.
After lunch it was time for the second half of the day. Two leading-banks' representatives had come to lure us into opening our salary accounts in their banks. The representatives of City Bank and HDFC gave a presentation each, and after pondering over it for a few moments I decided for HDFC. After filling-up the form and signing for 250th time in the day finally my account was opened. I was provided with a debut cum shopping card and a check book then and there itself (all thanks to the readymade account opening kits for fast service) . This was pretty much the end of the day for us at Polaris.

The CAT fever!!!

Getting back to blogging after what seemed like an eternity really feels good. For the past one month or so I'd been busy preparing for CAT and I'd like to tell that it had been an amazing experience. As of now i don't know how successful i've been (the results will tell) but one thing is for sure : i enjoyed myself throughout the journey. At times i felt disappointed, defeated, fatigued but i'd say that in the end everything went well or it is the way i look at it. Whatever may be the results it hardly matters (well not actually, results do matter) but i gave my best shot and i could not have done better possibly. Now just waiting for the results and praying for the best.

Its time India Inc. calls for the second Green Revolution

After writing some book reviews i decided to write on a serious topic so i picked up the most important and yet the most ignored subject among the people : Agriculture.
India is the home for a forth of the world's population and of it the 65% has agriculture as their main occupation or rather their only source of employment. But it is surprising to see that only 15-18% of our GDP is contributed from agriculture and the share is constantly plummeting. On one hand millions of people sleep hungry every night whereas on the other hundreds of tonnes of wheat gets rotten down because of lack of adequate storage facilities. I suppose its time for India Inc. to divest some of its energy and resources to this field , before the conditions aggravates any further.
The aggressive industrialization and urbanization policies will do no good if the people still die out of hunger. Further more, if India wants to increase its GDP, then the first priority should be given to the field which employees the highest percent of people : agriculture.
A lot needs to be done in this field which includes proper and adequate subsidizing of fertilizers and seeds, providing the farmers with proper markets to sell their crops and get the right price for their work, educating them and industrialization of agriculture.
However the conditions are not completely grave as some private and govt. aided companies have emerged as the savior like Reliance and ITC and also some entrepreneur. But the government should rise up to help before its too late.

The Impeccable

Sachin Ramesh Tendulkar, the apex, the magnum opus of the cricket world, the Indian run-machine and a lot more can be added to the eulogy of this little master blaster.
In 1989, when this mumbaikar made his debut at a tender age of 16 against Pakistan abandoning education for the sake of his first love CRICKET, who knew that 20 years from then, he'll be the king of his world. Soon after hitting his first century in international cricket, he found his second love,accidentally. Anjali Mehta, a medical student. Being in courtship with her for five years, he engaged her in 1994 and married her a year after. She had been her greatest support since then.

Lets take a look at some of his innumerable records and achievements:
Highest run scorer in test and one-day cricket
Maximum numbers of centuries in ODIs and test cricket
15 times man of the series(also a record)
61 times man of the match
the biggest of all: The only man on earth to score a double-ton in an ODI.
and a lot more.....

Life has not been a bed of roses for him. He faced many challenges in his 20 year long career. He Suffered a tennis elbow injury and trouble in his shoulder, but he stopped against none and roared again. Be it a fast bowler or a spinner, he thrashed each and every one of them.

The greatest player of the century is modest, humble and convivial by nature. Never do you find him involved in any controversies. Having a highly balanced personality who takes both criticism and praise as the way it comes to him, without being affected much by them. His calm and serene nature is adored by everyone he meets. His disciplined nature both on and off the field can not be neglected. Apart from the millions of chauvinistic followers, he is also admired by some of the world's greatest cricketers which includes Sanath Jaisurya, Shane Warne, Sunil Gavaskar, Kapil Dev and many more. Chances are there that he is awarded with the highest civilian award "the Bharat Ratna".

I pray this this legendary player lives for a thousand more years and scores a million more runs for the country. Love You Sachin!!!