RE:Lot of money is being sucked by a few lac people in india
by Kaushik Das on Feb 07, 2008 12:44 AM Permalink
I largely agree but the growth has been there a bit due to opening of the economy with good long term prospects, barring the corruption.
Now, the corruption and inflation can actually turn down everything and all this is happening due to the fraud of builders and bankers and insurance agents alike. There is no truth and openness in the system, only opening up of business realms.
RE:Lot of money is being sucked by a few lac people in india
by Asdfgfasdfgf on Feb 07, 2008 12:19 AM Permalink
Ha ha ha. You are so funny. I am sure your students must really enjoy you. How much I miss my college days! Ha ha ha.
Now it is clear that market is only driven by liquidity no fundamental plays its role. I agree with writer these all so called FIIS' bring their money and invest in equities all over world and buy any stock at any price and when they need money they sell any stock at any price whether making money or not doesnt matter. These people are not intelligent they just play money game nothing else. These all people collect money from their various investments lying in emerging markets and first clear their balancesheet and then after if money remain or they garner any new flow again start deploying money to emerging markets so be ready if they dire need of money you will get ant stock at any price there will 50% 70% sale and if they manage to make their account clear without selling more market will go up again..... So one thing is clear fundamental has no importance in atleast our market bcz our market is mainly driven by FIIS they are trend setters and we have no choice.
RE:SUB PRIME
by suby joseph on Feb 07, 2008 08:43 AM Permalink
i would disagree that there are no fundamentals involved. imagine that you have an opportunity to invest in india and say, Iraq. (i take the iraq example solely from a risk perspective). it's unlikely that you'd put a bucket load of money in iraq though logic says that iraq and it's economy is so beaten down that it can go nowhere but up from here in the long run. so lets say that you have 2% invested in iraq and the rest in india. today when ou have a downslide in india, you'll try to protect your 98% pie. iraq's returns may have been 100% but that's only 2% of your money. you'd sell that and try to save your shirt here. maybe when things settle down you'd go back to iraq with a wee bit. 50 years later you'd tell your grandkids that "if only i had invested 50% in iraq and let it lie there". but that's humna nature. and that's FUNDAMENTAL.
The size of sub prime is around 1.4 trillion us dollars still the complete data is yet to come,what is out into public domain is very little so investors watch out.
RE:the size
by Sanjay on Feb 06, 2008 09:29 PM Permalink
Well if that is the size of market and country wide 33% defaults you already talking a figure around 460 billion, but more because one part of the market collapses it creates a black hole sucking up the entire economy. Again, the banks that are reporting losses are the the biggest well known bank, it signals a very serious unstability in economy.Aleady 40 billion of finance is comming from China and Arabs, who is going to give the rest?
Again if someone cant pay bills, then others don't get paid, therefor they also may not be able to pay there bills, meaning a domino affect that is much more wide reaching.
Read this article in sify..horrible service and attitude plus write off's of about a billion dollars owing to poor management methods...and this bank claims to be number 1...pays money to buy awards..ha..ha..
Definitely Indian Stock Market will have the impact. My understanding is that it will fall further from the present level (BSE 18139). In my estimation next it is the turn of Mutual funds who will bear the impact. Many stock brokers and big players have suffered huge losses. The small supports coming at the low levels will vanish in a day or two. Probably the support is extended by Banks or MFs based on funds trickling in from small investors. Small investors will refrain from MFs hereafter or even if they continue, their support is very negligent and minuscule to prop the stock market in a big way. Caution to small investors, stay away from the Stock market and Mutual funds for the time being. Further it is unlikely that the BUDGET will have any incentive or attraction to boost the market. Budget is for reforming the taxation and a streamlining exercise. Nothing can be expected of it. Rather it will have only negatives as per my understanding. So till Budget keep away from Stock market- K.S.Balajee, Chartered Accountant
RE:Subprime pain: Who lost how much
by balajee ks on Feb 06, 2008 06:55 PM Permalink
Read as 'negligible' instead of negligent in line 5 in my message, K.S.Balajee
RE:Subprime pain: Who lost how much
by maverick on Feb 06, 2008 06:54 PM Permalink
dont give this kind of advice ,whenever the market falls its the best time for retail invetors to buy,i am doing this last 2 yrs and already got 150% profit ,ppl like u keep buying themselves and saying no to others,pls dont do it
RE:Subprime pain: Who lost how much
by balajee ks on Feb 06, 2008 07:08 PM Permalink
Really I am not doing (buying) that. I am giving my piece of thought to really small investors and nothing more than that. Even as you suggest the so-called small investor to continue to invest in the market, the market will not rise in a big way. Their support is miminal. Just a bit of caution to them.
will the proerty keep on rising the way it is. today i went to a property broker to check out 1 bhk.. in 20 days owners are asking 55-60 lakhs as 48 lakhs before.
this is in andheri mumbai. broker was telling me that 1-2 yrs back nobdy was willing to pay even 20 lakh for 1 bhk
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Abhay T on Feb 06, 2008 06:44 PM Permalink
It depends on whether you need that property now and whether u can afford it. 1. If u don't need property now and considering only as investment, answer is NO. You can wait for correction. Get a general feel in sourrounding areas. Is there any "real" change in cicrumstances around Adnheri or is it just the current trend? Also consider, whether its affordable to u now or u can consider other nearby areas that offer cheaper houses. 2. If you need a 1BHK house now as a priority, buy that is affordable to you. You may have to consider nearby cheaper areas. Once you settle in that house, over a period of time (5-10 years) the value will definately be much higher! At that time, u can consider another bigger house with additional savings and cash earned from this house.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Manish Jain on Feb 06, 2008 08:11 PM Permalink
Anyone India is the only market in world where only real estate prices are rising not the rent this goes only for residential properties. In Gurgaon you can get a two BHK for rent on 16K, but if you want to buy it will be at least 80 lacs. From simple business sense the 8% Interest rate on 80 Lacs after tax works out to be approx 35K. Why would a user then buy that property? It's only the speculators who are driving this boom. All set to become a doom after commonwealth games at least in NCR.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Abhay T on Feb 06, 2008 08:42 PM Permalink
1. It depends on your needs. Once you have family and need your own place to live, you have to think about your own residence. There are times when house may not be your priority or you may already have one. In that case you are right! Don't invest in property. I used the same logic in mid 90s, when property prices were nearly flat and it wasn't my priority. 2. From time to time, properties will go through boom and correction. But, I don't see anyway for it to crash! Don't believe in speculated prices. But also don't believe in "all doomed" theory. With continuing growth in India and shortage of houses for people, house price crash is just not possible. Slowdown and corrections happen only after some sharp increase.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by naive boy on Feb 06, 2008 09:40 PM Permalink
everyone talking about time value of money..wht about time value of need??? thevery purpose of any investment should be the need and not the future value. if someonereally need a property sucha s house due to certain unavidbale circumstances then one shouldbuy it without caring baout price.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by ThirdInstance on Feb 06, 2008 10:32 PM Permalink
is the rent always going to stick at 16 K Manish ?? Will the person who is buying properties with ur calculated amt of 35K not charge atleast 36K for rent sooner than later ?
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Manish Jain on Feb 07, 2008 03:32 PM Permalink
Yes the rent would increase but I am not saying to follow this approach for life but you can stick to this approach at least for next five years and then my understanding is supply and other factor would bring the prices to more affordable level. If you compare the rent of residential properties in India they haven't grown like the cost of these properties.
I agree with the argument raised here that property prices can not correct over night but the problem is technical otherwise it wouldn't take time to fall. Property prices are not available on any exchange, ownership transfer is not that easy. Moreover it's the local brokers and builders who can change the dynamics of any property market. There are many transactions done where there is no ownership transfer (Registration) only a power of attorney is taken. The sole purpose of these transaction is to hike the prices and those parties are traders.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Naveen Bhutani on Feb 06, 2008 08:42 PM Permalink
Very well said...property prices the world over are declining...It's only in India that the property prices are going up, and that too because of speculation...end users simply cannot afford these unrealistic prices.
RE:property rates go!!!!!!!!!!!!!!!!!!!ng up!!!!!
by Abhay T on Feb 06, 2008 09:02 PM Permalink
You are forgetting few things. Indian economy is in its teenage where as American economy is in its 60s. Its only in US where properties are crashing, because of subprime mortgages! This is not the case with Indian economy! 2. Remember one thing! There are always people who can afford it. They invest only when they see some prospects. Otherwise, why would Amabnis put so much investment in real estate!
aap log Home loan milata hai to 40 lakh ke home le rahe ho.... if there is slow down in our economy then is it possible to pay the 40K installament each month???
RE:bhaiyo jara socho
by Abhay T on Feb 06, 2008 06:31 PM Permalink
If anyone thinks, that's the possible risk....tehn save as much as you could now and pay back as much principal amount as possible....Earlier you repay, it reduces burden in future! Also, make sure u have enough balance in case of temporary job loss!Easy to say! But there is no alternative to cutting expenses and savings!
RE:bhaiyo jara socho
by rajinder sharma on Feb 06, 2008 06:30 PM Permalink
not possible...even wen the interest rates go down....the difference is marginal
It is said that one can learn from other's mistake. Nobdoy actually need to fall from 10th floor to learn consequences. Luckily, Indians are not badly exposed to subprime. But, since last decade there is a sharp increase in spending and using credit cards. People need to follow certain rules to make sure they play safe. 1. Use credit cards as ur personal accountant who lets you know how much you spent last month! Do not spend more than you can pay in the next month. Review your statement to work out where you could have saved some expenses. 2. Do not get loans that stretch your monthly spending and try to avoid longer durations. General tendancy is to spread the cost over longer duration to make your monthly budget easier. But the catch is you "Pay back lot more" and you are stretched over a longer period of time. You may have to consider what is affordable to you now and in future. 3. Make at least 20% savings every month. It helps in crisis time. 4. Plan ur future requirements. e.g. higher education expenses for child in 10 years. 5. This long term money can be invested in MFs, stcoks etc. u can earn far better returns in equities if u invest in longer terms. markets suddenly crash or surge. But, this shouldn't make much difference to ur plans. 6. Do not put money in stock exchange for short term! u may earn in 10 instances, but just 1 instance can wipe out all of your savings! Also if u had not taken out that money 10 times, u would have earned far better returns!
RE:This is a good lesson for Indians
by Pruthvi Simha on Feb 06, 2008 09:28 PM Permalink
nice one - well said and just to add a point if u r paying interest of 9 % u will end up paying double the amount u took in around 8 to 10 years
RE:This is a good lesson for Indians
by Rajendra Tapadia on Feb 06, 2008 10:32 PM Permalink
Wise advise.. Thanks. However most of IT/ITES folks spend money without thinking of saving for rainy days... God save such breed.
