Sunday 9 November 2014

Curious case of Israel

Israel is the most powerful state in middle-east and is surrounded by enemies from all the sides. Its neighbor (Jordan, Syria, Lebanon and Egypt) not only have ideological difference but also have cultural and religious difference with Israel. Jerusalem the holy place of Christianity, Jews and Islam has always been in the centre of dispute. Many wars have been fought for its control over the centuries. Its control has been passed over to many dynasties from various religions. The Land of Israel was predominantly Jewish until the 3rd century The area became increasingly Christian after the 3rd century and then largely Muslim from the 7th century conquest until the middle of the 20th century. It was a focal point of conflict between Christianity and Islam between 1096 and 1291, and from the end of the Crusades until the British conquest in 1917 was part of the Syrian province of first the Sultanate of Egypt and then (from 1517) the Ottoman Empire.

But we will focus on the modern period with birth and rise of Israel. It all started with the end of First World War in which Jews open heartedly supported Germany against Russia. After the end of the war British started encouraging Jews to establish their own motherland. This was the ploy to remove a huge Jew population which had resided in Europe.
Between 1919 and 1923, another 40,000 Jews arrived in Palestine. Many of these immigrants became known as "pioneers" experienced or trained in agriculture and capable of establishing self-sustaining economies. The Hefer Plain marshes were drained and converted to agricultural use. Land was bought by the Jewish National Fund, a Zionist charity which collected money abroad for that purpose. Between 1924 and 1929, 82,000 more Jews arrived because the United States Immigration Act of 1924 now kept Jews out. And slowly and steady their number swelled to hundreds of thousands and Palestine’s were happy to sell their land and move inwards towards Jerusalem and with the end of 2nd world war which ended with a massacre of 20 million Jews mainly by Germans the remaining Jews started moving towards the last Jews territory on the shores  Mediterranean sea. Soon Palestine started realising that their land has been captured by the Jews who constitute nearly 20% of the total population. A massive civil war broke out which ended with the creation of a new state for Jews in 1948 named Israel. Immediately following the declaration of the new state, both superpower leaders, U.S. President Harry S. Truman and Soviet leader Joseph Stalin, recognized the new state. The Arab League members Egypt, Transjordan, Syria, Lebanon and Iraq refused to accept the UN partition plan and proclaimed the right of self-determination for the Arabs across the whole of Palestine. The Arab states had heavy military equipment at their disposal and were initially on the offensive. But among large numbers of Jewish immigrants are World War II veterans and Holocaust survivors, and many joined the IDF(Israel Defense Forces) After an initial loss of territory by the Jewish state and its occupation by the Arab armies, from July the tide gradually turned in the Israelis' favor and they pushed the Arab armies out and conquered some of the territory which had been included in the proposed Arab state. At the end of November, tenuous local ceasefires were arranged between the Israelis, Syrians and Lebanese. Following the ceasefire declaration, On May 11, 1949, Israel was admitted as a member of the United Nations. Out of an Israeli population of 650,000, some 6,000 men and women were killed in the fighting, including 4,000 soldiers in the IDF.
Within three years (1948 to 1951), immigration doubled the Jewish population of Israel Overall, 700,000 Jews settled in Israel during this period. Between 1948 and 1958, the population of Israel rose from 800,000 to two million. In 1969 Golda Meir (The iron lady) became Prime Minister. Meir was the first female prime minister of Israel and the first woman to have headed a Middle Eastern state in modern times. At the 1972 Munich Olympics, eleven members of the Israeli team were taken hostage by Palestinian terrorists. A German rescue attempt led to them all being killed, along with five of the eight hijackers. The Israeli government responded with a bombing, an assassination campaign against the organizers of the massacre and a raid on the PLO headquarters in Lebanon. Later Mossad (Israel secret service) one the fieriest agency in the world tracked down and eliminated all the perpetrators of the terrorist attack for 20 years in all over the world.
In 1972 frequent invasion exercises by Egypt and Syria led to Israeli complacency about the threat from these countries. In addition the desire not to be held responsible for initiating conflict and an election campaign highlighting security, led to an Israeli failure to mobilize, despite receiving warnings of an impending attack. The October War began on October 6, 1973 (the Jewish Day of Atonement), the holiest day in the Jewish calendar and a day when adult Jews are required to fast. The Syrian and Egyptian armies launched a well-planned surprise attack against the unprepared Israeli Defense Forces. For the first few days there was a great deal of uncertainty about Israel's capacity to repel the invaders. Both the Soviets and the Americans rushed arms to their allies. The Syrians were repulsed by the tiny remnant of the Israeli tank force on the Golan and, although the Egyptians captured a strip of territory in Sinai, Israeli forces crossed the Suez Canal, trapping the Egyptian Third Army in Sinai and were 100 kilometres from Cairo. The war cost Israel over 2,000 dead, resulted in a heavy arms bill (for both sides) and made Israelis more aware of their vulnerability. Following the war, both Israelis and Egyptians showed greater willingness to negotiate. On January 18, 1974, extensive diplomacy by U.S led to a Disengagement of Forces agreement with the Egyptian government and on May 31 with the Syrian government.

Tuesday 4 March 2014

TALENT

Everyone living on this earth is different from one another and it is no short of a miracle that God has created each one of us unique. Sometime I wonder how does he keep us unique, must be some complex code or something which would beep every time there is a replica so that he could tweak something or other. Anyways it is his problem and let him deal with it. but it is true every one comes with a talent like some people are fast learner, some are artistic, some are good musician, some are good with numbers, some are good with public speaking, some are good businessman etc etc. So the important thing is to recognize what is unique about me. After all his (GOD) hard-work shouldn't be wasted.


During this short span of life I have witness many individual who have not done justice to there talents like for example in my school days there was a boy who was great painter but choose different profession, although he is doing good but I feel he could have done much better in this field. But on other hand there are also examples of people who have realized their talents and are doing great for example during my college (IIT KGP- civil Engg.) days one of my batch mate realized that he is very good in poker( Card game based on calculation) although he took job after college and did job for one year but soon realized his expertise lies somewhere else and quit his job and started playing poker professionally and has been doing exceptionally good.


Hence to optimize one's potential one have to be very clear in his choice, but unfortunately in India one doesn't get this opportunity at a appropriate time. It is the duty of the government to provide this opportunity to every individual at the correct time. So it is the high time for the government to bring radical changes in the education system so that the immense potential of our youth don't get wasted. If we look around the world India is among the few lucky countries which have majority of its population in the age band of 20-55 years. And it will remain like this for another 50 years, thanks to the people of UP and Bihar.

Sunday 2 March 2014

Risk and reward

Risk is the integral part of life. Every decision taken small or big have a risk factor associated with it. But the real question is what is risk reward situation.

People associated with financial institutions are quite familiar with this term because it is the part of there job profile. When bank grant loans the jugglery the loan officer do with number before announcing the rate of lending is actually the calculation of risk and reward. If someone have a stable job and assets which could be easily amortized to recover loan he/she would get loan at base rate but if someone have neither of these two there is a risk that he/she wouldn't get a loan at all!!! the primary reason is that the risk to reward situation is not in the favor of bank. 

Even in stock market risk to reward is the key driver, every trade big or small have a inherent risk associated to it. Whenever a call is given both target and stop loss are mentioned, the target is as important as stop-loss because it is the stop loss which determine the risk associated with that call. So there could be 3 scenarios:

1) Target - CMP > CMP - Stoploss 
2) Target - CMP = CMP - Stoploss 
3) Target - CMP < CMP - Stoploss 

Obviously in the first scenario risk to reward is the favor of the trading call and it would be advisable to take it but it is not that simple and various other factors are also involved in it. And these stop-losses and Targets are generally derived from the various statistical and graphical analysis which takes into account various triggers and factors. 

But when some decisions is taken in real life the calculation of risk to reward scenario become very complicated because it involve factors which are not know to us or are not fully defined. that why it is very critical to take informed decisions. Decisions based on correct information mitigate risk factor and improve risk reward situation

So the saying- " bigger the risk sweeter the gain" is basically "better the information, lesser the risk; and lesser the risk better the gain"

Friday 28 February 2014

Coalitions

coalitions

At the time of independence congress was the major single party and swept 400+ seats which were expected. They enjoyed this position for more than 20 years with some minor hiccups. the baton transferred from Jawahar Lal Nehru to Lal Bahadur Sashtri to Indra Gandhi but no one imagined a non-congress government in the centre. 

But meanwhile state assemblies started to see some changes with congress started to lose some ground and regional party making head way. The main reason for this change is the congress failed to understand the needs and wishes of people of each and every states which are quite different from one another and people give equal importance to local as well as national issues. Feeling neglected and oppressed the people started giving importance to regional parties as their agendas are more state focused and cater to local needs hence slowly and slowly they rose to prominence.

Still there individual strength were negligible and most of the time congress swapped them away in Lok Shabha election. But all that changed in 1977 when first non-congress government came into power with the help of many small regional parties. Although the govt. didn't last long but it gave a new dimension to the Indian politics and a new term was evolved i.e. coalition government. And regional parties stated nurturing national dreams.

In 1990's all that changed with meteoric rise of BJP and and a sudden downfall of Congress. With both of them struggling to making government in centre a new era of alliances stated giving leverage to regional parties. Knowing fully well that neither congress nor BJP can cross the magical figure of 272 regional parties started arm twisting them to acquire major portfolios and releasing special funds for their states. This unique situation give them a perfect opportunity to realize there national dream.

But the main question is: IS IT GOOD FOR THE COUNTRY?    you decide!!!!!!!

Wednesday 26 February 2014

US FDA hammering Indian pharma companies

US FDA hammering Indian pharma companies

Right to live is the basic right in our constitution but what will happen when this right would be forcibly snatched from us. Life saving medicines are very important but due to the greed of few rich corporates they have been treated as a luxury. What will happen to the guy who is suffering from cancer and his only lifeline is a drug which comes @ 2.5 lc/ month supply. And it is all due to a corporate which wants to make a fortune out of it while other company says it can sell the same in roughly 9k/ month. 

Indian companies have been fighting tooth and nails against multinational corporates for last 2 decades over the patent rights and there infringements. but lets not get into the technicalities, the important thing is that our government should understand the needs of common people. In India less than 2% people have the medical cover against 90+ % in develop countries. In develop countries providing quality life is considered as a duty because they can afford it. But most of the developing countries could not afford the basic amenities. This does not mean that the people receding there have lesser right to live and every one should do there bid to make it possible. 

As it turn out they don't US government is using FDA as tool to close manufacturing units in India which not only caters domestic needs but also the needs of countries such as Brazil, Thailand, Malaysia, South Africa, Kenya and other developing and undeveloped countries. But multinational corporates now want to arm twist these countries to buy there ridiculously expensive drugs rather than the far much cheaper substitute provided by our companies.

It is brutal, it is like if you can't pay you deserve to die and we will enjoy watching you die. No one is denying the fact that they have made a discovery and they should be the beneficiaries but to a limit. One should not fall to the level where money becomes more important than saving lacs of lives.

please go through these links:

Tuesday 25 February 2014

Stress and Life


Sometime we feel
Why all bad happen to me only??
Why am I always on the receiving side??
I have worked so hard for it but credit goes to someone who doesn’t even know what it is??
I have done everything right but there is no result??

Actually all these things are mental blocks which have to be removed as soon as possible. All these thoughts do build up frustration and will slowly and gently make you a complicated person. It is logical that if someone puts hard work he/she expects some results and when results comes out to be less than his/her expectation one feel cheated, frustrated and irritated but results are not always that matter, results generally is the combination of various factors which are not in his/her hand (most of the times). So why one should worry about something which is not in his hand, all one should have to worry is about the efforts he/she has put into it. All the external factors do get squared up over the period of time, although one does feel it but they do get squared up.

So having a positive approach towards life is very important. If something bad has happened to someone it should be treated as an opportunity to test his/her mental strength and ability to cope with it.

These experience starts from very tender age. Now a day’s schooling has become so competitive that it put lot of strain on children. All parents want their kids to top the class but unfortunately there can be only one topper. Having competition is not a bad thing; actually it is quite good till it is healthy. The day it transforms into stress it becomes harmful. And in country like India which is having a 1.25B population it becomes fearsome.. If one looks at the merit list of premier institutes one would find that it is stretched to the breaking point (sometime more than 500 applicants per seat).

So the solution to the problem is that from the tender age kids should also be prepared to handle mental pressure, failures and adverse situations. So that when they face real challenges they would be mentally tough, emotionally strong and psychologically balanced. Then they can lead a successful life.

Monday 10 February 2014

Beginners guide for share market (do’s n dnt’s)

Beginners guide for share market (do’s n dnt’s)


First thing that comes in the mind regarding share market is ‘its risky and no one can make money by it’ but let me tell you, this perception is wrong. Let’s be frank why one should invest in a share market!!
It is because everyone (I mean most) want to be rich as soon as possible.

lets see what happens to a young investor like me (based on facts and study I have done):-

We have a job from which we try to save 20-25% every month (don’t forget restrain and determination we have to exercise not to spend it) after couple of years when we have a corpus of few lacs we might decide now I could take some risk, lets venture into share-market (after all it gives 16% CAGR much higher than what one should get in FD and policies). Mostly we might ask somebody what to do, or we ask our PR manager of demat account, some brave souls even read the crappy reports which most banks/brokers send us regularly. Personally being an Engineer I have never understood whats in it!!! All that matters is 10k laga do 15k ho jayenge ek saal me (invest 10k n you will get 15k in one year) ok done. 10k in this, 12k in this, 8k in this, 15k in this, and so on...  My target of investing one lac is done.

Initially we would monitor them regularly but as time progress our interest and monitoring decrease drastically even reduced to once a month (some people even forget what they have bought and in what quantity)

But one could earn a decent amount including tax free dividend if one would have bought so called value for money stocks (pun intended). Do it over and over again and I assure you will end up with a stocks worth few crores(adjusting inflation) in 30 years. Simple math:- A= I*((1+r/100)/r) (I might be wrong) and it work outs to be 5.4cr with a modest CAGR of 16%, not to mention 50% which we were dreaming!!!!! (Do math yourself)

Now we enter into the ugly world of derivatives and their all hell break lose. I have been the part of derivatives for last couple of years and believe me there is no mercy......

Futures and options sound very fancy and they are lucrative where on earth you can buy 250 reliance shares in just 25k!!!! Sounds amazing.... Even better buy some option of reliance and make your money 2-3 times in couple of days. I still remember my first trade, it was TATA STEEL I bought 1 lot i.e. 500 shares (somehow managed it by arranging 40k) at 374.75 sold it at 393.65 made a profit of 9450-540(brokerage)= 8900 and I was very happy. But ran out of my beginners luck very quickly and made some very bad calls and eroded almost 40% of the total capital but over the period of time I studied hard and analysed what went wrong and subsequently improved. But I am not here to tell you what I have done or what I have achieved but to discuss what one should avoid.

The first thing to remember is that the derivatives and the cash segment are altogether different things. The strategy of buying and holding till eternity doesn’t work in derivatives because at the end of every series (last Thursday of every month) one has to shell out roughly 1% of overall order value to carry forward the trade. So if someone wants to venture into the world of derivatives one has to be very vigilant keep a strict stop-loss and should be clear of its objective and options are mostly hedge tools and should be used very carefully. I don’t want to discourage anyone but my suggestion is that one should be fully prepared for it, believe me once you get hold of it you will become addicted to it (as I am!!!!)


So concluding this topic I would like to say that the share-market provides a unique opportunity for investment and one should start investing in it as early as possible (total exposure to risky asset = 100 – your age) and try to be patient and vigilant to again maximum out of it and if someone wishes to take exposure in derivative market one should be very careful and it is better to start early as you would have lot of time to build-up on the invaluable experience you would gain in it. 

Modi answer to our problem!!!!!

Modi answer to our problem!!!!! 


There is no denying that the BJP is in fact well prepared and hungry for success in this election than the last 2 lokshaba elections. Let me first give you the preview of what happened in the last election:
BJP was convinced that they will have landslide victory owing to the fact that they were thrown out of govt. unceremoniously in last election even after having a reasonably good governance and a strong face of ABVP.
and congress which was having lots of hiccups in decision making, pocilies, UPA partners (left and NCP) and global slowdown will definitely loss. On paper mathematics did look right, even some opinion polls were giving 180+ seats to BJP in the beginning but what BJP didn't anticipate was the A of spades which Congress has- RAHUL GANDHI. The PR managers of Congress party have done a wonderful job of projecting him, even I was convinced that he has a different vision and a new prospective. BJP beaming with overconfidence and sheer arrogance discounted him. What happened next was a disaster for BJP, as congress swept away the whole country with an amazing 200+ seats and even more amazing was the 23 seats congress got from UP. Everyone knew they were a extinct species in UP with very less cadre base and even lesser vote bank but it was the charm of Rahul Gandhi by which they managed that victory (at that time they had more MPs than MLAs in UP)
BJP dumb-folded and thunderstruck ran for cover. Its management was faulty, their stand was dubious, their allays were unhappy.

"SAD aur BJP sirf naam ke partners hai ye polling booth per saath saath nhi lad rhe hai. zamini sachai yahi hai"- famous quote of Rahul Gandhi     
and it is true that BJP did suffered a humiliating defeat in their strong hold and Congress had its new star-Rahul Gandhi

But what happened next was unexpected and unprecedented Congress led UPA-2 which were more powerful and independent got themselves in lots of trouble. The term which many political and economic analyst were saying would be a dream run turned out to be a nightmare. Barely 18 months in the power they were rocked by series of mega scams.

Starting with 2-G scam, It came into light with unprecedented auction of 3G spectrum which fetched govt. thousands of crores and telecom companies paying their arms and legs to grab it. The auction process, which ran for more than 60 days(longest in the history) saw fearsome bidding war among telecos. So question arises why 2G spectrum(more valuable) was given in throw away prices? The answer I believe no one have.

Then came CWG scam, the game which was projected to cost 750 cr happened in 70,000 cr. It worldwide tarnished the image of India, with the amount of infighting and the mind boggling deals. Next came the coal scam which also runs in lacs of crores (according to some estimates) and if we want to highlight every scam the series would be endless.

So the main question is- DO MODI HAVE SOLUTION TO OUR PROBLEM??
Can he provide fair, dedicated and growth oriented government..