Is it good to be a shameless stock stealer?
In this issue:
» Why India can beat China in the long run
» Government throws Air India another lifeline
» This city is showing how to build a world class infrastructure
» A financial innovation that is good for the society
» ...and more!
---------------------------- Yet Another Bailout... Speak out before it's too late! ---------------------------
When millions don't even have food to eat, our government is busy bailing out companies...
And this time, again, it's Air India.
This PSU gets a Rs 4,000 crore equity infusion... funded by the taxes we pay.
Not to mention the huge debt restructuring is basically a bailout in a different garb. And this runs into tens of thousands of crores.
Is this government really made up of our representatives or is it on the payroll of those corporate giants?
We at Equitymaster feel strongly about this cause, and thus have started an Urgent Poll where you can read all about this and cast your vote to make your voice be heard!
We strongly recommend every Indian, who wants to make a change, to take a look at this.
Click Here to read more and cast your Vote... Before it's too late!
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So, have we uncovered one of the big secrets to investing successfully? Certainly we believe. Keeping a tab on the investment activities of investors with a great long term track record should be a part of every investor's stock screening armoury. Surely, the approach does have negative connotations to it, some going as far to calling it a shameless theft. But there is nothing morally wrong in it we believe. The original investor has nothing to lose from his investments being copied by others. This is because he would have already made his investments by the time his stock ideas become public. Besides, this whole approach isn't just a one way street. There is only so much even the most successful and hard working investor can research. Thus, all investors can benefit if they have access to each other's investment ideas.
And if you cast the net wider and take the big picture into account, you will realise that if there is one big reason that humanity has progressed so much, it has to do with the fact that each successive generation has copied from its previous one. Newton summed it beautifully when he said that if he has seen farther, it is by standing on the shoulders of giants.
Thus, as it is with other disciplines, in investing too, there should be no shame in copying investing ideas from others, provided it is followed by one's own due diligence. Besides, one has to also ensure that the price being paid is not way too high than what the original investor paid for it.
Do you steal stock ideas from others? Share your views with us or you can also comment on Facebook page / Google+ page.
01:09 | Chart of the day | |
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Source: Business Standard |
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But not doing so will mean bloated non performing loans for PSU banks like State Bank Of India (SBI). That infact makes the matter more imperative and urgent for the government, given the Reserve Bank Of India (RBI)'s strict norms. What is more frustrating is that this is a failure story in the making for long. However the government has blissfully ignored the same. Bankers in turn have relied on government guarantee to lend to the subprime borrower.
Despite the fact that the company has been in losses for more than a decade banks chose to fund its operations. The losses at the end of the last financial year (FY11) have not even been published! And now the government is all set to use its sparse funds to bailout the failed entity! If you feel the same way as we do, then raise your voice to Ban Bailouts. Remember, every vote counts!
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Now, here is a very surprising revelation. If the ideas of a book called 'Why Nations Fail' are anything to go by, the fate of the two economies could reverse. In other words, India could beat China in the long run. And that too, because of the very same reasons responsible for its lousy rise. Let us explain how. The book argues that in the long run, democratic economies will prevail over autocratic ones. The problem with autocratic political establishments is that they tend to benefit elites. For the masses, the prosperity is mostly short-lived. On the other hand, democratic institutions tend to create opportunities for all. This in turn, brings in prosperity that is sustainable. While applying this argument for India and China, it is important to note some ground realities. One, democracies can be partly autocratic. India's myriads of corruption scandals are a testimony to this fact. At the same time, despite the communist regime, China has grown at a robust pace for three long decades.
Will India really be able to surpass China? Given all the scams, political paralysis and poor governance in the recent history, it is difficult to say. India needs a lot of political will to give it a truly democratic character.
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This involves linking financial innovations to social media. In other words, many investors contribute small amounts of capital to projects that they read about online and that otherwise may be grappling for funds. The point is to democratize Wall Street. Though it must be noted that this is still in a very nascent stage and the potential benefits for investors is still hazy. The idea is that financial innovations were not always bad. They have been instrumental in kick starting businesses and providing much needed capital way back from the early 1800s. It all boils down to ensuring that innovations of any kind benefits businesses and in the end society and that it is not all about greed.
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However, the Hyderabad municipality has found an interesting concept to overcome shortage of funds for projects. It is known as Tax Increment Financing (TIF). Under TIF, the money is borrowed now for financing infrastructure and is paid once the facility comes into use. TIF uses increase in the property tax revenue to fund future capital spending. The basic rationale is that the as infrastructure improves in the TIF areas, the property values increase. And with that the taxes on property. The Hyderabad municipality has achieved a great success with this model. And we believe it's time for other city municipalities to follow the same course.
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04:54 | Investing mantra |
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2 Responses to "Is it good to be a shameless stock stealer?"
Pradip
Apr 12, 2012"India could beat China in the long run."
Here below 5 plus point in favor of India to beat China in the long run.
1)Knowledge of English is better than China have.
2)People grow under 54 years of democratic environment.
3)Trading is tradition in people.
4)Advantage of Geographic location between East & West.
5)Politeness in people is batter than greediness.
Ragini Ghanekar
Apr 14, 2012I wish to make comment about the innovation by Hyderabad Municipality. I have another idea. communities should make a deal with Municipality that they will make all necessary improvement and arrangements themselves. And they will not pay any taxes until amount invested is repaid but will pay to the bankers who will finance the project on the back of this guarantee. How municipality employees will survive will be paid apart from the bribes they are taking will be a question need to be sorted out.