As Time Goes By... Happy 2015
(Jan 1, 2015)
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In this issue:
» The best way to make your New Year resolutions
» What to expect in 2015
» How did gold perform as a currency hedge?
» ...and more!
As we start the New Year with the resolve to make your journey with us an enriching experience, we bring you some great food for thought. Our friend and Managing Editor of Common Sense Living, Anisa Virji, has put down some interesting insights on how one should make new year resolutions, exclusively for you. For those of you who are not familiar with Common Sense Living Letters, they offer a unique perspective on how one can use simple ideas to live richer, fuller lives. And we believe that there is no better way to help you decide and prioritize your biggest goals for 2015. Here you go....
As Time Goes By...Happy 2015
I was recently discussing 'life' with my friend Sanay, and he was talking about how when he was in school he used to love theater and writing funny musical pieces. Now as a lawyer he has made a lot of money and lived all over the world... but misses that fun whimsical guy he used to be in school.
So here's the thing, right. We all did things at one point that we loved, that we were doing just for ourselves, not to impress friends or parents, not to project any image onto the world... but just to be... ourselves.
And then time and responsibility took over and rearranged our priorities, and of course we let them, but more often than not something gets lost in this transition... just being ourselves gets lost a little.
And we are left being plagued by a big question: 'what is the purpose of life?'
As the year ends and this question flares up with greater intensity than ever before, it makes me think the question must be time-related. As the changing numbers on our calendars count down to the end of our lives, maybe when we're wondering what our life purpose is, what we really need to know is, 'what can I do with my time before the sands run out?'
This year instead of resolving to exercise, quit smoking and be nice to everyone - new year's resolutions are but short-lived fantasies as we well know - I have resolved to discover what I really want to do with my time. And then do it.
It's difficult, though, to focus on what you want to ... not should, not ought to, not need to... but want to do with your time. Most of our decisions about how we use our time stem from responsibilities, from things we must do for others, and from avoiding pain, uncertainty and other fears.
So below are three fantasy scenarios that can compel you to find the answer to: what do I want to do with my time?
Scenario 1: You're about to die...
When asked, what do you want to do? most people will answer, 'I just don't know for God's sake'.
Ah. That is how deep denial is! If I put a gun to your head and asked the same question... I'm absolutely sure you could come up with an answer.
Not to be morbid, but imagine you are going to be shot dead in a few minutes... What do you wish you had been doing instead of what you are doing with your time now?
Whatever you picture yourself doing - that is time well spent. Whether you'd always wanted to write a book, jump out of a plane... invent something ... whatever dream is wasting away on the back shelf of your life... do it.
Now, not later. Don't leave room for regret. Don't become one of those people who sighs on their deathbed, 'I wish I had...'
If you were about to die, what would you want to spend your time doing?
Scenario 2: You can turn back time...
One of the reasons we don't pursue our dreams is because of fear. What if you fail, and it's embarrassing, what if you lose money, your family doesn't approve, what if you write a book and no one reads it, what if everyone reads it and thinks you are stupid... what if you just don't have it in you?
Imagine you have a remote control that lets you rewind. You can try anything. If you fail you can turn back the clock. If you lose money, just turn back time. If it goes wrong in any way just hit rewind.
All your fears are really just imagined and pasted onto your future... you don't know for sure something will go wrong, you're just guessing. If we are always turning the clock forward to imagine negative outcomes, why not learn to turn the clock back and let ourselves erase all our mistakes.
If you did have a rewind button, then what would you do with your time?
Scenario 3: You're the last person on earth...
Many of our decisions are made for people who are not us, either our responsibilities to others - parents, families, friends - or to fulfill some social requisite - get married, have a respectable job, behave a certain way.
What if the world was wiped clean of people (in a non-depressing way) and you could do anything you wanted with no one to judge you. You could go to clown school instead of business school. You could be a comedian instead of a CFO. A cycle rickshaw wallah pedaled for two months to get to Ladakh. Everyone thought he was insane. He didn't care.
If no one was watching, what would you spend your time doing?
These scenarios, although fantasies, can de-clutter your life and mind, sift through the impositions of fear, shame and responsibility, and help discover the dreams of the real you - that have been getting buried deeper inside year after year.
This year, dig him out, the real you and your dreams, and just try spending some time on these. What do you have to lose? Except maybe a little bit of time.
But you are losing so much of that anyways. You're going to blink and suddenly find yourself at a Happy 2016 party... where nothing has changed and you're still resolving to eat healthy and quit smoking.
Instead open your eyes, put a gun to your head, and make 2015 the year where you discovered and worked on your dreams.
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As we promised yesterday, here are our thoughts on the key economic outcomes we expect in 2015:
What are your key economic expectations in 2015? Let us know your comments or share your views in the Equitymaster Club.
- Since the Union Budget in February will be the first test of the government's commitment on reforms, we believe that at least some if not all the necessary policy decisions will see the light of the day. Key amongst these being the long pending Goods and Services Tax and Foreign Direct Investment (FDI) in key sectors. Given that the government is already feeling the heat of ballooning fiscal deficit, we will not be surprised to see Union Budget 2015 break away from the populist stance of the UPA regime when it came to taxation. Also allowing foreign investment in key infrastructure sectors will be necessary if the government wants to make any headway in economic growth without straining its budget.
- An ordinance on opening up the mining sector to private sector players has already raised hopes of the power and mining sectors getting much needed policy push in 2015. All that we hope for is a transparent and economically viable method of allocation of precious natural resources. Focus on improving the efficiency levels of key PSU mining and power sector players will also act as tailwinds to India's growth story.
- Indeed, as Warren Buffett says, interest rates act as gravity behaves in the physical world. At all times, in all markets and in all parts of the world, the tiniest change in interest rates brings about a change in the value of every financial asset. Consequently, with the US treasury rate being the most important of all interest rates in the world, all eyes will be on whether the Fed Chairperson Janet Yellen will bite the bullet this time around. If she indeed does, brace for a bit of a volatile ride. However, it should be noted that the first few rounds of hikes aren't going to have that much of an impact. But if the magnitude is indeed large, then investors would of course get jittery we believe. As far as its impact on Indian stocks is concerned, we reckon the ride would be volatile but it won't change the fundamentals that much. As a result, keeping some ammunition ready in case the fall is quite pronounced would be handy. It would allow for picking up some good quality merchandise at prices that are significantly marked down.
- There's another quote. This one not by Buffett though. In fact we don't even know who's behind it. Nevertheless it says that in capital markets, you shouldn't raise money when you need it but in fact when it is available. Therefore with the sentiments the way they are, expect a lot more IPOs and disinvestments this year. However, do not forget our usual caveat, especially with respect to the former. IPOs are usually priced to make the insiders and investment bankers rich. The ones that produce an attractive entry point for investors are thus few and far between.
- What more, 2015 could see the ambitious Make in India initiative gather more steam. But we like what Dr Rajan, the RBI Governor has said on the issue. Trying to blindly ape the China growth model is going to be a recipe for disaster we believe. Not to forget the imbalances it has created in terms of the gigantic US debt on the one hand and the huge reserves that the dragon nation has been left saddled with. Also, the world in which we are going to start this initiative is a lot of different than when China kick started its exports led boom. Consequently, as Rajan highlighted, India needs to make for India more than anybody else in the world.
Just in case you're wondering whether we are going to disclose our favourite asset classes for 2015, we reiterate what we have always said - follow the ideal mix in your asset allocation. And besides stocks and fixed income, make sure you do own some gold to hedge yourself against inflation and currency risks. In fact if you look at the performance of major currencies in 2014, gold was the clear winner after the US dollar. So having the yellow metal in small quantity will certainly be a good insurance for your portfolio in 2015.
Gold versus other currencies in 2014
After a weak opening on the first trading session of the new year, the BSE-Sensex managed to move above the dotted line in the final hours of trade. Consumer durables and metal stocks were amongst the key gainers. The BSE Mid Cap and BSE Small Cap indices were trading higher by about 0.7% and 1.2% respectively at the time of writing.
"You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets".- Peter Lynch
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