Glass of global economy half full or half empty?
In this issue:
» How you can beat Wall Street at its own game?
» US taxpayers are now bailing out Europe as well
» Is the coal scam a nonsense?
» Real estate developers can go to jail if they mislead consumers
» ...and more!
---------------------------- Raise your voice before this turns into yet another scam! ----------------------------
When millions don't even have food to eat, our government is thinking about bailing out multi-millionaire CEOs!
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, that's the glass half full perspective. However, it would be a mistake to jump right into the markets based on these predictions alone. For the list of those who see the glass as half empty is equally illustrious. Take Jim Rogers for example. Only last week he came out with a prediction that there is a big trouble lurking ahead and the world economy shall go through a very rough phase. Then there are people like Marc Faber who are equally gloomy.
Going through these contrasting predictions could confuse even the most level headed investor we believe. Fortunately though, there is a way out of this predicament. You see, it just can't be known in advance all the time how the economic environment would unfold. Thus, it makes immense sense for an investor to build his portfolio in such a way that it is able to withstand both the environments better than most other investors. And this can only be achieved by building a diverse portfolio of stocks with only the strongest companies bought at reasonable valuations. Thus, most of an investor's time should be spent spotting such opportunities and investing in them right away irrespective of how the future looks. Trust us; this strategy has a proven track record. You would do very well for yourself if you shut out the noise out there about the future market environment and focus only on what is under your control i.e. unearthing fundamentally strong companies.
Is worrying too much about the macro economy a right thing to do? Share comments with us or you can also comment on Facebook page / Google+ page.
01:13 | Chart of the day | |
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Source: Petroleum Planning & Analysis cell |
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The US obviously does not seem to have learnt its lesson. Two rounds of quantitative easing hardly spurred growth in the flagging US economy. Instead job growth is muted and unemployment continues to remain high. All of which has led to reduced consumption despite the Fed keeping interest rates low. Why in such a situation then would it choose to monetize European government bonds, is a mystery. Europe is also in the same soup as the US and is struggling to keep its head above water as countries brink on the edge of bankruptcy. Quantitative easing did not do much for the US and is hardly likely to bolster Europe's fortunes either in the longer term.
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The senior managements of some of the largest public financial companies - mainly LIC, SAT, UTI, GIC, IRDA and NIA - in India are going through similar pangs at the moment. For a period ranging from 3 to 14 months, their ships have been sailing without a captain. In fact, certain companies are experiencing their most difficult phases presently. Since the top positions in these companies have not been filled formally, the 'acting' senior managements have their hands tied to a certain extent. But what are surprising are the reasons for the same to occur! They vary from CBI probing the top official due to alleged irregularities while heading previous organisation; vacancy not being filled due to very high qualification requirements; salary expectations not being met; plain delays in decision making considering the government has had its hands full with others issues. This is yet another example of how policy paralysis and government inaction is having an effect on these institutions, which at the end of the day have been formed to serve public interest.
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It seems that something is finally being done. The Union Ministry of Housing has proposed to come out with a real estate bill. The draft legislation contains stringent laws against the builders who bully customers. For example, the draft proposes to jail the promoters if they will fully do not comply with some key provisions related to the project. There is also a penalty clause for giving false information to buyers with respect to the project. There are several other provisions in the act which will tighten the noose around corrupt builders. Once the act is approved, real estate regulatory authority will also be formed in each state. We believe this a welcome step by the government. Not only will it reduce corruption in the sector but it will also improve transparency over the long run.
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04:53 | Today's investment mantra |
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1 Responses to "Glass of global economy half full or half empty?"
Anupam Garg
Mar 28, 2012m getting highly unsure about Warren Buffett's quotes when markets have been in the same limbo for years altogether...the level of indian market indices 2 years ago is the same today...volatility being sky high, i wonder if short term trading is the only way to make money now....if not mistaken, mr. jhunjhunwala also acceded to this fact...time to change the game?