Tuesday, March 10, 2009

Smart ways to save money during recession

1. If you have more than one girl friend then layoff the most expensive ones
2. If you have a single girl friend then cut down on expensive dinners and gifts
3. If girl friend is not reasonable then meet her less often or better take a break and enjoy your single hood
4. If you have a mistress then its needless to say that you won't be able to maintain her any longer. So people!!! recession is not a bad thing after all. It actually helps your spouse to remain faithful to you.
5. If you have a wife then god save you!



Friday, March 6, 2009

Think before investing in India's Exchange Traded Index Funds

Index Funds are good. How about Exchange Traded Index Funds? They are good. That's what we are told and that's what I thought until I checked the volumes of the ETFs listed on NSE. To my horror and surprise I found that the volumes are miserably low and for some funds there were no trades at all. I use the stats from 6th Mar 2009 to drive home my point

Benchmark Mutual Fund-Nifty Junior Benchmark ETF -6257
Benchmark Mutual Fund-Nifty Benchmark ETF -76129
Benchmark Asset Management Company Pvt. Ltd. - Bank Index -1900
Reliance Mutual Fund -Banking Exchange Traded Fund (ETF) -236
Quantum Index Fund -Exchange Traded Fund (ETF) -104
Benchmark Mutual Fund - PSU Bank Benchmark Exchange -510
Traded Scheme
Kotak Mahindra Mutual Fund -0

From the stats you can clearly see that the volumes are pathetically low so its quite possible that you won't be able to sell when you want and at the prices you want since the spread between the bid and ask prices are high. Out of these funds only Nifty Benchmark Index seems to have decent volumes so that may be the only fund worth looking at.

I think the concept itself is very good but unless more people are aware of these funds and participate in them you are in real danger of getting stuck. You may not find buyers and you may get quotes far less than the market price. So think hard before investing in the ETFs.


Sunday, March 1, 2009

Warren Buffets big mistakes

Warren Buffet's mistakes? Does he ever make one? If you don't think so then you are wrong. He has made some big mistakes last year i.e. 2008 and like any great man he had the courage to admit in his latest annual letter to this share holders. The following is the admission taken from his report

I told you in an earlier part of this report that last year I made a major mistake of commission (and maybe more; this one sticks out). Without urging from Charlie or anyone else, I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.

I made some other already-recognizable errors as well. They were smaller, but unfortunately not that small. During 2008, I spent $244 million for shares of two Irish banks that appeared cheap to me. At yearend we wrote these holdings down to market: $27 million, for an 89% loss. Since then, the two stocks have declined even further. The tennis crowd would call my mistakes “unforced errors.”