A’Satyam’
All that has been said and heard about Satyam reveals one satyam: Indian promoters still have more influence than they should actually have on the company. When a company grows beyond the size promoters can run it, it should be run by professional team and if the promoters are not professional enough, they should just remain non-executive or move on to other ventures. Satyam may reveal more ugly facts on the transperency of Indian corporate sector.
While my head says Ramalinga Raju is a 420, but by heart I still respect him as one of the brave entrepreneurs that took on the IT challenge. Apart from Satyam, the other charitable activities he does are of great help to common people. Generating 53,000 jobs is not an easy task in this country, and he is one of those tough guys who did it.
To my knowledge, all this can’t happen with out the knowledge of bada netas. Only time answers everything.
‘Satyam’eva jayate, for the sake of 53000 employees.
RBI is no joker
Yesterday midnight, some friends called me and said that there is a lot of mess going on in AP around ICICI Bank, after some TV channel exaggerated the losses made by ICICI bank. All the customers were afraid and queued up before the ATMs.
Are people crazy? There is RBI, there is government. At most, what could happen is a merger with some other bank, if ICICI screws up big time. Why are people queuing up before ATMs? No bank in this world can get cash for all its customers at once. And in a small town, how much cash can be there with a bank to distribute immediately?
I don’t know how much people (including me) are aware of the real financial situation. It’s the television channels that mislead people these days. Just as everything that appears on the Internet is true, everything told by news presenter is true. It’s just a news item for television channels, but it really plays with people’s emotions. Although, the sky is falling shouts that were around for an year now is clearly evident now. That’s true for the US. I don’t say Indian banks are insulated from that, but as the RBI says, Indian banks are well regulated and people need not panic looking at the global situation.
I’m not saying that hard earned money is not precious, but people need to think a little before running to the bank in the midnight, leaving their family at home. There are more important problems that we need to focus on. Go, stay alert and avoid serious loss to life that is caused by terrorists.
Watch out for the landmines
Red is the colour traders and inverstors don’t like. It was January 2008, every investor was happy. All the stocks were at life highs, all IPOs oversubscribed, huge volumes in derivatives and day trading. There were even news articles suspecting terrorists’ investments in Indian markets. All of a sudden, the land mine exploded. Its name is FII.
My experience with the stock market is very less, I understand the situation this way.
Recession in the US might have forced millions of people to withdraw their savings from mutual funds. Fund houses and banks are already hit by sub-prime and where will they get the money to cover losses and to give back to the investors? They should withdraw their investments from the markets to get money. So, the obvious target is a market like India, where there was an excellent bull run and they might be in profits in almost all their holdings. There the landmine is, the FII investment in India.
“Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.” -Warren Buffet
I read a wonderful article in ‘Dalal Street’ – The ticking bomb called FII. According to them, the FII investment is about Rs. 6 lakh crore. Even if the FIIs pull back a portion of this huge amount, there would be a sharp dip in the prices of stocks. That is what exactly happened. Prices of some stocks touched the sky when FIIs showed interest in them. And they are hit badly when they sold them.
I think the worst is not over yet. If more FIIs decide to sell off, we may see worse sensex levels. Investors, be cautious. Don’t chase a stock just because FIIs have invested in it.
“Be fearful when others are greedy and greedy only when others are fearful.” -Warren Buffet
It’s the time to buy stocks. Buy, buy, buy, just stocks.
