http://ia.rediff.com/money/2007/oct/08guest.htm
I blogged about the importance of selecting a land and calculating the project's ROI with land prices. As this blog is about mind boggling things that appear trivial to grasp for you but others would not get it. Retail sector in India apparently made a blunder of underestimating the difficulty of grabbing land proximity to the city !
Monday, October 8, 2007
Thursday, October 4, 2007
Good decisions have nothing to do with the result
Each minute in our life is made of decisions. All we can do is analyze the situation, take into account all the data and all the decision choices, assess the risks and rewards of each decision and take one. If you do all that, it is a GOOD decision, IRRESPECTIVE of what the result is. Now comes my book recommendation.
Book Recommendation - Hard Call: Great Decisions and Extraordinary
People Who Made Them by John McCain and Mark Slater. Not all the
stories are good, but some of the stories are great enough to make the
book a good read, especially the story that the book starts with.
Book Recommendation - Hard Call: Great Decisions and Extraordinary
People Who Made Them by John McCain and Mark Slater. Not all the
stories are good, but some of the stories are great enough to make the
book a good read, especially the story that the book starts with.
Life and Happiness
I have two recommendations for ya'all people - Goes back to a few us who are on constant search for meaning of life and such. Each of the videos tell a lot of gripping lessons about "leading life:
Movie Recommendation - The Pursuit of Happiness:
http://imdb.com/title/tt0454921/ . I somehow missed the movie when it
was released but it is a very good movie and it has some very good
subtle messages about happiness told in an interesting way.
Video Recommendation - The last lecture of Randy Pausch, a CMU professor
and pioneer of vision and virtual reality who is going to die in a few
months :http://youtube.com/watch?v=4HqdnjgkExY
Movie Recommendation - The Pursuit of Happiness:
http://imdb.com/title/tt045492
was released but it is a very good movie and it has some very good
subtle messages about happiness told in an interesting way.
Video Recommendation - The last lecture of Randy Pausch, a CMU professor
and pioneer of vision and virtual reality who is going to die in a few
months :http://youtube.com/watch?v
Friday, August 3, 2007
Looking for land
I was looking for land for a specific project and looking for the right set of land is not as trivial as it looks like. Here are some factors that you need to look at -
Size of the land
The size of the land should be inline with the potential future expansion of the project. The questions you need to answer are 1) what are the adjacent technologies or markets that you might enter ?
Resources
1. Water: The questions you need to look for answers are 1) what is the type of bores are present in the land ? 2) how well it had fared over the drought years ?
2. Availability of labor: How much labor is needed for the project ? What type of skill set does the project need ?
Proximity
What are the proximity needs of your project ? How much near to the city does it need to be ? What are the expenses that you might incur (or save) depending on the land being nearer to a city ? Does the land need to be accessed by a road ? How frequently do things need to go back and forth from the land and what size transportation do those things need ?
Quality of soil
Weather
Proximity of supporting industries
Price
Price is the most trickiest. People forget that you should not spend more money on land than you can make out of the project that you are going to put on the land. Do not include the potential increment of real estate prices into the project ROI calculations. Treat the land price and the corresponding spend as an expense.
Size of the land
The size of the land should be inline with the potential future expansion of the project. The questions you need to answer are 1) what are the adjacent technologies or markets that you might enter ?
Resources
1. Water: The questions you need to look for answers are 1) what is the type of bores are present in the land ? 2) how well it had fared over the drought years ?
2. Availability of labor: How much labor is needed for the project ? What type of skill set does the project need ?
Proximity
What are the proximity needs of your project ? How much near to the city does it need to be ? What are the expenses that you might incur (or save) depending on the land being nearer to a city ? Does the land need to be accessed by a road ? How frequently do things need to go back and forth from the land and what size transportation do those things need ?
Quality of soil
Weather
Proximity of supporting industries
Price
Price is the most trickiest. People forget that you should not spend more money on land than you can make out of the project that you are going to put on the land. Do not include the potential increment of real estate prices into the project ROI calculations. Treat the land price and the corresponding spend as an expense.
Wednesday, June 20, 2007
Strategies for diversified portfolio
Having researched about it quite a bit, I think a good strategy for building a diversified portfolio is real estate (either REITs or apartments of condos or commercial) in foreign countries.
Stock markets in various countries tend to move together, but not their real estate markets. One reason for it is that real estate is not as liquid as the stock market and it has much harder accessibility. In the long run, the real estate is the definitive index to the prosperity of a country, but in real estate you can find local markets (such as NY) where the market has nothing to do with over all real estate or the economy or vacation/university markets.
The only watchout factor is a) you have to find a way to access those markets b) you have to find a way to reliably get back the investment :)
Stock markets in various countries tend to move together, but not their real estate markets. One reason for it is that real estate is not as liquid as the stock market and it has much harder accessibility. In the long run, the real estate is the definitive index to the prosperity of a country, but in real estate you can find local markets (such as NY) where the market has nothing to do with over all real estate or the economy or vacation/university markets.
The only watchout factor is a) you have to find a way to access those markets b) you have to find a way to reliably get back the investment :)
Thursday, May 31, 2007
Democracy and cognitive myopia
I thought for a while now that democracy would work in a country only if people of that country are educated. Thats my justification for democracy not working in a few countries (free electricity or a film star or an extremist organization would win an election).
In retrospect, I think democracy itself is a problem. It has nothing to do with the literacy of the people. It has everything to do with short term popularity - It has striking relations to stock market. People would not vote on long term thoughtful position on an issue, but on what the news snippet is that week, the same way most people would not buy a stock on long term but on a short term news snippet.
At the end of the day, both free elections and stock market are like a popuilarity contest. Whoever lines in with the most popular trend of the day wins for the day, however they lose it in the long run.
Semi dictator ship in China, Singapore and Malaysia worked well. I am not sure there is any other way to determine a stock price than let the populus to determine it.
In retrospect, I think democracy itself is a problem. It has nothing to do with the literacy of the people. It has everything to do with short term popularity - It has striking relations to stock market. People would not vote on long term thoughtful position on an issue, but on what the news snippet is that week, the same way most people would not buy a stock on long term but on a short term news snippet.
At the end of the day, both free elections and stock market are like a popuilarity contest. Whoever lines in with the most popular trend of the day wins for the day, however they lose it in the long run.
Semi dictator ship in China, Singapore and Malaysia worked well. I am not sure there is any other way to determine a stock price than let the populus to determine it.
Tuesday, May 8, 2007
Buffett gives nod to index funds over ETFs
Its official, buffet gives a nod to index funds.
He does not have anything against ETFs either, he thinks that ETFs would impose greater temptation to trade, which is a very very valid concern.
Investing has been split into people supporting indexing (ETFs) and cherry-picking stocks (aka buffet style), now buffet seems to acknowledge the advantages of index funds. The 2% management fund in index funds is huge that you have to hold a lot longer to get the desired %, the low fee ETFs therefore offer a good alternative, one disadvantage is the temptation to sell, that depends on you. Another disadvantage is ETFs are not cherry picked, but thats the point, it is proved to be hard to beat the index by cherry picking in the long run.
So, if you can resist the temptation to get swayed based on recent past, you would do good with ETFs. If you are a person who gets into ST buying and selling, you are screwed anyway :)
He does not have anything against ETFs either, he thinks that ETFs would impose greater temptation to trade, which is a very very valid concern.
Investing has been split into people supporting indexing (ETFs) and cherry-picking stocks (aka buffet style), now buffet seems to acknowledge the advantages of index funds. The 2% management fund in index funds is huge that you have to hold a lot longer to get the desired %, the low fee ETFs therefore offer a good alternative, one disadvantage is the temptation to sell, that depends on you. Another disadvantage is ETFs are not cherry picked, but thats the point, it is proved to be hard to beat the index by cherry picking in the long run.
So, if you can resist the temptation to get swayed based on recent past, you would do good with ETFs. If you are a person who gets into ST buying and selling, you are screwed anyway :)
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