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How To Win Friends And Influence People – Dale Carnegie


wealthymatters.comThis book was required reading in class XII.At the time I didn’t pay too much attention to it.I was way too focused on improving my PCMB scores .Today I’d say it’s worth at least one read and deliberate practise of the techniques suggested in it.Business is after all all about getting people to do as you want and having friends always makes getting ahead easy.

Here is the author’s own summary of this book: Read more of this post

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The Ascent of Money


wealthymatters.comThe Ascent of Money by Niall Ferguson is a fantastic book.I was drawn to read it after watching the TV series based on the book and I have no regrets.It’s time and money well spent.

The book describes how banks, joint stock stock companies, bond markets, insurance companies, etc. originated at different places, at different points in time, in response to specific needs .While I was reading the book I had many aha moments and I heartily recommend the book to anyone who wishes to understand our modern financial world better.

Prof.Ferguson also tells the fascinating stories of how time and again with every financial innovation there have been abuses and excesses.These stories are great to remind us that neither good nor bad times last forever,that frauds and scams are par for the course and that no financial crisis is the end of the world though it might end the world as we know it. Read more of this post

Currencies of Antiquity


The Reichsmark was never an international currency.So studying inflation in the Weimar Republic is not enough.This post traces the history of the Drachma,Denarius,Bezant and Dinar–the international currencies of antiquity.I think knowing this history will help us see the parallels and understand our world better.If macro-economics is not really your thing,atleast knowing about the coins should give a rough idea of which ones would be more collectable for their bullion content!

The Drachma

wealthymatters.comThe Greeks minted stunningly beautiful coins.Non-Greeks thousands of miles away treasured these coins and so they became the first “international currency”.Archeologists have found Greek coins as far away as China, India and Northern Europe. In fact, even though Rome soon rose to eclipse Greece, most Asians kept using Greek money for centuries.

The main currency of Greece was the Athenian Drachma (pic on the left). It was a silver coin, and its weight and quality stayed amazingly consistent through the centuries. From Solon, around 600 BC, to Alexander the Great, around 300 years later, it stayed exactly 67 grains of fine silver. This was the money Alexander brought to India, and from there it traded yet further East becoming the monetary standard of all Asia. And even as Greece declined and was finally absorbed into Rome, its value did not fall much. By the end of the Drachma’s life, it had only declined to 65 grains of fine silver. This is an extraordinary achievement. No other civilization has ever had an international currency that stayed the same value —or pretty much so, since a fall from 67 to 65 grains of silver is a loss of less than 3%. And this was not only during the period of its greatest influence, but even as it declined in power over a period of six centuries.Whatever the secret of the Greeks was, no international currency since then has ever been able to keep its value, even as the government issuing it started on its seemingly inevitable decline.Certainly the conquering Romans were astounded at how the Greeks had mastered money. They paid Greece the ultimate monetary compliment by fashioning their own money, the Roman Denarius, as an exact copy of the Drachma right down to the size and weight. Read more of this post

Cold Steel


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‘Cold Steel’ is a mesmerising read.It is a narration of the takeover battle waged by Lakshmi Narayan Mittal against the management of Arcelor to emerge as the Emperor of Steel.

In 2006, the two largest steel-producers in the world-Arcelor and Mittal Steel, are in the middle of  a bitter battle for total market domination

At first Lakshmi Mittal proposes a friendly merger with rival Arcelor, a pan-European company whose interested parties include the governments of Spain, Luxembourg and Belgium.

Arcelor’s mercurial CEO, Frenchman Guy Dollé, firmly refuses,using intemperate language.To quote,“The answer is clearly no…There are two categories of steel. There is premium-quality steel and there is commodity steel. It’s like, there’s perfume, that Arcelor specialises in, and then there’s a sort of eau de cologne which is Mittal’s domain… a lot more technology and grey matter goes into each tonne we sell.” ….. “Part of Mittal’s offer consists, if you’ll excuse the expression, of monnaie de singe.”(literally meaning “monkey money” or “funny money” or tainted money).These same words come back to haunt him later.

The refusal sets the scene for a massive hostile takeover involving billions of dollars of finance and government and shareholder manoeuvring. The corporate battle that ensues takes on epic proportions and becomes  one of the world’s biggest and most hard-fought industry takeovers of recent years. It sends shockwaves through the political corridors of Europe, excites the world’s financial markets, enriches thirty hedge funds and transformes the global steel industry.The participants come from many different continents and include six billionaires, many of the world’s top investment bankers (interestingly with two brothers, pitted against each other, one working for Goldman Sachs and the other for Morgan Stanley),top law firms and public relations outfits , presidents , prime ministers and politicians occupying the highest positions in the current and emerging superpowers. Read more of this post

Why Not Teach People How To Become Wealthy?


This post is in reply to this post http://goodnewsforisla.wordpress.com/2010/12/11/day-58-billions/ and other articles in a similar vein.

To quote from the above post:

Richard Stearns World VisionHere are a few facts about billionaires and the wealthy (taken from ‘The Hole In Our Gospel ‘by Richard Stearns).  
1) Today’s 1,123 billionaires hold more wealth than the wealth of half the world’s adult population.   

2) The wealthiest 7 people on earth control more wealth than the combined GDP (Gross Domestic Product) of the 41 most heavily indebted (poor) nations.  
3) The poorest 40 percent of the world’s population accounts for just 5 percent of the global income.  The richest 20 percent accounts for three-quarters of the world’s income.

 
These facts are staggering when you consider the disparity between the wealthy and the poor.  If only those that were extremely wealthy would share their wealth, perhaps the poor wouldn’t be as poor.  The sick could be cured.  Thirst could be quenched, and hungry tummies fed.  

                                                                                                                                                                                                              

Please  consider the following points:

(1) Billionaires hold about one percent of the world’s house hold wealth( source:http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecID=900003&contentID=254950).So what would happen if all the world’s rich gave away their wealth?Something like this…..The world’s richest man Carlos Slim Helu has a estimated networth of less than US$60billion.There are some six billion souls on earth.So if we were to distribute his money amongst all the people of the world,each person would get an additional US$10.And if instead of all the people if we were to give the money to only the poorer 50% ,each person would get  US$20.Still money but not that much….. Read more of this post

The Difference Between Stock Market Investors and Speculators


wealthymatters.com

The following is an excerpt from Seth Klarman’s ‘Margin of Safety.’I got around to reading this book based on the recommendations of one of the readers of this blog.Thank you Andy!I think the following is a nice way of making a distinction between stock market investment and speculation.BTW the book is pretty nice and I will blog more about it as and when I come across more interesting stuff.

 

 

 

To investors stocks represent fractional ownership of underlying businesses and bonds are loans to those businesses.Investors make buy and sell decisions on the basis of the current prices of securities compared with the perceived values of those securities. They transact when they think they know something that others don’t know, don’t care about, or prefer to ignore. They buy securities that appear to offer attractive return for the risk incurred and sell when the return no longer justifies the risk.Investors believe that over the long run security prices tend to reflect fundamental developments involving the underlying businesses. Investors in a stock thus expect to profit in at least one of three possible ways: from free cash flow generated by the underlying business, which eventually will be reflected in a higher share price or distributed as dividends; from an increase in the multiple that investors are willing to pay for the underlying business as reflected in a higher share price; or by a narrowing of the gap between share price and underlying business value.Speculators, by contrast, buy and sell securities based on whether they believe those securities will next rise or fall inprice. Their judgment regarding future price movements is based, not on fundamentals, but on a prediction of the behavior of others. They regard securities as pieces of paper to be swapped back and forth and are generally ignorant of or indifferentto investment fundamentals. They buy securities because they “act” well and sell when they don’t. Indeed, even if it were certain that the world would end tomorrow, it is likely that some speculators would continue to trade securities based on what they thought the market would do today.Speculators are obsessed with predicting-guessing-the direction of stock prices. Every morning on cable television,every afternoon on the stock market report, every weekend in Barron’s,every week in dozens of market newsletters, andwhenever businesspeople get together, there is rampant conjecture on where the market is heading. Many speculators attempt to predict the market direction by using technical analysis-past stock price fluctuations-as a guide. Technical analysis is based on the presumption that past share price meanderings,rather than underlying business value, hold the key to future stock prices. In reality, no one knows what the market will do;trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.

The Polyester Prince


wealthymatters.com‘The Polyester Prince ‘ by Hamish McDonald is an unofficial biography of Shri Dhirubhai Ambani.I personally enjoyed the book and gained from reading it.There is much in the book to inspire people starting out on their personal entrepreneurial journeys.

Dhirubhai was not born to privilege.He didn’t have much of a formal education.It was sheer enterprise , hard work , measured risk taking , a fighting – spirit , good people skills , networking , thinking out of the box , seizing opportunities and great execution skills that helped him make his fortune.This book details many of the incidents of his life.It can be mined for information on how to grow one’s business and deal with the day to day problems faced in building a business from scratch.

Dhirubhai held the opinion that there could literally be thousands like him.This book is a great gift to give an friend who could potentially be one of those few thousand.Dhirubhai’s life-story is the encouragement and in this book is the information needed to get started as an entrepreneur.

How Wealthy People Behave That The Poor Do Not


wealthymatters.comFollowing is a list of the differences in the habits of the wealthy and the poor found in the book “Secrets of the Millionaire Mind-Mastering the Inner Game Of Wealth” by T. Harv Eker.I have found these distinctions to be quite true.And if you think about the actual behaviour of richer and poorer people you personally know you will be able to verify the differences yourself.

I use this checklist periodically to check my own thought patterns and behaviour and correct them.I have personally benefitted from this exercise and I urge you to try it.

Wealthy people believe, “I create my life.” Poor people believe, “Life happens to me.”

Wealthy people play the money game to win. Poor people play the money game to not lose.

Wealthy people are committed to being rich. Poor people want to be rich.

Wealthy people think big. Poor people think small.

Wealthy people focus on opportunities. Poor people focus on obstacles.

Wealthy people admire other rich and successful people. Poor people resent rich and successful people.

Wealthy people associate with positive, successful people. Poor people associate with negative or unsuccessful people.

Wealthy people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.

Wealthy people are bigger than their problems. Poor people are smaller than their problems.

Wealthy people are excellent receivers. Poor people are poor receivers.

Wealthy people choose to get paid based on results. Poor people choose to get paid based on time.

Wealthy people think “both”. Poor people think “either/or”.

Wealthy people focus on their net worth. Poor people focus on their working income.

Wealthy people manage their money well. Poor people mismanage their money well.

Wealthy people have their money work hard for them. Poor people work hard for their money.

Wealthy people act in spite of fear. Poor people let fear stop them.

Wealthy people constantly learn and grow. Poor people think they already know.

Indian Style Philanthropy


wealthymatters.comConversations about charity and philanthropy often make me acutely uncomfortable.There is a bit too much sanctimony, one upmanship and pretence for my tastes.Unfortunately ever since Warren Buffet came up with his “The Giving Pledge” , philanthropy is frequently in the news and such conversations have become increasingly commonplace. I just don’t think much of using social pressure to get individuals to comply.It just offends the Libertarian in me.Moreover,I find it hard to see every act of charity I hear of as completely altruistic and having to go through the motions of pretending otherwise is a drag.Worse , I’m all to aware of my own motivations and social expectations of altruism makes giving so stressful.

For people like me ,I come across something interesting while reading last Thursday’s Economic Times newspaper.In an article reviewing the book  “Stages of Capital: Law, Culture, and Market Governance in Late Colonial India” by Ritu Birla there is a mention of different types of donations practised by traditional Jain merchants of Jaipur such as:

  • anukampa-dan, a gift given out of compassion;
  • ucit-dan, a gift given out of duty;
  • kirti-dan, a gift given to earn fame;
  • abhay-dan, a gift of fearlessness;
  • supatra-dan, a gift of religion.

 This approach of accepting that donations have various motivations,and according all such donations, irrespective of motivations, legitimacy makes it so much easier to talk about charity,gifting and philanthropy.It doesn’t expect the giver to be a altruistic saint all the time.Nor does it demean the receiver since he/she helps the giver to get something of value in return.Overall it saves a lot of agony and agonizing in the giver,receiver and society at large.

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