February | 2011 | wealthymatters

Mukesh Ambani – In His Own Words

February 4, 2011 6 Comments

Normally here are only 3 types of articles on the Ambanis: Awestruck journalists gushing about the Ambani fortune, trenchant criticism from people who seem to have the belief that all money is evil and that great wealth is singularly evil and society mags featuring the newest Ambani Toys and other tittle-tattle.Just because this article is so very different from the normal ones I have kept it so far.Thought I would share it here even though it dates from 2007. The highlighted bits are stuff I found interesting.I got a couple of good money making ideas out of reading this piece.I hope you do too.

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But very little is publicly known of his beliefs, vision and motivation. In his most expansive interview ever to MoneyLIFE, a personal finance magazine, Reliance Industries chairman Mukesh Ambani tells
MoneyLIFE editors Sucheta Dalal and Debashis Basu, what drives him and his business decisions

A lot of details about your life are already known. But we don’t know things from your end. Your life has changed dramatically in just about three decades; will you take us through that process?

From my point of view, very little has changed (Laughs). In terms of attitude to life, little has changed. There are important lessons I have learnt during my upbringing. It is important to share these, though these are tough to practise as a parent (smiles).

We were like a joint family and I was the first child of the family of that generation. There were advantages in being the first child those days. My father navigated through life from Aden in Yemen to Bhuleshwar (a congested commercial precinct in Mumbai , to Usha Kiran (Mumbai’s earliest skyscraper) at Altamount Road to Sea Wind (an exclusive tower which is the Ambani residence).

My first memories are of the early ’60s at Altamount Road which was then an emerging area. We were a close-knit family and the four of us — Dipti, Nina, Anil and I — were left to do what we wanted. There were boundaries, of course, but within those, we were not micro-managed. Things have changed so much now. When my kids, Isha and Akash, were in the third standard, we behaved as though it was our exam.

Our own childhood was totally different. I guess when you are left on your own, you find your true potential. I remember my father never came to our school even once. Nevertheless, he was hugely interested in our all-round development for which he did some amazing things. Read more of this post

Filed under Tidbits Tagged with Agribusiness, Ambani, Anand Jain, Bill Sharpe, DuPont, Education, Fresh Produce, Kiran Manelkar, KK Malhotra, Life Sciences, Mahendrabhai Vyas, Manoj Modi, MM Sharma, Mukesh Ambani, Patalganga, Polesyster, Rasikbhai Meswani, Reliance, Retailing, SEZ, Stanford, Telcom, World Bank's Young Professional's Programme

Melinda Gates

February 4, 2011 3 Comments

I have never really been much of a fan of the Gateses.I have heard of their philanthrophy and it’s done on a truly gargantuan scale.The beneficiaries are in poor countries.The causes are important to countries like India.Obviously urgent problems are getting addressed.Normally this should get me interested.However I have never been able to find a connection with the Gates.I normally avoid reading or watching them in the news.It’s not so much any particular thing they say that is a turnoff as I can’t really relate to where they are coming from.

But while hunting around for the story of how Bill and Melinda met each other , today, I stumbled on an article from Fortune Magazine focussed on Melinda.It filled me in on the details of Melinda’s background and helped me get where she might be coming from.Thought I’d put it up here.

BTW I just figured that the real turn-off comes from her view of the world as a place of finite wealth which needs to be allocated in the best possible manner.I guess I believe that assets are infinite in nature.It just needs imagination and human ingenuity to literally create assets.So sand or silica has been known for just about forever, it’s just when we learnt to use it to make ever smarter computer chips that we humans started creating assets out of materials nobody considered as useful before.Not everyone is born with a silver spoon in their mouths but there is not that much variation in the mental faculties of humans.In fact necessity is the mother of creation and people who grow up facing more constraints are naturally more adept at being creative and seizing opportunity.So I believe it better to get all people to see wealth with their mind’s eye rather than battle to distribute existing wealth.Existing wealth is really puny if you think about it….The richest person in the world has not above US$60 .And there are 6 billion people in the world.So just redistributing the US$60 billion amongst all the people of the world will give each person only US$10……guess that’s not all that much.Don’t you think it’s better to learn how to be wealthy?

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Years before Melinda French met and married Bill Gates, she had a love affair – with an Apple computer. She was growing up in Dallas in a hard-working middle-class family. Ray French, Melinda’s dad, stretched their budget to pay for all four children to go to college. An engineer, he started a family business on the side, operating rental properties. “That meant scrubbing floors and cleaning ovens and mowing the lawns,” Melinda recalls. The whole family pitched in every weekend. When Ray brought home an Apple III computer one day when she was 16, she was captivated. “We would help him run the business and keep the books,” she says. “We saw money coming in and money going out.” Read more of this post

Filed under Philanthropy Tagged with Bill and Melinda Gates Foundation, Bill Gates, Bill Gates Melinda Gates, Melinda Gates, Warren Buffett

Office Romance : How Bill Met Melinda

February 3, 2011 2 Comments

Since some visitors to my blog have been searching for details of how Bill and Melinda Gates got together,I thought I’d put up this article from the Guardian newspaper of the UK.

Office romance: how Bill met Melinda

Friday, 27 June 2008

In summer 1986, freshly graduated from Duke University with a degree in computer science and economics, Melinda Ann French was working as an intern for IBM. She told a recruiter she had one more interview – with a new company called Microsoft. The recruiter was keen. “If you get a job offer from them,” she said, “take it, because the chance for advancement there is terrific.”

Indeed. Six-and-a-half years later, Melinda Ann had advanced through the company, from software marketing tyro to general manager of information products such as Expedia and Encarta; more significantly, she had advanced to a senior role in the heart of the chief executive, Bill Gates, soon to become the world’s richest man. Today, she is one half of the world’s top charity foundation, with personal jurisdiction over the spending of $80bn (£40bn). Clever, raven-haired, strong-featured and tough as nails, she brings equal amounts of compassion, common sense and business nous to the small matter of alleviating world sickness and poverty.

Born in 1964, she grew up in Dallas, Texas, the daughter of Ray French, an engineer and house-rentals agent. At school, Melinda was earnest, driven and goal-orientated. Her introduction to the cyber-world came at 14, when her father brought home an Apple II, one of the first consumer computers available. She was soon playing computer games, and learning the Basic programming language.

It has always amused Bill Gates that his wife is better educated than him – he is America’s most famous college drop-out. They met in 1987, four months into her job at Microsoft, when they sat next to each other at an Expo trade-fair dinner in New York. “He was funnier than I expected him to be,” she reported, neutrally. Months went by before, meeting her in the Microsoft car park, he asked her out – in two weeks’ time. She said, “ask me nearer the time.” He had to explain to her the ceaseless daily flood of meetings. Read more of this post

Filed under Tidbits Tagged with Bill and Melinda Gates, Melinda Gates, Office Romance

Diamond Prices

February 2, 2011 4 Comments

As gold prices have climbed up steadily over the decade many Indians have been shopping for light weight gold jewellery studded with diamonds.

Through long experience,Indians are sophisticated gold buyers.But it’s a different matter when it comes to diamonds. Most people just have no idea of how much diamonds ought to cost.Here is a link to help get a better idea of diamond prices http://www.diaprices.com/parcel-rates/round-pacel-prices .This should help us bargain while shopping for diamonds.

Happy Shopping!

By the way if you are considering buying diamonds abroad here is a link to find out what you might have to pay in NY http://diamondregistry.com/price.htm and here are prices from Antwerp http://www.ajediam.com/Diamonds_Prices_Diamonds_Ratings.html

Filed under Alternative Assets, Tool Kit Tagged with Diamond Prices, Diamonds

Discounted Cash Flow Calculator For Share Valuation

February 2, 2011 6 Comments

When we buy shares we all want to buy cheap and sell dear.However the really difficult thing is figuring out whether something is actually cheap.To an extent we can try to rely on our memories and those of older people to compare current prices with historic prices adjusted for inflation.If we have preserved old papers we can do slightly better than rely on memories and impressions.This method however does not really work when the economy and the company itself has changed beyond recognition.So if our parents or grandparents bought SBI shares at IPO for 100 rupees a share we would have a long wait to see those prices ,or even those prices adjusted for inflation, again.

To buy at dips or corrections in the share price,or to buy only in bear markets is a good idea.But no one has been able to predict market bottoms consistently.So we are all faced with the decision of whether to buy a given company’s shares at a given price or not at any given time.And it helps to know whether we getting a good enough price if not the lowest price.To determine if we are getting a good enough price we can compare it with the fair value of the share we get by using this calculator http://www.moneychimp.com/articles/valuation/dcf.htm

The calculator takes values in US Dollars,but if we mentally replace the sign with any other currency sign we will be OK.We just need to focus on the absolute numbers.We can get The EPS numbers from the Annual Financial Reports(either buy one share and have this document delivered home every year or download it from the company website), financial websites, ads in the financial newspapers like Economic Times etc.Finding the growth in earnings figure to plug into the calculator is a bit more tricky.I just go over the last 3 years EPS(often found in the year’s AFR or you need to find the back reports often found on company websites) and work out the average year on year growth in earnings.I then look to the management discussion section and check overall forecast for the industry.I then check for any debt funded expansion plans that are likely to affect the EPS.I then use these three pieces of information to guesstimate a growth in EPS.I keep the growth estimate for 5 years only and the annual growth rate therafter at 0%.The discount rates I use is the average 10 year Sensex returns I get from here: http://www.hdfcfund.com/Calculators/SensexRollingReturnsCalculator.aspx?ReportID=C208C983-C4A5-41B4-B245-CB77C8D2EDC3

Then I accept my falliability and try to look for shares of good companies available at prices well below those I get from using this calculator and my inputs.I then try to forget about the stock market and the daily fluctuations of share prices till the next time I wish to buy shares.