Paper Assets | wealthymatters

World’s Greatest Money Maker – Warren Buffett.

September 11, 2011 2 Comments

This is a BBC documentary I watched on Saturday on the internet.It was aired in India a few days ago. My friend Avishek Jha saw caught it on TV and was pretty insistent that I watch it.

This BBC documentary seems to have been made a couple of years ago and has probably been aired in the UK ,before being broadcast in India.So my apologies to my UK readers for re posting old stuff.

This documentary focuses more on Warren Buffett, the person,the manager,the entrepreneur and the philanthropist rather than just the investor .I think the movie is worth watching and at least I came out learning a couple of new things about the man.Here are the links to the documentary.Happy Watching!

Don’t Anticipate the Markets – Rakesh Jhunjhunwala

August 21, 2011 3 Comments

wealthymatters.com For a while now I have been expecting the stock markets to tank and keeping aside a lot of cash to go bottom fishing. I thought that the S&P downgrade of the US would be the trigger event.However as things panned out,at the time the markets didn’t slide as much as I expected.But in the time since then my expectations have come to pass.Meanwhile I’ve been assailed by doubts so often during this time that I’ve considered just rushing in and buying stocks for fear that I might not get a lower price.The video below also added to my doubts at the time but it has also given me a way to deal with doubts for all time.I just have to remember“Markets are going to do what they are going to do….In uncertain conditions you can’t really anticipate markets and valuations have no base………so let’s not anticipate markets,let’s watch them.” Read more of this post

Filed under Paper Assets Tagged with Don't Anticipate Markets, postaday2011, Rakesh Jhunjhunwala, RandomBlog2011

Bill Gross and Frogs

August 20, 2011 4 Comments

wealthymatters.com Using the metaphor of frogs Bill Gross explains Financial Repression and the ways of dealing with it.Of course he speaks of the situation in the US but there is no reason why investors in other countries whose governments are struggling with debt can’t learn from him.All said and done not for nothing he is the Bond King!

To quote him “Put a frog in a kettle of boiling water and he’ll jump out faster and further than any of those blue ribbon winners at the Calaveras County jumping frog contest.Put him in a pot at room temperature, however, slowly turn up the temperature to boiling, and you’ll have frog legs for dinner. This latter, more unfortunate toad temporarily adapted to his external environment, which seemed like a practical thing to do, until – well, until he reached 212 degrees at which point he was cooked.”Financial repression is similar to slowly turning up the heat on poor froggy/the bond holder/saver. And the boiling point is when the nominal returns on bonds turns negative. Read more of this post

Filed under Paper Assets, Theory Tagged with Bill Gross Frog Story, bonds, cheap bonds, debt, Financial Repression, nominal return, postaday2011, RandomBlog2011, savers, transfer of wealth

Bill Gross – The New Normal

August 20, 2011 2 Comments

wealthymatters.com

Normally whenever I hear some version of why something is different this time over I become a skeptic and start tuning out the person.However I am drawn to the idea of ‘The New Normal’ propounded by the Bond King-Bill Gross of PIMCO and Mohamed El-Erian his Co CIO.This is because they are not so much telling us that economic cycles are bunk but that we are blind to the larger economic cycles.

Bill’s message is anything but easily palatable for a lot of people.It is also true that his timing has been wrong in the past. I won’t go so far as to say every minor detail of what he describes as the ‘New Normal’ will come true but I believe he has gotten the big picture right.I fear that we are in for an extended period when equities might not on an average give the high rates of returns they did in the recent past.Bonds might outperform stocks in this period and investors will have to re-examine their beliefs.Assumed rates of return on various long term savings might have to be revised. The most successful investors during this period will probably be those with common sense and importantly the powers of intuition, observation, and the willingness to accept uncertain outcomes. And all the talk of countries like India escaping the international turmoil unscathed will be wishful thinking. Read more of this post

Filed under Paper Assets, Theory Tagged with Bill Gross Bond King, low returns, Mohamed El-Erian, New Normal, PIMCO, postaday2011, RandomBlog2011

Should You Buy Close-Ended Mutual Funds?

July 18, 2011 Leave a comment

If you ever hear a spiel that goes something like this:Staying invested in the market for the long term ,through various cycles ensures that investors get rich.Unfortunately at the first sign of trouble most mutual investors run.Then the fund house has redemption problems and long term investors like you pay for the weakness of these short term investors.But if you go for XYZ scheme,there is a lock-in of n years so no matter what happens investors can’t flee easily,so ABC wise fund manager can work his magic and give you extraordinary returns.And BTW this fund is now floating its NFO.If you delay you can’t benefit from this good scheme for n more years-Be skeptical.Very skeptical.This salesperson might just stick you into a dud investment you can’t exit easily. Read more of this post