“If a girl is beautiful a suitor will come. If a stock is beautiful, a suitor will come. So I don’t search for suitors when I buy the stock.”
“I have learnt two things about the press and wives. When they say something – don’t react.”
“India will remain in a phase of very good economic growth for the next 30 years.”
“Markets are like women — always commanding, mysterious, unpredictable and volatile.”
“Anticipate trend and benefit from it. Traders should go against human nature.”
” Successful investors are opportunistic and optimistic ones.”
“The mother of bull all runs is still to come.”
“I have two-three dreams in life. The first dream is that when I die and only truth of life is death, how many people come to my funeral and say, a good man has died. That is the greatest ambition in my life. Second thing is I want to earn the greatest wealth of the world in the most legitimate manner; practical legitimate manner and leave the largest part of it to charity.”
“Respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible.” Read more of this post
Filed under Paper Assets, Theory, Tool Kit
Tagged with average, bull runs, cash, economic growth, investors, large cap, loss, markets, opportunity, postaday2011, profits, Quotes, Rakesh Jhunjhunwala, RandomBlog2011, small cap, traders, trends, Words
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
The 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
Filed under Alternative Assets, Precious Metals, Theory, Tidbits, Tool Kit
Tagged with 6 carats, Africa, Alexander the Great, Alexius Comneus, America's Great Depression, Anastasius, Ancient Greeks, Andalusia, antiquity, Antoninianus, Arabian peninsula, Arabs, Aristotle, asia, Athenian Drachma, Aureus, Baghdad, bankers, base metals, Basilica di San Vitale, Battle of Milvian Bridge, black markets, book, Book of the Prefect, British Museum, Bullion, business, Byzantine Empire, Byzantium, Cairo, Caracalla, cash, Christ, Christian Church, Christianity, Christians, church of Sant Apollinare Nuovo, clip coins, confiscate property, Constantine, Constantinople, convivienca, copper coins, Cordoba, Council of Nicea, currencies, Damascus, Dark Ages, debase currency, debt, Delhi, devaluation, Dirhem, Edict of Milan, Egyptian, Egyptians, Elgin Groseclose, Emperor Diocletian, Emperor Heraclius, Emperor Nero, France, Genoa, Ghana, God of Abraham, Gold, gold coins, Goths, Granada, Greece, Greek Coins, Hagia Sophia, hard currency, history, hoard, Holy Land, Huns, Imperial Romans, India, Inflation, interest, international currency, Islam, Islamic coins, Istanbul, Italian City States, Jerusalem, Jews, Julius Caesar, Law of Maximum, Mecca, Mohammad, monetary history, monetary system, Money and Man, money changers, mosaics, Muslims, Orthodox Church, Ottoman Turks, pagan gods, Persia, Persian Empire, Pope Leo IV, postaday2011, poverty, Praetorian Guard, prices, prices soaring, RandomBlog2011, Ravenna, reduce taxes, Reichsmark, Roman Coins, Roman Denarius, Roman Empire, Roman persecution, Rpme, Septimus Serverus, Sicily, silver coins, slave, Sol, Solidius, Solon, Spain, St.Peter's, Syria, The Bezant, The Denarius, The Dinar, The Drachma, Thomas Carlyle, Tiber, Toledo, trader, treasury, trinity, Tripoli, Turkey, Umayyad Caliph Abdel Malik, Vandals, Vatican Palace, Venetian Crusaders, Venice, Visigoths, wage and price control, Weimar Republic
Those who learn from history, have the ability to PROFIT from it.So here is some history:
Inflations start out slowly.Governments will not openly admit to debasing the currency. They will cite other reasons for why inflation is going up. In Weimar Germany,for example, government officials and those within the finance community blamed their trade partners and foreigners for the Reichsmark depreciating. German writers and politicians at the time had said that “paper inflation was not the cause or consequence of the external depreciation of the Reichsmark. The depreciation of the Mark was held completely independent of the condition of paper circulation between 1921 and 1923″ – even though money in circulation went up 23 times within 2 years ! Prices of imported goods back then – denominated in US dollars – went up 344 times. The official view from within the government of the Weimar Republic – the chancellor, the head of finance, the head of the Reichsbank – was to blame it on the excessive burdens thrust on the German people with war reparations, the violent policy adopted by France (when France invaded and took over an entire industrial section of Germany), and they also blamed it on increases on the price of imported goods.Conversely, the view held by those outside of Germany was that the depreciation of the Reichsmark was due to the government’s huge budget deficits, which required Germany to continuously print paper money. I guess people around the world will recognize the current day parallels to this scene from history.Quite a few governments are doing something like this today. Read more of this post
Filed under Theory
Tagged with budgetary deficits, buy businesses, buy properties, cash, credit report, debasing currency, energy, food, foreign currencies, France, Germany, Inflation, liquid assets, loans, manufactured goods, money circulation, multiply wealth, postaday2011, print money, profit, RandomBlog2011, Reichsmark, savers, wealth, Weimar Republic
Financial advice always needs to be nuanced.What is good for one person in a certain situation many not be so good for another in a different situation. Unfortunately people are always looking for simple advice and rules of thumb.If we over-generalize on generally sane financial advice we can come to a sorry pass.
Here are some common homilies that need some reconsideration:
1. A house is always a good investment:A house is a tangible investment that you could potentially live in.You could rent it out and make some money.Maybe it will help you save tax.Maybe you could invest in one to save for retirement.Generally saving for a house to live in is good in that it gets a family to start saving.But at the time of buying a house it’s important to remember that you are buying a house and not a home.So do not go sentimental and over pay.Buying a house requires a deal of legwork and hard-headed thinking.Overpay and you will have to worry about the fluctuation in market prices.Try to buy an encumbrance-free house at a discount.It adds a greater measure of safety to your investment.Buy when the markets are down to safeguard yourself.Next how you pay for the house makes a big difference.Try to put down a large payment to save on the total interest you will pay.Shop around for a good loan if you need one.Read the fine print.Check if there is a penalty on prepayment.Lower rates matter.Also check if the interest is calculated on a declining balance.Check for hidden costs starting from the processing fee,the lawyer’s fee and structural engineer’s fee and insurance.When you consider the EMI you want to pay, don’t be too optimistic.Pay increments and bonuses might not come on time.Remember that over longer periods something is bound to go wrong.It’s the way of life.Also if you pay too much of your income into house payments you will not have any money left over to diversify into other assets and derisk your investments. Read more of this post
Filed under Theory
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