The Most Expensive Real Estate In The World
May 24, 2012 4 Comments
Monaco – $5,408 PSF Read more of this post
Prem Watsa – The Canadian Warren Buffett
May 23, 2012 5 Comments
Seeing how Prem Watsa is in the news in India these days with respect of the sale of Thomas Cook India by its British parent,(http://economictimes.indiatimes.com/news/news-by-industry/services/travel/toronto-based-fairbridge-capital-to-buy-thomas-cook-india-deal-estimated-at-rs-1000-crore/articleshow/13365646.cms) ,now might be just the time to take a look at the life of this media shy individual.
Watsa is not very widely known outside of Canada, but is well regarded and followed in value investing circles. He has shown an incredibly prescient ability to analyze the financial markets. Some of his most famous calls include selling half his stocks before the 1987 crash and buying S&P puts before the index fell off a cliff in 2000. He also bet against the Japanese Nikkei but his biggest success came more recently during the 2008 sub-prime crisis when he bought credit default swaps on the premise that banks and financial institutions would struggle if a credit and liquidity crisis arose. Today, Watsa is the CEO and Chairman of Fairfax, which has a market cap of approximately $8.7 billion.Fairfax Financial Holdings Limited is a financial holding company based in Toronto, Ontario, which is engaged in property, casualty, and life insurance and reinsurance, investment management, and insurance claims management. He is also a member of the Advisory Board for the Richard Ivey School of Business-his alma mater, a member of the Board of Directors of the Royal Ontario Museum Foundation and as well as Chairman of the Investment Committee of St. Paul’s Anglican Church.Till recently he was also a non-executive director of ICICI Bank.Whatever I can piece together of his story is pretty fascinating…. Read more of this post
How To Shift Between Simple And Compound Interest Rates
May 21, 2012 Leave a comment
Now that banks and other financial institutions are having to compete to raise deposits from the public,quite a few are resorting to a bit of window dressing.They quote annual yields,annualized returns or simple interest rates instead of compound interest rates for multi-year deposits.
Now a simple interest rate looks more impressive than a compound interest rate over longer periods of time ;so do check what sort of interest the seller is offering before locking your money away at a rate that looks great.
Here is a simple step-by-step way that you can use to mentally estimate the compound interest rate that is equal to any simple interest rate. Read more of this post
The Dam Analogy
May 21, 2012 Leave a comment
A river and a dam across it is a nice way of visualizing one’s finances.A source of income is like a river.To save a bit of it is like building a dam across the income stream.
In real life dams are used to impound water in times of plenty so that it can be used when water is scarce.Deducting money from a salary cheque to fund one’s pension or investing regularly in a mutual fund via a SIP , is like holding back water in the time of plenty to use when water is scarce.If a person comes by a windfall,say, by selling a business/ winning a lottery/receiving an inheritance etc. and saves/invests the money safely,it is akin to storing rainwater from a freak shower for use later. Read more of this post
Investing In Urban Residential Real Estate In India
May 20, 2012 22 Comments
The travails of the Western world might put a question mark on the expression “as safe as houses”. but in India, urban real estate continues to make sense as an investment option.
Here are the reasons:-
First:In the US, the average members in a household are 2.6. In India, there is an estimated shortage of 21 million housing units and unless there is a dramatic increase in supply, the shortage is not likely to come down because there is a sizeable young population adding to the demand .Also Indians will continue to migrate to cities and 50% of the country will be urbanized by 2044.As families often resort to step-migration many TierII towns will do as well as the major cities as investment destinations.
Second:The high rates of inflation and wage rises are bound to make houses more expensive to build in future.So residential real estate investments are bound to hold their value and possibly continue to give good capital gains. Read more of this post
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