Monday, March 17, 2008

5 lessons from the stock market crash

1. Believe no one. At times even yourself. If they tell you that stocks return more than bonds over the long term, ask them what they mean by long term. If they say 10 years, ask them if they've heard about a country called Japan. In 20 years, the stock market there has halved. If they say shit happens, ask them if they've heard about a country called the United States of America - 8 years (2000 to 2008), that market hasn't gone anywhere. Long term, short term, any term. If stocks return better than bonds, then just remember, you're also taking a higher risk. If you can't do the time, don't do the crime.

2. In the end, it all boils down to luck. Some people are born lucky and some are unlucky losers. Most of mankind trades in between. But no one is bigger than the markets. Take all the collective advice and learnings from all those market experts bombarding the CNBCs of the world and put it on one side. As Jack Welch said "There are more mediocre people making more money on Wall Street than any other place on earth. " So for all their collective experience, their pedigree education, their wisdom, their brilliance, they're all as prone to fall victim to greed as you are. From Wall Street to Dalal Street, a sucker's born every minute. The game changes, but the rules remain the same. South Sea, tulips, Ponzi, Enron, Long Term Capital Management, sub-prime.... I say bring it on. This is what the human race has to offer, as proof of so many years of technological advancement and progress. Sheesh. In some matters, we're still apes. Evolution kinda passed us by there now, didn't it.

3. Fear will scare you, and greed can kill you. Discipline is not a four-letter word. It's a tough exercise that you learn through the years. That's right, your own wisdom from your own experience. Not that of the guy managing your money, because he sure ain't answerable to anyone. Not you. Not to his boss. Ever wonder why there's only one Warren Buffett in the world? Read what he has to say. Learn, fall, learn and move on. Life's a bitch, but there's always debt, right?

4. Making money isn't fun. Bull runs don't last forever, and the bear is one ugly animal. Your money is hard-earned, so think before listening to some slick dude/babe armed with a laptop, who's flashing a presentation about the power of compounding, or long-term investing, or the next big thing. He's just trying to earn a living and the younger he is, chances are he'll only tell you about what happened between 2003 and 2007. Nowadays, spreadsheets and presentations aren't updating too quickly for what's happened in 2008.

5. Define and dare. Be clear that you have what it takes. Be clear about what it can cost you. It's your hard-earned money and that's what is at stake. There are no notional losses, there are just lost opportunities. If you want a suit, be prepared to lose your shirt, pants and then some. Over long, long periods, the markets can, maybe, at times turn kind. But don't expect it.

But heck, enough of cliched by-lines. Tell me, what did the markets teach you today?

Wednesday, March 12, 2008

Bombay's Black Friday, never forget

Blast 1 - 1.28pm - The Bombay Stock Exchange. 84 dead, 217 injured.

Blast 2 - 2.15pm - Narsi Natha Street. 5 dead, 16 injured.

Blast 3 - 2.25pm - Air India Building. 20 dead, 87 injured.

Blast 4 - 2.30pm - Lucky Petrol Pump, Dadar. 4 dead, 50 injured.

Blast 5 - 2.55pm - Century Bazaar. 113 dead, 227 inured.

Blast 6 - 3.05pm - Zaveri Bazaar. 17 dead, 57 injured.

Blast 7 - 3.13pm - Plaza Cinema, Dadar. 10 dead, 37 injured.

Blast 8 - 3.20pm - Sea Rock Hotel, Bandra. No one dead or injured.

Blast 9 - 3.25pm - Juhu Centaur Hotel. 3 injured

Blast 10 - 3.35pm - Airport Centaur Hotel. 2 killed, 8 injured.

"Subsequent police investigations revealed that 257 people were either killed or went missing in the blasts while 713 were injured."

Dawood Ibrahim, the main accused, is still at large.

Thursday, March 06, 2008

Song of the year 2008

I doubt anything can come close to "Ay hip hoppper" by Ishq Bector featuring Sunidhi Chauhan. More than 9 months to go for this year to be over, but man, I don't know if anything can come close to this blockbuster.

And no, I refuse to hear any criticism about this song. If you don't like it, if it's not in your head if you're not clicking "replay" on that link above then I have one four-letter word for you my friend. Snob. Guahaha. Lyrics here and this bit which is what I'm tripping on for now.
Mere pyar ki basti mein, mere love ki basti mein.
Thodi masti ho jai sir!
Aye Hip-Hopper!