Friday, March 18, 2011

WC2011 and India - Predictor

In WC 2011, Just finished watching Sri Lanka Vs NewZealand and Srilanka was all over Newzealand and they were never in the game. Even though, Most of them expect Pakistan and Australia to be a close contest, I don't think it would be one. Lets wait and watch. By the way, I want to predict the results of WC 2011 Quarters-
Group A
Sri Lanka

England had all their nail-biting close matches and managed to pull off a draw against the mighty (:)) ) Indians and win against WI and SA and lost against two minnows they faced.

Group B
South Africa
West Indies

Results - India would win against West Indies. South Africa would win against Bangladesh.

So, Now into the Quarter results to identify the Semi-Finalists.

Australia vs WestIndies - Australia
India Vs Newzealand - India

England Vs Sri Lanka - Sri Lanka
South Africa Vs Pakistan - South Africa

Now the Semi-Finals to identify the Finalists.

Australia Vs India - India (Of course, I am an Indian :) )
Sri Lanka vs South Africa - South Africa.

And the finals,

South Africa vs India - India (The revenge game :-))

India gets the cup this time anyway!! :)

Ohh!! There will be no India vs Pakistan match this World cup!!

The above prediction just got missed and still we have only few teams left. This all started with Australia losing to Pakistan and ended up at the third place in Group B waiting to face the mighty Indians.

1st Semi-finals: India Vs Pakistan (India will win this one)
2nd Semi-Finals: Sri Lanka Vs NewZealand (Sri Lanka would win this game)

WC2011 Grand final: India vs Sri Lanka (India would win and get the cup that really counts!!!)

I have 2 Lakhs. How to get it doubled in a year?

Its a catchy title to click on the contents of the post. If you have 2 Laks, Great! Already you have double of 1 Lak :)

Okay, coming to the point, you are expecting 100% returns in a year. I have few important questions to ask you!?

(1) How much risk averse are you? Do you know risk and returns join hand in hand?
(2) If you are willing to take risk, Are you sure "You will not feel anything if you completely lose this 2 Laks"

In the order of High returns, if you are great at trading and making returns.
(1) Derivatives (Options and Futures) - Highest risk - You can lose all your money in one day as well. Gain the same in one day as well.
(2) Intraday - High risk - you will lose comparably less money. But trading will lead to lose all your 5 days profit in the 6th day. Do you really want that. If you know what you do and confident doing that, and have the stomach for doing that, please carry on with it.
(3) Equity - High risk - you will lose comparably less money. Again depends on whether you are an investor or trader. Many people have a doubt whether they are really a investor or trader themselves. If you have a doubt, then its highly likely that you are a short term investor cum trader. This is a new role that I have given people who are not actively trading, but when they do trade they do it only in short, they don't have proper goals.
(4) Equity Mutual Funds - Medium to High risk - This is comparably the best option to park the money if you are risk averse and if you want only around 15% returns in the long term.
(5) Debt Mutual Funds - Low to Medium risk - This depends on your risk profile - Around 8% return
(6) Fixed Deposit - No Risk - Now-a-days you get 10% returns in here (Before tax)
(7) PPF, NSC, POMIS - NO Risk - 6-8% - Debt Government bonds and PFs

If you are knowledgeable, you can go with direct equity and opt for the high risk equity and park some remaining money in Equity mutual funds. If you have some more stomach and great knowledge, move one or two steps ahead and do intraday trading and derivatives to achieve your goal faster. But remember, in the meantime, it is highly likely that you may lose your money as well.

Also, Equity markets give returns over 200% in a year and negative returns in another whole year. So, it is where you are and whom you believe.

Real estate regulation - Need for the day

Real Estate - General Perception:
An asset that always appreciates in value.
Demand will always be there as land is of limited availability.
Rental Income is like interest to your principal and Land appreciation is capital appreciation.

Real Estate - My thoughts:
An asset that can appreciate in value, but not always. People are not selling in loss. Remember, if it stands at the same price for over an year, you are at loss.
The demand and supply nature of real estate is for those who are usually dealing with it and who are well versed with it.
Its a very big investment and your first house is not your asset as it doesn't give you income and you don't see it in the investment perspective
Its a very illiquid instrument and its very hard to find the client to sell the asset at the desired price at the required time.
When you are investing in real estate, most of the people are highly leveraged, and boosting their returns. You know that its a risky investment and if you are ready to invest with high leverage, you are going to get high returns. In the year 2010, Real estate was at the boom and land prices increased @165% and please don't expect it to happen year after year.

There is a saying in Tamil which can be translated to English as "Built a House and see; Do a marriage and see." Literal meaning is "Doing a marriage and building a house is really hard"
But now-a-days, people easily fall prey to many builders (reliable and unreliable by their name) to their cheesy words and give their hard-earned money to them and delve into their work caring less about their home.

And builder makes a great fuss out of it and people who buy it may be forced to face either
(i) wait for few more months for possession
(ii) Agree on what was already built
(iii) Pay extra for unnecessary things that might not be used/non-agreeable terms
And many more... and gets frustrated about this later.

So you say all the above will be applicable only when you buy a flat and not when you buy a plot and you built it. Yes, thats when all the problems lie right on your head. You will hire a contractor and you will be at the mercy of the contractor. If you don't know him already and if he is handling many projects at the same time, you are screwed. Forget about the money, you will always end up paying more, you will not be finishing the project on time if you are not following up.

This following up is really a big key in real estate, when ever you building a flat or building in plot. Even when you are getting a loan for your house, you need to follow up.

Wouldn't it all be better if we had some rules and regulations in here. Complaints and solutions in common place. I don't think it would give solution to all the problems. At least it will give some regulation in the real estate market , what SEBI did to capital markets, and investors can freely get the assistance of them after SALES.

Remember, if you are sold the flats, and after a year you are facing a problem and you find the flat promoter in other name sitting pretty well in another place. What can you do today. File a case. It will run for years. He would have changed his name the very next year several times :)
And still the case will be running and such is our judiciary. This is where Regulation of Real estate would help us all.

TATA HOUSING has recently proposed the real estate regulation and I don't think it will come anytime soon though.