Prices doubled from 2009...enough said....
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  • Venky bhai - Dollar is falling rapidly and kicking the **s of NRI earning in dollars

    What abt the rupee depreciation ,which you have been so confident of...

    Where do you see the dollar going from here...
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  • Originally Posted by punerebuyer


    5. Lastly, human mind tries to justify the cost once it is paid. So once anyone pays some money s/he believes that the deal was good. It is very difficult to convince oneself that one has been cheated. Once we spend, we try to justify the spending. Some people convince themselves that this is what i wanted and this is what i can afford hence this is a good deal. That's just human behavior.....




    Absolutely true.

    Every real estate deal turns into a fantastic deal as time goes on - and is boasted as such to all and sundry
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  • Originally Posted by amit001
    Venky bhai - Dollar is falling rapidly and kicking the **s of NRI earning in dollars

    What abt the rupee depreciation ,which you have been so confident of...

    Where do you see the dollar going from here...


    MArkets are like that.

    There are good reasons for dollar depreciation - US debt default, QE3 by other names looming on horizon, India stocks continuing to do well, Indian economy seen a long term growth bet and attracting FDI and FII in last 2 months.

    Dollar is depreciating, Rupee is appreciating. We are all seeing. Seeing is believing.

    I did not anticipate QE2 (stupidity on the part of Fed in my opinion - I dont expect people to be stupid). I also failed to anticipate QE3 (even greater stupidity on the part of the fed - again in my opinion, it is even more stupid than QE2 - anticipating and predicting stupidity is clearly not possible with a rational mind). If QEs keep coming, dollar will keep depreciating. Nothing to predict there - 2+2=4 that is all.

    I am still happy - my Rupee gold is doing well despite all this, my stocks are holding value, I continue to accumulate FD and FMPs.

    If my prediction of Rupee depreciation comes true in the future (at some point US will be forced to raise rates, possibly after they end up defaulting and their credit rating is totally junked) then at that point my gold will do phenomenally well, FD rates will rise to 17% (and poor me locked in at 8.75% long term!), stocks will collapse, my RE will rise. At which point I might shift from gold and FD back into stocks.

    As long as you hold all 4 asset classes, balance only 5-15% of marginal money based on perceived market direction and do systematic investing and not short term speculating, one will not come to harm.

    I continue to see no competitive advantage in India, our people and infrastructure are of no value, our stocks are over-priced and so gold, FD and RE are better bets than stocks for the next 1-2 years. Which is what I have been saying for the last 2 years - FD is the best followed by RE and then by gold. And I have been selling more stocks than buying, although my buying list is ready for a big fall in share prices.

    I also write to signal whatever I "do".

    Rationalisations I provide are sometimes (many times) wrong, but the investment decisions should be seen in themselves and not "justify every prediction coming true immediately". I write many things on wars, china, political happenings etc. But at the end of the day there are only 4 things.

    Stocks, bonds, RE and gold. Have some money in all four and shift 5-15% around based on what you "think". Rest 85-95% keep more or less static.

    YOu wont come to "harm" by this strategy. You also wont become the next Warren buffet or George Soros - that nobody can

    Long term trends are the way to go for investment.
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  • Venky - with the Talks of US debt issues

    Equity markets looks extremely dangerous to me....Should one look to exit from equity markets all together and have presence lets say only through SIPS's
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  • Originally Posted by stoxxx
    So there is invisible correction that no one but a select and lucky few would notice.....


    it is naive to say that the rates will reduce with people awareness and education.......it is a function of demand and supply period.....if these people did not have money or willingness there would not be demand and market would correct.....but as long as they have accessiveble money and there is a need there would be demand......price is a function of demand and supply.....


    You again lack on fundamentals of economics, price is not the only function of demand and supply. There are so much demand of few cars and bikes (where waiting time is more than 2 months), still their prices are not increasing. People want to buy BMW and their is so much demand, but they don't buy as it is beyond their affordability limit. If people can't afford something and if they think they can live without it (like in the case of costly cars/bikes), they would rather prefer to live without those things. Prices of any things in any society can't be increased beyond the affordability limits of people in that society, that is the simplest rule of economics.
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  • Originally Posted by amit001
    Venky - with the Talks of US debt issues

    Equity markets looks extremely dangerous to me....Should one look to exit from equity markets all together and have presence lets say only through SIPS's


    One should never be out of ANY of the 4 asset classes at any time.

    One should only change exposure levels in broad terms. Equity funds and stocks are both the same asset class - chose one - or both - whatever strikes your fancy in the equity space
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  • Originally Posted by BlotJab
    You again lack on fundamentals of economics, price is not the only function of demand and supply.


    Oh yeah.....you are so good at commenting on people than posts....I give you that....

    Originally Posted by BlotJab
    There are so much demand of few cars and bikes (where waiting time is more than 2 months), still their prices are not increasing. People want to buy BMW and their is so much demand, but they don't buy as it is beyond their affordability limit. If people can't afford something and if they think they can live without it (like in the case of costly cars/bikes), they would rather prefer to live without those things. Prices of any things in any society can't be increased beyond the affordability limits of people in that society, that is the simplest rule of economics.


    You are actually making my point....if that is the case as you say that they cant be increased beyond affordability then why worry?....they will be within those limits by natural process...

    Some basics of economics....demand is not want....demand is ability and willingness to pay....

    So people want to own a castle....can they and will they....this is only a dream not demand......

    to your BMW example.....since there are people who want to own BMW and many of them......so there is this waiting period and prices are so high....

    so tomorrow does it mean that BMW prices should come down because a lot of people cant afford....no....as long as there is demand at that price point the price would hold......

    if tomorrow BMW produces billions of cars and there is not much demand....prices will come down.....

    so it is a game of demand and supply
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  • Originally Posted by stoxxx

    to your BMW example.....since there are people who want to own BMW and many of them......so there is this waiting period and prices are so high....


    When demand is there why is BMW not getting costlier?? why is price stagnant??
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  • Originally Posted by UncleScrooge
    When demand is there why is BMW not getting costlier?? why is price stagnant??


    demand is that price....at higher price demand may not be there....we need to ask BMW for that....they must have done market research....

    without further facts and figures we can only assume above than speculating...
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  • Originally Posted by stoxxx
    demand is that price....at higher price demand may not be there....we need to ask BMW for that....they must have done market research....

    without further facts and figures we can only assume above than speculating...


    Same applies to RE as well.
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  • Originally Posted by stoxxx
    demand is that price....at higher price demand may not be there....we need to ask BMW for that....they must have done market research....

    without further facts and figures we can only assume above than speculating...


    The problem is when you try to sell an Alto at the price of BMW by spreading fear that demand is so high for Alto that tomorrow it will be available only at the price of a Ferrari.

    The rentals staying stagnant or even going down in some cases indicate that supply is plenty, mostly occupied by investors (high number of those with ample of black money to park). And builders are the best avenue to launder your black money in India.
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  • Originally Posted by stoxxx
    Oh yeah.....you are so good at commenting on people than posts....I give you that....



    You are actually making my point....if that is the case as you say that they cant be increased beyond affordability then why worry?....they will be within those limits by natural process...

    Some basics of economics....demand is not want....demand is ability and willingness to pay....

    So people want to own a castle....can they and will they....this is only a dream not demand......

    to your BMW example.....since there are people who want to own BMW and many of them......so there is this waiting period and prices are so high....

    so tomorrow does it mean that BMW prices should come down because a lot of people cant afford....no....as long as there is demand at that price point the price would hold......

    if tomorrow BMW produces billions of cars and there is not much demand....prices will come down.....

    so it is a game of demand and supply


    I don't know from where to start, but let me tell you straightway one thing that prices might get increased even when majority of people can't afford (which is paradox, and opposite of fundamentals), but that increase of price is just bubble, and you never know how long this bubble will sustain. It is valid in any kind of things, however in car industry this bubble can't even sustain for one week, whereas in RE it can sustain for years.
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  • Originally Posted by shahkushan
    The problem is when you try to sell an Alto at the price of BMW by spreading fear that demand is so high for Alto that tomorrow it will be available only at the price of a Ferrari.

    The rentals staying stagnant or even going down in some cases indicate that supply is plenty, mostly occupied by investors (high number of those with ample of black money to park). And builders are the best avenue to launder your black money in India.


    rental and buying are separate markets...

    you example of Alto only indicates that the inflation can bring on ridiculous valuations and that's why gold is going up....

    is gold affordable to everyone.....why can't gold correct?...if it is in demand then why can't be it infinite....why is gold more than double in last two years? has the end user demand for gold increased that much? does gold provide any operating revenue like rent etc?.....

    at any point for any product there are sellers and buyers......fear and greed....that makes the market.....and market decides the prices....not our whims and fancies....

    if everyone was a buyer with no sellers or all sellers but no buyers then there wont be a market.....
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  • Originally Posted by BlotJab
    I don't know from where to start, but let me tell you straightway one thing that prices might get increased even when majority of people can't afford (which is paradox, and opposite of fundamentals), but that increase of price is just bubble, and you never know how long this bubble will sustain. It is valid in any kind of things, however in car industry this bubble can't even sustain for one week, whereas in RE it can sustain for years.


    because car is seen as durable consumer goods and not as a long term self use / investment product....

    bubbles happen in assets / investments not in consumer goods.....

    do you know the concept of elasticity of demand....in consumer goods that is at highest point....that means the impact of any price movement is felt to a great extent and much quick in those goods....

    one really needs to understand basics
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  • Originally Posted by stoxxx
    because car is seen as durable consumer goods and bubbles happen in assets / investments not in consumer goods.....


    what is an asset or not is a matter of perception...

    Yesterday's asset might be todays consumable (I.e. Tulips)
    or asset of person A might be a consumable for Person B (I.e. Tulips)
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