I was just going through this headline in economictimes website "Stocks fall on US, China economic news" and I was wondering what is really happening in the world economy?

We see China posting slow growth (taunted to be the driver of world economy) USA still crawls, UK's debt mounting all the time and whatever our politicians say India is no better. Because I myself and my friends experience the difference of the present time and time we are flooded with offers in 2007. I can tell you one of my friend who has an experience of 5 years and working as a relationship manager is finding it very hard to even schedule a prospective interview for himself. And the hikes that are announced by most of the companies are only in paper's or in peanuts.

On the basis of current situation I'm actually wondering about two things about India.

1. The stock market keeps on rising - This increase is may be due to the fact that FII's are pouring in money. But china being a FII's darling has seen their stock market value coming down. But that does not seems to be the case with India. Is Indian stock market rising just because of FII's or Indian public is investing in stocks? Or Is India really immune?

2. Real Estate - I have heard and seen in most of Tamil Nadu that land prices have stagnated or have come down in a very few areas, but in most of the cities and towns the sellers are quoting those absurd prices with no takers, but still the sellers or hanging on to the price. Where it is all going to end? Will RE as whole (flats, land) survive this period or the imminent depression predicted by economists like Paul Krugman will sweep the world and India.

I would like to know your thoughts on it. I know there are people in this forum who say the RE is going to rise all the time and there people who say the RE will go down in short term. Let's see what we can get out of this thread?
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  • Ha Ha nice one,

    You know when you tell some body who has no idea about the winters, that buy a coat winter is coming he thinks this guy is crazy. There is nothing called winter.
    What we are trying to say is you buy a coat a winter is coming, if winter doesnt come this time your coat is not wasted. However if u are faced with winter without a coat u might not survive.

    Just FYI the markets are fractal in nature, there motions and movements are repetitive. To understand this try CHAOS THEORY on google and u will find it.
    Understanding is other part.

    What wise man is trying to say take cover, if nothing happens u are safe however in other case u may loose your shirt.

    Well Iam short on markets. I may be wrong, but iam prepared .

    Happy investing
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  • http://online.wsj.com/article/SB10001424052748704111704575354853980451636.html

    The metropolis of about five million people is booming as scores of international car makers and suppliers have set up shop. Ford Motor Co., Hyundai Motor Co, Nissan Motor Co., Renault SA, Daimler AG and BMW AG all have converged here.

    They are spending billions of dollars to make Chennai one of the world's biggest hubs of small cars for export as well as for increasingly affluent Indians. Soon, the city will turn out close to 1.5 million vehicles a year, more than any one U.S. state made last year.


    Car-parts suppliers also are placing big bets on the city, formerly known as Madras. Tire company Michelin SA and window maker Saint-Gobain SA, both of France, are setting up some of their biggest factories globally in Chennai. Germany's Daimler, meantime, is building a multimillion-dollar test track.
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  • Originally Posted by Digvijay
    Ha Ha nice one,

    You know when you tell some body who has no idea about the winters, that buy a coat winter is coming he thinks this guy is crazy. There is nothing called winter.
    What we are trying to say is you buy a coat a winter is coming, if winter doesnt come this time your coat is not wasted. However if u are faced with winter without a coat u might not survive.

    Just FYI the markets are fractal in nature, there motions and movements are repetitive. To understand this try CHAOS THEORY on google and u will find it.
    Understanding is other part.

    What wise man is trying to say take cover, if nothing happens u are safe however in other case u may loose your shirt.

    Well Iam short on markets. I may be wrong, but iam prepared .

    Happy investing



    only problem with the analogy is if you have a coat and no severe winter u dont lose anything - In case of investing if you wait for a crash hold on to your cash and if it doesnt happen inflation kills your cash. - its not fail-safe
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  • The inflation is not here to stay for long and the biggest problem the world is facing is deflation. Holding on cash actually gives you good returns.

    You can reduce the inflation impact ( iam saying reduce) by having fixed income instruments like FD's and secured debt.
    Buying a coat actually cost you some money.
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  • Hi All,

    The fact is - nobody is going to ready this blog/forum when they go for investment while they have excess cash in hand.

    I don't think the actual RE investor is reading what Krugman says and What happened to the Bank stress tests. :)

    We know there are different asset classes. RE is one of the best If you purchase at the lower price and hold for long period.

    OR if you know the RE will be stagnant like (2007 - 2009) can exit and if you have invested in the Equity it should have given 3 -4 times return.

    Few of the Top-line Equities which returned 3+ times are.

    1) Ashok Leyland Rs 15 - 74 ( 4 times)

    2) L & T ( RS 650 to 1950) - 3 times.

    3) BHEL (Rs 800 - 2400) - 3 times

    ..
    ..
    ..
    n) VIP Industries ( RS 35 to Rs 390 ) -------- 10 Times :)
    (and RAkesh Junjunwala heavily invested in this scrip).

    There are many banks have given good returns and dividend.

    Please don't keep you money in FD (8-10%) but instead please BUY bank stocks. (Andhra bank, Allahabad bank, Canara bank, Dena bank, IDBI, Vijaya bank)

    IF the equity starts falling then we can switch to FD (for short term only).

    Happy investing !!!
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  • Consider your argument on following

    1) Unitech quoting around 500 fell to Rs 22 or 23 in span of one year.

    2) ICICI bank quoting at Rs 1300 fell to Rs 255 .

    3) Same goes for many Infra stocks and other stocks.

    The list is endless.



    I think you must refer this thread from start to understand the discussion in complete.
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  • Sir,
    What I am saying is Buy a asset when it is cheap.. whether it is Real Estate or Equity..

    And you know Unitech is basically a RE company.. and ICICI is funding for RE :)
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  • And I see nothing cheap right now.
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  • Originally Posted by Digvijay
    And I see nothing cheap right now.

    dont panic, wait wisely for a few years you'll get everything cheap...
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  • Originally Posted by Digvijay
    The inflation is not here to stay for long and the biggest problem the world is facing is deflation. Holding on cash actually gives you good returns.

    You can reduce the inflation impact ( iam saying reduce) by having fixed income instruments like FD's and secured debt.
    Buying a coat actually cost you some money.



    i dont know ...either u are super-intelligent people who know something even the Indian PM doesn't know or ....just in denial

    and i dont know where u get your facts from ...the PM says the inflation will be down to 6% in december

    http://www.thehindu.com/news/national/article531657.ece

    if you are happy with 3% nett annual returns keep your cash in Bank ! good luck
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  • No Sri, I dont think any body is denial or our PM doesnt know.

    Infact u ignored few very basic facts.

    Intrest rates around the world are at record low very close to zero, this is the case for all developed coutries. In India also the rates are intentionally kept lower.

    And why they are kept lower, just to make sure we dont go in deflationary spiral.
    In fact all the governments around the world are trying hard to push the prices of various assets.
    With such low rates the US and other Western countries were able to bring the inflation from negative ( May to Oct) in 2009 to postive by end of 2009 or start of 2010. But the problem is even with lowest possible rate, the inflation has again started falling from last 3 months. In fact they are near one percent only.


    And if you have some remberance of June 2009, the inflation went to negative in India also, which actually means deflation. This happened in India after good 32 years or so. We also benefited from low rates and again the prices are up. But if the world goes into deflation spiral, India with all the problems will also follow the suit, may be little late.

    So Sri if you are ignorant about certain facts, it doent make any body super intelligent.


    Originally Posted by sri_idea
    i dont know ...either u are super-intelligent people who know something even the Indian PM doesn't know or ....just in denial

    and i dont know where u get your facts from ...the PM says the inflation will be down to 6% in december

    http://www.thehindu.com/news/national/article531657.ece

    if you are happy with 3% nett annual returns keep your cash in Bank ! good luck
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  • I have not ventured into predictions at all - and i'm sure i have my facts right because i'm giving the source of information - unless you question the statistical data my facts cannot be wrong - bec. i'm just reading stuff aloud

    lets see where we are - whenever i give some facts back-up with data , i find replies with global spin.

    to make it easier lets put in black and white

    my not-so-knowledgeable prediction for india

    upto dec 2010 - inflation >5%
    upto june 2011 - inflation >5%


    I invite analysts/experts to put down their numbers ...we'll find out in time who's right.

    there's no point in going about using 'near future' , 'down-the-line' -
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  • Originally Posted by Digvijay
    No Sri, I dont think any body is denial or our PM doesnt know.

    Infact u ignored few very basic facts.

    Intrest rates around the world are at record low very close to zero, this is the case for all developed coutries. In India also the rates are intentionally kept lower.

    And why they are kept lower, just to make sure we dont go in deflationary spiral.
    In fact all the governments around the world are trying hard to push the prices of various assets.
    With such low rates the US and other Western countries were able to bring the inflation from negative ( May to Oct) in 2009 to postive by end of 2009 or start of 2010. But the problem is even with lowest possible rate, the inflation has again started falling from last 3 months. In fact they are near one percent only.


    And if you have some remberance of June 2009, the inflation went to negative in India also, which actually means deflation. This happened in India after good 32 years or so. We also benefited from low rates and again the prices are up. But if the world goes into deflation spiral, India with all the problems will also follow the suit, may be little late.

    So Sri if you are ignorant about certain facts, it doent make any body super intelligent.



    Another question, this time a difficult one to Digvijay, Wiseman & Dooms day Co.

    Can you guys show any equation which clearly shows

    Deflation in US & Europe = Fall in real estate market in India specifically Chennai.

    I don't needs stats based on historical moving average or some subjective factors. The world is changing, show a clear cut equation.
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  • I think the RE Bull started to run again. By seeing the last 1 year transactions there were many individuals interested in buying Flats and in the last 3-4 months lot of land (plot) transactions happening in Chennai. And the price ranges are Rs 30 L to 40 L.

    The real estate business persons started buying the lands with Power holding.

    I think if this continuous for another 3 years then we can see again inflated price till the next recession :)
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  • parliament seems to be suspended for price rise issue !!

    why... dont they know (like digvijay and wiseman) that we are having deflation soon ?
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