Invest in Reality ( Pune / Mumbai ) ??

Today I had a long discussion with one of my friend Mr. G.B. (GB). He is a really a hard working guy and just wants to earn more and more.... and ofcourse like a lot of us. So keeping up to our interest we were discussing about investing, investment scenario in India, some stock to invest in and all about money... Some days back I was in his position and was planning what to do to maximize my returns from my investments.

The case was a individual male with salary in seven digit, staying in Mumbai, Pune... spending on weekends and working all the week..... and OFCOURSE ending up paying up huge taxes to the government.
Now this is what we found out what one in this case should do and this has convinced me to invest in reality.

1. One earns about 50,000 pm (ofcourse MR GB may be earning much more than that)
2. Saves 100000 (80c) to reduce our tax liability
3. Stays in rented apartment paying about 12000 pm..
4. Tax comes out to 12000 pm approx.


Now if this guy decides to invest in reality...

1. Buy some property in Pune / Mumbai ( ofcourse he has to stay there )
2. The property cost varies but a 2BHK flat is available in 30 to 40 lacks... lets take 30 lacs
3. Now take a loan of 25 lacs and down payment of 5 lacs

So Savings

1. Some 4-5 k in income tax (lets take 5000)
2. Saving of the rent paid = 12000
3. Net saving 17000
4. A loan of 25 lacs for 20 yrs will have installment of Rs 25000 pm

Thus real expenditure per month is 8000... i.e is 8000*12 ( 96000 ) per annum... AND by the most conservative estimates if I assume that the market prices of the this property increases by Rs 100 per sqft
even then i end up spending nothing on my living expenses..... But remember all this calculation are valid for the first house where ones gonna live....

Bye Bye Happy investing ... if you have any investment ideas do share with me.....remember I also want to earn….

TCS IBM ask employees to resign

http://www.hindu.com/thehindu/holnus/006200802051965.htm

The country's largest software exporter TCS has shown the doors to 500 employees after their performance was found wanting. IBM has also asked employees to resign.

The news harsh on the one who had to resign and to million... of engineers we are producing in this country. Everyone is aware that the US economy is on slow down and thus is forcing FED to cut rate making the US $ weaker and weaker. This is pushing Rupee upwards, thus reducing the marrgins of IT companies.

It appears that a mistake on American Banks on policies to lend money has not affected US economy but also is hitting india. This cutting off employees in such a small number may be associated to performance issues but is it a preindication of what IT industry has for us in future..
So for those in IT just start praying that IT's flag stays up and flying high as Mr. Moorthy said some days back... in the mean time enjoy bcoz come what may life goes on...

India Stock Market BSE NSE Hits Bottom Low !

The market has seen hit the circuit and both NSE, BSE got closed for 1 hrs. The market were not bleeding but were on onslaught of the leveraged investors. When it opened after the circuit closure it started moving up for a while and again started falling. The investor and traders could just not hold their nerves have see panic everywhere with epicenter in mumbai. At these lower levels there were some retails investors ready to invest but were not able to buy or sell as the margins of their brokers already exhausted. One of the big trading portals has suspended margin and marginplus trading till the next notice. As this merciless killing was going on the FTSE also opened in red. But some time later FED chief declared the 75 bps cut in the FED rate. This helped FTSE recover and it up by 159 points, CAC is also trading in green. The US markets have started and till now they seeing the same color as Indian markets have. I just hope that this extra cash flow to India and some investors recover some of their losses tomorrow.

10.23 PM, 22 Jan, 2008

Be Cautious ! The Bear Again Looking Stronger

8:50 AM dt Jan 22, 2008

Its 8.50 am and our markets will open as usual but the global cues are again hinting towards another bear day. Yesterday I wrote about the cues being deep red and today also its not looking any better. The Indian markets have suffered heavy downslide yesterday. So can we believe that the market are also going to show similar results.
I thinks there is a bit change in the market today. Yesterday the sell off from FII lead to margin pressure on a already less liquid market. This has forced the margin traders to square off some positions to hold on others. Yesterday some investors have put in money seeing good stocks at huge discount. The change today is that the investors mood is moving towards buying some stock today. But finally buying depends on the cash available. It seem that if FII sell again then today also we may see some results similar.

Stocks to watchout for tommorow !!!

ACC 736, Ispat Industries 74, NTPC 206, Power Grid 110, Reliance Energies 1764, RPL 171, IOC, ONGC, TTL 40.40, Reliance 2500, BHEL 2113, ADANI, TATA Motors, SBI, ICICI Bank, L&T.

Bear Wins But Bulls Started Investing Again !!!

The morning global cues were very deep red and only firm bulls would have not hedged. In this type of market falls the unhedged retail investors are the real losers. Today, I saw a lot of people sad dull face on losing money in this crash. But isn’t this part of stock market investing. Well some of smarter ones amongst us have definitely used NIFTY or MINIFTY for hedging. Thus the money lost is lost now the investors with liquid cash who have been waiting have got the opportune moment to enter. What better they would have expected than entering when all the biggies are down by hugh percentages.

History Repeats Itself !

If you are believer of some relationship between indian and Global market then here is the bad news for you. The US and European markets are in deep read. The asian markets which open before ours are also bleeding. This reminds of some days back when all the markets including asian markets were low. On that day indian market opened in green but eventually gave in to the selling pressure… so wait and watch till the end of the day if history repeats itself.