Simplus

Stocks are expensive. Bonds are expensive. What is an investor to do? Unfortunately, the only answer appears to be to invest in new and…

Mr. Gerard Colaco: Over the last three decades, we have come across any number of articles of the kind forwarded by you from the Financial Times. The overwhelming majority of such articles are very well written, very erudite and very wrong. No country of the world in the last two centuries has been written off more and more often than the United States. So far all these doomsday predictions have been wrong.

RBI announces Scheme for Inflation Indexed Bonds – 2013-14

For Rs. 12,000-15,000 crore

To be issued in tranches

First tranche on June 4, 2013 for Rs. 1000-2000 crore

1. Pursuant to the announcement made in the Union Budget for 2013-14 to introduce instruments that will protect savings of poor and middle classes from inflation and incentivise household sector to save in financial instruments rather than buy gold, RBI, in consultation with Government of India, has decided to launch Inflation Indexed Bonds (IIBs).

Foreword

Sometime in 1988, we wrote what we hoped was a simple paper on investment in the Indian stock market. The paper was intended to help beginners to invest effectively in stocks and seasoned investors to reinforce certain crucial equity investment fundamentals. In 2013, this paper will complete 25 years of its existence. During this period, we are gratified that it has helped a larger than expected number of investors who made an honest attempt to implement the strategy it advocated.

Much has changed in the Indian stock market over the last three decades. We are happy that none of these changes have hindered the implementation of the ideas in this paper. On the contrary, the wonders of modern technology and better regulation have worked in favor of a genuine equity investor, who is willing to use a little common sense and self-discipline in equity investment. Our paper said nothing new when it was first published. It says nothing new now. It merely invites investors to focus on certain valuable ideas culled from the world’s finest writers on equity investment.

India is heading straight for economic failure post-Chidambaram’s budget as a direct result of the lack of meaningful economic reform, saysHeritage Foundation, an important conservative thinktank in the US. Assessing finance minister, P Chidambaram’s budget, Derek Scissors of the Washington-based organization said that it “leaves India on the same, failing course it’s been on of undisciplined spending and unrealistic expectations”.

The Indian economy is in dire health, he said, not only because Indians’ incomes have stagnated, income growth slowed and consumer inflationis high, but because manufacturing that should lead the Indian economy that would create jobs for the swelling ranks of young Indians is refusing to take off.

Mr. Gerard Colaco: The problem with Indian finance ministers is that they are tinkers, not leaders, much less visionaries. If a man of Mr. P Chidambaram’s learning, knowledge, experience and ability could present a budget as insipid as the one tabled on 28th February 2013, then there is not much hope for this country.

There has been needless tinkering with surcharges both at the individual and corporate income-tax levels. These are short-sighted methods to raise revenues. The best way to shore up government revenues and the country’s economy is by bold economic reforms aimed at stimulating growth. Revenues will automatically rise in a resurgent economy.