for Richie,

Good puzzling question for many. Here are the answers ( I can not dilate on them here)

Richie:
Initially, when the stocks go up, the gold will come down and US$ may go up
Kalidas:
when you talk of $ going up, specify which stocks go up or down - US or India?
- Normally, when the stocks go up, it is known to be a measure of confidence, so the gold goes down. The $ goes up because to buy US stocks, one need to buy $. (It does not happen nowadays)

Richie:
Sir don`t you think that the current crisis is due to the lack of money in the system ?

Kalidas:
Right and wrong.
Right: The money disappeared into losses, so there is lack of money. It is like you lost 500,000 and have nothing left in the bank account.
Wrong: Every day you hear that FED prints $700 billions, FED intervenes with $900 billions, European Union inputs $650 billions (Euro 500 Bln) British Government pumps in 300 bln pounds in the form of take over and money supply

Further, these Kubers in charge of finances, have started issuing blanket guarantee for all banks. How could you stand a guarantor for some one when you do not know his status or extent of obligations?

Today, a stage has come that A Bank does not trust another bank. After few months, we will have situation that One Nation does not Trust another Nations. What will they do then?

Richie:
Don`t you think that the current rally in gold is also speculative

Kalidas: Anything one does not know and still try to meddle into it, it is called Speculation. All nations are now speculating because they promise to float/guarantee/disburse billions of paper currencies without knowing what for? This is speculative.

Gold is the only commodity which is not speculative over long run. My family bought Gold in 1961 for Rs 260/tola which is now Rs 13000/tola, that is 50 times in 50 years or 100% gain every year on simple rate basis. Property is next.

When we try to marry, we tend to speculate that the bride will be very good, she will mix up with the family, she will take care of entire family etc for which you spend rs 5 lakhs towards wedding expenses (investment). If the bride is really good enough, your stock did well and you would say that it was investment. If bride is not really that good, you would blame yourself for speculating.

The difference beween the Investment and speculation is as thin as the difference between Dawn and Day or Night; difference between DUSK and Evening or Night.

Richie:
Jab Insaan Ke paas paisa nahi hota, to kya woh sona lene nikelega kya

Kalidas: when the people distrust paper money, that you call wealth, they will go only for Gold. In second world war or partition time between India and pakistan, people fled their homes with gold, not paper currency which may not be valid in other country.

Jas Sona hi sachha paisa hai to Nakli paisa ki kya jaroorat?

Kalidas, Hong Kong
13-10-2008

...

Sell for the time being. I you want to stay on in the Auto sector, swap into TVS Motors (Rs 30 or about) in correction if present. Maruti has not dropped much,so in the event of rally, it will come down and those stocks which dropped most will rise.

Maruti - SELL (although it is a good company)
Tata Motors: SELL and do not look back
Ashok Leyland : Reasonably good buy but lousy management. The controlling family may come into serious problems in Switzerland and London.
TVS Motors: Accumulate
Hero Honda: Good to own, in steep correction. Better than othr breeds
Hindustan Motors : Ignore it. Even if it has land in West Bengal, who is going to buy it after Tata`s ignominious exit from Rs 1 Lakh car?
Watch for Tractor related stocks - they will do better and are safe except those companies, where they have family disputes.

Kalidas, Hong Kong
13-10-2008...

for Cybergamer

The education is the best long term investment, even ahead of property. It always pays off. so if you have to chance to become a MBA graduate, just accept it and go ahead. The present crisis may stay for about 2-3 years but will wither away by the time you are freshman from MBA. You wil have few competitors then.

Kalidas, Hong Kong
12-10-2008...

for amarawargaonkar

I already replied you on my blogsite. As i mentioned there, it is the Brokers who make the market. Investors are generally followers. This is why you always here - so and so broker gave me this tip and that. It takes courage to say what you want to say. Just see the earlier comment who pokes a fund at me for having made the prediction of 2400 rally in 7 days - he has read only headline not the contents of the message, so he will go on writing in peculiar English and hurl abuses at me. You also experienced that - so do not worry.

I have selectively started buying. I am also losing very little in some of the scrips but in some i have gained like HPCL, BPCL, even Air Deccan (in two lots I made money, but in one old lot, I am losing a bit), Spicejet - twice I made good money, I also bought more recently. I have not touched blue chips but will buy cash rich companies like ITC, MTNL, Hindustan Level (where I made good money - already sold at profit). I am still losing in IFCI (cost Rs 36 - one lot I bought below 30 sold over Rs 35.85), GV Films etc. but the my invesment is very small, and what I have invested is in the same couner where I had earlier quadrupled. I have bought back Essar Oil (120/132 and 158), Essar shipping (Rs 54/66/72) and RNRL (59/68) GSPL (44/36). I will be stepping up the purchases in another meltdown. Any stock you buy today, will have downside of 20% minimum, so If you can muster this loss, then invest, otherwise make money in your hotel. Yes, I will come to Aurangabad once - and in that case - i will need a hotel to stay in. My father in law many years ago lived in that city for over 4 years. I will be coming to India in early November

Kalidas, Hong Kong
12-10-2008...

for raneshramesh,

500k is too high amount to lose. The properties in India are not going to crash that you can afford to lose this much. I do not know the valuation of your property and whether the apartment is ready for possession or under construction. Normally, I never advise anyone in India to buy the property under construction, because in downturn, they run away. It is better to pay 10% more and buy the ready one - pay him on one side, receive on the other - like COD or Cash against delivery. Always make final payment through the financing bank or Lawyer so that all formalities are complied with.

You could have token money of say Rs 1000 and seek all documents from the builder saying that they may be required by the bank for the purpose of loan. If the market situation reverses or you find that the property is not that worth, you can retrace saying the bank did not approve the loan. The most you lose is Rs 1000

Under the cirumstances, you may apply for a loan and pay the builder against delivery of the flat (if it is ready) or make him to agree to receive part payment of just 20% more and balance only against possession. Tell him these are the terms of the bank you are borrowing from. If he disagreed, ask him to return the amount (official or No.2). If the market is in rising trend, he may refund.

Otherwise, proceed cautiously if the property is under construction and the builder is of high repute.

Kalidas, Hong Kong
10-10-2008...

In testing times, the investment field is reserved only for bravo.
- Never be afraid of uncertain times. Deal with it when it comes
- You are in IT business, where your capital is your own brain which is indestructible. So why worry?
- If you are afraid of losing job or face pay cut, start applying in other stronger companies. Just by applying you are not losing or changing job. You will get real feel of the job market.
- your inveetment approach is correct, 50:40:10 in stock:cash: gold
- Howeever, when you find good stocks have come down a lot and really worthy, forget the ratios and go for the guns. Pick up that stock.
- then you have to have patience, you did whatever you can. Leave it to your fate. Fates does not disappoint you when you have done your part.

Kalidas, Hong Kong
10-10-2008...

there are three kinds of investors Those
- who are afraid to lose money
- who are afraid to make money
- who are afraid to hold the money.

You are in last category. Buy altogether 5 stosks. I will tell you tomorrow the list

Kalidas, Hong Kong
10-10-2008...

Thanks a lot for your opinion!...

Kalidas ji, -Q- My family bought Gold in 1961 for Rs 260/tola which is now Rs 13000/tola, that is 50 times in 50 years or 100% gain every year on simple rate basis. -UQ- 260 * 50 = 1300. Is this how you calculate the returns..!? I am just curious. What could be the value Rs.260 now if invested in FD. (say Fixed deposit in SBI in 1961 and keep on renewing it till now) Assuming the money will be doubled in 7 to 7.5 years (on an average at bank interest rate or in bonds) Rs.260 in 1961 is worth Rs.33280 now. If you agree to the above, then you are sitting on 60% loss and claiming that as 100% returns each year over the past 50 years..! My opinion is "Investing in gold is good alternate investment option when there is a CRISIS. but it is not a money spinner. One has to be short term player to earn any meaningfull returns in gold. Excuse me if my calculations are not correct. Just started my journey in financial markets. Regards, Sri ...

Kalidas, I am waiting for your stock list. Thank you, Ravi ...

Guys I fail to understand one thing is that if others (US and Europe) are printing currency in their backyard without any real backing for them (securities - like gold) then why is everybody including us trying to get thier paper (as good a Zimbabwian paper (where they have million dollar notes with which they might be able to buy a loaf of bread at best). Something worng in my uinderstanding or we are all being taken for a big ride to nowhere land ?? Calrifications are most welcome....

Thanks a lot sir for advise. Regards, Atul...

Hi Kalidas sir, Can you pls advise me on Maruti Suzuki? I bought it at 775. Thanks and regards, Atul...

Hi Kalidas sir , i have a fundamental question for you related to present crisis . Is money a zero sum game ? Say we take some property , sell it useless fellow at high rate [ transaction 1 ] , then sell that loan as papers [ transaction 2 ] and so on till transacion n . If we look at all these transactions in total and look at the money changing hands then i agree that we have bigger turnover than we have currency at hand . But if we look at the system as whole , are we just exchanging the same money again and again and money is still there . if someone has lost money then someone has to get it ....rt ? now if we talk of reversing all the transaction at one go then its we will be short on cash and if we just cross settle all these transaction then except the last person holding the cash eveyone else might be in loss.But the money is still there . After all they did not being any new thing for trading in money [like co2 emisson - where a completely new commodity added in trade needs more money to be printed ] If all this is true howcome US/world is facing liquidity problem ? could you pls explain for a layman like me . ...