Vijay Basrur

Blood on the dance floor

Well not exactly the Micheal Jackson song but it is blood on the stock markets all over. Its scary how deep the sub prime crisis has been and the impact it has had on global markets has been devastating to say the least.

My personal portfolio has been wiped out by over 45% and it is easy to panic. I dived into the markets thrice. Once when the Sensex was at 14000, then at 20500 and then again at 14500. Since now we are down to 12500 the math is very simple to arrive at how much I am in the red.

This morning, while driving to office I was chatting with my colleague (in these tough times it makes a lot of sense to car pool) and he was advocating to jump out right now since there are rumours the market will go to 9000 levels. Will it? Who knows? But its difficult to jump out right now. My logic is how much more will it hurt? Not much considering I am already 45% down. But I think I come from a school of thought, which a lot of folks still advocate, which is invest for the long term. But looking at the market conditions the long term is getting longer than ever.

So I guess it boils down to the fact that in these tough times if you want to make your money grow, you will have to work harder at doing so. You will have to be glued to the screen for a decent part of your day and keep monitoring your portfolio. Junk whats not adding value and load up the ones which are looking good. But then if you start doing it you might end up getting sucked into it. So what do we do?

As for me I think the first thing is to reduce expectations from the stock market. I don’t think it will give huge returns for quite a few years. Deep wounds take a while to heal. The fall to 12500 (or maybe even lower) will take a long time to recoup. Second is to keep looking for value buys and reduce the size of investment into the market. Don’t expose yourself to more than what you can afford to lose. Be it 2000 bucks or be it 50000. This way you won’t feel bad. Third don’t go on hearsay. Fourth is to look for investments in businesses you understand. When the markets were at 20500 I invested in Jhagadia Copper based on a tip without having a clue on what they do. My investment has tanked so badly that I have written it off. Fifth is to keeping nibbling at the SIP. I think it makes a lot more sense now due to volatility. And lastly before this ends up being a long list, remember that cash is king. Use FD’s or RD’s to beat the inflation impact on your cash. After all if the market does go to 9000 you’d be grinning if you have a decent bank balance to dive into the market

PS: This is only 2 cents on how to go about it. Considering my track records I am no expert but hindsight usually has lot to offer for the future.

Project 10 to the 100th

Google announced the Project 10 to the 100th. Details are here

They have an interesting video to drive home the point

Fight inflation, get a membership at Metro cash and carry

I managed to check out Metro Cash and Carry last weekend. I was impressed by the savings it offers but was surprised by the minimum purchase you have to make each time. Well after all it is not for the end consumers like you and me.

The cash and carry concept is pretty simple. You come, purchase in bulk, pay in cash and then carry it out. No free bags here! The minimum purchase value should be 1000 bucks. Some of the stuff needs to bought in bulk. Ex: Biscuits can be picked only in packs of 5. So you may end up with more biscuits than you want unless you plan to sell them to someone else.

To simply put, it is a wholesaler for a retailer. But one look at the prices and it makes you wonder how much “margins” the middle man makes. A Tropicana juice carton costs 75 bucks in any shop. At Metro it sells for 59 bucks leaving the retailer to make nearly 15 bucks (20%) on a 75 bucks item. That’s whopping! I picked up Diapers (what else!) and saved 20% again. Pampers pack of 28 which retails for 275 is available for 225. I was happy

While Metro may be a good thing for retailers since it probably puts any other middlemen out of the value chain, it is no saving grace for consumers who shop elsewhere. Retailers buying from Metro are not goig to sell you stuff for any cheaper. Even a Hyper mart such as Shoprite offers Tropicana for 73 bucks, I think.  This whole distribution seems to be a controlled “cartel like” business value chain allowing retailers to make decent profits squeezing the last bit from the consumer.

So if you live on the Central side (since Metro is located at Bhandup, they have one opening at Borivili in about an years time) you should network with someone who has a Metro card and go get your monthly shopping from Metro.

Amul Ice Cream

A few weeks back I tasted Cappuccino flavoured ice cream by Amul. It was heavenly. Infact very close to tasting like a Bailey’s ice cream. I could have finished the entire pack but then I had to behave.

So on Saturday I went hunting for Cappuccino flavour Amul Ice Cream. And man did I have a tough time. I think Amul has got it really wrong on the distribution front and as for the marketing I think these guys have some serious gap to catch up on. Frankly Amul makes pretty decent ice cream. I love their black currant flavour too. And to top it they have an excellent pricing strategy. For 130 bucks you get 2 packs of ice cream (nearly a liter). I mean how many of the mass ice cream brands can boast of it? Not that there are many brands left now. Walls is on every wall, Mother Dairy is a new kid on the block in Mumbai. Dinshaws & Vadilal have become extinct. Really where are those guys?

So all Amul has to do is play a few cards well and they can really make a dent. If you look at Walls they are pretty much all over the place. In every Udipi hotel, in every kirana store and with branding which screams in your face. Amul branding is always so discreet. You have to look into every corner to check if the store carries Amul. And as for the stocks the store never have enough of every flavour.

After hunting quite a bit I was glad to lay my hands on Cappuccino at a small store. I blessed his soul.

We finished one pack on Saturday night. The other one sits in my freezer. It may not see the light of the day tomorrow.

Richard Wright R.I.P

Richard Wright, pianist and keyboardist for Pink Floyd passed away on Monday.

So long and thanks for all the music!

TDK cassettes

I had a constant supply of TDK cassettes from the US to record my music. Other brands I had were Sony, Memorex I think. My Dad had a few BASF tapes. He used be a big time spool collector until they ran out of fashion.

Before the CD’s came in I had all my music on tapes and most of them were recorded. its only when Magnasound (whatever happened to those guys?) started releasing English music I started to buy original tapes. Infact i had a huge collection of tapes which had recorded FM music from the top US FM channels. My aunt used to religiously record the top twenty on weekends and send them across once in a while.

I bought my first CD in 1994, with my first pay. Its was Hell Freezes over by Eagles. And that was pretty much the decline in my purchase of cassettes. Today I don’t own any tapes. Its all CD’s and I think the future is digital (mp3/iTunes etc.)

So I was a nostalgic when I came across an old TDK advertisement on the All Music blog

Parent’s day out

Last night we tried something for the first time. Sneaked out for a movie while the baby was asleep. We watched Rock On and rushed back as soon as the movie wrapped up. Mansi woke up 15 mins before we entered but she was quite manageable.

I liked the movie. Infact I think the music was amazing considering its a shift from the usual hindi movie sound tracks. Lyrically I thought all the songs were pretty average but the final output covered these flaws. The closing song is really cool and draws from the Floydish sets (from Pulse) and is the longest song in the entire soundtrack but surely is a winner.

This is the first time we watched a movie worried about something else. We were hoping Mansi doesn’t wake up bawling and hungry for milk and she helped us watch the movie in peace by sleeping like a baby!