“No man is fit to hold public office who isn’t perfectly willing to leave it at any time.” [Elihu Root]
New Zealand has had the privilege to have a prime minister, John Key, who was a successful forex trader earning millions of dollars an annum as far back as year 2000 at Merill Lynch. Key had no reason to serve public office than his passion, he was running successfully in his 4th term as the Prime Minister of the country.
Key decided to resign today, the 5th of December, in the middle of his 4th term. That is the best way to leave at the peak when the country rankings are near the top.
Key has been a fearless, passionate, down to earth, humble, no drama, no nonsense leader of the free country, as it should be.
With pain, loss of life, inconvenience, misery meted out to a billion plus people, it has been estimated by the premier Govt. bank in India (http://economictimes.indiatimes.com/industry/banking/finance/rs-2-5-lakh-crore-wont-come-back-into-banking-system-sbi/articleshow/55756927.cms) that 2.5 Lac Crore or 35 Billion USD of old notes will not come out of the system. Size of black economy in India per annum ~1000 Billion USD. Thus ~3.5% has been wiped out in this bold move. I know I know, what the supporters will say, trying to change the behaviour, digitizing economy, bringing more people to tax net, and such similar nonsense…
Govt. of India wants to implant national anthem prior to all movie shows in the cinemas. (http://www.bbc.co.uk/news/world-asia-india-38155630)Its not clear whether foreigners should also stand up in respect to the Indian national anthem in the cinema halls, if yes, including Pakistanis ? How should the hands be held over heart ? with palm towards the heart or floor or is it optional ?
Oh yes, now my investor friends in India are so afraid of Modi, they aver, Modi is coming after Gold crackdown and Illegitimate property next. Some positives like Gold bonds with free of capital gains tax sound like a step in right direction but the demonitization saga that occurred, is, in my opinion, expected Gold to see renewed interest in India rather than less. If I am very wealthy and not in equities (only 3% of assets held by Indians are in equities), I would hold Gold or Real Estate. Yes there are two conditions, if you have Gold more than 1 Kg, then it should be either for the chastity belt for the women in the family, and if the source of funds is not known then your father in laws death certificate must be provided proving or annulling that Gold was given in dowry. Such seems to be the retrograde path India is heading towards. 2016 veritably was a step backwards Trump, Brexit, Demonetization, what next?
In this game of chess the Modi is now playing,seems like he will go out with Gold detectors in the homes now. I had a feeling of missing out six months back but now even more so on CODAN, which has quadrupled from 50 cents to 2 dollars, I should have put my bet on a fine Australian company which is leading equipment maker for gold detectors and diggers (no not women), actual hobbyist gold finders. I did miss this one as topline was growing only 10%.
So, remember key points, hang on to Gold on your chest or make a chastity belt. If burying gold in the walls/floor make sure its not detectable. Modi the mad dog cometh !
For a very long term buy-forget-and-hold investor its unlikely that gains accrue without a drawdown. I have shifted MFI investment in India to NBFCs, Home Loan and Gold Loan companies. Instead of selling Satin at 700+, more than double my purchase price or continuing to hold in the mayhem, I switched to above three type of companies at ~400.
Manish Dhawan actually called the right day and time when Satin bottomed at 323 on the 21st of November. Good call!
Many a long term gains have come with big draw downs. There is another position where I am down 35% from my buy price but I continue to buy without chickening out, i.e. NSE Kenya. You’ve got to be careful with financials (leverage), I lost 100% of my holding in the 4th biggest UK bank, Norther rock in 2008.
See the Apple and Amazon drawdowns, stocks that returned 252 and 388 times respectively.
You know the pain in individual stocks when the leading index like DJIA or NIFTY is down 10%. Around 14 times in the previous century, the index has been down over 30% or more.
For Kenya and Nigeria that time is NOW. NSE20 index and Nigeria Index is down 40% as I write. You can imagine the plight of individual stocks.
I feel the next six-twelve months will continue to be bad for Kenya and Nigeria (Especially given the black market rates for NGN). But this is also the time to pick up opportunities, if not now then in 2017.
Tanzania has had a good run with its new President, John Magufuli playing tough with corrupt regime.
Meanwhile India has not had a major correction since 2008, and second one earlier in 2016, that was more of a global pull down.
Of most interest are the un-correlated independent downturns in specific companies and countries, its where the opportunity to outscore exists.
Quoting and building up from Indian Express’s article here are the questions Modi’s app is not asking
- Has someone’s father / mother / brother died standing in queue or due to non admittance into a hospital?
- I wiped out 50 Billion USD out of 1,000 Billion USD black economy in India i.e. 5%? Do you think that cost payoff was worth it?
- Could I have done things differently?
- Could I have sent mobile banking vans for 600 million people who have never entered the bank?
- Do you have any money with you now?
- How long have you had to stand in the queues before you could withdraw/exchange some of your money?
- Are the ATMs/ banks in your locality being steadily supplied with cash?
- Did you have to forego any potential opportunity pertaining to career/personal life due to the currency shortage?
- Do you think the move should have been implemented in a phased manner?
- Has the move disrupted your regular routine?
- Whom do you think the move has affected the most in the hierarchal ladder of India’s economy? The rich, the middle class or the poor?
- Are you finding it difficult to use the new currency of Rs 2,000 ?
- Have I modified the behaviour of black money hoarders permanently ?
- Will they hoard Rs 2,000 notes now next year from thei 1,000 Billion USD income?
- Did I execute poorly?
- Am I a human rights offender?
- Have I pulled the wool over people’s eyes with an app survey and some psychological traps?
Trump it seems is not the only firebrand agitator. Recent elections in the US and India have been won based on social media.
So, Modi (using phrases like “Modi Govt.” rather than “Govt. of India”), has come out with a questionnaire on his Namo app.
You’ve got to give points to Modi for his oratory skills, showmanship, acting and drama. But un-prime yourself prior to answering the questionnaire on the Namo app.