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Archive for the ‘Macro Economics’ Category

Should a recession affect your purchasing decision making?

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Is the reduction in purchasing decisions/actual purchases made a good thing or a bad thing during recessionary times. While technically, India is still motoring along at over 5.5% GDP growth and is tipped to be the 2nd fastest growing economy in the world for 2009 (a miserable year for other world economies), should the discerning consumer cut down on his purchases of items? Read the rest of this entry »

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Written by Naveen Athresh

March 1, 2009 at 9:12 am

Berkshire Hathaway Annual report 2008 / a must read

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http://www.berkshirehathaway.com/2008ar/2008ar.pdf

You can’t be mistaken when you are reading from the greatest punters in the Financial space – Warren Buffett. The Chairman’s letter to shareholders did not dissappoint me. It was filled with the usual interesting titbits on his insurance ops and business, the concept of insurance ‘float’, his profit margins, the stake he took in Goldman Sachs, GE etc. during the troubling cashflow starved times of late 2008, the usual caveats on on the derivatives business and the future of Berkshire! Oh btw – there was no mention of “fruit of the loom” as marketwatch said there would be!

As I have said many times before, I am a self proclaimed protege of Warren Buffett and anything he does interests me. His annual reports are always looked forward to by much ado and this time was especially different to get the views of the man who I consider is king in stock market investing alongwith with his mentor Ben Graham and associate, Charlie Munger.

Barack Obama – Mr. President of the United States of America!

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He is the ultimate modern tech savvy Blackberry wielding Mr President of the United States of America. For once, I see genuine hope in the way the US will go about sorting out its financial mess and it’s foreign policies.

Checkout: http://www.whitehouse.gov

As with most Americans and millions from other countries and their citizens, I did not miss his swearing-in ceremony that was held in Washington DC on 20th January 2009 on television – that marked a new era in world history!

Good luck – President Obama. May god be with you in all your endeavours! We have hopes on you to revitalize the world and of course, with it, the United States and my country, India!

Brand Obama is sure flying high!

Written by Naveen Athresh

January 22, 2009 at 7:52 pm

Nortel networks Corp. files for bankruptcy

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One of the jewels of the 1990’s boom in the telecom sector, Nortel networks Corp. (NYSE: NT) filed for bankruptcy as quoted by Marketwatch.

I have watched this stock closely alongwith it’s peer, Lucent (now, Alacatel-Lucent) then in 2001 and have seen them in their glory days before the bust of the dot com and telecom bubble in 2001 when I used to follow the coverage by CNBC America live then in 2001.

This just shows how deeply engrained the financial mess has been in the system and even behemoths with stock prices of over $500 a share then at their peaks have come to penny stocks with a value of not more than a few cents a share.

Saddening but that is life!

Written by Naveen Athresh

January 14, 2009 at 7:59 pm

US Government bails out CITIGROUP

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As expected, the US Government bails out CITIGROUP. They are extending a lifeline of $20 billion at a higher rate of interest than that given by the TARP plan. Also, they plan to absorb some of the bad assets provided CITI takes the initial $5 billion followed by the US Government followed by the FDIC (the total gurantee amount by the US Government, FDIC and Federal reserve might amount to almost $300+ billion). In return, the US Government gets preferred shares of CITI (NYSE: C). Bonuses of executives (executive compensation) would have to have the Government’s approval.

Let’s see how it pans out but allowing a 200 year old bank operating in 106 countries to fail would have proved catastrophic.

Can large banks fail / CITIBANK on the brink

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I saw the developments of the last week where CITI (NYSE: C) shares really fell to $3 a share and was in danger of going bust as public confidence was eroding sharply. CITI faces a real threat of a collapse.

There were two options open to the board: 1. Fire the CEO, Vikram Pandit as a sacrificial lamb, 2. split the company and sell the parts or whole of the company. Read the rest of this entry »

Inverse correlation – Sachin’s highest test score and the BSE Sensex

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These two seem to be negatively correlated. As one goes up (read: Sachin’s highest test score – 12K-odd runs), the other goes down (8K-odd as on Black Friday – 24th Oct 2008).

What are the other alarming statistics of the Sensex? Read the rest of this entry »

Written by Naveen Athresh

October 25, 2008 at 12:07 pm