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Why is Jim Rogers Sceptical of India's Future?

Investor and Adventure Capitalist Jim Rogers remains deeply sceptical of India’s future. In an interview with Forbes India, he argues the country is sitting on a fiscal time bomb.
 

The finance minister has changed the direction of India’s budget deficit by reducing the target for 2010-11 to 5.5 percent.
You really believe it will happen? Go back over the years and see their previous claims.

He has got a lot of praise for that in India. Still you are not impressed. Why?
Even if it happens, it is not being done by sound budgeting. It is from selling off the family jewels if it happens.

Don’t you think a high deficit was justified last year when the government had to spend and help the economy revive?
No. They are just trying to push the problems out into the future rather than solving the underlying problems. Do you really think the solution for a problem of too much debt and too much consumption is more debt and more consumption?


Are we not living in extraordinary times when we have to follow such flexible policies?
We are indeed. They are making the problems worse in extraordinary times which require tough measures to correct decades of abuse.

The finance minister rolled back some of the economic stimulus measures he had announced last year. Would you have preferred to see a complete rollback than a partial one?
Yes. And more.

If you were to set an agenda for the government, what would that be?
Cut spending and subsidies dramatically. Many studies have shown that countries start having serious growth problems when debt is 90 percent of GDP (gross domestic product). India is now [at] 80 percent and will be [at] 90 percent soon under this budget. The subsidies distort the economy in less productive areas.

Full Interview: LINK

Pride-Fear -Greed-Hope :Video

Some great videos about these emotions by Scott O’Neil. He is President of MarketSmith Incorporated, a stock research tool developed by a team of investment professionals at William O’Neil + Company, a Registered Investment Advisor for Institutional Money Managers providing equity market buy/sell recommendations and independent research. Scott is also a portfolio manager with O’Neil Data Systems, Inc.-Forbes

How Mohnish Pabrai Crushed The Market By 1100% Since 2000

Mohnish Pabrai’s long-only equity fund has returned a cumulative 517% net to investors vs. 43% for the S&P 500 Index since inception in 2000.  That’s outperformance of 474 percentage points or 1103 percent. [Disclosure: I and/or some of my clients are long Pabrai’s fund or specific holdings within his fund.]

To anticipate your next question: Yes, his fund is closed to new investors.  But there is still hope.  Read on — sadist that I am, I put the answer at the end

Pabrai is a classic value investor in the tradition of Warren Buffett, Charlie Munger, Seth Klarman and Joel Greenblat. I recently had an opportunity to hear him talk and thought I’d pass along some of my bright yellow highlighting.

How to start investing (more…)

Donchian: Forbes Circa 1982

An excerpt from Forbes circa 1982:

The fundamentalists — a decided majority among successful investors — look on chartism somewhat the way physicists look on parapsychology. They are probably correct to regard them so, but there is no rule that does not have an exception. Dick Donchian seems to be that exception. Donchian differs from many a chart watcher: He doesn’t predict price movements, he just follows them. His explanation for his success is simple and as old as the Dow Theory itself: “Trends persist.” He will buy a hog or Treasury bond future after an upswing is under way, and sell it only after the price has begun to tumble. He misses some of the profit, but that’s part of the discipline of his style of investing. “A lot of people say things like: ‘Gold has got to come down. It went up too fast.’ That’s why 85% of commodities investors lose money,” he says. Donchian gained that wisdom the hard way. His Futures Inc., the first publicly offered commodities fund, came out in 1948 at $10 a share. It was before its time — or Donchian’s. “When I started trading I was bearish,” he recalls. “Cocoa seemed too high. So we took a short position at 30 cents, and it went down to 19. We made a lot of money at first; that was the worst thing that could happen. I looked around for another commodity that was overvalued. Coffee was making a new high of 20 cents, so we took a short position, and it went up to $1. I made a rule never to be a price trader. There’s no such thing as too high a price or too low a price.” Futures Inc. went as low as 4 cents a share before finally being dissolved…The essence of trend-following, however, is always this: Buy on a rising price and sell on a falling price. That sounds like buying dear and selling cheap, but it works, if prices move not in random walks but in long strides.

Lifestyle & Improvement

  • How to add an hour to your day (Harvard Business Review)

  • The Bucket List lie (Jonathan Fields)

  • Why all happiness and success fades away (Peter Shallard)

  • Why what you believe gets you nowhere (Peter Shallard)

  • How to really shake things up (James Altucher)

  • There are real-life advantages to being a strategic deceiver (New York Times)

  • Don’t let email run your life (CNN)

  • Great idea – change your smoke alarm batteries with daylight savings time (Lifehacker)

  • Yet another reason to get off your duff and exercise (BBC)

  • We make risk/reward decisions every day, all day long (Tech Crunch)

  • Tips from Thomas Edison (Open)

  • It’s looks like it is a really good thing I feel happy while trading (Forbes)

  • Natural approaches to combating the winter blues (Dr. John Briffa)