Bindas-Blog

In-flight cell phone service:

2008-04-19T14:48:00.000-07:00

European Union recently passed a law allowing people on board a plane to use the cell phone. Air France is the first carrier to kick-off this facility on its plane. New York Times reporter took a flight and checked out this new feature. The reporter found several faults in the system.

• The quality is patchy and keeps most in-flight calls short and tinny-sounding. One receiver of an OnAir call complained that it sounded like "talking to a small robot."
• Hefty roaming charges of up to 3 euros ($4.72) a minute.
• Calls made from the plane to the ground usually need a few tries to actually connect. Calls made from the ground to the plane tend to go directly to voice mail.
• Only six passengers can get a signal at any one time to avoid interfering with aircraft equipment. OnAir says the capacity will double to 12 in the coming weeks.
• Blackberry users had trouble downloading e-mail messages

I am sure this will improve over time but are we really that dependent on cell phones that we can't even wait for a few hours without talking to someone? Now, I am not a big fan of this service. How would you feel if you got stuck next to a person who keeps chatting on phone with someone during the whole flight? It would be damn annoying for me. I for sure will remember to take my ear plugs before boarding one of these flight.

US stocks have best week in 5 year:

2008-04-18T17:19:00.001-07:00

Sounds unbelievable but US stocks had their best year since 2003 with Dow Jones industrial average finishing up 229 points. Fueling the confidence in Wall Street are three assumptions:

Despite a recession in the United States, companies with significant sales outside the U.S. continue to do well and are benefiting tremendously from a lower dollar.

Many technology companies appear to be weathering the domestic slowdown.

Investors believe the big financial companies appear, finally, to be close to understanding the depths of the problems from the subprime-mortgage crisis. That's why Citigroup and Merrill Lynch both moved higher Friday. Merrill Lynch was up 1.4% to $47.35 on Friday and ended the week with an 8.4% gain.

Wall Street is hoping that this rally in stocks will continue but we should not forget that oil is still trading around $115 and inflation is still a problem. So is it really the end of bad times? Are we going to see another leg down in stocks? Only time can answer these questions but what do our readers think? Please let us know your thoughts.

Reference: money.msn.com

9 reasons to archive your emails in Gmail.

2008-04-18T15:46:00.000-07:00

Many users don't archive their email. If you don't regularly click on the "archive" button or never even thought about it, here are some reasons you might want to get in the habit. Archiving just means moving mail out of your inbox and storing it for safekeeping. Your messages will be waiting for you when you click All Mail or search for them.

9. Phone numbers and addresses
You never know when you'll need a phone number someone emailed you or an address that was in a signature.

8. Procrastination
Sometimes you want to get a message out of your inbox, but you don't want to deal with organization, and you don't want to trash it.

7. Posterity
Just because you’re not famous now doesn’t mean that in forty years (or fifteen minutes) you won’t want to write your memoir.

6. Winning arguments
“But on May 5, 2005 at 8:43pm EDT you said….”

5. Mailing lists
Do you really need to know what Clintobamccain is doing every day? Auto-archive* their messages until you want to donate again.

4. Birthdays
Search for “grandma birthday” and voila, find the message you sent her last April. Aren't you glad you archived instead of deleted?

3. That guy
Remember that guy you thought you’d never need to get in touch with ever again?

2. Because you can
May as well use the free storage space. Plus, clean inbox = clean mind.

1. Fate-tempting is bad. You just never know
Thirty-one days after you send that message to the Trash and it gets permanently deleted, you're going to need it. Don't tempt the fates.

What Warren Buffet thinks:

2008-04-16T21:50:00.000-07:00

According to Warren Buffet, “stocks are a good thing to own over time. There are only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time.”1

Warren Buffet is a value investor, if we look at his buying pattern, it is clear that he invests in companies which are under valued and the companies that have potential to grow bigger. A normal investor does exactly the opposite of what he does. It is human nature to follow the crowd; when companies do well, people start buying… and keep buying without realizing that they might have grown overweight and there is only one way for the company to go from there… down! (Stock price has to adjust to what the company is really worth.)

People keep buying more and more stocks in bull markets and keep selling in bear market. If we listen to what Buffet says, we should be doing exactly the opposite. “I always say you should get greedy when others are fearful and fearful when others are greedy. But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.”1

This article was published on CNN where he invited a group of business students for an intensive day of learning. You can read the complete article at http://money.cnn.com/galleries/2008/fortune/0804/gallery.buffett.fortune/index.html

1 Reference: money.cnn.com

Lesson from Tibet:

2008-04-15T22:31:00.000-07:00

Olympic torch is all set to arrive in Delhi on the April 17^th. We all are aware of how it creates turmoil everywhere it goes and why it does so. Question is should India embrace the torch with open arms? Is there any thing we can learn from what Tibetans are doing?

China considers Tibet as a part of China. Tibet is fighting for its rights as an independent nation. Tibetans have found a proper way to raise their voice in front of world when the entire world is paying attention to China as it is about to host the biggest sporting event for the first time. Many world leaders have criticized China on its stand over Tibet. This might not resolve the Tibet’s conflict with China but it definitely provides a solid ground for Tibetans to claim their rights. Should India do the same? Remember that we are trying to resolve border conflict with China for a few decades now. China claims part of Arunachal Pradesh as its territory when this territory has been an integral part of India for ever. Shouldn’t India take advantage of this opportunity? What’s been happening here is completely reverse. China has been pressurizing India over Tibet. India recently issued a statement considering Tibet a part of China and asked Dalai Lama, the Tibetan spiritual leader who has left Tibet and took refuge in India years ago, to refrain from making any political statement over recent turmoil. Shouldn’t India stand up for the rights of its people? If a small country like Tibet can do it, why can’t we?

TV and your waist

2008-04-14T21:10:00.000-07:00

Picture is worth a thousand words!!

2008-04-14T12:21:00.000-07:00

There is a hidden image in the tree..Look carefully and u will find an image of a baby.
Did u get that?

Firefox in India

2008-04-13T17:21:00.001-07:00

Here is an interesting scene - a new addition to unofficial Firefox catalog. Apparently, this bus driver prefers Firefox over IE.

Sword 2008

2008-04-13T15:18:00.000-07:00

This is from a Military drill called Sword'08 between USA-JAPAN..It was one of the largest Naval exercises in the world where more than 100 ships took part to check their inter-operability skills....There were Air-craft carriers, Frigates, destroyers and submarines....cutting edge 100 warships is HUGE number man...There is a lot going on including the Malabar Hills exercise in Indian ocean by the newly-formed "Quadrilateral Initiative", which brings together the US, Japan, India and Australia....This all is good news for India as we are increasingly facing heat in north east from communists....

Oil, Gold and US Dollar:

2008-04-11T18:38:00.000-07:00

Oil and gold prices are sky high these days on weak dollar. So what is the relationship between oil, gold and dollar? Let’s analyze. Oil has been exclusively priced in US dollar since 1975 and oil producing nations are keeping their assets in US dollar. Today, increased demand for oil with constant supply has increased the price of oil to almost $100/barrel. Experts are predicting this price will even go higher as summer approaches. US dollar on the other hand, is decreasing in value due to various reasons (recession, trade deficit etc.). OPEC, which have been keeping their excess assets in US dollar, have lost more than 33% in value of these assets because of the decline in US dollar which began in 2001.

How long are OPEC going to continue to hold their excess currency in US dollars? There might come a time when they decide to convert their US dollars into euros. Many OPEC leaders have stated this publicly. Even Saudi Arabia, the largest producer of oil and the largest supplier of oil to the US, has stated that it is considering pricing its oil in euros, as well as in US dollars. There have even been discussions among Arab nations about pricing oil in Islamic gold and silver dinars. If this happens, other producers may follow suit and opt out of accepting US dollars for oil. Demand for the currency will plummet, sending the dollar into a freefall while demand for euros, gold and silver soars. Declining US dollar may force countries like Japan and China, who have been holding US dollars in vast amount, may be forced to sell part of their holding to diversify in euros, gold and other precious metals. This may push prices of gold even higher.

To conclude, as long as US dollar is declining or is expected to decline, the prices of oil and gold are going to climb higher and higher. Both oil and gold have been in major up trend for a few years now. If I were a trend investor, I would look at any pull back in prices as an opportunity to buy.

Used Nick Barisheff’s article “The Gold, Oil and US dollar relationship” for reference.

What is Inflation?

2008-04-11T18:31:00.000-07:00

I remember my grandma saying in her time she could buy one kilo ghee for less than a Rupee (which is now what Rs 160?). And we all have heard that, “your grand pa’s salary was just Rs 600/month yet he managed to raise 3 kids and you can’t even buy a pair of jeans for Rs 600?” Humm how did that happen? Well, that’s Mr Inflation at work!

To put in simple words, inflation reflects a situation in economy where the demand for goods and services exceeds their supply. Inflation is measured as an annual percentage increase. As inflation rises, the purchasing power of a Rupee decreases. This means with higher inflation, you can buy a smaller percentage of goods or services for the same money you have. For example, if inflation is 6% annually, then theoretically a Rs. 1 chewing gum would cost you Rs 1.06 in a year. With inflation the value of your money does not stay constant. (This means if you decide to keep all your money under your pillow, it would erode with the rate of inflation every year…it’s not a good idea to keep your money under your bed either for the same reason!).

Now, next question that may come up in our mind is, what causes this inflation? There is no one factor that could cause inflation, there may me many factors involved. But as Investopedia explains there are two main causes for inflation.

Demand-Pull Inflation: This happens when “Too much money chasing too few goods.” If Sixth Pay Commission’s recommendations were accepted it could cause this type of inflation. People will have more money to spend on goods and services, so prices will go up. This type of inflation is called Demand-Pull Inflation.

Cost-Push Inflation: Price increase could also be triggered by increase in costs of production. For example increase in prices of imported row materials, increased wages, taxes etc. Companies are forced to increase the prices of their product or service as a result. This type of inflation is called Cost-Push Inflation.

Does this mean inflation is evil? Not really. Inflation is evil only when it is rising at quicker than expected rate. Infect inflation is the sign that economy is growing, and this is the reason why developing countries have higher inflation rate then developed countries. Government usually tries to keep inflation at acceptable rate by controlling interest rate. This is the reason whenever inflation is out of control we see RBI stepping in and adjusting interest rate. (It is important to note that Inflation may be a major reason but it is not the only reason why RBI would adjust the interest rate.)

Now, may be at this time most all us are thinking how inflation affects our investments? This is a new topic in itself. I will be writing a new post to answer this question.

Please feel free to comment to let me know your thoughts or suggestions.

How to invest successfully in Mutual Funds:

2008-04-11T18:30:00.000-07:00

Many people chose to invest in mutual funds over stocks for various reasons, main being less risk and professional money management. History says that majority of mutual funds under perform the market. Choosing the right mutual fund is a very important task. I will cover few tips on how to select mutual fund in some other post but as for today, I will share a few tips regarding how to successfully invest in mutual fund and gain a substantial return that would beat the market.

Many people assume that investing in mutual fund is very well done by a systematic investment plan (SIP), meaning investing fix amount of money every month or at a fix interval of time. This approach definitely helps avoid downward risks, it also fails to yield superior gains. Remember, we are in the market for long term (I have no fix definition of long term. As long as a company continues growing/expanding and keeps delivering good return, I am in) and we have to get the maximum gain out of our investment. Matching or under performing the market is not an option. So even though this is a safe approach, for all practical purpose is not the only way. There is something that needs to be added to SIP in order to gain superior returns and the trick is to invest as much money as possible during the market down turn. Let me add something that I read in Peter Lynch’s best selling book “One up on wall street”. (For those of you who do not know who is Peter Lynch, he is one of the best mutual fund managers in our time. He successfully managed Fidelity Magellan Mutual Fund delivering market beating returns for 13 years. Magellan went on to become the biggest mutual fund in the history under his management. I would strongly recommend his books for all investors.) Lynch had done research over a period of time which included a few bull and a few bear markets and found that historically when stock market was at a peak of its bull run, people were pouring money in the market. The money inflow was highest when the market was at peak. On the other hand, people were pulling money out of the market hand over feast during the bear run. The money inflow was the lowest when market bottomed.

There should be no surprise in this finding but let’s analyze this scenario. When you are fully invested in the market with every single penny you got, the market tumbles and you start losing money and when you are barely invested in the market, the market starts its bull run and you lose out on good opportunity. I know there is no way to predict the bottom in the market but doesn’t it make sense to invest more and more when market is in the bear run (kind of market we are having right now)? We can take a great advantage of cost averaging. I think we can get substantial return by mixing SIP and the approach I explained above.

As always, all thoughts/comments are welcomed. I will share a few tips regarding selecting good mutual fund sometimes later. Cheers till then!

Interest Rate Conundrum

2008-04-11T18:27:00.000-07:00

I am not an expert on Interest rates, but based on what I have been reading, it seems like the RBI is facing an interesting problem regarding the interest rates. While the Fed has been aggressively cutting interest rates to bolster US economy that in all likelihood is in a recession, the RBI has held the interest rate steady at current level. This raises an interesting problem.
The high interest rate difference between the US and the Indian banks causes lot of Dollar investments to come to India. This is because it is cheaper to borrow in US and invest in India. Dollar, thus, becomes the carry currency. However with the increase in dollar inflows, the rupee strengthens. This affects the export market and could have a future impact on the economy. We have already seen the manufacturing numbers getting affected. RBI ofcourse has been pressured by the export lobby and does keep the Rupee within a range. It does so by buying US dollars against the dollar inflows that come into India. RBI intervention has caused Rupee to strengthen when all the major currencies were gaining against the dollar when it was in a free fall just the week before the Bear Sterns bailout. RBI, ofcourse, cannot continue to do this, and there will be a point when it will have to let Rupee to strengthen. That will affect the exports.

The other course for RBI is to cut the interest rates. However, doing so increases the liquidity in the market and can possibly lead to even higher inflation. The possibility for higher prices and a struggling economy (at least the exports) is going to put even more pressure on the economy. Traditionally, to curb inflation common sense suggests raising interest rates. However as I explained above the RBI may not have the luxury to raise interest rates.

It would be interesting to know what RBI ends up doing and how the scenario looks as far as the inflation, exchange rate and exports are concerned.

Please feel free to put your comments.
Submitted by Johnny G.

Krazzy 4 movie review

2008-04-11T10:56:00.000-07:00

Krazzy 4 has created quite a buzz.. A few reasons to catch the movie..
Undoubtedly, the main attraction of Krazy 4 is the item numbers performed by two of the biggest superstars in Bollywood, Hrithik Roshan and Shahrukh Khan. Rakhi Sawant too has an item number! All this in itself is worth the price of your ticket!
The lead actors - Irrfan Khan, Arshad Warsi, Rajpal Yadav, Suresh Menon - are a bunch of extremely talented actors.
Jaideep Sen, the debutante director of Krazzy 4, has been in the industry for a long time and assisted Rakesh Roshan in quite a few movies.

Overall, Krazzy 4 is a above average movie. Good performances, well-made first half, average second half, super item numbers, few truly hilarious sequences make it worth atleast a watch at your nearest movieplex. At the box-office, the item numbers by two superstars should ensure a good opening. Could just cross the Hit mark.
Rating: 3 star
Worth a watch

How to invest successfully in Mutual Funds:

2008-04-10T20:32:00.000-07:00

Many people assume that investing in mutual fund is very well done by a systematic investment plan (SIP), meaning investing fix amount of money every month or at a fix interval of time. This approach definitely helps avoid downward risks, it also fails to yield superior gains. Remember, we are in the market for long term (I have no fix definition of long term. As long as a company continues growing/expanding and keeps delivering good return, I am in) and we have to get the maximum gain out of our investment. Matching or under performing the market is not an option. So even though this is a safe approach, for all practical purpose is not the only way. There is something that needs to be added to SIP in order to gain superior returns and the trick is to invest as much money as possible during the market down turn. Let me add something that I read in Peter Lynch’s best selling book “One up on the street”. (For those of you who do not know who is Peter Lynch, he is one of the best mutual fund managers in our time. He successfully managed Fidelity Magellan Mutual Fund delivering market beating returns for 13 years. Magellan went on to become the biggest mutual fund in the history under his management. I would strongly recommend his books for all investors.) Lynch had done research over a period of time which included a few bull and a few bear markets and found that historically when stock market was at a peak of its bull run, people were pouring money in the market. The money inflow was highest when the market was at peak. On the other hand, people were pulling money out of the market hand over feast during the bear run. The money inflow was the lowest when market bottomed.

As always, all thoughts/comments are welcomed. I will to share a few tips regarding selecting good mutual fund sometimes later. Cheers till then!