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Amal
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| 30 November 2008, 20:41:26 |
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Dear Friends
The real reason here lies in leveraging. Every person from the streets to the corporates ends up leveraging. This is good to a limited range but the moment it crosses the trash hold levels it becomes toxic. We are taking of US sub prime, but look who is to be blamed for this. If sound financial basics are kept in place the question of sub prime wouldnt have come. Again the next bad thing is to spend the money even before you have earned it. In the U S people would be spending money which they may earn 2-3 years down the line that mean they would be perpetually in debt. If there is a down trend then the defaults are bound to come in. Atleast here in India the trend is not as much we are still a society which spends what has been earned last month. If we as advisors teach people the soundness of planning properly we would be doing a great job.
While talking about the FII selling then, i feel we are crying about spilled milk. I would see this situation as absolutely normal. If I have a house on fire i would take hold of all the valuables as it is and run. So you cannot blame the FIIs doing this they too need to fill up the gaps that have come into the system by pouring in as much money they can possibly do so and it would mean selling across the board.
Why are we not seeing the opportunities that have come around to us to regain the control of our companies with major holding by the citizens of the country who have all the rights to the wealth being created in our country. i should see that the average holding in most of the bluechips companies around 30% or more before the fall set in, should now drop less then 23-25% post fall. This is good.
A lot more can be said here, but i feel that we as indians need to come out and take equities as an option of creating wealth then to put money in debt instruments and then cry for others to come and create value for the money. |
