Thursday, September 22, 2011

Investing - the better option

Find your own answers to the following:

On the one hand you have this financial institution - called a commercial bank - that says, 
"Folks, trust me with your money. I assure you that your capital will remain unimpaired for the duration, there will be no erosion in value. On top of that, I'll pay you a fixed rate of interest for the entire period, on the dot. It may not be very attractive, but it's guaranteed. At the end of the promised period you will get back the entire original amount of your principal and the interest due to you (unless you have drawn it earlier).
Incidentally, for ages, apart from the usual savings and current accounts, we have had only three term investment schemes, viz., fixed deposit, recurring deposit and reinvestment deposit. Would you like to trust us with your hard earned money?"
Now, on the other hand, we have this institution called the mutual fund industry (some call it unit trust). It proclaims thus: 
"You lay investors have neither the skill, nor the ability or the time to take the best investment decisions. You are also not smart enough to pick some blue chip shares for yourself. Investing is a full time job calling for analytic and a myriad of other skills.
We have full time fund managers, backed by full-fledged research teams, to take the right investment decisions for you. Putting money in a bank is the worst thing that you can do. Give me your money, and we will do a better job with it than you can with your own money. Just see our track record for the past so many years, the number of times that our funds (and schemes) have beaten the market, and made our investors richer.
However, note that our past performance is no guide or indicator of our future performance (meaning, don't blame us if we goof up badly!). You know, investments are subject to market risks. (Meaning, we do not assure you that you would get back your original amount, not to speak of any return on your investment.) You investment may go down by 50% or more in value. And, we may not show any growth or give you any dividend for months or years. We don't even know if and when we'd be paying you any dividend, if at all. Nothing is guaranteed. 
And, because we are not sure about our investment schemes, we have floated hundreds of them - although one is hardly distinguishable from another (good enough even to fool the experts) - so that we can confuse you further, earn more commission, while covering up our failures. We also keep floating NFOs to lure newer victims. If even five of the 200 (say) schemes happen to click, we tom tom about those few, but never talk about the other 195 that have performed miserably. 
Ah! Certain things are guaranteed, though! Such as our annual bonus, performance incentives, pay packets and perks. You see, whether you earn anything or not, the expense ratio of 2.5% that we deduct from your portfolios every year, keep us in good cheer. 
What are you waiting for? Why not invest in mutual funds, you morons!"

Wednesday, September 21, 2011


“Why Vietnam, of all places? What's there to see, anyway!” The eyebrows went up several notches when we announced our vacation plans. Images of a long suffering, war-ravaged country, run by a Communist government, did nothing to add up to Vietnam as a tourist’s destination of choice, especially if one was from West Bengal. I wondered for a moment if our research had gone wrong somewhere.
Flying from Calcutta through Bangkok, we reached Ho Chi Minh City (HCMC), formerly called Saigon, in South Vietnam, in the evening. As we exited the airport, the wide roads, the crowded streets, orderly traffic and the brightly lit towering buildings impressed us immensely. This was surely not what a country recovering from the effects of several invasions and a long war with the US was supposed to look like. This was as modern a city as any city could be.
We had to have an early dinner and check in. "Early", because we learnt that the Vietnamese start their days very early indeed, have lunch at 11 am, and dinner by 7 pm. Restaurants are virtually empty and about to close by 8 pm. But we were still on Indian time, which meant that we were one and a half hours ahead of even their "early" dinner time!
During our city tour the next morning, we were impressed by the beautifully maintained public parks, monuments, and many lakes dotting the city. The French Quarter was not unlike Paris. Apart from museums and cathedrals, the main post office itself was a sight to behold. The wide pavements were swept 3-4 times a day. The parks had exercising machines (all in working condition, and free) that one would normally find only in a gym. The city folks were out by 5 a.m. at these parks, walking, jogging and exercising together. Most left for office by 7 a.m.

About 40 km from the city, at Ben Duoc and Ben Dinh, are the 250 km network of Cu Chi Tunnels. The area represents the typical symbol of the inner strength, the resilience, the dogged determination and the innovative fighting spirit of the Vietnamese people. The tunnels themselves are very small in size, most being only 1.2m high and 80 cm across, with no lights, and unique ventilation systems. The wide variety of booby traps to maim and kill the unwary American soldiers must also be seen to be believed. A knocked-out M-41 tank, a bomb crater, shooting with a rifle and live bullets, underground kitchens, old surgery facilities, meeting areas, ammunition factory and camouflaged dining halls added to the thrill. Back at the city, our day ended with a full body message, topped up with a river cruise, lots of music and dancing, and a feast fit for the kings.
Da Nang, in Central Vietnam, is an hour north by flight. It’s an unbelievably picturesque city on the South China Sea. The city boasts of a very long bay area and a beach that’s adjudged as one of the 6 most beautiful beaches in the world. The spotlessly clean pavements were much wider than the roads that ran along the coast line and along both sides of the river; not a single hawker or beggar was in sight. At one end of the beach lies the Monkey Mountain, hosting a temple and a Buddhist pagoda. A calm, serene place, it offers a panoramic view of the bay area, the beach and the city.

Da Nang city- straddles the river; it leads to the sea.

Da Nang beach
Just across the river Han is Han Market, a must for shoppers. Buy your gift items from here for yourself or the people back home.
On the way to Hoi An along the paved, wide roads, is the Marble Mountains. It’s a cluster of five mountains, said to represent the five elements of the universe. Do not be afraid to climb the 200 steps to the top of one of them. Avoid the lift, climbing is more fun. The inside of the natural cave on the top is bigger than any cathedral you have ever seen, and the view from the top is worth the climb.
The ancient town of Hoi An, an World Heritage site, was next on our agenda. In the 16th and the 17th centuries Hoi An was the leading international trading centre in Central and Southern Viet Nam. An estimated 300 to 500 tailors there can stitch you any clothing in two hours flat. A walking tour around the charming and wonderfully preserved section – combining Chinese, Japanese and European influences – is its main attraction. The city gets flooded every year by the Hoai River that runs along it, the flood water getting into the 150 year old wooden houses too. In 1946 the flood was 2.5 metres high, repeated in 2007. Yet, life goes on.
If you visit Hue, insist on road travel. The 35 km journey across the mountain pass and the heavenly sights are a photographer’s delight. Use the 16 km long tunnel, but only for your return journey to Da Nang.
The capital city of Viet Nam, Ha Noi, was an hour’s flight from Da Nang. Ha Noi is known for its numerous peaceful lakes, shaded boulevards, verdant public parks and colonial architecture. Stay in the Old Quarter, if you wish to know the city from close. Take an early morning walk. Watch the city wake up ever so slowly. Over the loudspeakers, for about 30 minutes every morning, you’ll hear the local People’s Committee announcing messages on cleanliness, discipline, hygiene, and other civic duties. For breakfast, try out the specialities like pho (rice noodle soup), the bun cha (grilled chopped meat) or Cha ca La Vong (fried fish) at one of the many roadside eateries.
There are a whole lot of places to visit in Ha Noi. The capital city is also a shopper’s and gourmet’s paradise. You will rarely see more polite, courteous, ever smiling, disciplined or helpful people. And there are lots to see and enjoy. So stay an extra couple of days at the end of the tour and explore the city on your own.
Our last port of call was the Ha Long Bay, 180 km from Ha Noi by road. The Bay is a dense cluster of over 3,000 limestone monolithic islands rising spectacularly from the ocean, each topped with thick jungle vegetation. Words cannot describe the wonder of this place, a World Heritage Site. The Sung Sot cave is massive and stunningly spectacular. Looks like a straight lift from the Indiana Jones movie set. There are a lot more islands, many such caves worth visiting. Plan a two-nights' stay at Ha Long Bay, and if possible, stay overnight on an island. Your time won't be wasted. 

Later, we did some kayaking and swimming, visited a fishing village, spent hours on the sun deck, took hundreds of photographs, and gorged on the food served. Without doubt, this was by far the best part of the tour.
Ha Long Bay

The General Post Office, ,HCMC

Between HCMC and Huae

At Huae

If you are choosy about food, you will miss one of the most compelling  reasons for visiting Viet Nam. Because of the 3000 km long coastline, sea food predominates. The taste is unique and fantastic, most unlike Chinese or Thai food. A typical lunch or dinner may consist of seafood soup, white cabbage salad with shredded pork or chicken and peanuts, fried fillet fish with spicy sauce, stir fried pork with baby corn, fried chicken with cashew nuts, stewed fish in clay pot, sour fish soup, sautéed water spinach, grilled shrimp in garlic sauce, steamed rice, deserts and padanus or Jasmine tea. Visit a new restaurant for every meal. The names of the dishes may appear to be similar, but the way the food is cooked will blow your mind. Make the best of your stay in Viet Nam - the country is a gastronome's delight.
While there, we found that there were a lot more fabulous places that we had not seen yet. We are determined to go back soon. 

Strangely though, we did not come across a single Indian during the entire tour. However, having seen the photographs and heard about how much we enjoyed the tour, our friends and relatives too have now queued up to visit Nam. West Bengal was under Communist rule for 35 years. Viet Nam has always been ruled by the Communists. But the difference and the rate of development have left us speechless. My son said it was the best vacation he had ever had. We agree with him completely.
Do not miss the photographs of Viet Nam.  Copy/paste the  following to your address bar:


For your information:

  • The best time to visit is late March to early May.
  • Even for the so-called conducted tours, in Viet Nam you need not travel in a large group. The local tour operators will accept even a small “group” of three (as they did for us), provide a 9-seater Mercedes air-conditioned vehicle and an English speaking guide, for the entire tour - everything tailor-made, exclusively for you
  • The travel agency will arrange for airport pick up and drop, hotel reservations (hotels are very reasonably priced), and local sightseeing. Being the smallest possible group, you are free to adjust the schedule to suit your convenience.
  • Local currency is the Vietnamese Dong (VND), but prices are freely quoted in USD too. 
  • Changing currencies is easy; there are exchange bureaus everywhere. Even the jewellery shops offer a very good rate. Exchange rate is USD 1.0=25,000 VND. (As on March 1, 2014 the rate of exchange with INR is INR 100= VND 34,000 approx.)
  • Visiting Viet Nam is not only much cheaper than touring Europe, but it is hassle free and far better value for money.
  • You may consider touching Angkor Wat (in Northern Cambodia) on the way from Bangkok to HCMC. It is mid-way between Bangkok and HCMC, about 45 minutes' flying time from Bangkok.
  • Carry empty suitcases. Almost everything is very affordable in Viet Nam.
  • All three-star hotels are of excellent quality, conveniently located, smartly outfitted, offering (unlike in Europe) English TV channels, English newspapers, WiFi, and internet access at the lobby - everything for free. Some have swimming pools too. Other hotels too are quite reasonably priced.
  • English is spoken by only a few, the signboards and road signs are all in Vietnamese, but one can easily get by (the local people are used to tourists). The local guides speak English. We found our guides to be very gentle, very courteous, very polite. 
  • We did not see a single Indian during the entire 11-day tour. But there were a large number of tourists from other countries. Wonder why!
  • Almost all the outlets, shops, malls, restaurants, counters, supermarkets are run by girls. Rarely would you see a store being ‘manned’.
  • Every toilet, even in public places, is spotlessly clean and maintained as in a five-star hotels.
  • Local travel is 95% by two wheelers. Two wheelers or cycles are available for hire. Public transport remains a rarity in most cities.
  • You’d hardly see any policemen anywhere, except on the highways. No video cameras either. Yet the traffic is disciplined,  moves smoothly, no one jumps the signals.
  • The people have a great sense of cleanliness and discipline, are very hard working, proud of their heritage and their hard-fought independence. The country is fully geared towards offering the best to the tourists.
I know of several who, after having read about this blog on Viet Nam and seeing the photographs, have already been there. Go ahead, have a great time, folks! Without doubt, it's value for money, any day! Have fun. 

"Star Ananda"-High Speed Headlines

Have you ever watched the Bengali new channel "Star Ananda". If you have, I wonder if you could ever catch the headlines properly. For, the reader (most she) appears to be break the world record for speed reading. Whoever reads the headlines, reads so fast that it is hardly possible, if at all, to understand what she is saying.

I wonder what gave the channel the idea that reading headlines at the speed of light is the right way to deliver news. Hasn't anyone told them what a fool they are making of themselves? This has been going on for months, if not years.

When will they ever learn!

Tuesday, September 20, 2011

Protect your investments

This is from one lay investor to another.

Everyone who has been keeping track of the world economy, or the domestic financial markets are fully aware that the world is on the brink of another financial Tsunami. Greek is due to default in its commitments any time soon. There is a 90% chance that it will. Not all the European central banks nor all US money can bail them out this time around, for none of them (except may be, Germany) has the funds to make a difference. US is mired in its own trouble; Spain, Portugal, Ireland and France are in no better position to help others.

Unlike the previous occasion (Sept 2007), this time there will be no concerted effort to a bailout; no one has either the capacity or the funds. The crisis, if it happens, could be far worse this time around. If and when Greece sinks, there will be a "catastophy, a Dominao effect" (in the words of Angela Merkel, German Chancellor) that may engulf the rest of the world.

What should a lay investor do? The stock markets are not going to go up soon. They may move sideways, at best, or go down. My suggestion: cash being king, liquidate all your investments that are "subject to market risks". Hold on to your cash, or put them where it will not be at risk, like in a bank. In India, the banks are paying pretty decent interest rates (up to 10.0% p.a. on term deposits). Best to park funds there and wait for the crash to come. Then buy some units, mutual funds or stocks that you always wanted to hold. You might get them far cheaper than now.

Proect your capital, while earning a decent return in the meanwhile.