Cricket booms in India A big hit

The Indian Premier League is raking in money but its teams are not

India Reviews Tax Treaty With Mauritius

In India, the proposed tax changes are also a sign of the government's desire to exert greater control on offshore money flowing into the country. Regulators have made moves limiting the use of promissory notes in order to increase market transparency. These promissory notes, or P-notes, have been widely used by foreign investors that haven't registered with Indian regulators, allowing them to buy shares anonymously.

ICICI Bank Cuts Back on Retail Lending

So ICICI is cutting back on its business in unsecured loans. With a renewed push in corporate lending, she said, the bank's retail-loan portfolio has come down from around 65% of its total lending a couple of years ago to 55% today and will likely fall to 50% soon. With half of its loans now corporate, ICICI Bank is retreating somewhat from its aggressive push into retail banking over the last decade.

Where did all the love go?

No crisis, says the White House, but American patience with Israel has run out

Not Made in the U.S.A.

Being American is a little more complicated these days. That’s especially true for iconic brands like Levi’s, Converse, and Rawlings baseballs, all of which built their reputations on products produced in America. Globalization has changed all that. Here’s a look at all-American goods that no longer exclusively sport a “Made in the U.S.A.” label.
1) Chuck Taylors
2) Fender Stratocaster
3) Etch A Sketch
4) Radio Flyer wagons
5) Levi jeans
6) Craftsman and Stanley tools
7) American flags
8) Rawlings baseballs
9) Cannondale bicycles
10) NBA uniforms
11) Brach’s confections
12) IBM personal computers

Not pointing or wagging but beckoning

Defensive and assertive in its words, China for the time being has a bark that is worse than its bite

25 Best Blogs 2009

Full List Top Blogs

1. Talking Points Memo
2. The Huffington Post
3. Lifehacker
4. Metafilter
5. The Daily Dish by Andrew Sullivan
6. Freakonomics
7. BoingBoing
8. Got2BeGreen
9. Zen Habits
10. The Conscience of a Liberal: Paul Krugman
11. Crooks and Liars
12. Generación Y
13. Mashable
14. Slashfood
15. Official Google Blog
16. synthesis
17. bleat
18. /Film
19. Seth Godin's Blog
20. Deadspin: Sports News without Access, Favor, or Discretion
21. Dooce
22. Confessions of a Pioneer Woman
23. Said the Gramophone
24. Detention Slip
25. Bad Astronomy

Most Overrated Blogs

1. TechCrunch
2. Gawker
3. Jim Cramer's Blog
4. PerezHilton.com
5. Daily Kos: State of the Nation

The Top 10 Everything of 2009

Top 10 Best Business Deals

1. Berkshire Hathaway–Goldman Sachs
2. JPMorgan Chase and the Deals It Didn't Do
3. BB&T-Colonial
4. Berkshire Hathaway–Burlington Northern
5. Ford's $23.6 Billion Loan Grab
6. BlackRock–Barclays Global Investors
7. HP-EDS
8. Google-AdMob
9. Time Warner Spins Off Cable and AOL
10. Mead Johnson Nutrition

Anymany more .............must read

The 50 Worst Cars of All Time

Is Google the Omen of a U.S.-China Trade War?

From Beijing's standpoint, there's a lot of that going around at the moment. For the past two weeks, China has been in a rhetorical firefight with the U.S. about the value of the renminbi (RMB) vs. the dollar. President Barack Obama called on Beijing to let the RMB more accurately reflect market fundamentals — most economists believe the RMB is undervalued relative to the dollar — because doing so would help boost U.S. exports to China. Premier Wen Jiabao said China had no intention of doing that anytime soon because so many of its exporters are barely profitable as it is. And in response to calls in the U.S. Congress for tariffs on Chinese goods should RMB revaluation not occur, China's Minister of Commerce, Chen Deming, bluntly told the Washington Post on Sunday that in the event of a trade war, the "American people and U.S. companies" would suffer more than China.

What Health-Care Reform Really Means

A one-stop guide to how a new plan would affect you

Full List
A User's Guide
1. Understanding Health-Care Reform
2. If You Are Insured Through Employer
3. If You Are Insured Independently
4. If You Are Insured Through a Public Program
5. If You Are The Owner of a Small Business
6. If You Are Uninsured

Big Players

1. The Insurance Companies
2. The Hospitals
3. The Doctors

Insurance Vocab

1. Health Care Glossary

Roach Rebuffs Krugman Call to Pressure China on Yuan

Morgan Stanley Asia Chairman Stephen Roach said a “baseball bat” should be taken to economist Paul Krugman over his call for the U.S. to pressure China into allowing the yuan to appreciate.

How do Highest NAV Guarantee Plans work ?

Now a days, we are seeing a new “Innovative” product in the market. They’re called Highest NAV Guaranteed Plans .These products have come in, after the recent crash in the market, and companies are taking advantage of the fact that Investors are looking for some kind of a safe investment equity product. Hence, they’ve launched these Highest NAV Return ULIP’s which confuse investors and make them (the investors :) ), believe that they are going to get the highest return from the Stock market in long run – generally the tenure is 7 yrs, for these plans .

In this article, we look at how Highest NAV Guarantee ULIP’s work, and you will understand, how any Guarantee product can be created by simple methods . The simple catch, here is that these schemes, are structured in such a manner, that the collected funds can be invested either in equities, debt instruments or in money-market instruments in proportions varying from zero to 100%
How Highest NAV Guarantee Policy Works ?

These plans use strategies like Dynamic Hedging and CPPI (Constant proportion portfolio insurance), which are advanced strategies used in Derivatives world. But, let me explain a simplified version of the whole process.

Supposing a policy starts today and is guaranteed to give highest NAV in next 7 yrs and we can control how money moves to debt and equity, its pretty simple.

In the beginning, let’s assume a NAV of Rs 10, and the Asset allocation is 100% in equity and 0% in debt . Now suppose, the market moves up and NAV goes upto Rs 15 by the end of the first year, at this point, try to understand what Insurance company has to provide – they have to make sure, that they provide at least Rs 15 as the return after 6 yrs . Now in order to achieve this, all they have to do is keep X amount in debt instruments which will mature in next 6 years and provide Rs 15 at the end of 6 yrs, so assuming the debt return at 7%, they need to put around Rs 10 in Bonds , so that the maturity of the bond is Rs 15 at the end of 6 yrs .

=> 10 * (1.07)^6
=> 15.007

They can now invest the rest Rs 5 in Equity as Rs 10 is allocated to Debt . So, now they’ve made sure that whatever happens to the market, they get Rs 15 for sure at the end of 6 yrs. Now, there are two possibilities

Case 1 : Market Goes down : If market goes down, the NAV will go down correspondingly, but as per the strategy, the maturity value will be at least Rs 15.

Case 2 : Market Goes up again : If market goes up at this point and the NAV rises above 15, for example say to Rs. 18, now again they will pull out money from Equity and allocate such an amount to debt, that the maturity at the end of total 7 yrs would be Rs 18 and so on…

Note :

* These highest guaranteed schemes do not provide wide range of product categories, such as equity-oriented growth funds, balance funds and debt funds.
* Guarantee on highest NAV is available only if you survive the term. If you die during the term, your nominees will get the prevailing value of the fund. This is inferior to even a regular debt product because of the high cost structure involved.


How does a Highest NAV guarantee plan works
How Investors get Confused

You have to read in between the lines; Investors need to understand that these schemes guarantee the “Highest NAV”, READ AGAIN! , it’s Highest NAV and not “Highest Returns” . Normal Investors don’t give much thought before buying these products and normally assume that the returns will be linked to the Equity Markets .
Do you Know , you can Now Subscribe to All the Comments on JagoInvestor !! (You can Unsubscribe Later)
Returns from Highest NAV Guarantee Plans

So, what are the return expectations of these funds? We know, that long-term equity returns, are normally in the 12-15% range while, debt returns turn out to be 6-7%. So, considering the fact, that these products will shift most of their money to debt, by the end of the tenure , we can expect the returns to be in range of 9-10%. We do get some equity upside in these products, but that will be limited. After a point, this product will turn into a debt oriented fund with a major portion in debt . Also if you factor in costs, like premium allocation charges , fund management charges and other yearly charges, the returns will not be what you actually expect.

You will be amazed to know, that the returns expected from these schemes, may be lower than the returns offered by equity-oriented Ulips. The reason being, that the basic objective of protecting the previous high NAV of the fund, may constrain the fund manager’s ability to take risks while allocating funds. So if the market has fallen down, the fund manager can’t take the risk of shifting the money from Debt to Equity to gain from the potential upsides in future , because they have to provide the “Guarantee.”

Read : Important Questions you should Ask an ULIP Agent ?

Return%20comparision%20of%20Regular%20and%20Guaranteed%20ULIPs How do Highest NAV Guarantee Plans work ?

Source : LiveMint Research
Current Products in Market with Highest NAV Guarantee

* ICICI’s Pinnacle
* Birla Sun Life Platinum Plus-III
* Bajaj Allianz Max Gain
* SBI Life Smart Ulip
* Tata AIG Apex Invest Assure
* LIC Wealth Plus
* Reliance Highest NAV Guarantee Plan.
* AEGON Religare Wealth Protect Plan

Controlling your emotions with these products

Let’s talk about mistakes from the investors point of view. We, as investors, don’t think with inquisitive, susceptive minds. Getting good returns from stock markets is anyways a tough thing in itself. So when these companies come up with plans like these, which say “highest NAV in 7 yrs”, we have to ask, “How is this possible?” . Dont say it’s not possible at all, just ask how? How do they achieve it? Stop seeing dreams of getting high returns without looking at the risk involved, and try to find out – what is the strategy they’re using , Is there something in between the lines ?

We all want to get great returns, but we have to shed this belief that, companies come up with plans specially for us. All the companies out there exist to earn money, and their motive behind every product is to make money, & generate profits for their companies, so that they keep their shareholders happy. So next time a product like this comes up , you have to control your emotions before getting in and first investigate. The worst part of this whole business, (of guaranteed highest NAV products) is the timing and how it gives naive investors, high illusions about the product. Products like these, take major advantage of psychology of the ordinary saver. Many Investors in smaller towns have broken their Fixed Deposits and taken some loan to invest in products like these, especially SBI Life Smart Ulip and LIC Wealth Plus because of the trust factor with LIC and SBI . See How Agents are Misselling LIC Wealth Plus

Why you should be “Pissed off” At these Insurance Companies

* Do you Know that, The Securities & Exchange Board of India (SEBI) , the stock market and mutual fund regulator, does not allow mutual funds to guarantee returns. Therefore Mutual funds can not provide guaranteed products which are related to stock markets, but IRDA can approve things like these and all these insurance companies come under the ambit of Insurance Regulatory and Development Authority of India (IRDA). So any Insurance Company can come up with a new Plan , link it with market and start providing “Guaranteed products” . You have to understand that “equity markets” and “guarantees” are a very risky idea together , so please stay away.

* Do you observe when do all these “Innovative” products come up in Market ? The answer is around end of the year, which is a premier Tax Investment time (Jan , Feb , Mar) . Is innovation in Finance space limited to End of the year ? Why dont these products come through out the year? Why ? The answer is simple , if it comes after anytime other than last 4-5 months of the Financial Year (ie Dec , Jan , Feb , Mar) , no body will bother to invest in these, because no body is bothered to “invest” at all . Companies very well understand investors psychology and their helpless ness at the end of the year because they have to provide investment proofs for Tax exemption as soon as possible . This is not just limited to these products , its true for NFO’s , IPO’s in booming markets , More Sales calls at the end of the year, and other new products .

* The so-called “Guarantee” is a marketing gimmick and is implicitly a result of the way the investment is structured . what it means is that the strategy they use itself is such that it will provide you the highest NAV , even we can create our own Plan and do what they are doing . But they make sure that Investors feel like they have done years of research and came up with these amazing plans .

* Why The Tenure is 7 yrs ? I am not very sure on this , but here are my thoughts on comments area

* You have to understand that there is nothing “Innovative” in this product , the fact that 7 companies have come up with the same product proves that its not “innovation” because Innovation is unique . Aegon Religare has gone ahead in this stupidity and introduced their Guaranteed Plan which guaranteed 80% of the Highest NAV , Looks like they think that it makes them look different from others .

Who should Invest in These Products ?

If you are looking for modest returns, like 8-10%, you can invest in these policies. The return of these policies may be high in the beginning, if market does well; but when market starts performing badly, the returns can take a hit and then be in a tight range. Your NAV will be protected for sure, but the returns wont be, since over time the CAGR return will go down. Remember, if your NAV is 10 today and you highest NAV is 20, for a 2 year period, the return is a good enough 41%, but by the 4th year it’s just 18.9% and by the end of 7th year it’s a measly 10.4%. So what you really need, is protection of returns, not the NAV which is just a fixed number.


Nice article by Manish click on the link to read entire article with pictorial presentation....... must read......

Even FM can't take Budget speech home

Very good description of budget process by former FM

Even FM can't take Budget speech home

Very good description of budget process by former FM

Yuan 'not cause of US woes': scholar

Deficit result of low savings, high consumption

Microsoft Opens A New Window

The software giant thinks beyond desktops and embraces the cloud with a vengeance

Intelligent Taxation

Replacing the corporation tax by a general tax on value added by businesses would end the Mauritian tax haemorrhage

Hollywood bound

Reliance ADAG wants to become a global media and entertainment house. It is diversifying its services for stability and investing in Hollywood to reach scale.

10 major shifts in Marketing mindset in the Age of Turbulence

KOTLER ’ S LIST OF THE MOST INNNOVATIVE MARKETING STRATEGIES

1) IKEA 2) Southwest Airlines 3) Wal-Mart 4) Amazon.com 5) Dell 6) Toyota 7) Enterprise Rent-a-Car 8) Progressive Insurance 9) USAA Insurance 10) Barnes & Noble

INNOVATION MISTAKES A COMPANY CAN MAKE IN A TURBULENT ECONOMY

1) Fire talent 2) Cut back on technology 3) Reduce risk 4) Stop product development 5) Allow boards to replace growth-oriented CEOs with cost-cutting CEOs 6) Retreat from globalization 7) Allow CEOs to replace innovation as a key strategy 8) Change performance metrics 9) Reinforce hierarchy over collaboration 10) Retreat into a walled castle

"The Dangers of Deficit Reduction"

The Dangers of Deficit Reduction, by Joseph E. Stiglitz, Commentary, NY Times: A wave of fiscal austerity is rushing over Europe and America. ...

Wolf's world

Like quite a few other analysts, Wolf assesses this global crisis as a key turning point in the evolution of the global balance of power. The financial crisis and the major recession “have undermined Western credibility and prestige”, while demonstrating the resilience of China and India. He foresees a continued rise in the relative economic and political power of these Asian giants, if not all members of BRIC.

An unconventional glut

Newly economic, widely distributed sources are shifting the balance of power in the world’s gas markets

Europe's engine

Why Germany needs to change, both for its own sake and for others

Older and wiser

For all its stolid reputation, Germany has become surprisingly flexible, says Brooke Unger (interviewed here). But it needs to keep working at it

Business this week

Pranav Mistry at TED; The Sixth Sense - part 1

Must Watch series. Amazing and .........with many ??????

2009 in Photos

Beautiful Snaps of 2009. Some are soothing and some are disturbing

For the Arms Industry, India Is a Hot Market

One question left unanswered at Defexpo 2010 was whether a country in which one-third of the adults are illiterate and 43% of children are malnourished should spend so much on weapons. India's central government spent $4.5 billion on education in 2008 — about the same amount that it plans to spend on 197 new helicopters. A handful of protesters picketed outside the gates of the exhibition hall on opening day, but they drew little notice. India's attention is firmly focused on what a defense-company representative called the "quality gap" between its weapons and those of its neighbors, Pakistan and China. The gaps at home will have to wait.

Boeing or Bust: Europeans Cry Foul Over a Defense Contract

Despite the vehement statements of those denouncing the deal — and the veiled threats of retaliation — most observers say the chances of the spat jumping from the defense sector to wider commercial deals is limited at best. First off, military contracts have historically been so vulnerable to protectionism and national preferences that they aren't covered by World Trade Organization rules. For that reason, says Nicole Bacharan, a specialist on U.S.-European affairs at Stanford University, "the way this contract was handled wasn't any different from how it would be handled in any other country — especially one whose defense industry is as big but fragile as America's."

Report: The Case for Global Warming Stronger Than Ever

One of the many crimes that climate scientists have been accused of lately is that they claim absolute certainty in a field of research fraught with uncertainty. Sure, the planet is warming, say skeptics, but that's happened throughout Earth's history, long before humans were burning fossil fuels. So, how can we be sure this isn't just a natural phenomenon?

10 Ideas for the Next 10 Years

Full List
Important Trends

1. The Next American Century
2. Remapping the World
3. Bandwidth Is the New Black Gold
4. The Dropout Economy
5. China and the U.S.: The Indispensable Axis
6. In Defense of Failure
7. The White Anxiety Crisis
8. TV Will Save the World
9. The Twilight of the Elites
10. The Boring Age
Very good Article from TIME. Worth spending time for this

Somik Raha: Ignorance is really bliss

Indian banks didn't have the expertise to use the tools of statistics and finance, which misled US investment banks into making bad decisions

Nationalization of Indian Banks and the Financial Crisis

To make this clear, consider the example of drunk-driving. Almost everyone agrees that it is a bad decision to drive drunk. If I am to drive drunk, and get into an accident, that would be a case of "bad decision-bad outcome." If I am to drive drunk, and still get home safe, that would be a case of "bad decision-good outcome." If I am to drive sober, and get home safe, that is a case of "good decision-good outcome." And it could be that if I drive sober, I might still get into an accident. That is an example of a "good decision-bad outcome."

Impending Explosion: U.S. Intensifies Threats To Russia And Iran

“There is another possible strategic consequence to US bases in Yemen, hypothetical but not out of the range of possibility: a US air base in Yemen could be used as a launching pad for an air attack on Iran, not only for US planes but for the Israelis as well.” [40]

The Road to Armageddon: The Insane Drive for American Hegemony Threatens Life on Earth

The U.S. has already encircled Iran with military bases. The U.S. government intends to neutralize China by seizing control over the Middle East and cutting China off from oil.