"Desire is
poverty."
—Swami Sivananda (Indian,
1887-1963)
Word for the day
Antinome (n)
A logical contradiction.
Something that is contradictory or opposite to another.
Malice towards none
Our TV journalist are
certainly far superior investigators than any of the government agencies. They
can solve most of the crimes within hours.
Sir Sherlock Holmes would be
truly proud of them!
So are we!
First random thought this morning
This we all know that most Socialist leaders in the country have
come from very humble socio-economic background. For example, MSY was apparently
a school teacher and Lalu Yadav was a clerk in Bihar Veterinary College.
What business did these socialist do, besides full time politics,
to amass such tremendous wealth in past 3 decades?
Why should it take 10-15yr for enforcement agencies to find the
source of their wealth? I guess a trainee accountant can work backward 30yr
from the IT returns and bank accounts and tell you the whole story in less than
two months.
Red flags - 6
Political stability, or otherwise, has been one of the most
regular argument for investing or not investing in Indian equities over past
three decades. Though there is not even an iota of evidence to suggest that the
form (minority or majority), constitution (single party or multi party
coalition) or ideology (left, right or center) of the government has any profound impact of the
direction of economic policies or market returns.
The market in fact performed best during the periods when there were
minority governments at the center, that is, 1989-1991, 1991-1996, 1998-1999.
Most radical reforms were done during minority government rules (in case you
have forgotten all the dream budgets of 1990s.
VP Singh with socialists like Madhu Dandwate, Janeshwar Mishra,
George Fernandes in his cabinet, pursued basic reforms like free trade, a
floating exchange rate, deregulation and macroeconomic stability started by
preceding Congress Governments, before Mandir & Mandal undid him.
With less than 150 Lok Sabha seats, the socialist Chandershekhar
government in 1991 originated the idea of disinvestment in PSE with the stated
objective to “broad based the equity, improve management and enhance the
availability of resources for these enterprises”.
NF government (1996-1998) led by Deve Gowda had Communist Party of
India as one of the constituents, and 1996 dream budget of P. Chidambaram is
still celebrated as a watershed in market history of India.
The NDA-II government led by A. B. Vajpayee with 182 Lok Sabha
seats and minuscule representation in the Rajya Sabha added the term
privatization to disinvestment policy in 1999. This government bravely and
rightly focused more on "Divestment of Monopolies" as against mere
"Disinvestment of Minority stake in PSEs". The government sought to
divest its monopoly over core businesses like ports, airports, coal, power, oil
and gas exploration and production, roads, mobile telephony, data transmission,
etc.
UPA-1 government that was supported by communists opened up Indian
economy like never before.
Whereas the Rajiv Gandhi government with unprecedented majority
brought the economy to the brink of default while people were kept busy with
Bharat Mahotsavs.
The point in brief is that I would give no weightage to political stability
in my investment strategy for Indian equities.
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