Do it yourself

 The latest issue of Sarvekshna (March 2022 ), the periodic journal of National Statistical Office (NSO), presents some important insights into assets and indebtedness of the Indian households. Some of the data is actually contrary to the popular perception. I find this data important since it defines the limits of potential domestic inflows into the financial markets; and the challenges the household face in a persisting negative interest rate environment. The key highlights of the NSO presentation are as follows: Asset ownership pattern ·          96.6% of Rural households own some financial asset . This percentage is lower (94.7%) in case of urban households. ·          Average value of financial assets held by a rural household in India is around INR73,000. For an urban household, this value is much higher at INR2,52,000. ·          About 91% of rur...

Continuing from yesterday ( see here ) Many readers have asked a very pertinent question, viz., "why the stock prices are not reflecting the economic reality?" It is a common knowledge that the outbreak of COVID-19 pandemic and consequent socio-economic shutdown has caused extensive damage to After pondering over this question for many days, I have reached the following conclusions: All financial assets (Bonds, Equity, MF Units, Derivatives etc.) have two clear manifestations - (i) Interest in some underlying business(es) or loan to some underlying business with or without a charge on the assets; and (ii) independent commodity without any regard to the any underlying business or asset. When someone buys equity shares of a company with the intent of acquiring an interest in the underlying business of that company, he is considered an investor in that underlying business. He may use the services of stock broker or may buy directly from the company ...