Management Punditz

New Commercial: Mahindra Bolero

2012-01-06T20:10:00.000-08:00

Bolero has been the undoubted leader in the entry level UV space. It is the only UV to make into the top 5 selling cars in India. It is hard to believe that the numbers of Bolero even exceeds those of i10, Beat, Nano...etc.

The new commercial completely focuses on its offroad capabilities and has a beautiful locale in its background (its probably Pangong Lake, Ladakh). The theme is as usual man-centric where the protagonist tries to impress two damsels whose frisbee has been snatched by a dog. The hero then comes on a Bolero and helps retrieving the frisbee from the daring dog.

Here's the ad -

A Complete and Comprehensive Checklist for Buying Term Life Insurance

2012-01-05T06:57:00.000-08:00

Buying insurance for protection and wealth creation has always been a very complicated task involving careful analyzes. The analysis involves the amount of coverage, reason for coverage and the term/time that the cover is required. Term policies taken for a specified period of time like 5, 10, 15, 20, or even 30 years helps to look after family’s financial commitments like education and marriage of our children and the day to day expenses for a reasonable standard of living.

Term insurance policies that resemble motor/house insurance are not subject to the law of indemnity as damage due to human life cannot be measured. Taken for a specified period when financial obligations have to be met, no money is generally paid back if death does not occur in the period.

A bird’s eye view of term insurance policies would tell you:

· Term policies are cheaper as they cover only the risk of death happening within a specified period. In addition the premium charged depending on the age of the person insured and time of coverage required with medical examination being compulsory in most of the cases.

· With very competitive premium rates being the present scenario of the insurance sector, it is found that most companies encourage insurers to take a much higher coverage for extended period of time even up to 35 years or 65 years of age. This accounts for popularity of these policies for people with long term financial commitments.

· Term life policies can be bought very easily either online or through life advisors that market and service these policies. You would benefit buying term insurance policies online as this does away with the expenses of agents/life advisors commission. This accounts for discount in premium.

· In addition a check of the insurer’s 'claim settlement' ratio or the percentage of claims settled by the insurer of the total received would help, with this available on the IRDA website.

· Once death occurs and claim is to be settled this is done in a lump-sum to the nominees or beneficiaries. This depends on the terms of the policy that the insured has taken, with the settlement free of tax payments.

· Term plans suit young earning members with dependents, with the low premium allowing them with additional funds to invest in lucrative equity-linked savings schemes that provide tax breaks

Deciding different factors about term life insurance:

1. Term insurance serves as the best life cover for large amounts and extended terms to meet your family’s financial commitments if you are not there. Insurance experts suggest about 12 times your annual income added to your total liability less investment in various assets.
2. It is important to note that liabilities include loans taken for house/ personal/ vehicles/and other obligations.
3. You should also consider amounts required for the education and marriage of your children, healthcare needs for your spouse and dependents and other amounts that would be required to maintain a reasonable lifestyle.
4. Term life insurance policies are mainly meant for earning members of the family, whose financial commitments have to be meant on his/her death. It is however not meant for the young, unmarried working people that have no dependents or financial commitments.
5. Term plans are best taken for amounts that consider not only the present financial needs, but also inflation, increase in salaries and lifestyle needs. The premium could rise with age and with increase in the amount of insurance taken and with riders/ additional benefits like personal accident insurance and critical illness coverage.

6. Insurance contracts being contracts of utmost good faith require revealing of material facts that would influence its acceptance. This could include your existing health conditions, family history and details of other insurance contracts that have been rejected in past. Undergoing a medical examination if necessary may help reduce chances of claims being rejected in future.

7. Term policies are best taken in blocks and increased or decreased according to need. Reviewing insurance needs every 3 to 5 years is ideal to adjust insurance needs. Taking insurance in blocks provides for flexibility to discontinue some in case of decreased financial obligations with time.

Finally take care to ensure that you have read and understood all the information to the best of your knowledge and disclosed the correct material facts like age, income and present health status. In addition carefully go through the signed proposal form and policy document and inform the insurance company in case of discrepancies within 15 days of issue of policy.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in)

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Indian Car Sales Figures - December 2011

2012-01-03T09:14:00.000-08:00

December 2011 Sales Figures - Pan India

Highlights -

December has been a breather for the Indian Auto Industry where many of the OEM's saw a marginal growth over last year. December has always been a tricky month - as majority of the customers postpone their purchase decision to avoid losing out on re-sale when the year of manufacture comes into consideration. On the other side aggressive discounts by OEM's are used as a catalyst to pull customers. Also most dealers are on the ramp for clearing their 'old' stocks. Other whip that the manufacturers use is the news of increase in prices from January.

In totality December gave a reason to rejoice to Hyundai, Tata & Mahindra who saw a growth of 12.8%, 46.79% & 23.97% YoY respectively. While the country's biggest automaker is still ailing with its decline in sales, hopes are still on its revival with interesting products such as Ertiga in pipeline.

GM had a growth of 6.74% YoY primarily due to the improved sale of its 3-cylinder Diesel Beat. Shows how diesel can work wonders for a product! Etios range of products may not be liked by all and many believe it is not of Toyota standard, but numbers are surely depicting a different picture. Toyota grew over twofold to 15,948 units from 6,362 units in same month last year.

A list of the top 20 brands of the month -

A Decade of sheer Performance!

2012-01-01T08:38:00.000-08:00

What better way to start with our first blog post for the year than other than the face of Indian Performance Bikes - the Bajaj Pulsar. A decade ago a rebel was born, against the conventional commuting philosophy this bike aimed a bit ahead of times. A need to answer that bikes were just not a means to travel - but a way to identify oneself. Biking was slowly a rage, a passion,a religion one can say... Bajaj was successful to identify this need. Pulsar not only elevated the Brand Bajaj to the next level but also bought volumes - to an extent that was envied by many commuter bikes too.

Specialty of a bike lies in its rider - Bajaj knew it !

Bajaj rightly describes its journey of Pulsar - Pulsar has moved beyond being just a brand or a product of engineering; it embodies a spirit, a movement, a strong sense of pride.

I own one and can relate to every word of it - "Engraved in the DNA of every Pulsar is an attitude that is also translated to every biker, who gets his daily dose of pride riding a Pulsar."

Here's a video celebrating the decade of a PERFORMER -

2012

2012-01-01T02:25:00.000-08:00

As the new year heralds in, we at Management Punditz wish all its readers a very revved up and ambitious New Year.

2011 was an exciting year. Right from the Anna Movement to the unassuming Kolaveri, from cricket world cup success to the F1 intro in India, we loved every part of it.

It was also a mixed year for the automotive industry - saw some of the biggest car launches and faced the worst labor issues. But we're sure that 2012 will be one of the best years in the Indian Automobile history. The signs are already positive with the upcoming Auto Expo and India as a market has matured to accept both variety and novelty. The dominance of the industry is bound to grow back to its peak this year.

With all the positiveness we welcome the new year with open hands and extend our greetings to our valuable readerbase -
Wishing a very Happy & Prosperous New Year 2012!

Parenting To Raise Financially Smart Children

2011-12-28T09:12:00.000-08:00

"Someone's sitting in the shade today because someone planted a tree a long time ago." Warren Buffet

This quotation, it made me think that this is what children that were taught to be financially smart turned out as adults. This next made me feel that it was just not important to send children to school to learn how to count and write, but as parents to teach them about the value of certain aspects in life. With consumerism overtaking the economy even in developing countries of the world like India, many youngsters are having easy accessibility to credit cards and EMI’s, making our children realize the difference between a real want and need would make them financially smart for a lifetime.

Hence smart parents should assume a vital role to render useful lessons of financial management to their children. Smart parents would not only render useful finance lessons, but would also be a prominent example and take effective feedback by making their children a partner in their financial decisions.

Let’s look at how we can make parenting to raise children, who are financially smart, an interesting and enjoyable experience.

Have a look at these aspects in inculcating learning about personal finance:

Ø Simple living:

My grandfather has always been a part of my learning principles of smart financial management and I respect him for what he always told us as children, “Simple living and high thinking are the essence of life. We should be able to live with minimum wants if we wish to have an umbrella over us for a lifetime.” He was a standing example or what he preached, making me feel we could make our children lead better lives if we rendered these lessons to our children and practiced it ourselves to set an example.

Ø Setting Financial Priorities:

Setting priorities in our children such as ‘having basic necessities of life like food, clothing, and shelter were more essential than fancy and fashionable articles’ would surely help. The habits built at the cradle carry on to the death bed. This applies in educating our children about the clear demarcation between wants versus needs.

Setting up financial priorities in children could start off with teaching them budgeting that is appropriate to their age. Inculcating the habit of budgeting in our children would start off with working together with them and making a child friendly budget. Young children are very happy to have budgets prepared with bright colors, graphs and other visuals. A joint effort would make them feel a part of it and be ready to cooperate and learn.

Ø Goal Oriented:

My observation of financially smart adults made me understand that they believed in saving for a goal. So we need to involve our older children by involving them in budgeting for costlier possessions like car, a house, new furniture or probably saving for a sound education or marriage. It is true that even younger children need to be encouraged to save for small fancy needs like probably going for a movie, an evening having pizza or that remote control toy or Barbie doll. Their achievement would give them a sense of fulfillment that could make them feel motivated and focused to save for bigger goals.

Ø Rewards:

Motivation has always been the keyword to progress, so praise and rewards could also make a great impact on children learning and implementing financially smart objectives. In addition teaching our children of how to survive and earn would help. So suggesting alternative ways to earn, like helping in the cleaning of the car, helping younger siblings with homework, running errands like shopping for essential or helping in small household chores in an age appropriate manner would surely help.

Ø Banking:

“Putting your savings in the bank would help you earn more money to meet your financial goals,” is what most financially smart parents would have instilled in their children right from childhood. A savings bank account started with parents being a guardian would help overlook their children’s spending habits and guide them.

Ø Financial Learning:

In addition instilling a habit of reading articles and reviews on finance have helped many financially smart children to save for their future once they started earning.

Stocks, shares and other financially appreciating instruments are best taught to older children, with involving them in real life examples of your investments helping a lot. Next is to introduce them to credit cards and loans. When they should be taken and when they should be avoided need to be taught well in advance.

Experience makes principles of smart financial planning more deep. So allowing our children to borrow money from us and repay it back with/without interest makes them realize the impact of loans.

Lastly do realize that each child is made in a different way with different spending and savings traits. Identifying each child’s financial habits early in life would help us to guide them tactfully without being imposing on them. I have known of children who have learnt better by their falls in financial decisions, so just rest assured that experience sometimes renders the best lessons for a healthy financial life.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.)

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Investment Behavior and Returns

2011-12-24T04:07:00.000-08:00

Why investors are not making returns in the stock market?

In the last 10 years, sensex gas grown at 17.79% CAGR. That means, if someone could have invested Rs. 1 lac 10 years back, it could have grown to 5.14 lacs. In the last 10 years one third of diversified equity mutual funds have delivered a CAGR of more than 25%. That means if someone could have invested 10 years back in these mutual funds Rs.1lac, it could have grown to Rs.9.31 Lacs.

But how many investors have REALLY got these kinds of returns…?

In this context knowing about the study conducted by Dalbar to determine how the investment behavior and decisions impacted the overall investment performance would be advisable. Dalbar, Inc. is a US based leading financial services market research firm. They have done comparative study on the returns of S&P 500 Index and the returns of the investors for a 20 year period ending 31-12-10.
The study revealed the following two important facts.

· The average return of the S&P 500 during this 20 year period is 9.14%.

· The average return of the equity investor during the same period is only 3.27%

When the market is delivering so much, why is that the investor is making out less? What are all the factors contributing for this gap in the market returns and the investor returns?
Though the market is delivering returns, investors were not able to benefit. Why is it so? What went wrong? It is because of the nature or character of the investor.
Agriculture is getting affected by nature, either because of excess rain or no rain. But we found out a system to fight against this nature. We built dams. So whenever there is excess rain, dams retain water to save agriculture and whenever there is no rain, it releases water to help agriculture.
Similarly investors are supposed to find and build a dam against their nature and behaviour towards stock market investing in order to get better returns.

What are the natures or behaviours of an investor that blocks him from getting the market return?
Fear:
When stocks suffer large losses for a sustained period, the overall market can become more fearful of sustaining further losses. At that point in time everyone will come with their own logic, reasoning, and statistical evidence on the chances of further losses. Fear stands for “False Evidence Appearing Real”.

Greed:

Most of us have a desire to acquire as much wealth as possible in the shortest amount of time. This get-rich-quick mentality makes it hard to maintain gains and keep to a strict investment plan over the long term.

An investment portfolio based on ones personality

Basing investment portfolios on one’s personal likes and dislikes are the first of the powerful influences. It is like investing in cars and fancy gadgets just because you love them. Investing on shares just because you think they are smart or flashy is ambiguous, for they could sink in the long run. It is better instead to invest in profitable ventures that pay in the long run. It is true; our investment fancies make us pay a heavy price.

Follow the flock policy

The follow the flock for fear of being the black sheep policy makes you as an investor to believe in following others in the share markets. The pitfalls of group behavior lead us to buying high and selling less.

It also leads to unbalanced investment emotions of black or white (wrong or right) with no shades of objectivity and rationality. Buying high and selling low has made many investors suffer heavy losses in the long run.

A look at positive investment behavior:

It is good to be investment smart with humility and reasonable aspirations that makes achievement of financial goals a reality. I have never known of any high return investments that did not have high risks.

Patience over a lifetime and being able to assume stress helps in aiming for long term positive returns and contributes to assuming less financial stress after retirement.

Positive investment behavior requires balanced moods, one of neither elation nor panic. Neither selling in a panic due to share market positions or adverse world or country conditions is advisable, nor is a reaction of extreme financial prosperity, both can destroy a lifetime of healthy investment. A long-term investor needs to realize that neither despairing nor elation of situations in civilization proves worthy for long term financial portfolios.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.)

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Factors To Consider Before Investing In IPO’s

2011-12-21T07:06:00.000-08:00

IPO’s or initial public offering is best understood as the first public offering of shares by a private limited company before listing in a stock market. Looking down IPO’s history of success and failure stories, you would be smart to first fully understand the various aspects behind such offerings and makes the right choice to invest or not in IPO’s. It is advisable to understand that

investing in IPO’s could prove risky with unfavorable market situations and sentiments and when the fundamentals of the company and industry are weak. It is best to go by facts, avoid being influenced by rumors and have a closer look at the past performances also.

Understanding the concept of investing in IPO does require a clear look into these factors:

v It is not wise to believe rumors and success stories of IPO’s at face value, for investing in IPO’s is not easily learnt and there could be some misconceptions. So it is best to venture into IPO’s only after you have learnt the art of investing your hard earned money in them.

v It is wrong to be overwhelmed with hearing general statements that some IPO’s are attractively priced. You would be smarter comparing the price earnings ratio that helps get the relationship between the stock price and the company’s earnings and comparing it with those of competitive companies.

v Beware of being under the misconception that investing in IPO’s could give you great gains on listing. It has been noticed by both amateur as well as experienced investors that sometimes high losses are also made. It would be safer and secure not gambling in the shares of new issues.

v It is good to experiment with new products in the market. But I would say that it is not smart to have this attitude with shares and invest in IPO’s. Investing is about getting effective and safe returns on the hard earned money that you put into shares, so it would be smarter putting your money to work in index stocks that have been in the market for a long time and have survived the volatile economic market for long.

v Beware of being influenced by the favorable feeling and trend in the investment market to borrow money from financial institutions of brokerage companies for getting higher allotment of shares. It is sometimes very difficult to judge the trend of the market especially as an amateur and this could make you end up in huge losses coupled with the repayment of the loan with interest.

v Some assume that investing in IPO’s would surely bring about gains in the long run. However I would suggest that you would definitely be much better off investing in good listed shares that have a proven record, though they sell at a higher price. However you may invest with sufficient information of the IPO’s, but could not always be sure that the listing will not bring down the issue price.

So it is best to be prudent and informative before investing in IPO’s.

Factors that have a bearing on analyzing investments in IPO’s:

v It is first important to know that companies are required to file their draft red herring prospectus (DRHP) with SEBI while floating an IPO. Analyzing this document would give you financial and other information about the company. The highest percentage of shares held by institutional investors, banks and financial institutions could be a positive indicator to invest in IPO’s.

v The draft red herring prospectus (DRHP) would also provide other important information and indicators like the quality of management. The quality of management like their work experience, their past history or work experience, qualifications and projects handled would help in the decision to analyze IPO’s.

v Another factor having a bearing is strong promoter backing. Big companies like Tata and Birla bring about credibility and also add a premium to the price of IPO’s. The ownership by the government and public sector undertakings are also an indicator of high level of safety of returns.

v The other major, though not the only indicator though is grading, with a higher grading being good. However also could be false as seen with the IPO of Vasvani Industries that had a 2/5 grading. Similarly high graded companies like Galaxy Surfactants with a CRISIL rating of 4/5 withdrew its IPO. So it is best to understand that even some good companies withdraw their IPO’s due to poor public sentiments and difficulty experienced in raising funds in the market.

v The objective for raising funds would prove to be an important indicator to its profitability and time for return. Finding out this objective looking at various factors like the businesses past performance, future growth prospects, potential rate of return and profitability. In addition it is best to avoid investing in businesses that you cannot understand.

v Last, but most important a periodic review would help you understand how your investment in IPO’s are fairing and help effect follow-up. However it is advisable to avoid taking hasty decisions to sell, as some IPO’s have underperformed initially but has given consistent returns in the long run. But prompt follow-up action would be required in case of IPO’s that lose very badly or are fundamentally wrongly invested.

To conclude investing in IPO’s is best kept to the minimum as they involve a high level of research and uncertainty. However if they are selectively chosen they would help avoid investments with bad performance.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.)

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A Study on Physical Gold and Gold ETF

2011-12-17T08:02:00.000-08:00

Stock Market has lead to tendency of many to go in for much safer investments that gives a reasonable return. This is the reason for gold gaining popularity as one of the safest avenues for investment.

Gold has always held importance as a good investment proposition since the days of our ancestors. But the recent trends of daylight robbery, murders and greed for the precious yellow metal with the difficulty of storage and safety of physical gold had made gold a cumbersome proposition. In addition, fraudulent and not uniform practices followed by jewelers and difficulty in establishing the purity of gold contributed to the popularity and desirability of gold ETF’s.

Gold ETF’s or gold exchange-traded funds are instruments investing in gold of 99.5% purity. Investing and maintaining these funds just required demat account and a trading account with a registered stockbroker. Gold ETF’s are more ideal than physical gold due the following reasons:

¨ Gold ETF’s are investments in gold of 99.5% purity only. It prevents one from falling into the clutches of some jewelers that fool customers with smooth and artistic talk. This avoids chances of misplacement of trust, as only a goldsmith could find out the exact purity.

¨ Owning something virtual like gold ETF’s does away with the difficulty of storage and security experienced in possessing physical gold. The units of gold ETF’s can easily be stored in both demat and trading account without being known to the greedy, cheaters, robbers and looters. A word of caution here, you could be sure of it all when you keep your units in accounts with privacy of user name and password.

¨ Gold ETF’s are most ideal for small investors as they can be purchased in small denominations sometimes of even 1 gram or ½ a gram. So ETF’s can be bought easily in small installments regularly and increased in the virtual form. This advantage is not available when investing in physical gold.

¨ Low cost, with affordability in dealing with gold ETF’s contributes to their desirability over physical gold. These instruments are listed in exchanges; the exchange traded mechanism helping to reduce processing charges, disbursements and collection charges. Gold ETF’s also help do away with the carry charges in gold futures.

¨ The ease to convert gold ETF’s into liquid cash easily at real time prices on the stock exchange avoiding charges like commission, and unnecessary fuss over quality and price by jewelers make them a desirable investment. This makes buying and selling these units easy.

¨ Right and uniform pricing in Gold ETF’s offered no scope for price discrimination that is experienced in encasing physical gold at the jewelers. One lacking knowledge and experience in dealing in gold would do best to invest in good gold ETF’s.

¨ Gold ETF’s offer protection from the liability of taxes. The taxation system for gold ETF’s is similar to non-equity mutual funds. One only needs to pay the lower of the two, long-term capital gains tax of 10 per cent without indexation or 20 per cent with indexation on profits made.

¨ Gold GTF’s are likely to show lesser tracking errors as compared to normal funds as the creation and redemption of units are done with units of the same type. This accounts for lesser liquid cash being required and the short time interval between buying and selling of units.

However some may disagree with me and say that the psychological satisfaction of seeing and feeling physical gold in the physical form is important and gold ETF’s are a fictitious concept. It is purely a question of ones own perception, but I would strongly contest gold ETF’s if investment, safety and security is ones objective.

If you keep gold in the form of ETF, you will not have any emotional attachment towards that. You will really consider it as an investment. If you need money for buying a property or kid’s higher education you will feel free to encash it. But in the case of physical gold, we will not be prepared to sell it because we will have emotional attachment towards physical gold.

So, Gold ETFs are the better way to invest in gold.

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Know All About Form 16 – Be An Informed TaxPayer.

2011-12-13T07:02:00.000-08:00

Most of us are aware of Form 16 given by our employers before April 30^th each year that give details of the income earned, and tax deducted at source and paid to the government. This certificate proves useful in filing income tax returns. In addition banks also issuing Form 16 and Form16A to pension holders and those that earn interest income, with no Form 16 required when TDS is not deducted from salary. Knowing about Form 16 helps us to be a well-informed taxpayer and do better tax planning.

The 13 components of Form 16 are:

1) PAN that stands for Permanent Account Number, a 10 digit alpha-numeric code that is generated by the Income Tax Department of India. It is mandatory for everyone- NRI, PIO & companies that wishes to conduct business, file and pay taxes, invest, buy and sell property, open a demat or bank account to have this number in India. The need

2) TAN is best known as Tax Deduction and Collection Account Number is another mandatory 10 digit alpha-numeric number that is very necessary for all persons and companies that are responsible for collecting taxes. It proves useful to note that this number is unique in case of different companies.

3) Gross salary, the common term used in practice includes all regular incomes in an employee’s remuneration. It would include allowances, overtime pay, commissions, and bonuses, with all other amounts before the deductions are made.

4) It is best to know that perquisites are just additional benefits in addition to the fixed salaries. Known popularly as perks this term could include rent free accommodation, loans at subsidized rates and others.

5) Profits in lieu of salary are just payments given instead of salary that is given by at or in connection with retrenchment or termination of employment. This item forms a part of taxable income and includes gratuity, commuted value of pension, retrenchment compensation. However the contribution made by the employee or interest thereon is not taxed.

6) Next allowances in Form 16 are certain payments made or allotted to employees for bearing of certain expenses. It could include allowances like medical allowances, and travel allowances that are generally taxable in the hands of the employees.

7) House rent allowance or HRA In Form 16 refers to a special allowance paid to employees to meet the cost of housing. There is tax exemption on HRA and it is limited to the least of either the HRA received from employer, or rent paid in excess of 10% of the salary, or 50% of salary in metropolitan cities and 40% in other cities. The term salary here includes basic, dearness allowance and other commissions put together, this exemption not available to those that do not pay rent.

8) It is best to understand conveyance allowance as an allowance paid to an employee to meet commuting expenses between his/her home and place of work. There is a maximum exemption of Rs.800, with a special provision for an orthopedically handicapped employee until Rs.1600.

9) The term medical allowance paid for medical treatments and medicines is fully taxable. However reimbursement of medical expenses against submission of bills could get you a maximum exemption of Rs.15000 annually.

10) The allowance received to employees for entertainment services or entertainment allowance is allowed as a deduction for government employees. However in other cases one can avail of deduction as a least of actual allowance received, or 1/5^th of salary excluding all other allowances and perquisites or Rs.5000.

11) Deductions as in Form 16 is given as an incentive given by the government to invest in certain long term savings schemes. This includes long term savings for retirement, insurance schemes and others that give tax breaks.

12) All taxes in India are subject to an education cess that is 3% of total tax payable. This contribution is made towards the Secondary and Higher Education development in the Indian economy.

13) It is lastly important to understand the relief granted to employees when salary is paid in arrears in a lump sum best known as Relief u/s 89. This includes salaries received in arrears/advance, family pension received in arrears, retirement benefits such as gratuity, commuted pension, VRS and retrenchment compensation.

Understanding your form 16 helps you in many ways like planning for taxes, filing your income tax and so on.

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3 wheeled sprinter

2011-12-04T10:13:00.000-08:00

INDIAN 3 WHEELER INDUSTRY

After the advent of the revolutionary Tata Ace in 2005, analysts believed the Indian 3 wheeler Industry would slowly be phased out and be replaced with efficient 4 wheelers. Even Industry Experts were betting big on bringing more 4 wheeler cargo/passenger trucks into the market. The more powerful, stable, upmarket & value for money 4-wheeled offering was a real scare for the 3 wheeler industry. The market changed drastically and slowly the sale of 4W numbers was higher than 3W. The industry also saw a steady decline in the year 2006 to 2008 as a resultant of aforementioned reasons. Suddenly the vehicle stability, long distance travel, interior space, higher payload, increased speed and car like comforts/driving were the value propositions sought by the Indian buyer.

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As said and the done, the future was very different. The 3-wheelers suddenly emerged out of the grave and proved a valuable business proposition to the auto makers. The cognizance of the 3-wheelers was undeterred by the mighty 4-wheelers competitors. It grew manifold after 2008 and still is the first choice for the value conscious commercial vehicle seekers. The production almost touched 8 Lakh figures in F11 is the best example of its success story. So what is it that kept it alive???

Let’s start with a brief on the Indian 3 wheeler Industry:

The 3 wheeler market in India is over four decades old and is currently the largest 3 wheeler market in the world. Initially only 3 wheeled passenger autos were introduced. Later in eighties lower capacity cargo carriers were introduced – 0.5 Tons open body Pick-up van. Till late eighties, 3-Wheeler market was virtually ruled by Bajaj Auto Ltd. Late eighties - early nineties, new manufacturers developed higher capacity category by introducing 6 seaters & 0.75 Tons Cargo carrier. Late nineties saw a renewed interest in the 3-Wheeler market. Optimism about growing need of free mobility as well as the need for remote and efficient distribution of the goods and services was the key factors for the same.

The OEMs involved in manufacturing 3 wheelers –

Slowly according to the market requirements LPG & CNG variants were also launched. The stringent government regulations also threw out the diesel variants from the city.

The Segmentation of the industry emerged as follows –

Key Drivers to the sustainability and growth were:

1. Last mile transportation needs -

Its small turning radius, ideal for intra city operations and easy to drive in narrow roads made it the favorite for small distance load/passenger carriers. Its maneuverablity allowed it to pass through even smallest lanes of the town. High product maneuverability & driveability had been always ideal for congested Indian roads and tropical conditions.

2. Inadequate urban & rural public transportation infrastructure.

Infrastructure remained the biggest concern. Unavailability of structured roads/highways didn't allow the 4-wheeled machines to bloom. The 3-wheelers still proved to be the fastest and most viable alternative to the narrow, pot-holed Indian roads.

3. Low initial ownership/acquisition cost

It is still the most economical vehicle in the commercial vehicle industry. Better mileage and Pickup Low maintenance cost along with amazing price and better load optimization made it the perfect choice! The low EMI's stood as an attractive option and the easy availability of spares in the local market was another added advantage.

4. Self-employment opportunity

Various subsidies offered by the state governments encouraged the unemployed youth to openly accept this opportunity of owning it and make-a-living out of it.

Indian 3-wheeler market has seen its fair share of up and downs. Considering the exciting phases it has been through we had no doubt in calling it a '3-wheeled sprinter' who has able to keep upto speed to the market requirements and has evolved to survive the dynamism/vulnerability of the Indian Automobile market. It'll all exciting to track its growth/decline in times to come.

Indian Car Sales Figures - November 2011

2011-12-02T08:34:00.000-08:00

November 2011 Sales Figures - Pan India

Highlights -

“Every cloud has a silver lining” – This is what the sales figures for the month of November 2011 has to say. Except Maruti all OEM’s have seen a considerable growth in its volume. Even Maruti Suzuki has exceeded the 80k figure after 6 long months! This is a sure shot sign of revival for the industry, and with the slight decrease in petrol price along with the huge year-end discounts we can expect the sales registers ringing this December.

1)
1. Nano 2012 is here!!! The increased numbers surely bought some hope among Nano enthusiasts. This brand still has a long way to go in terms to prove its potential.

2) 2. Beat grows over 80 percent than last year – this surely shows how GM was devoid of the market acceptance even after having a winner in hands. With the diesel version it has emerged as a savior to GM and enabled it to sustain its numbers.

3) 3. Eon with its slapstick pricing and futuristic looks has the potential to push Hyundai to the top position in India. But it is not easy to shake Alto’s dominance.

4) 4. Maruti has been able to revamp its supplies – evident from the offtake numbers of 17273 for Swift, 24422 for Alto and 10403 for Dzire. Estilo seems to be in its death phase, we think it is the right time to phase it out.

5) 5. Tata seems to be on Steroids. Both its Indica and Indigo brands are doing extremely well. This is primarily due to the performing Vista and Manza variants.

6) 6. Verna has taken the C-segment by storm. It has consistently proved itself as a rightful competitor over the last 6 months and has strengthened Hyundai’s position in C-segment.

7) 7. Bolero seems to exceed the magical 1Lakh figure this fiscal. It has already garnered 63314 numbers within 8 months of this financial year. Also Scorpio has shown a strong growth this year. With 4646 numbers it has grown over 38 percent over last year.

8) 8. Skoda’s Rapid did a decent start with 957 billings. We can expect it cannibalizing Vento’s sale to an extent.

Source

OEM Offtake Figures - November 2011

2011-12-01T10:25:00.000-08:00

November 2011 Sales Figures

1) Positive Signs in the month of November. Labour Unrest seems to be settling for Maruti - hope the sales completely revive in Dec'11.
2) Etios Brothers (Etios+Liva) has boosted the growth for TKM. Made for India Etios has got TKM to an enviable position.
3) Someone forgot to tell Mahindra about the Recession in the Auto space. M&M has an excellent growth of around 53%.
4) Tata Motors revive sales with the growth in Nano Sales. Also the new Indica Vista has boosted the numbers for TML.
5) Figo again emerges saviour for brand Ford - what a winner it has proved for Ford in India!
6) GM tastes the power of Diesel. Has a marginal growth (just 1%) - all thanks to the new Beat Diesel.
7) With more than 1600 bookings for Rapid, we expect a more RAPID growth in sales figure of Skoda in December'11.
8) VW's Polo & Vento has grown to a sustainable position and are bringing increasing numbers to VW portfolio.

Resident to NRI

2011-11-25T10:15:00.000-08:00

Have You Taken These Financial Steps Before Becoming An NRI?

Are you planning to go abroad and become am NRI? Today you are a Resident Indian. Tomorrow you may become an NRI if your employer provides an opportunity. When an opportunity like this knocks at our door, are we ready to face the change? Are we prepared?

Creating a Checklist or ‘to-do list’ helps to ensure consistency and completeness in carrying out a task. Becoming an NRI is a major transition which definitely needs a checklist. Here is a personal finance check list to be taken care before departing from India.

NRO & NRE ACCOUNT:

The first thing to do is to convert your savings bank account to an NRO or NRE account. An NRO or non-resident ordinary account is like an ordinary savings bank account that gives a domestic rate of interest. This account can be used for depositting your domestic earnings like rent, interest and dividends and remittances from abroad into this account. Cheques can be issued for EMI and investment, but there are restrictions for transferring money to the country of residence. Money in this account is non-repatriable.

You can transfer current income earned in India, but transfer of sales proceeds of property and investments can be only to the extent of 1 million $’s a year. A certificate from a chartered accountant, declaring that all taxes have been paid has to be furnished. It is important noting that an NRO account invites a tax of about 30.9% at source.

An NRE or non-resident external account can be opened with foreign currency when you wish to transfer substantial money to the country of your residence. There is neither restriction to remittance nor any taxes in this account, but you would only get a low rate of interest. This account offers no facility to receive incomes in the shape of rent, interest and dividends, but you can make local payment in rupees, invest money and receive proceeds from sale of investments and property.

It is much easier to open both these accounts in India, with you requiring giving 2 passport size photographs along with a copy of your passport and visa. In case you are already abroad, it is mandatory to get an attestation from the Indian Embassy or Notary before sending it to the bank branch.

DEMAT ACCOUNT:

The next step is to close your domestic demat account and open a non-resident ordinary (NRO) demat account under the Portfolio Investment Scheme (PINS). This is mandatory, as there are restrictions to the amount of investment that an NRI can make in the shares and stocks in Indian companies; it should not exceed 5% of the paid–up capital of any Indian company. You need to transfer your existing share holdings also into this account.

You have the option of 2 types of separate demat accounts namely for repatriable and non-repatriable shares and this account is to be separate from other bank accounts. Your demat service provider would help you on submission of copies of passport and visa. Once you return back to your country you can close the PINS demat account.

Power Of Attorney:

The third step is to give the power of attorney to someone you trust in India to manage financial transactions in bank accounts, buying and selling real estate, renting out property and signing up tax forms. The power of attorney could be general, where the authority entrusted holds good for banking as well as real estate transactions or could be specific, where the authority is restrictive to only certain transactions. Consulting a lawyer and submitting attested copies to the concerned people like banks and mutual funds proves essential.

Update your NRI status in Various KYCs:

The last step is inform the mutual fund, bank and insurance companies by submitting the updated Know Your Customer forms stating your change of status as a non-resident Indian. Your Financial Planner and Agent and bank branch could help you best regarding the different formalities that are required.

Now you are all set to assume your NRI status.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

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Indian Automotive Brands & Segments

2011-11-24T11:15:00.000-08:00

There was a time (1980s) when we had only two Indian Automotive brands - Padmini & Ambassador. The consumers had only two options and the estimate Annual Sales used to be around 20000 numbers. Maruti pitched in the year 1983 with its legendary Alto which challenged the monopoly of HM & Premier Automobiles. Post liberalization many foreign auto makers set shop in India. Fiat, Ford, Peugeot were the early entrants into the Indian market realizing its potential. Soon we saw an upsurge in demand and our home-grown Tata Motors jumped into the bandwagon. Within a short span of 25 years the number of OEM's in the Indian market grew to 25! The market which was churning out 20000 numbers now grew to a level of more than 20 Lakh vehicle sales annually.

With demand grew competition, so did the complications. Customers were spoilt for choice! There were so many options in the market, that it had to be regularized. Hence, SIAM decided to divide it into SEGMENTS. It was primarily a division based on the length of the vehicle. The Segmentation as per SIAM (considering the length) and the Indian Brands in the segments is as follows -

1) Mini (A1) / A Segment

The stalwart segment which boats of the most popular brands such as Maruti 800 & Tata Nano. This segment had grew very fast in the initial years of expansion of Indian Automotive Industry. It started shrinking with the formation of new segments. It was recently revived with the entry of Tata's Nano and has also triggered other OEMs to bring products in this table. Bajaj/Nissan/Renault JV is expected to bring another offering in this segment. All would depend on how Nano sales progresses.

Brands:

2) Compact Hatchback (A2) / B Segment

This is one of the fastest growing segments in India and accounts to more than 50% of Automotive Sales. This Segment has a never-ending number of brands lined up and the list keeps growing. The value-for-money, city friendly and practical qualities of products in this segment has made it the peoples favorite. We expect this segment to stabilize now and predict the dynamic growth of value for money sedans in the next few years. The Brands in this Segment are -

3) Midsize (A3) / C Segment

This segment also has many models today catering to a wide price bracket. It is classified into entry-level and premium 'SEDAN' categories. 2011 saw maximum launches in this space. This highlights the importance OEMs are giving to this segment and is bound to grow exponentially in near future. Models -

4) Executive (A4) / D Segment

Majority of the models in this segment were brought into the Indian market as CBU's. As volumes increased, localization and price rationalization were the after effects. This Segment has become the obvious choice of successful professionals and stands as an attractive option between Sedans and Premium Saloons. The offerings in this segment are -

5) Premium (A5) / E Segment

The Luxury or the high end segment is the only segment which has shown signs of sustainable growth in past 2-3 years. This has attracted a lot of Premium Auto Manufacturers to explore Indian terrain and India has emerged as one of most important Strategic Markets for these OEMs.

6) Luxury (A6) / F Segment

The choice of CEO's, Managing Directors and the ultra-luxurious chaffuer driven car - would be the right definition for the offerings in this space.

7) SUV / MPV / MUV

Considering the poor infrastructure and road conditions - this segment has been the most rational choice for all. This segment has always been the obvious choice for Rural masses and is still bound to grow further. With immense people carrying capacity, off-road capability, driven by diesel and with the 'image' factor attributed to it; it has grown leaps and bounds throughout. You'll not be amazed to see the number of offerings in this segment -

9) Convertible/Coupe/Supercars

This is an extension of E & F segments. With the advent of Ferrari, Bentley, Lamborghini, Porsche, etc in last few years the number of offerings have amplified. After the popularity of F1 and with the increasing number of billionaires in India, we are sure to see a much of these on Indian roads -

The exhaustive list of Brands mentioned above are the right indicator of the Indian Automotive Growth story. But the million dollar question is - how many of the brands mentioned above are going to remain in the next few years.

2011 also saw the demise of the iconic Fiat Palio. Auto makers need to understand the competitiveness of the Indian Market - and there is no room for failure!

Insurance For Home Makers

2011-11-22T09:16:00.000-08:00

Is it necessary to have Insurance For Home Makers?

It has always been a question of common belief that the male member or the bread winner of the family only needs to be insured. This belief has emerged due to the fact that the financial interests of the other dependent family memebers had to be protected in case of death of the bread winner. However changes of lifestyles and with more women being employed in lucrative professions both in big cities and towns the perception of insurance has changed.

In addition the entry of many MNC-Indian insurance joint ventures, and their bringing out unique solutions and products, it is time that we all looked into taking insurance policies for home makers too. Home mekaers have been neglected all these years with regard to insurance.

It would be interesting to study why home makers too need insurance:

Ø It is significant to note that in a country like India, homemakers contribute to households in the form of cooking, education of children and other menial work. But their importance and value of services evaluated in monetary terms is greatly neglected. It is true that the absence of these services on the death of the homemaker a big financial impact on lower and middle income families.

Ø Another noteworthy factor that places a value on insurance of homemakers is that they provide great counsel to their spouse and children. So losing them would mean that lots of money would have to be spent on counseling services proving that loss of love and companionship is priceless.

Ø It is also true that no one could replace a home maker mother and her loss could make it difficult to get competent and loving people to look after the family and children. It is also significant to note that the cost of competent daycare centers could be high and the cost of not insuring a home maker in lower and middle income families could be pretty high.

Ø There is a money value behind each and every household work performed by the home maker. In case of any eventuality to the home maker, one need to shell out more money to upkeep the house in order.

Considering various aspects like paying expenses out of the pocket, remarriage and insurance, insurance proves to be the most reliable and safest solution. The insurance cover should be proportional to the amount of financial loss that would be suffered or through a need based cost replacement analysis.

In addition to insurance to guard against financial liabilities in case of death of a home maker it is vital to also plan for a dream retirement home and college education funds through various insurance linked plans.

Health Insurance:

It is also true that insurance needs to be taken for critical illness, prolonged illness, accident or a major hospitalization for all family members. It would also be beneficial to take health insurance policies early in life to gain benefits like full cover of all ailments and lower premium.

However each family could have their own unique insurance needs, so taking the advice of a trusted financial planner in the form of an insurance advisor or trusted bank would help. They would render you correct information, best skills and advice based on your family’s financial circumatances, priorities and risk profile.

Insurance for the whole family also requires that all the adult family members be fully aware of all the insurance policies taken, their benefits and exclusions and where they are kept. Having an open discussion about long term savings and insurance plans both for the bread earner and home maker and for children build a better family understanding and bond. They also convey the message that proper life insurance coverage should form an integral part of financial planning in families.

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Shootout: Entry-level Luxury Bikes Segment, India

2011-11-20T12:46:00.000-08:00

Indian 2 wheeler Market was the only rejoice in the ailing Indian Automobile Industry. While Industry experts believed that Hero Motor Corp would suffer after its divorce with its Japanese partner Honda, Hero proved all the analysts wrong by beating the market expectations. During the first half of the year Hero's market share grew marginally to 73 percent from a market share of 70 percent last year. HMP also recorded its all time highest retails of 6.5 Lakh units in October 2011.

Now coming to the Luxury Performance Bike market in India, Hero again has been the first mover in this category. It launched Karizma way back in 2003 and can be easily crowned as India's first 'realistic' superbike. It not only marked the entry of performance biking but also allowed Indian Bikers to elevate from the traditional 100cc/150cc category. But volumes were minimal, Indians weren't ready to shell out the money just for the premium price tag and was meant unsuitable for the Indian roads.

But as our Infrastructure & Economy improved, the bike found many takers. Indian Bikers were slowly inclined towards much powerful and good-looking bikes. Larger and Meaner bikes found place in the garages of many Indian homes. Such was the craze that motivated much premium brands like Harley, Ducati, Hyosung, etc.. to set shops in Indian soil.

As we all know, Indians like to be 'spoilt for choice'. Hence there was the launch of India's first of its kind 'super sport bike' - Yamaha YZF R15. This 150 cc monster instantly won hearts over and became the face of Yamaha's performance oriented culture. It also played a vital role in reviving Yamaha's identity in the Indian terrain. This slowly turned out to be the crowned jewel in Yamaha's stable. It re-defined the ways of Indian 2-wheeler enthusiasts thought about a performance bike. R15 set many benchmarks in terms of design, ride-quality, performance and overall appeal. It also proved to be a crowd puller in many of its showrooms which also improved the sales of its sister brands too.

And 2011 saw the competition heated up. Indian 2-wheeler space generated interest in Bike Manufacturers throughout the world and these manufacturers were pretty serious about the size the country had to offer. Honda's R&D gave birth to a product that was specially designed and manufactured keeping developing countries into mind. The overall proportions of the new baby - CBR 250R never made it look like a 250cc segment bike. It put the elder siblings to shame. It was launched in early 2011 and garnered tremendous bookings in the Indian soil.

The sales numbers were as follows -

Although the overall size of the luxury bikes market accounts to around only 1% of the Industry; it is bound to grow exponentially . This is evident from the fact that Honda sold more than 11000 of CBR 250R just within 6 months of its launch - even though there were major supply issues after the Japan earthquake. And the recent upgrade of the Yamaha R15 (version 2.0) clearly signifies the seriousness of the manufacturers in this space. Even Bajaj is planning for a 250cc Pulsar anytime soon in early 2012. Also Suzuki would be launching a 250cc bike in the same space.

Keep looking for much activity in this segment. This is obviously the most sought after space in the Indian market now (not for generating volumes, but for creating the brand for the manufacturer).

Critical Illness: What a Disaster?

2011-11-19T00:34:00.000-08:00

Ursula K. LeGuin quotes “The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next.”

I agree with Ursula K. LeGuin for critical illness could strike anyone at anytime and in any place with the modern trend of rise in lifestyle diseases that call for prompt and costly medical care. The necessity of critical insurance or health insurance with critical illness riders was strengthened with my friend Mr. Karthik being diagnosed with multiple blocks in his heart that involved a treatment of 3lac. Then one more friend told us all about the necessity of critical illness insurance and health insurance with critical illness.

Understanding all about critical insurance and health insurance with critical insurance riders would tell us that most such health insurance policies would cover 12 critical illness besides others. They could include heart attack, coronary artery bypass surgery (CABG), cancer, kidney failure, stroke, coma, liver failure, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, aorta graft surgery and total blindness.

These diseases and surgical procedures could be wanted by anyone, at any time and anywhere and hence cannot be neglected at all. Health insurance companies generally undertake to pay a lump sum for the treatment of these diseases irrespective of the amount spent. Some companies may include such coverage on payment of additional premium every year. This could vary from company to company and also between companies dealing in life and general insurance.

Features of Critical Illness Insurance

Ø It is quite possible to take up critical insurance policies or health insurance with critical insurance riders. When a critical insurance policy is taken the entire amount of the sum assured is paid on treatment of the critical insurance irrespective of the amount actually spent. Such a policy is a benefit plan.

Ø The benefit payment under the Policy will generally be paid to you on survival for more than 30 days on post diagnosis of the critical illness.

Ø However critical illness insurance will not cover ordinary hospitalization and medical expenses. While health insurance policies with critical illness riders would offer extra protection against critical illnesses with payment of additional premium. They would also pay the lump sum on the treatment of the critical illness.

Ø However one needs to understand that critical illness insurance does not have any maturity value and just offer cover in case of critical illness. Such amounts may lapse on their not occurring. Life insurance policies offering critical insurance riders have a maturity value but no maturity value is allotted for riders. Riders merely cover the risk of critical insurance. However this need not deter one from taking up critical illness insurance, as it is well worth to cover risk of high expenses with critical illness.

Ø Having a look into the premium on these policies would give us information that the amount of premium on critical illness insurance and riders for critical illness would vary depending on the age of the insured and the illnesses that are covered.

Ø Critical illness insurance could have exclusive coverage for all critical diseases or for only some, the terms and conditions varying from company to company. A check would prove useful before taking up a critical illness insurance or life insurance with critical illness riders.

Ø Tax benefits under Sec 80D or Sec 80C of the Income Tax Act are available.

Get critical insurance today

“Caution is a most valuable asset in fishing, especially if you are the fish.”

I am sure you would not prefer to be the fish that is not cautious, for life is so sweet and short. Mr. Karthik and his family are now out to advice families like them, for they believe their experience could educate others too.

What are you waiting for to take protection today? Information is nothing more than mental garbage if it doesn't transfer an individual. Unimplemented knowledge is a burden. Our problem is not ignorance; but inaction. Don’t fall into this trap.

One of these days is none of these days; today is the day to start the big job. Just browse the net, discuss with financial planners for better understanding of the coverage required and product clarity, and get quotes and rest in peace with the best critical illness insurance for you.

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Felt like throwing rocks at this star!

2011-11-16T10:06:00.000-08:00

It would be the first time I would be expressing my review on a movie on a public forum; but I couldn't stop myself from doing this. It is with great expectations and after reading fantastic reviews I decided to step into the theater. It wasn't a pleasant experience at all, I anticipated a lot more from the veteran Imitiaz Ali after watching his previous masterpieces - Jab We Met & Socha Na Tha. I had always been a fan of Imitiaz's way of describing a tale - peppy, unpredictable, intriguing and with lot of fun.

Although Rockstar's ending was unpredictable though; the story seemed a lot humdrum. I wished it would have been more straighter to our senses. At one point I couldn't make out why Ranbir disappeared from Heer's marriage and why his parents suddenly dis-owned him. And how our JJ (Janardhan Jhakhad) gets so serious about Heer (was that one HUG that changed the feelings altogether?). Why does JJ become a Devdas - was it separation from Heer / feeling of being rejected from his family? Why does Heer name our JJ 'Jordan'? What made Jordan crave to go to Prague (was this the confidence Jordan had that he could get intricate with Heer)? I couldn't solve a mystery and another question would pop up.

Rockstar's tale starts with a 'JHAPAD' for entertaining the crowd at the Bus Stop. This is the moment where i wish it would have been better if he was named as Janardhan Jhapad. To be fair, I somehow loved the first half of the movie. I could relate the madness of Heer to that of Jab we Met's Kareena. The idea of fulfilling one's dark desires clicked me. Heer's idea of 'enjoying' her life before marriage by - watching Jungli Jawani, drinking desi alcohol, driving a motorbike, roaming around the most scenic places was just exciting to watch. Another thing (and also the most important factor) that worked well for the movie - MUSIC! I was transformed to a different world when our JJ touch the highest note while singing "Kun Faya Kun". Also I also sang in chorus "Nadaan Parindey Ghar Aa Jaa" without realizing! My feets were tapping to the songs all the time. To sum it all - it was a one man show - Ranbeer Kapoor. He is undoubtedly one of the most mature actors of his time. The way he has carried his role is above all. And the costumes/hair style has added the oomph that no one could miss.

What disappointed me was the second half. I just totally lost the track here. I couldn't realize whether it was JJ's separation or Bone Marrow that had caused Heer the critical illness. Why couldn't the 'magical touch' revive Heer off the tragedy. And how did JJ notice Heer's sister in the crowd when he was totally disconnected from the outer world. Imitiaz totally lost out in the second half. The movie would have been a disaster if AR Rahman wouldn't have graced with the lovely songs. Nargis Fakhri was another weak link in the movie - I could see similar expressions in her face all throughout the movie. If I was asked to rate the movie, I would rate it 2 out of 5. If you really want to enjoy the music; only then step into the cinema hall. Else it is a total waste of time.

Image Source: Glamsham.com

New Skoda Citigo - For The City

2011-11-14T07:05:00.000-08:00

When the government announced the hike in fuel prices the automobile companies have started to focus more on small cars that consumes less fuel and thus have lower maintenance / operating costs. The Czech automaker Skoda Auto is now planning to bring its hatch Skoda Citigo. As the name suggests 'citygo', the new car will be a city car and is going to hit the Indian Car market soon.

The new Skoda Citigo is based on the Volkswagen Up. When we compare the two cars the difference lies in the headlamps, newly stylised tail lamps, different alloys wheels and refurbished bumpers. Moreover, Citigo is one of the cars to offer emergency braking functionality.

European Version - 3 door Citigo

The car will be available in a three door version but it can be assumed that India will get a 5-door version. The design of Citygo is unique and doesn’t look like the trademark Skoda models (especially that traditional familiar grille). In three door version, the 'Easy Entry' system allows easy access to the rear seats. The same can be expected in the India bound 5-door version. The engines also will be available in two trims; one with three-cylinder 1.0 litre petrol engine will be producing 60 HP and 75 HP for the international markets. There are rumours also that the car will be available in electric version in future as well. Citigo is expected to deliver a decent mileage and with very low emissions.

The car looks sporty, compact, muscular body panels and narrow vertical tail lamps. When you look it from inside, the interiors of Citigo looks fresh and lively. It has same two-tone color theme as seen on other Skoda models and to keep the costs on the lower side it’ll have same parts as that of the Fabia. The steering and the gear lever both have similar looks as that of Fabia and moreover, the two smaller pods in the speedometer console have also been derived from the Fabia. When we talk about its safety - the top-end Citigo will come with ABS and air-bags. It’ll also come fitted with head-thorax side air bags – ‘a first time for India’, to protect the head of both the driver and the front seat passenger.

The Skoda Citigo price will be range from Rs 3.5 lakh for the base model and the top end is expected to be around Rs 5.0 lakh. This pricing can work wonders in Indian market if bought to reality. The design is fresh from the Skoda stable and seems a lot inspired from its “Mission L” concept. Citigo is a perfect example of Skoda’s new philosophy ‘Simply Clever’.

2011 - A year of Launches

2011-11-13T09:15:00.000-08:00

Year 2011 will be always be remembered as the most crucial year in Indian Automobile Industry. It experienced the launch of segment-defining products and changed the overall perspective of the industry. No one had shaken Honda's dominance in C-segment till date. Suddenly Fortuner fears its dominant as the most sought after Premium-SUV position is at stake. Alto slowly seems to 'let it go' and out of the blue entry-level car segment isn't all that "entry-level"; we have an offering that oozes a lot more style/premium-ness than its costlier competitors.

A brief line up of the launches in 2011 -

Hyundai's all new fluidic design philosophy was showcased by the launch of New Fluidic Verna. With the right pricing, attractive design and striking diesel variant, it overtook Honda's indomitable City within months of its launch
Mahindra's target to become an aspirational brand was strengthened with a giant "Cheetah" leap - XUV 500. The XUV 'five double ohh' not only re-defined Mahindra's engineering process but also welcomed to the league of PREMIUM car makers. This surely has provided M&M a strong foundation before the launch of its international brands in lieu with Ssangyong.
We were all anticipating a worthy competitor to the King of entry-level hatchs. Hyundai's codenamed HA was one of the most awaited launch of the year. The product was launched as EON. The fluidic design philosophy was carried over by Verna and the breakthrough pricing has made it all more luscious.
Ford after its success of Figo, wanted to replicate the same with its sedan offering - Kinetic Fiesta. The Fiesta had already tasted success internationally and the extrovert Kinetic design was a sure eye-turner. But the product couldn't really make a dent in Indian Scenario due to over-the-box pricing and cramped interior space.
Maruti's second generation Swift had a Blockbuster launch. The longer and roomier swift has garnered over a lakh bookings till date. But the labor unrest at the plan disturbed the deliveries and has left a majority of its customers waiting for it.
Renault launched two of its premium offering - Fluence and Koleos. While both the products couldn't bring numbers to the auto maker; Renault surely wants to build its image as a Premium Car Manufacturer.
Nissan's Micra and Sunny proved to be instant successes. Even with its petite dealer network it has amassed an average of more than 1000 numbers for Micra and Sunny. As its network expands, we can expect more numbers and newer product launches.
VW wants the top OEM slot internationally by 2018. India as a market plays a very vital role for VW for turning its vision to reality. Hence it has been very aggressive in its strategies in the sub-continent. Be it dynamic network expansion, break-through marketing or slew of launches - VW is trying all means to gain the market/mind share. This year Vento allowed VW to establish itself as a serious competition in the lucrative C-segment. Even the new Passat marginally increased the numbers and stood a threat to its sister brand Superb.
Skoda is leaving no stone unturned to churn numbers in Indian Market. It has learnt from its mistakes and have implemented its learnings this year - a price cut was seen in its hatch-offering 'Fabia'. Also the Octavia-replacement 'Rapid' is expected to be priced competitively. With its mini-limousine type space and the Skoda badge, we expect the Rapid to heat up the competition in the C-segment.
The Firodia's led company launched the Force-One. The premium SUV has the design cues from the Chinese Guangdong Foday and the Benz-engine had high hopes from the product. But again the value-conscious Indian market couldn't see value in the offering and the mass-mover brand image of Force acted as hurdles in its way to establish Force One as a Premium SUV.
Toyota's ambitious 'Made for India' products Etios and Liva was also made public this year. Toyota's expansion plans in India is backed by these two products. Toyota has almost grown more than 50 percent this year. Although both the Etios & Liva are bringing numbers to the Japanese car maker; but in sight to get the prices down the quality has degraded as well.
Honda's new hatch 'Brio' has a lot of expectations riding on it. With a competitive price and cute looks it has already harvested more than 5000 bookings.

There were also some very exciting launches in the Luxury Car space. My personal favorite was the Indian launch of Range Rover Evoque. I believe there would be no other car in the world that would be as similar as its prototype/concept model.

We expect the trend of launches to continue in 2012. Around more than 50 launches are planned this year. The Snapshot is as mentioned below -

Indian Car Launches - 2012

Child Plan: Is that REALLY worth for your kids?

2011-11-12T12:17:00.000-08:00

I am reminded of a Tamil saying, “Experience what it is to build a house, and get a child married”, probably that is the reason why wise parents invest to meet the long term financial obligations like education and marriage cost of their children. In addition the rising inflation rate also calls for starting savings early in a child’s life. However it would be advisable to know, evaluate and compare various means of savings. This could also enlighten you about how “child plans” need not be the only method.

Disadvantages of a Readymade “Child Plan”

v “Child plans” with insurance resemble unit linked insurance plans, starting early in a child’s life and ending only when the child attains maturity. The amount of money invested in these plans is insignificant considering an in-built insurance component, and other charges like premium allocation charges that are the commission paid to distributors. This could lead to low return in the initial stages and additional losses on leaving before completion of the tenure.

v Most of the “Child plans” in the industry comes with a catchy name to capitalize the “Child sentiment” in us.

v We need a different medicine for a kid and adult. But do we necessarily need a different type of investment options for securing a kid’s future. Think.

Alternatives for Child Plan:

v It is to be noted that other investment products like Public Provident Fund, National Savings Certificate, National Savings Scheme, RBI bonds, post office deposits and instruments and mutual funds that serve the purpose of savings and increasing of capital value apply equally well to investment for a child’s future.

v Mutual funds are available in a wide range to satisfy all appetites for risks. In addition there are mutual funds that are designed for meeting long term financial obligations of children. One could also invest in funds with a right balance between debt and equity that promise better capital growth than child plans. It is also possible to go in for systematic investment plan that offers the opportunities of taking advantages of price differences and gaining in the long run.

v It is true that systematic investment plans or SIP help save entry cost and build a habit of regular savings for capital growth to meet children’s financial obligations. It is also possible to avail of tax benefits as such funds are taxed only on maturity and a major child’s income would be taxed separately. I am sure you would agree that this would help saving unnecessary expenses and cuts in investing in child plans.

v PPF or Public Provident Fund is also good as mutual funds, with opening a PPF account for a 20-year period in a child’s name helping to meet long time financial obligations of children. It has been stipulated that an annual investment of just Rs.70000 would leave you with almost Rs.32lac as a result of the compounding effect. It is difficult for a “child plan” with insurance component and upfront charges to offer you such a great return without taking much of risk.

An Ideal Mix:

*Instead of going for a “Readymade Child Plan”, one can customize their Investment Plan for their child with a combination of Term insurance, PPF and equity diversified funds.
*If tax saving is your motive one can consider ELSS funds instead of a regular equity fund.
*It gives you similar tax benefit like a child plan. You get 80 C benefits for your investments. Also the returns are also tax free.
*At the same time, the charges are very very minimum and negligible when compared to “readymade child plans”.
*You can increase or decrease your contribution every year depending upon your financial situation.

So whenever, you think of child plan think of a customized investment plan for your kid’s future with a mix of 2 or 3 investment options instead of readymade product with a tag “Child Plan”. I am sure you would agree that readymade child plans prove to be not ideal instruments to save. The wisest line of thought would be a mix of diversified investments that gives good return with low charges.

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Blistering Barnacles!

2011-11-11T10:11:00.000-08:00

Business of Movies - III

When Steven Spielberg and Peter Jackson teamed up, one thing was for sure - the creation of a masterpiece. But, no one expected them to bring back Tintin to life. Both Speilberg and Jackson were masters of sci-fi movies and have produced one of the best Hollywood flicks. Be it E.T, Jurassic Park, King Kong or The Lord of Rings - use of VFX was best of its time and all had one thing in common: innate use of graphics. So, when I heard they gonna produce an animated movie - I was surprised!

But animation in movies have stood the test of time and its global appeal has made it all more lucrative to movie producers. It is interesting to see the businesses animated movies have done: Toy Story 3 ($1,062,984,497), Ice Age: Dawn of Diosaurs ($887,773,705), Shrek 2 ($880,871,036)..etc and this means serious business! The existing fanbase of Tintin makes the proposition more attractive. An interesting storyline and much interesting presentation is what they needed.

India is proving to be an important base for Hollywood. It is astonishing to notice that the Potter series, Avatar, Kung Fu Panda, etc have raked millions and performed better than the more touted Bollywood flicks. This was the reason why Fox Studios released its much hyped movies - Rio with 217 prints, Kung Fu Panda with 146 prints. This is primarily due to the growing popularity of Hollywood cinema in Multiplexes and 3D has fueled the growth higher.

This will also be the first time that a Hollywood movie (The Adventures of Tintin: The Secret of the Unicorn) would be released in India over a month ahead of its opening in US! The response recieved from the trailers have been extremely positive. This motivated the distributors to showcase it across 380 screens (in 2D & 3D), the ever highest for any animated movie in India till date! Also the dubbed version in Hindi will find viewers in Tier-2 & Tier-3 cities.

The movie has released in the same day as the much anticipated Hindi movie Rockstar and it would be all exciting to witness how Tintin fares against Rockstar.

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Switching to a new job?

2011-11-10T11:01:00.000-08:00

A Financial Checklist While Switching Jobs

“Careful planning is the key to safe and swift travel." ULYSSES

This very much applies to the many especially young executives who look for lucrative and better job opportunities. But careful planning and following a financial checklist before one change a job can give them all the benefits of the change and more.

For the smooth transition from one job to the other you need to carefully attend to the points discussed in the below checklist.

1) Old Salary Account

Opening of a new salary account and the non-maintenance of the old accounts should be carefully considered. Most companies would require one to open a new salary account in the bank advised by them. This would leave one with an extra account to be maintained. The old account, which you have opened when you were in your earlier company, would after 3 months lose the benefit of zero balance of a salary account.

It would also seem unmanageable since regular operation of the account and maintenance of minimum balance may be difficult. Lack of regular maintenance and minimum balance could also invite penalty charges. In case of a non-operation for over 2 years the account could become dormant or inoperative, inviting additional yearly charges as a penalty and extra charges if average quarterly balance goes below the minimum amount that is set by the bank.

If your old salary account is linked to various investments (like Mutual funds, shares…) and loans, you may want to update the new salary account with the respective investment company and financial institutions.

2) EPF

A careful consideration has to be made regarding how to deal with Employees Provident Fund Corpus. Switching jobs suggests 2 ways of dealing with Employees Provident Fund Corpus. You could either transfer your existing account to the new employer or close the old account and open a new account.

However withdrawing the corpus and opening a new account could be time consuming taking between 3-6 months. In addition, you would be left with a smaller retirement corpus because you would lose on the advantages of the corpus compounding. You would also have to pay taxes if it is withdrawn before 5 years. So just transferring the corpus would give you better tax benefit and retirement benefit. This task is best left to the human resources department of both the old and new employers.

3) Health Insurance

You need to check up the features and benefits of the health insurance provided by your new employer. You need to compare these with the health insurance provided by your previous employer.

Especially you need to look into the features like the coverage amount, whether the coverage is on floating basis or individual basis, the total number of dependents covered, the list of hospitals for cash less facility.

One more important point to check is the availability of the health cover during the notification period. Notification period is the period between one submits the resignation letter and one gets actually relieved from the job. Normally it is 3 months period. Some employers don’t provide health cover to employees who are in the notification period. So before entering into the notification period, one needs to make alternative arrangement before entering into the notification period.

4) Tax Computation

Tax liability and exemptions form an important consideration while switching jobs. Most employers would be computing employees’ tax liability after taking into consideration the basic exemption limit of Rs.1.8lac and also the exemption availed under Section 80C.

So there is a possibility that your previous employer and present employer may give you these exemptions for the same financial year. Making a job switch in the middle of the year involves making sure that the deductions and exemptions regarding tax liability are made only once.

Always report the income earned from your previous employer for that financial year to your new employer. This would avoid duplication; thereby making sure one is not taxed twice or given twice the benefit and having to pay the lump sum taxes later.

If you are not intimating your income from the previous employment to the current employer, then you may need to pay some penalty for non-payment of advance tax or TDS.

It proves essential to collect the Form 16 from ones past employer as a proof that one has received the tax benefits and paid the tax liabilities.

5) Retirals:

If you have worked for more than 5 years, then depends on the terms of your employment you will be eligible for gratuity, superannuation and other similar retirement benefits. Some schemes can be carried over to the next company and some other schemes need to be encashed when exiting a company. You need to pay attention to the details of these schemes before quitting your job.

How very true it is, “Planning is bringing the future into the present so that you can do something about it now” Hence following all the steps of the financial checklist while switching jobs would make sure your journey from one job to another is smooth and trouble-free.

Analysis of the Indian Automobile Debacle

2011-11-06T12:09:00.000-08:00

Everyone is discussing the downward trend of the Indian Automobile market. While India is in the hotlist of all the top OEM's of the world; the recent downfall in the sales chart has raised a lot of questions on the lucrativeness of the market. The volatile trend is not a good sign. Analysts believe that the trend is to continue for another 3-4 months without any signs of revival. This has made the investors wary and the manufacturers scared. This amidst the fears have forced the OEM's to announce heavy discounts in November and I'm sure the same will continue for December.

The most attributed reasons for the downfall are:
*Rise in Interest rates
*Increase in fuel prices
*Inflation
*And Labor Agitation in the biggest Automaker

The bad times even got worse with the last point mentioned in the above list. Maruti Suzuki is reeling to supply the vehicles according to demand and the labor issues in past 3 months have hit the production hard and has turned out to be the worst nightmare in MS's history. This had a direct impact on the company's sale and was even reflected in its Q2 results - the company saw a fall of almost 59.8% in its profit. MS used to be the mascot of the Robust Indian Auto Industry and its decline in profits raised many eyeballs. Even though with an exhaustive booking list for its new Swift (almost a lakh booking), the signs from MS aren't too upbeat.

October 2011 Passenger Car Sales Figure - OEM wise

India's two biggest Automobile manufacturers MS & Hyundai experienced a de-growth of more than 52% and 5% respectively. Although the reasons for the de-growth in MS was explicit; Hyundai's downfall was worrisome even after the launch of its much awaited Eon. The industry was expecting a boost in Hyundai's sales chart after Eon's arrival.

While the growth of VW, Toyota, Ford and M&M was a sigh of relief for the industry. With festivities around these OEM's performed as they were expected to do. The growth was primarily pushed by the introduction of new products in their stable - Polo & Vento for VW, Etios & Liva for Toyota, Figo for Ford and XUV 500 for M&M. We're sure with the all new Brio and the re-worked Jazz will do similar wonders for Honda in coming days.

But, the recent increase in petrol prices have again fueled the discussion on how is it going to affect the industry. And to fuel the fire, the increase in Repo rates from the RBI will also hike the already soaring interest rates.

To explain on how these factors are going to affect the common man let us take an example of the following scenario -

From the above table the following points could be inferred -

The product price (Maruti Alto) has rose a decent 2% which is acceptable.
The EMI has increased by a marginal 10%. The loan rates which used to be once lucrative has now made the common man think twice before finalizing his/her purchase decision. And with the volatility of the interest rates; it has pushed many consumers postpone their purchase.
A whopping 70% increase in the price of the Petrol. It is difficult to digest the fact that fuel prices have hiked unprecedentedly over just a short time of two years. As the petrol prices have been de-regulated by the government - we would not be surprised to see the petrol price touch the century mark in a nearby time.
Considering all the above factors, the total cost of ownership has increased by a considerable 22%.

We at Management Punditz do not understand on Why does the government do not think about the Auto Sector and the people associated with it and is just concerned about the Oil Companies??? We're sure that the losses beared by the economy as a whole is greater than the losses of the Oil majors. We hope government realizes the truth pretty soon.

Trend - Diesel Price (Rs/Litre)

However to exhibit the sudden upsurge in demand for diesel cars is due to the sustained increase in prices of the diesel and the long term benefit associated along with it. Today the performance and refinement between a petrol and a diesel car is surprisingly similar. Even the maintenance costs of a diesel machine has rationalized over the period of time. This makes Diesel Cars a sensible buy for the consumers. A perfect example to describe this - Out of a lakh bookings for the new Maruti Swift; 80 percent of the customers have opted for a diesel variant.

We hope that the recessionary trend in the Indian Auto Sector is short lived and as with the array of new launches, we see the sure-shot signs of revival.

Indian Car Sales Figures - October 2011

2011-11-03T09:34:00.000-07:00

October 2011 Sales Figures - Pan India

Highlights:

· Fortuner sales lowest in past 5 months – 763

· Bolero – away from the recessionary trend clocks above 8000 numbers

· Alto in its worst phase – once ruled the segment with more than 33k numbers has dropped to 15k

· Sunny sees a brighter side – the value for money sedaaan from Nissan does impressive 1340

· Chevrolet BEATs the heat with a successful more than 5k figure with its diesel offering (for Beat)

· Verna stands tall as the king of C segment – again overtakes the Honda in its own game – does 4217 numbers

· Etios proves to be a growth booster to Toyota – along with Liva gains 5851 figure

· Micra clocks it’s all time highest 1619

· Eon does a modest figure of 6315 and already is 8^th in Top 10 selling cars of the month.

· Brio does 1220. Honda is already busy with 6000 bookings of Brio and is reeling with components issue (due to flood in its parts/component base Thailand)

· Sumo and Indica has their best offtake number in last 6 months – 2109 & 10812 respectively.

Source: http://www.team-bhp.com/forum/indian-car-scene/110482-october-2011-indian-car-sales-analysis.html

Plan & Make a Difference to Your Child’s Future

2011-10-30T09:26:00.000-07:00

On a beautiful late spring afternoon, twenty five years ago, two young men graduated from the college. They were very much alike, these two young men. Both had been better than average students, both were smart and both were filled with ambitious dreams for the future. Recently,these men returned to their college for their 25^th reunion. They were still very much alike. Both were happily married. Both had a kid. And both had gone to work for the same industry and held similar positions in different companies.

But there was a difference. One of the men’s kid has completed M.S from a reputed university in USA and the other kid has completed a graduation from a local university. What made the difference?

Have you ever wondered, as I have, what makes this kind of difference in our kid’s career? It is a carefully thought out long-term planning for kid’s future.

As a responsible parent, you would not like to compromise on your child’s career, regardless of rising cost of education. You need a well developed investment plan that will allow you to meet all expenses for your child’s future.

Provision of Medical Expenses

Health care for mother and child will be a potentially handsome expense for new parents. New babies require regular checkups and immunizations even though if your child is in good health. So you need to make provision for these expenses well in advance even before the arrival of the baby.

Adding the newborn to your Mediclaim Policy

If you have an individual mediclaim policy, add the newborn as a member in that policy and get coverage. Do you have an employer provided mediclaim policy? Then, check if the terms and conditions allow you to add the newborn for coverage. If it allows, then add the newborn to that policy. If it doesn’t allow then take an individual mediclaim policy for your kid.

Increasing your Term insurance coverage

You need to check whether the existing insurance coverage is sufficient to support your child’s future or not in case of any mishappening to you. If it is not sufficient then take term insurance policy for the gap.

Ongoing educational expenses

The educational expenses are skyrocketing year on year. What your father has spent for your college education, is now you need to spend for your kid’s primary school education. So adequate provision in your monthly budget and a projection for cash flow with reference to school education expenses will be an important exercise for you

Financial Planning for Higher Education

It is going to be a biggest financial shock for you, if you have not properly planned for your kid’s higher education. Don’t delay this plan, start this plan as soon as the arrival of the newborn. Then you will have time on your side.

Assume your kid has completed today his/her schooling. Imagine how much you may need to spend for higher education at today’s costs. This cost is going to go up year on year because of inflation. So project this cost with inflation rate for the future. Now you will know how much exactly you may need for higher education in future when you kid is actually completed its schooling.

Other dreams for your child

Apart from the higher education, you may have some other dreams like buying a home for your kid, corpus setup for your kid’s future profession or business or corpus creation for wedding expenses. You need to follow the similar steps as mentioned in ‘Financial Planning for Higher education’ for these dreams also.

In case you don’t have time or knowledge to do this financial planning you can seek assistance from professional financial planners. They will save your time and make sure that you are achieving these financial goals for your kid.

Savings account for your child

You can open a savings account in the name of the minor. Whatever gifts, the kid receives by way of cheque or cash on the occasions like birthday can be saved there. Also this account can be used to motivate the kid to save from its pocket money.

The other investments which you make for your children’s future like mutual funds or shares need not be invested in the kid’s name. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor. So, it can be invested in your name. As and when required it can be encashed to meet the necessary expenses for the kid. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor.

Follow these four rules to get rich!

2011-10-27T07:35:00.000-07:00

Do you want to create wealth? Are you satisfied and happy as you are?

Most of us would answer the first question as Yes, and the second as No, and if you are one of them then you are at the right place at the right time. My Hearty Congratulations! to you. Wallace D. Wattles said, “Every person who gets rich by creation opens a way for thousands to follow - and inspires them to do so."

Wealth creation is not the privilege of a few, but as Ralph Waldo Emerson pointed, “Man was born to be rich, or inevitably to grow rich, through the use of his faculties."

Here come the 4 maxims to wealth creation as jacks out of the box:

1. When young be a youngster, when old be mature.

"Don't let the opinions of the average man sway you. Dream and he thinks you're crazy. Succeed, and he thinks you're lucky. Acquire wealth, and he thinks you're greedy. Pay no attention. He simply doesn't understand." By Robert Allen

Some youngsters are easily influenced by the ideas, advice and experiences of others, like Vijay, 27 years old, believed in safe and secure investments in fixed deposits in banks and companies, just because his father lost heavily in the share market. However Rahul invested in mutual funds and created more wealth.

Youngsters in their 20’s should invest in stocks and shares as they can afford to wait and benefit with compounding effect and lower taxes. Likewise an old person should play mature and responsible and invest in safe and secure investments like debt instruments and big cap mutual funds.

2) Know the depth of ocean before stepping in, and your investment risk:

Investment risk calculation of each portfolio helps judge risk. Your age, appetite for risk, and length of investment decides your investment portfolio. M.R. Kopmeyer said, The great road to wealth is to learn useful facts", how true it is that many investors had lost heavily in future stock selling in a bull market without much knowledge. A safer investment would have been multi cap mutual funds with wealth creation period of 10-15 years. However senior citizens should invest in big cap mutual funds with much lower allocation.

Wealth creation decisions should be long term, for it is futile to be swayed to sell units/shares in a rising market and miss on opportunities for further wealth creation. Follow the market trend and do as J. Paul Getty quotes, "Buy when everyone else is selling and hold until everyone else is buying"

3) Set an optimum leverage between debt for wealth creation and lifestyle assets.

"Abundance is not something we acquire. It is something we tune into." By Wayne Dyer

There is an urgent need for quick wealth creation to meet inflation demands, but we need lifestyle assets like car, TV, furniture and a house to live in. Unplanned debt can be a barrier to your wealth accumulation process. It is true with easy debt options available, there is a choice to borrow for lifestyle assets alone or for also for wealth creation investments like real estate. In addition, payment of EMI leaves youngsters with less capital to invest in wealth creation assets.

In addition, leverage requires not investing in same type of assets like land and house, as price fluctuations could adversely affect all in that type of asset. Also investing on lifestyle comforts pay nothing in the long run.

4) No one created wealth by laying all eggs in one basket.

Variety is the spice of investment decisions too, helping in diversifying risks, and making it possible to offset the fall in value of one asset by profits in another. So having a diversified portfolio of real estate, gold, shares, mutual funds and house, and avoiding investment just in one asset class helps. In addition, portfolio diversification proves effective in tax saving, and better wealth creation.

Now finally you too are on the path to being a high networth person. How do you view yourself?

Do you quote George Claso, "Wealth is power. With wealth many things are possible." and end on a final note, with John Emmerling, "Study well what the billionaire does. It may make you a millionaire."

Resurrection of the Truth

2011-10-25T12:41:00.000-07:00

The Indian entry level sedan market has grown by a modest 6.1%. This year (till date - April to Sep), it has churned a volume of 1,14,377 units against a volume of 1,07,763 units. There weren't any major new launches in this space except the refurbishment of Tata's Indigo in form of Manza and the French Stallion - Logan was operated and renamed as Verito. Although everyone's desire still remained the much successful offering from Maruti Suzuki - 'Dzire'. Toyota also brought its most awaited 'made-for-india' product Etios, but couldn't offer anything revolutionary in terms of design/quality/value. Hyundai's Accent and Ford's Ikon are slowly being retired; but they are yet proving to be worth war-horses and are producing quite a decent figures in the Sales Charts. Major growth was seen from Southern and Western markets where the space grew by around 10.3% each.

The growth steeply increased from Cochin, Mumbai, Ahmedabad, Bangalore & Pune markets where the consumers found more value in a 3-box car at a lower price. The customers will to shell out a little more for an extra boot was well identified by OEM's and proved to be an attractive proposition.

Click to enlarge - April'11 to Sep'11 Sales figures

Even after the luke-warm response from the critiques, the Etios swept the show with 22,825 units with an average of 3800 units/month. The segment stalwarts Dzire & Indigo experienced significant downfall with a de-growth of 9.9% & 26.7% respectively.
But, one product clearly managed to steal the show - Mahindra's VERITO. Earlier known as Logan, analysts believed that the product had lived its life and Mahindra's bitter experience with Renault would again expedite in murdering the product. Even customers were sure that the boxy and stubborn looks of the Logan would catalyze the rejection. Then, one fine day we all hear about Mahindra-Renault divorce and were sure that it was the end of M&M's saga in the sedan space.
But the company's faith in the product motivated it to play a different game. Strategically we saw an increase in the number of media campaigns - "Logan loves India" which elucidated about Logan's segment-best mileage and interior space. Instantly it striked chord with value conscious customers and slowly gained acceptance. The numbers aroused some confidence in the OEM over the dying product.

Growth of over 100% was the proof of success for the product

Now with rejigged independence, M&M immediately imparted some cosmetic changes such as inclusion of roof rails, sporty rear-chrome applique, side cladding and mahindra's insignia - front & rear created some buzz in the market and re-instated interest amongst the consumers.

The brand which was performing (rather surviving)at a level of 250-300 gained momentum and touched 1500 units/month within a span of six - nine months. This was the live example of how a capable product was ignored because of lack of right marketing and wrong pricing. M&M was competent enough to identify the glitch at the right time and act pro-actively. We are happy too that with the features that Verito has to offer vis-a-vis competition; it still has a long way to go....

5 Signs to when you should sell Mutual Fund

2011-10-22T10:11:00.000-07:00

When To Sell A Mutual Fund?

Start making the decision:

It is vital for an investor, to have long-term investment plans. But he needs to constantly verify if these funds are helping him to achieve his financial objectives. You, as an investor need to keep track of how your investments in mutual funds are growing. Also you need to make sure that you do not suffer huge losses due to non-performance.

As an investor you need to learn not only when to buy but also when to sell a mutual fund. Learning the principles of when to sell a mutual fund helps weed off investment in unprofitable mutual funds and build up a desirable and profitable portfolio of mutual fund investments.

Look at situations to sell mutual funds:

1) Chronic Under-performer:

Investor should stay invested for long tern in a risky asset class like equity. You should wait patiently for a minimum period of 5 years to watch your investments grow. Making comparisons between similar funds proves futile.

However you should make a note if your fund is continuously under performing. Comparing each of your funds with the respective fund benchmark index for various periods like 2 years, 3years and 5 years helps. You may need to move out of a continuous under performer and move in to a continuous performer.

2) Changes in objectives of your mutual fund:

Next, an investor like you, investing with definite financial objectives with allocation to different sectors and market capitalization may feel uneasy and suspicious with the change in the fund’s objectives that exposed you to greater risk or risk in other sectors also.

Fund takeovers, change of ownership and mergers change the level of risk in a mutual fund portfolio. So you as an investor may find your need, not met and may want to sell the fund. This was the reason why many investors, who invested in UTI Mastergrowth Fund, sold their funds when it changed to UTI Top 100 Fund.

3) Repositioning of a fund:

Though the fund has got an investment objective to invest in various market caps, so far the fund may be investing only in midcaps and positioned in the market as a large cap fund. But later, the fund may reposition the same fund as a multi cap fund and start investing in large cap stocks also. This change may not be a suitable one for an aggressive investor.

So as an investor, you need to be careful in watching the funds after investing. That too when a fund changes its positioning, you need to keep a close track of the same to prevent your investments from any adverse effect.

4) Appreciation in investment attained:

It is quite possible that your investment could have been shrewd and calculated and achieved the targeted appreciation ahead of time. I congratulate you, but would like to tell you that greediness may also make you lose on that foresighted gain. Selling off your fund in full or part and investing in safer avenues like debt funds, fixed maturity plans and fixed deposits of companies and in banks would safeguard your money yet give you some small return.

Say you wanted to accumulate Rs.10 lacs for the higher education of your daughter/son in 5 years time. Your investments have appreciated to 10 lacs at the end of 4 year itself. It is better to change it immediately to safe and non-risky investments. If you leave the investments in the same fund, it may come down in value because of the subsequent market fall.

So when the goal value has been reached, one needs to protect the appreciation by moving out from the existing risky investments and moving in to a safer investment.

5) Rebalancing based on the asset allocation:

As an investor you need to maintain an overall asset allocation ratio and you need to stick to it to gain more. Sometimes your investments have appreciated and this has increased the percentage of your portfolio in equity and maybe reduced the percentage on debt and other safe avenues.

You need to realize this means that you are exposing more of your investment to the volatile equity market that was risky. This could surely be remedied with rebalancing. That is selling a portion of the over appreciated asset and reinvesting the same in the lesser appreciated asset.

Selling funds to Achieve:

I am sure you would have understood these principles of when to sell a mutual fund. This will assist you in taking better investment decisions and achieving your financial goals.

Image Source

Hero Motor Corp identifies the right Impulse!

2011-10-18T10:54:00.000-07:00

The worlds numero uno motorcycle manufacturer proves again why it is 'The Hero'. I always dreamt of riding a dirt bike kinda motorcycle ; but couldn't imagined how would it practical on Indian roads. And Hero Motor Corp has brought the right product which emulates many features as of a motocross bike and yet falls under a reachable price point. The not so whacky looks seems decent and can trigger mass acceptance.

Looks are derived from Honda NXR and just meets the eye!

Hero has been a pioneer in introducing segment defining products. It had introduced us to the performance centric 150 cc segment (CBZ) and also to the first mini-super bike Karizma. Even Impulse will set a stage for on-off road bikes - which will suit perfectly for Indian conditions. The front 19' and rear 17' tyres seems to raise the overall height of the bike; but is quite ride-able. I however felt that the headlamps resembled that of Honda's Shine. The stance of the bike provides an amazing confidence to ride it in several angles which otherwise would have been unthinkable in other bikes. This will allow the riders to easily sneak through traffic.

The Rear is the most attractive portion with classy LED tail lamp treatment and high level exhaust

The additional elements as solid knuckle guards, raised fenders, pull spokes, front telescopic suspension, raised front guard and the motocross seat adds to the oomph. The digital console justifies the features and provides ample info - additional "Service Due" indicator is quite innovative and useful. And the icing on the cake is the price - ex-showroom of Rs. 66,800 is a delight. The power of 13.2 PS with a 150 cc engine seems value for money. The competitive pricing is surely bound to create some stir in competitors.

Attractive looks with competitive price point and utility seems that HMC has a winner in hand

Will this be the new face of Hero Motor Corp? Could this de-thrown Pulsar as the king of 150 cc bikes? Will it revolutionize off-road biking concept in India? Can it bring the numbers flowing in? A lot of questions have arisen; and as the Indian Biker Population is seeking freshness we are hoping to see positive answers.

Image Source: Zigwheels

BSMotoring

Need For Speed RUN: Race for your life!

2011-10-15T11:33:00.000-07:00

Electronic Arts made gaming a worthy business. Any video game according to me is a piece of art and takes years to turn to fruition. It also involves tonnes of investment and time along with it. Similar to movie making, gaming is a lucrative business too. And EA has developed several game series to build upon the base story and thus develop, market, publish & distribute the franchised series. The business generated by the series would even put any Hollywood flick to shame. It has earned many followers of the racing phenomena and is growing larger by time.

One of the most awaited games of 2011

My personal favorite EA series has been the NFS - also the most successful racing video game series in the world! NFS franchise had sold over 100 million copies of the game way back in 2009 itself. The series has already successfully bought 18 versions of its game. I was thrilled to watch the trailer of the 19th edition - NFS Run. The memories of Most Wanted can never be erased and any new edition of the series provoke the nostalgia. See the all new NFS Edition named Run which is to be released on 18th November 2011.

5 Steps to choose your Financial Advisor

2011-10-12T11:01:00.000-07:00

The 5 Steps That Help Selecting The Best Financial Advisor

Preparing to start the choice:

Satish grew concerned about how to manage his personal finance investments and asked his uncle, who is a very successful investor, if he knew a good financial advisor. His uncle knows a few each specializing in a particular type of financial consultation, and asked him about the type of consultation he required.

Then his uncle went to tell him that his first task lay in identifying his financial objective, whether he needed financial advice for goals like long-term financial portfolio, or tax planning, or providing for the higher education and marriage of his children. Uncle went on to tell him there were more than 50 type of specialists specializing in aspects like stocks, insurance, mutual funds, postal savings, financial planning, taxation and real estate and told him the five steps to select the best financial advisor.

1) Meeting and reviewing different financial advisors:

Once your financial objective and goals are set, your choice of a specialist would depend on whether you want one for your savings plans, tax advice and preparation, stock and equity portfolios, investment strategies, personal budgeting and debt management, retirement planning, estate planning, or insurance advice.

A search on the internet and referrals from friends, colleagues and relatives could help you find some appropriate financial advisors to look into your concern. Make sure that when the financial advisor suggests suitable financial plans, he also assures you to look into its maintenance, updating and implementation with periodic reviews of reports and correspondence.

2) Details about the financial advisor’s educational qualifications, certifications, and experience:

As all other dealings financial dealings too require the qualifications, certification and experience. So it is best to know and verify the advisor’s educational qualifications, certifications and experience. It pays to verify required certifications, like being licensed by IRDA to do insurance business and by by AMFI to deal in mutual funds in India. The extra qualifications like CFP add more value.

In addition, the professional’s experience in the nature of business, and with sizable experience dealing with recession times plays a vital role in the choice of a financial advisor. The investment advisor’s past professional positions and his reasons for change will be able to tell how efficient he is, with a positive switch of revealing his good expertise.

3) Information of clients he has dealt with along with references:

I would say it is in your interest to not rely just on the positive talk of a financial advisor, and beware of his trying to belittle your ideas. Asking for a reference helps verifying his authenticity, honesty, integrity, and empathy and whether he specializes in the similar nature of business you expect of him. I would say if you are young, you would not benefit from a financial advisor dealing mainly in retirement and senior citizen plans.

Interviewing a number of clients would give you the best idea if the financial advisor can be relied upon confidently to meet your financial goals and objectives. In addition to this you may verify the testimonials given to him by his clients.

4) Verify his past records to judge his present and future behavior:

I would rather rely on written words like past documents than what he professes, and would say that a financial advisor’s past performance indicated well his present and future actions. I would also make sure that any disciplinary action for professional and ethic violation has been taken. I would also avoid financial advisors claiming very high performance, as they would highly risk my money.

5) The rate and method of compensation for services:

Now comes, the final stage of discussing and knowing your financial advisor’s compensation. Financial advisors have varied compensation methods for their services, charges could be hourly, a flat monthly fee, a percentage on the assets managed, and a commission on the financial products managed or could be based on the number of transactions. Others could be a combination of 2 or more methods.

A word of caution in dealing with financial advisors charging on number of trades, or getting commission from the investment company, these fees or commissions can be profit motivated with no empathy to client needs.

You could always suggest changes in the fee structure, if not accepted you could always find a reasonable financial advisor to sign a compensation agreement with him.

The final note:

My best wishes for good financial dealings with financial advisors, but a word of caution, are ‘be selective, diligent and patient to understand well the philosophy of your investment and never be shy to ask questions and clarify doubts’.

(Ramalingam K, an MBA (Finance) and Certified Financial Planner, is founder & director of Holistic Investment Planners (P) Ltd (www.holisticinvestment.in))

All set to "Rapid"-Fire

2011-10-11T11:14:00.000-07:00

We at Management Punditz are always excited to see developments in the Indian Auto Industry. And when it came to publish our 150th blog post, we wanted it to be special. So, what better subject - which according to us is the most important product in Skoda's strategy.

The C-segment sedan which is touted to be Octavia replacement has generated a lot of buzz around and is in news from quite a while. Lot of rumors were around that it will be named 'Lauretta', which we personally didn't like and are happy that the name 'Rapid' is retained in reality. The vehicle was unmasked internationally (for the first time) at the 8th anniversary of the famous 'Car N Bike' show - NDTV's flagship Auto Show. This was termed as the Birthday Gift to CNB by Skoda honcho Thomas Kuehl.

On first looks the car seems to be elegant and elite. Although the nose is 'Fabia'-ish, it doesn't seem to be totally inspired by the hatchback cousin (like in case of Vento & Dzire which denote just an extension of Polo & Swift). Even though the car takes its design cues from the concept 'Mission L' - its doesn't look all flashy (which we feel is a huge positive). The side profile is a lot like its sibling Vento but it seems lengthier. Even Thomas in the Demo termed the inner space of Rapid as equivalent of a "Compact Limousine". The rear resembles the family Skoda look and is pretty decent. In totality we agree to the Skoda's implementation of the design with its motto 'Simply Clever'. We believe that the buyer in this segment wants an executive-looking car, with a lot of room on the rear and be fitted with all the gadgetry. Going around with Thomas's word we are sure about the looks and the space, but will have to wait to know about the interior dynamics.

The C-segment has proved to be the most exciting segment this year. We saw the onset of segment shakers - VW Vento and the fluidic Hyundai Verna which overtook Honda City as the market leader since their launch. Even Ford tried to bring enthusiasm with its kinetic Fiesta. The point to be noticed here is that Verna & Vento have proved to be number churners and were the primary reason of growth for both the OEM's. In some months Vento outsold the smaller sibling Polo which exactly delineates its importance.

Sales Performance of C-segment cars for past 3 months

The market size of the segment is around 50,000 units per month and carries significant importance for any Auto Maker to define its brand. And seeing Skoda's strategy (1.6L petrol & 1.6L diesel) we are sure that they are going to "Rapid"Fire sales with its upcoming saloon. Another important decision by Skoda team to supply dealers with sufficient stock before the launch is extremely wise. With a mid-November launch Management Punditz is all excited to see the market response for Skoda's new offering.

9 Ways to Be Credit Card Smart

2011-10-10T23:22:00.000-07:00

Credit cards have turned into an integral part of modern living as they facilitating making purchases and paying bills without carrying cash. They make life easy and help maintain a record of our expenses and help us dispute charges for undelivered and defective things. In addition they enable us to earn reward points. However credit cards could make you overspend and get into debt. There are 9 ways that could help you to be credit card smart.

One can be very smart in playing a game only when he knows the rules of the game very well and follows the same diligently. Similarly to be smart with your credit card you need to know the rules of the credit card usage. Let me unbundle the same for you.

9 ways to be credit card smart:

1) Do not have many credit cards:

It is true that credit cards definitely help in emergencies and facilitate payments. But having too many credit cards could tempt us to overspend and get into credit card debt that could be difficult to recover from. In addition it is best to avail of reward points on one credit card, so that you could encash the points more quickly.

2) Cultivate and maintain an emergency fund:

Most of us believe that credit cards can definitely help in medical and unexpected emergencies, but it is unwise to consider it as a general rule. A much better alternative would be regular setting aside money as an emergency fund for such unexpected emergencies. This will prevent getting into credit card debt.

3) Repayment capacity should determine credit card spending:

It is right that using credit cards in place of cash helps. But this applies to purchases that we can afford only and also repay immediately. Spending more than what you can repay is highly undesirable and could get you into credit card debt.

4) Avoid cash advance withdrawals:

It is best to live within your means and avoid making cash advance withdrawals even in emergencies. This is the worst thing you can do with a credit card. Having a smart spending plan will help you in not falling this trap

5) Avoid bank transfers without valid reasons:

Being credit card smart requires avoiding making balance transfers from one credit card to the other. This will avoid payment of balance transfer fees and getting into further credit card debt that could turn vicious. However transfer of bank transfers like taking advantage of lower interest rates could prove fruitful.

6) Make full payments in time:

Being credit card smart requires you arranging for payment within a month or next billing date. Delay in repayment and minimum payment could affect your credit standing and make you also liable to pay high rates of interest that you could not afford. Not carrying any balance forward would relieve you of stress of getting into credit card debt.

7) Understand the credit card agreement fully:

Being credit card smart requires understanding fully the agreement and other terms and conditions for use of the credit card. This includes understanding transaction fees levied, interest rates, and when increased rates for credit would be charged. This would help take precautions to avoid getting into increased debt on credit cards.

8) Recognize the signs of credit card debt:

Many consider a credit card a boon and fail to realize that they are getting into credit card debt. It is best to understand and recognize signs like skipping a credit bill to pay another, avoiding credit card payment statements, and charging more than your repayment capacity by purchasing luxuries. Failing to cultivate and maintain an emergency fund could also be a cause. Once you recognize these signs you can turn credit card smart.

9) Never lend your credit card:

Being credit smart requires not trusting others with your credit card even if they promise to pay back in time. It is unwise because you will be responsible for the debt and charges. It is quite possible that credit card companies did not allot them a credit card because of certain adverse circumstances.

The last word:

I am sure you will agree that credit cards can be a boon only when you are credit card smart.

Workable Budget

2011-10-07T10:18:00.000-07:00

How to create a workable budget that gives you money and life?

"Modern man drives a mortgaged car over a bond-financed highway on credit-card petrol."

Taking control of your cash inflow and outflow is the base for financial planning. Budgeting is important to gain control over your financial life, be prepared and avoid surprises, save for a major purchase, get out of debt and stay out of debt, expand your lifestyle, and to retire early.

Thiruvalluvar, a much celebrated Tamil poet emphasizes budgeting through his following lines:

Incomings may be scant; but yet, no failure there,
If in expenditure you rightly learn to spare. (Kural: 478)

Who prosperous lives and of enjoyment knows no bound,
His seeming wealth, departing, nowhere shall be found. (Kural: 479)

Most of us hesitate to make a budget because we think it is about cutting all the fun in life. Budgeting is not about cutting all the fun; it is about conscious allocation of funds. Once we start spending consciously, our mind will find out a whole new way of having fun within the budget.

Making Budget: A step by step guide

There is a saying, “God is in the details”. Detail every bit of your financials while creating a budget.

1) 1) Check your financial statements:

It could be your utility bills, d’mat account statement, other investment receipts, ITR, Form 16A, Form 16, bank statement, credit card statement etc. The idea is to make out the monthly average of income and expenses. Therefore the more details you can get the more relevant and accurate will the budget be.

2) 2) Listing out income from all sources:

It is very easy for us to list down the income from employment or self employment. Normally we will lose track of income from investments, rental income and other miscellaneous income. Also check is there any annual income. Don’t forget to record the incomes received by way of cash equivalents like meal voucher and credit card reward points.

3) 3) Finding out your total expenses:

We can easily list down the major expenses. But listing out the miscellaneous and petty expenses would be difficult. This is where the collected financial statements would help. Don’t forget the annual expenses like car insurance and property tax. Once you have recorded all the expenses then split them into fixed expenses and variable expenses. This classification will provide much more clarity.

Most people are surprised to learn that it may go for things that we do not need at all. Writing your expenditures down provides us with the unique opportunity to visualize and find out if any money goes for things that we do not need or want.

4) 4) Are you saving or over spending?

Now you have your total income as well as total expenses. Deduct the total expenses from the total income. You will know whether you are saving some money or doing over spending. If you are saving some money channelize that money into the priority areas such as clearing your credit card outstanding or any other loan to become debt free or retirement savings or children’s future plan. If you are on over spending, then you need to make some adjustments to expenses.

5) 5) Review your spending pattern:

On your expenses list, pay close attention to the variable expenses. This is where you can cut short a few expenses.

Every month we need to keep aside appropriate amount for the proportionate annual expenses.

You can find out the reasons for over spending. Most of the cases it would be emotional buying or unplanned shopping. Once you have pointed out the reasons for overspending, then find out the steps or precautions to be taken to rectify the same.

6) 6) Are you on the track? Check monthly:

Every month set aside an hour to compare the actual expenses with the budgeted expenses. If there is a negative deviation, find out the measures to control them.

Why your earlier budgeting attempts failed?

Budgeting is not a onetime activity. It is a continuous process. Normally we start budgeting with a genuine motive. But after a few months it may get off-tracked like our attempts on dieting or exercising. Therefore one needs to understand the behavioural aspects of budgeting.

1) *Positive Approach:

Never focus on the negative aspects. Focus on the benefits of successful budgeting. What will you accomplish by creating a budget? It could be becoming debt free, some money for vacation, planning for retirement or children’s future.

2) *Keep your enthusiasm alive:

Budgeting may over a period of time become routine and hence boring. Set a few short term goals like trying to repay the personal loan in 18 months instead of 36 months. If you achieve it reward yourself. Recognition could be a good motivating factor. Inform all your family members, friends and well wishers about your progress on budgeting. You can also join in some of the forums related to money management.

3) *Have a realistic expectation:

One needs to keep realistic expectation on the outcome of the budget. Over expectation may demotivate you. Budgeting is not a magic. It is an art like singing and dancing. You will be able to progress it only over a period of time with constant practice.

If you have not done budgeting for yourself and family so far, then now is the right time to take action. The fact that you are reading this article shows you have decided to stop procrastinating, and have answered the ancient question, “If not now, when?” with “NOW!”.

The Greatest Pundit of all times!

2011-10-06T12:08:00.000-07:00

Steve Jobs is no more... And he has left back a Vision, an Idea, a Thought on how Innovation can transform the rules of business. And 'Belief' is the key. We thank him for his defining work in digital age and would always miss his persona.

We found this New York Times article as a perfect description of Mr. Jobs and would like to dedicate in his fond memory -

The death was announced by Apple, the company Mr. Jobs and his high school friend Stephen Wozniak started in 1976 in a suburban California garage. A friend of the family said the cause was complications of pancreatic cancer.

Mr. Jobs had waged a long and public struggle with the disease, remaining the face of the company even as he underwent treatment, introducing new products for a global market in his trademark blue jeans even as he grew gaunt and frail.

He underwent surgery in 2004, received a liver transplant in 2009 and took three medical leaves of absence as Apple’s chief executive before stepping down in August and turning over the helm to Timothy D. Cook, the chief operating officer. When he left, he was still engaged in the company’s affairs, negotiating with another Silicon Valley executive only weeks earlier.

“I have always said that if there ever came a day when I could no longer meet my duties and expectations as Apple’s C.E.O., I would be the first to let you know,” Mr. Jobs said in a letter released by the company. “Unfortunately, that day has come.”

By then, having mastered digital technology and capitalized on his intuitive marketing sense, Mr. Jobs had largely come to define the personal computer industry and an array of digital consumer and entertainment businesses centered on the Internet. He had also become a very rich man, worth an estimated $8.3 billion.

Tributes to Mr. Jobs flowed quickly on Wednesday evening, in formal statements and in the flow of social networks, with President Obama, technology industry leaders and legions of Apple fans weighing in.

A Twitter user named Matt Galligan wrote: “R.I.P. Steve Jobs. You touched an ugly world of technology and made it beautiful.”

Eight years after founding Apple, Mr. Jobs led the team that designed the Macintosh computer, a breakthrough in making personal computers easier to use. After a 12-year separation from the company, prompted by a bitter falling-out with his chief executive, John Sculley, he returned in 1997 to oversee the creation of one innovative digital device after another — the iPod, the iPhone and the iPad. These transformed not only product categories like music players and cellphones but also entire industries, like music and mobile communications.

During his years outside Apple, he bought a tiny computer graphics spinoff from the director George Lucas and built a team of computer scientists, artists and animators that became Pixar Animation Studios.

Starting with “Toy Story” in 1995, Pixar produced a string of hit movies, won several Academy Awards for artistic and technological excellence, and made the full-length computer-animated film a mainstream art form enjoyed by children and adults worldwide.

Mr. Jobs was neither a hardware engineer nor a software programmer, nor did he think of himself as a manager. He considered himself a technology leader, choosing the best people possible, encouraging and prodding them, and making the final call on product design.

It was an executive style that had evolved. In his early years at Apple, his meddling in tiny details maddened colleagues, and his criticism could be caustic and even humiliating. But he grew to elicit extraordinary loyalty.

“He was the most passionate leader one could hope for, a motivating force without parallel,” wrote Steven Levy, author of the 1994 book “Insanely Great,” which chronicles the creation of the Mac. “Tom Sawyer could have picked up tricks from Steve Jobs.”

“Toy Story,” for example, took four years to make while Pixar struggled, yet Mr. Jobs never let up on his colleagues. “‘You need a lot more than vision — you need a stubbornness, tenacity, belief and patience to stay the course,” said Edwin Catmull, a computer scientist and a co-founder of Pixar. “In Steve’s case, he pushes right to the edge, to try to make the next big step forward.”

Mr. Jobs was the ultimate arbiter of Apple products, and his standards were exacting. Over the course of a year he tossed out two iPhone prototypes, for example, before approving the third, and began shipping it in June 2007.

To his understanding of technology he brought an immersion in popular culture. In his 20s, he dated Joan Baez; Ella Fitzgerald sang at his 30th birthday party. His worldview was shaped by the ’60s counterculture in the San Francisco Bay Area, where he had grown up, the adopted son of a Silicon Valley machinist. When he graduated from high school in Cupertino in 1972, he said, ”the very strong scent of the 1960s was still there.”

After dropping out of Reed College, a stronghold of liberal thought in Portland, Ore., in 1972, Mr. Jobs led a countercultural lifestyle himself. He told a reporter that taking LSD was one of the two or three most important things he had done in his life. He said there were things about him that people who had not tried psychedelics — even people who knew him well, including his wife — could never understand.

Decades later he flew around the world in his own corporate jet, but he maintained emotional ties to the period in which he grew up. He often felt like an outsider in the corporate world, he said. When discussing the Silicon Valley’s lasting contributions to humanity, he mentioned in the same breath the invention of the microchip and “The Whole Earth Catalog,” a 1960s counterculture publication.

Apple’s very name reflected his unconventionality. In an era when engineers and hobbyists tended to describe their machines with model numbers, he chose the name of a fruit, supposedly because of his dietary habits at the time.

Coming on the scene just as computing began to move beyond the walls of research laboratories and corporations in the 1970s, Mr. Jobs saw that computing was becoming personal — that it could do more than crunch numbers and solve scientific and business problems — and that it could even be a force for social and economic change. And at a time when hobbyist computers were boxy wooden affairs with metal chassis, he designed the Apple II as a sleek, low-slung plastic package intended for the den or the kitchen. He was offering not just products but a digital lifestyle.

He put much stock in the notion of “taste,” a word he used frequently. It was a sensibility that shone in products that looked like works of art and delighted users. Great products, he said, were a triumph of taste, of “trying to expose yourself to the best things humans have done and then trying to bring those things into what you are doing.”

Regis McKenna, a longtime Silicon Valley marketing executive to whom Mr. Jobs turned in the late 1970s to help shape the Apple brand, said Mr. Jobs’s genius lay in his ability to simplify complex, highly engineered products, “to strip away the excess layers of business, design and innovation until only the simple, elegant reality remained.”

Mr. Jobs’s own research and intuition, not focus groups, were his guide. When asked what market research went into the iPad, Mr. Jobs replied: “None. It’s not the consumers’ job to know what they want.”

Early Interests

Steven Paul Jobs was born in San Francisco on Feb. 24, 1955, and surrendered for adoption by his biological parents, Joanne Carole Schieble and Abdulfattah Jandali, a graduate student from Syria who became a political science professor. He was adopted by Paul and Clara Jobs.

The elder Mr. Jobs, who worked in finance and real estate before returning to his original trade as a machinist, moved his family down the San Francisco Peninsula to Mountain View and then to Los Altos in the 1960s.

Mr. Jobs developed an early interest in electronics. He was mentored by a neighbor, an electronics hobbyist, who built Heathkit do-it-yourself electronics projects. He was brash from an early age. As an eighth grader, after discovering that a crucial part was missing from a frequency counter he was assembling, he telephoned William Hewlett, the co-founder of Hewlett-Packard. Mr. Hewlett spoke with the boy for 20 minutes, prepared a bag of parts for him to pick up and offered him a job as a summer intern.

Mr. Jobs met Mr. Wozniak while attending Homestead High School in neighboring Cupertino. The two took an introductory electronics class there.

The spark that ignited their partnership was provided by Mr. Wozniak’s mother. Mr. Wozniak had graduated from high school and enrolled at the University of California, Berkeley, when she sent him an article from the October 1971 issue of Esquire magazine. The article, “Secrets of the Little Blue Box,” by Ron Rosenbaum, detailed an underground hobbyist culture of young men known as phone phreaks who were illicitly exploring the nation’s phone system.

Mr. Wozniak shared the article with Mr. Jobs, and the two set out to track down an elusive figure identified in the article as Captain Crunch. The man had taken the name from his discovery that a whistle that came in boxes of Cap’n Crunch cereal was tuned to a frequency that made it possible to make free long-distance calls simply by blowing the whistle next to a phone handset.

Captain Crunch was John Draper, a former Air Force electronic technician, and finding him took several weeks. Learning that the two young hobbyists were searching for him, Mr. Draper had arranged to come to Mr. Wozniak’s Berkeley dormitory room. Mr. Jobs, who was still in high school, had traveled to Berkeley for the meeting. When Mr. Draper arrived, he entered the room saying simply, “It is I!”

Based on information they gleaned from Mr. Draper, Mr. Wozniak and Mr. Jobs later collaborated on building and selling blue boxes, devices that were widely used for making free — and illegal — phone calls. They raised a total of $6,000 from the effort.

After enrolling at Reed College in 1972, Mr. Jobs left after one semester, but remained in Portland for another 18 months auditing classes. In a commencement address given at Stanford in 2005, he said he had decided to leave college because it was consuming all of his parents’ savings.

Leaving school, however, also freed his curiosity to follow his interests. “I didn’t have a dorm room,” he said in his Stanford speech, “so I slept on the floor in friends’ rooms, I returned Coke bottles for the 5-cent deposits to buy food with, and I would walk the seven miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on.”

He returned to Silicon Valley in 1974 and took a job there as a technician at Atari, the video game manufacturer. Still searching for his calling, he left after several months and traveled to India with a college friend, Daniel Kottke, who would later become an early Apple employee. Mr. Jobs returned to Atari that fall. In 1975, he and Mr. Wozniak, then working as an engineer at H.P., began attending meetings of the Homebrew Computer Club, a hobbyist group that met at the Stanford Linear Accelerator Center in Menlo Park, Calif. Personal computing had been pioneered at research laboratories adjacent to Stanford, and it was spreading to the outside world.

“What I remember is how intense he looked,” said Lee Felsenstein, a computer designer who was a Homebrew member. “He was everywhere, and he seemed to be trying to hear everything people had to say.”

Mr. Wozniak designed the original Apple I computer simply to show it off to his friends at the Homebrew. It was Mr. Jobs who had the inspiration that it could be a commercial product.

In early 1976, he and Mr. Wozniak, using their own money, began Apple with an initial investment of $1,300; they later gained the backing of a former Intel executive, A. C. Markkula, who lent them $250,000. Mr. Wozniak would be the technical half and Mr. Jobs the marketing half of the original Apple I Computer. Starting out in the Jobs family garage in Los Altos, they moved the company to a small office in Cupertino shortly thereafter.

In April 1977, Mr. Jobs and Mr. Wozniak introduced Apple II at the West Coast Computer Faire in San Francisco. It created a sensation. Faced with a gaggle of small and large competitors in the emerging computer market, Apple, with its Apple II, had figured out a way to straddle the business and consumer markets by building a computer that could be customized for specific applications.

Sales skyrocketed, from $2 million in 1977 to $600 million in 1981, the year the company went public. By 1983 Apple was in the Fortune 500. No company had ever joined the list so quickly.

The Apple III, introduced in May 1980, was intended to dominate the desktop computer market. I.B.M. would not introduce its original personal computer until 1981. But the Apple III had a host of technical problems, and Mr. Jobs shifted his focus to a new and ultimately short-lived project, an office workstation computer code-named Lisa.

An Apocalyptic Moment

By then Mr. Jobs had made his much-chronicled 1979 visit to Xerox’s research center in Palo Alto, where he saw the Alto, an experimental personal computer system that foreshadowed modern desktop computing. The Alto, controlled by a mouse pointing device, was one of the first computers to employ a graphical video display, which presented the user with a view of documents and programs, adopting the metaphor of an office desktop.

“It was one of those sort of apocalyptic moments,” Mr. Jobs said of his visit in a 1995 oral history interview for the Smithsonian Institution. “I remember within 10 minutes of seeing the graphical user interface stuff, just knowing that every computer would work this way someday. It was so obvious once you saw it. It didn’t require tremendous intellect. It was so clear.”

In 1981 he joined a small group of Apple engineers pursuing a separate project, a lower-cost system code-named Macintosh. The machine was introduced in January 1984 and trumpeted during the Super Bowl telecast by a 60-second commercial, directed by Ridley Scott, that linked I.B.M., then the dominant PC maker, with Orwell’s Big Brother.

A year earlier Mr. Jobs had lured Mr. Sculley to Apple to be its chief executive. A former Pepsi-Cola chief executive, Mr. Sculley was impressed by Mr. Jobs’s pitch: “Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?”

He went on to help Mr. Jobs introduce a number of new computer models, including an advanced version of the Apple II and later the Lisa and Macintosh desktop computers. Through them Mr. Jobs popularized the graphical user interface, which, based on a mouse pointing device, would become the standard way to control computers.

But when the Lisa failed commercially and early Macintosh sales proved disappointing, the two men became estranged and a power struggle ensued, and Mr. Jobs lost control of the Lisa project. The board ultimately stripped him of his operational role, taking control of the Lisa project away from him, and 1,200 Apple employees were laid off. He left Apple in 1985.

“I don’t wear the right kind of pants to run this company,” he told a small gathering of Apple employees before he left, according to a member of the original Macintosh development team. He was barefoot as he spoke, and wearing blue jeans.

That September he announced a new venture, NeXT Inc. The aim was to build a workstation computer for the higher-education market. The next year, the Texas industrialist H. Ross Perot invested $20 million in the effort. But it did not achieve Mr. Jobs’s goals.

Mr. Jobs also established a personal philanthropic foundation after leaving Apple but soon had a change of heart, deciding instead to spend much of his fortune — $10 million — on acquiring Pixar, a struggling graphics supercomputing company owned by the filmmaker George Lucas.

The purchase was a significant gamble; there was little market at the time for computer-animated movies. But that changed in 1995, when the company, with Walt Disney Pictures, released “Toy Story.” That film’s box-office receipts ultimately reached $362 million, and when Pixar went public in a record-breaking offering, Mr. Jobs emerged a billionaire. In 2006, the Walt Disney Company agreed to purchase Pixar for $7.4 billion. The sale made Mr. Jobs Disney’s largest single shareholder, with about 7 percent of the company’s stock.

His personal life also became more public. He had a number of well-publicized romantic relationships, including one with the folk singer Joan Baez, before marrying Laurene Powell. In 1996, a sister, the novelist Mona Simpson, threw a spotlight on her relationship with Mr. Jobs in the novel “A Regular Guy.” The two did not meet until they were adults. The novel centered on a Silicon Valley entrepreneur who bore a close resemblance to Mr. Jobs. It was not an entirely flattering portrait. Mr. Jobs said about a quarter of it was accurate.

“We’re family,” he said of Ms. Simpson in an interview with The New York Times Magazine. “She’s one of my best friends in the world. I call her and talk to her every couple of days.”

His wife and Ms. Simpson survive him, as do his three children with Ms. Powell, his daughters Eve Jobs and Erin Sienna Jobs and a son, Reed; another daughter, Lisa Brennan-Jobs, from a relationship with Chrisann Brennan; and another sister, Patti Jobs.

Return to Apple

Eventually, Mr. Jobs refocused NeXT from the education to the business market and dropped the hardware part of the company, deciding to sell just an operating system. Although NeXT never became a significant computer industry player, it had a huge impact: a young programmer, Tim Berners-Lee, used a NeXT machine to develop the first version of the World Wide Web at the Swiss physics research center CERN in 1990.

In 1996, after unsuccessful efforts to develop next-generation operating systems, Apple, with Gilbert Amelio now in command, acquired NeXT for $430 million. The next year, Mr. Jobs returned to Apple as an adviser. He became chief executive again in 2000.

Shortly after returning, Mr. Jobs publicly ended Apple’s long feud with its archrival Microsoft, which agreed to continue developing its Office software for the Macintosh and invested $150 million in Apple.

Once in control of Apple again, Mr. Jobs set out to reshape the consumer electronics industry. He pushed the company into the digital music business, introducing first iTunes and then the iPod MP3 player. The music arm grew rapidly, reaching almost 50 percent of the company’s revenue by June 2008.

In 2005, Mr. Jobs announced that he would end Apple’s business relationship with I.B.M. and Motorola and build Macintosh computers based on Intel microprocessors.

His fight with cancer was now publicly known. Apple had announced in 2004 that Mr. Jobs had a rare but curable form of pancreatic cancer and that he had undergone successful surgery. Four years later, questions about his health returned when he appeared at a company event looking gaunt. Afterward, he said he had suffered from a “common bug.” Privately, he said his cancer surgery had created digestive problems but insisted they were not life-threatening.

Apple began selling the iPhone in June 2007. Mr. Jobs’s goal was to sell 10 million of the handsets in 2008, equivalent to 1 percent of the global cellphone market. The company sold 11.6 million.

Although smartphones were already commonplace, the iPhone dispensed with a stylus and pioneered a touch-screen interface that quickly set the standard for the mobile computing market. Rolled out with much anticipation and fanfare, iPhone rocketed to popularity; by the end of 2010 the company had sold almost 90 million units.

Although Mr. Jobs took just a nominal $1 salary when he returned to Apple, his compensation became the source of a Silicon Valley scandal in 2006 over the backdating of millions of shares of stock options. But after a company investigation and one by the Securities and Exchange Commission, he was found not to have benefited financially from the backdating and no charges were brought.

The episode did little to taint Mr. Jobs’s standing in the business and technology world. As the gravity of his illness became known, and particularly after he announced he was stepping down, he was increasingly hailed for his genius and true achievement: his ability to blend product design and business market innovation by integrating consumer-oriented software, microelectronic components, industrial design and new business strategies in a way that has not been matched.

If he had a motto, it may have come from “The Whole Earth Catalog,” which he said had deeply influenced him as a young man. The book, he said in his commencement address at Stanford in 2005, ends with the admonition “Stay Hungry. Stay Foolish.”

“I have always wished that for myself,” he said.

Source: http://www.nytimes.com/2011/10/06/business/steve-jobs-of-apple-dies-at-56.html?pagewanted=all

Taking the competition 'Spot On' - Hyundai Eon

2011-10-05T05:53:00.000-07:00

I was amazed to see 7188 Eon's shipped to the Hyundai dealership's right 15 days before its launch. This is a very intelligent move by the company and would enable it capture the market early.

Hyundai's strategies have worked well for the company till now - be it entering the Indian market with Santro or capitalizing the premium hatchback space with the uber-stylish i20; also the i10 has helped company gain good numbers. The recent launch and success of the fluidic Verna has also showcased Hyudai's Design prowess. Verna easily overtook the well established Honda City and VW's Vento and established it as the leader in the sedan space.

Eon has to play a very crucial role for Hyundai. Hyundai has always been devoid of the top OEM spot because of its lackluster performance in number-crunching entry level hatchback space. This is prominently ruled by Maruti Suzuki's Alto and was more strengthened after the introduction of K10. This could be evident from the fact that in some months the sales number of Alto alone would overtake the combined sales figure of Hyundai's portfolio.

This product could be a game changer for Hyundai. But this can be a very challenging game - even a revolutionary product like Tata's Nano couldn't shake Alto's dominance. Even Chevrolet's Beat being a worthy competitor couldn't prove as a threat to Alto and had an average run in this segment over the years.And as petrol prices increase, people's inclination towards diesel cars would also be more.

As an overall package Eon seems to continue Hyundai's fluidic philosophy and we are sure that it will be launched near the 3 Lac price point to take Alto head on!

The Honda's new Civic 2012

2011-10-04T10:45:00.000-07:00

The Japanese car maker has announced the launch of the new look Honda Civic, next year in 2012. The Civic has got a face lift and looks promising. The Honda Civic 2012 is slightly taller and has a higher ground clearance than the current car, but on a whole is quite similar to its predecessor, Civic 2012 has a very similar roofline, similar window pane and similar ‘pop-out’ mirrors.

Not only this, the orientation of the headlights and grille on the nose is similar too. Inspite of many similarities the car is very different. The interior is completely fresh. There is a steering wheel with steering mounted controls; the central console is tilted towards the driver. The new car has triangular high mounted tail lights a higher and shorter bootlid, and the rear bumper is more substantial as well.

The 2012 Honda Civic has a 1.8-litre 4-cylinder SOHC i-VTEC engine with 139 hp at 6,500 rpm and 174 Nm of torque at 4,300 rpm, with a 5-speed automatic and front-wheel-drive, all are quite similar to its predecesssor. The Honda Civic will have an improved fuel economy, and will draw buyers.

The new features include a new Intelligent Multi-Information Display (i-MID) standard on EXI and VTI, which displays a wide variety of driver’s selected information including Audio, Trip computer, Fuel economy, HFT, and Clock. The display can also be personalised by uploading a wallpaper of choice. An Econ mode is standard on all grades to help improve fuel efficiency by controlling the AC compressor load and changing the engine throttle characteristics. Also, in choosing to drive in an Econ mode, it helps improve the driving habits by observing the ambient lights guide.

The use of aerodynamic components like a sealed under floor and wheel flaps will be made and Honda may carry over their ECO Assist technology as well. The latter is an on board information system that helps the driver improve fuel economy by as much as 10 percent. This beautiful and elegant new Honda Civic price is expected to be around Rs 12-15 lakhs.

What you have to do is, just wait till the year ends. The segment is currently dominated by the diesel counterparts – Chevy Cruze, Skoda Laura, VW Jetta & Toyota Corolla Altis. We would be much excited if we could see Honda bring a diesel variant along. For Indian market only cosmetic changes won’t do good – the value conscious Indian customer needs much holistic return on its investment.

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Mutual Funds Mythbuster

2011-10-04T09:05:00.000-07:00

Rahul is working for a mutual fund house. They have recently came out with an NFO (new fund offer). The day on which the fund house announced its maiden NAV (net asset value), he received lot of calls from investors asking why the NAV is at below par. They thought something was wrong.

Then Rahul went on clarifying them that though both an equity fund and a stock extend market-related returns, there are some key differences between the two. If you have similar misconceptions about equity funds and stocks, this article will demystify all those misconceptions.

New Fund Offerings:

A new fund offer is not likely to generate amazing returns as can be the case with an initial public offering from a company.

This is because the NAV reflects the market value of the stocks held by the fund on any day. Because a fund holds several stocks in its portfolio, the NAV can only reflect the combined returns on the portfolio between the NFO date and the date of first NAV.

The first NAV declared by a fund can, at times, be lower than the par value of investment. A lower NAV does not mean a cheaper fund: Just because a New Fund is issued at Rs 10, it does not mean it has a chance of giving better returns than an existing fund that has a higher NAV.

Whether the scheme in which you are planning to invest has an NAV of Rs.15 or Rs.150 does not matter at all.

There is a difference between the price of a listed security and the NAV of a mutual fund scheme. Listed security has a price, determined by the demand and supply of the security. Whereas the unit's NAV of the scheme has a value determined mathematically, by the prices of the securities in the portfolio. If the portfolio appreciates by 10% Rs.15 NAV will become RS.16.5 and Rs.150 AV will become Rs.165. So in whatever the NAV you invest your investment will fetch you 10% return.

So instead of concentrating on LOW NAV and more number of units, it is worthwhile to consider other factors (performance track record, fund management, volatility) that determine the portfolio return.

A fund with higher NAV may give higher returns than a lower NAV fund, if its stocks did better in the markets.

Funds Vs Stocks

Point of distinction	Equity Fund	Stocks
Level of Risk	High	Highest
Entry/Exit cost	No Entry Load; But there will be Exit load. Advisory fee may be applicable.	Demat a\c and Brokerage charges
Options	Options available like dividend payout, dividend reinvestment, growth.	No such options
Minimum Investment	Min investment is usually Rs.5000.	Even one share can be bought.
Measuring Performance	Returns Vs Benchmark	Net Profit margins/EPS
Sub-division	Classified based on stocks in which it invests. (Diversified, Midcap, sectoral, thematic)	Classified as per the industry in which it operates.(FMCG, IT, PSU, METAL)
Pricing	Based on the price of the underlying securities	Based on the demand and supply of the particular stock

Dividends are not extra returns:

Immediately, after the dividend payment of dividend the NAV of the fund will fall to the extent of the dividend payment. Let us illustrate.

Fund’s cum dividend NAV is Rs.25. Proposed dividend is 50%. You are investing Rs.1 Lac and you will not get Rs.50000 as dividend. It is only Rs.20000 (50% on the face value Rs.10 is Rs.5 per unit) as the unit price is Rs.25 you will get 4000 units. Rs.5 dividend * 4000 units=Rs.20000.

And this dividend is not an additional gain or income. After payment of dividend the NAV of the scheme will fall to the extent of the payment and distribution taxes (if applicable). Now your nav will become Rs.20 and your investment value will be Rs.80000 (4000 units * Rs.20 NAV).

In a nutshell,

Investment amount Rs.1,00,000

Dividend amount Rs. 20,000

Present Value Rs. 80,000

It is nothing but investing Rs.80000 after dividend distribution at NAV Rs.20.

So investing in a scheme because it is declaring dividend in the near future is meaningless.

Usually a company with a liberal dividend policy may enjoy greater investor interest in the stock market. The same is not applicable to an equity-oriented mutual fund.

Investing more number of funds is not actual diversification. It may reduce your return.

Owning several mutual funds doesn’t necessarily broaden your holdings. It will be a mistake to buy the same securities over and over again in different funds with different names. You tend to believe they're diversified. But it is not real diversification.

There are only very few funds which are performing consistently. Instead of investing in few funds, if someone chooses to invest in more number of funds (because he intends to diversify) he may be forced to choose some average performing schemes also. As a result his returns will be diluted. The step taken by the investor to diversify his investment is not leading to diversification but to dilution of return.

Thus ideally your portfolio should not have more than four-five funds.

NO tax for churning:

When we buy shares and sell them within a year we are accountable for short term capital gain tax at the rate of 15%.

But mutual funds provide the benefit of churning of stocks with no tax implications. A fund which churns its portfolio within a year is exempt from tax because it only redistributes these profits to investors.

Indian Car Sales Figures - September 2011

2011-10-03T11:08:00.000-07:00

September 2011 Sales Figures - Pan India

Highlights:

1. Chevy Beat crosses 5k figure for the 1^st time!!! (All thanks to the delicious Diesel variant)

2. Hyundai floods dealerships with 7188 Eon. That makes it India’s 9^th highest selling model even before it’s on sale! The same strategy of flooding dealerships with the Fluidic Verna had worked earlier.

3. Nissan Sunny makes a decent entry with 659 numbers.

4. Mahindra's XUV's offtake is positive with 505 units within just 3 days (launch was on 28th Sep)

5. Maruti faces extreme problems. Its all-rounder Alto dips again this month with just 21198 numbers. Remember this car used to perform at an average of 33k per month? SX4 with a figure of 196 seems to be in its deathbead, but its just the production niggles. Hope things get alright this October. I'm sure Maruti Suzuki would 'wake up once september ends'!

6. Brio starts with 170.. We expect easy availability and aggressive promotional campaigns for it to make a mark.

Source

Investment Myths

2011-10-02T02:41:00.000-07:00

8 Investment Myths To Be Avoided

Today I am going to debunk a few investment myths. You will know ‘why individual investors are failing miserably and how you can avoid being one of them’.

1. I am too young to plan for retirement

Have you started planning for your retirement? You may be saying ‘who me? I am too young to be thinking about retirement”. It is not so! Rethink. You should have started thinking about it yesterday. Because time flies quickly.

If you were smart, and planned for retirement when you are young, your retirement years will be really those “Golden years”. If not you need to compromise and you need to work longer and retire later than others.

2. East or west FDs are safe and best

Nothing wrong in investing in FDs. FDs are really safe and it gives us fixed return. But there is no meaning in investing all your money in FD. The post tax return of an FD will hardly beat inflation. If your investments are not beating inflation, then your money is losing its purchasing power. FDs are safe but not always the best option.

3. I can never be as good as Warren Buffet or Rakesh Jhunjhunwala so why try?

In the words of Warren Buffet “Success in investing doesn’t correlate with IQ once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.” You don’t need a super brain for making investment decisions. You only need common sense and discipline. If you don’t have enough time and expertise, then you can get assistance from professional financial planners.

4. Stock markets can earn me quick bucks

This is a common myth among investors. Stock market will reward the long term investors. Stock market is a system which transfers money from investors who are fearful and greedy to the investors who are balanced and rational.

You need to be calm, patient, disciplined, and rational. You don’t have to be smarter than the rest; you have to be more disciplined than the rest.

5. Timing the market is important

Investors often spend a lot of their time in trying to identify when the market is very low or high, and timing the purchase and sale of investments accordingly.

In other words, they want to time their exit when the market has reached its top and to time their entry when the market has reached a bottom. This not a practical idea because there are so many influencing factors to the stock market. Predicting all the factors and making investments is practically not possible. Instead of that stagger your investments through SIP, STP and stay invested for long term.

6. There is no such thing as too much diversification

Diversification is needed. A well diversified portfolio can be created with 10 stocks or 3 mutual funds. Having more than 20 stocks or 6 mutual funds can dilute your returns. The reason is you are not only investing in best stocks and funds, you are investing in above average and average stocks and funds. So your returns will come down. Instead of over diversification, you need to concentrate on a few stocks. It is possible to achieve the required diversification with a few stocks or funds.

7. The best way to make money is investing in what is hot

If you are investing in what is hot, then you are following the crowd. If you follow the crowd, you will get what others are getting. You will not get anything more. You need to be fearful when others are greedy and you need to be greedy when others are fearful. So don’t go by the market trend or the hot pick of the month. Think like a contrarian and follow value investing.

8. Saving tax is the only objective for me to Invest

Which group you are in? There is a group of people who invest just to save taxes. They will not bother to invest anything more than that. They will meet their objective of saving tax. There is another group which invests to save tax as well as to save for their other life goals like retirement, children’s future. They will meet the objective of saving tax and achieving other life goals. Kindly check you belong to which group.

You can be an assured successful investor if you could avoid these investment myths.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

Domestic Car & 2-Wheeler Sales - September 2011

2011-10-01T10:37:00.000-07:00

September has turned positive for all Auto Manufacturers except Maruti Suzuki which was reeling with labor and production issues. Indian Auto Industry expects to be bounce back with a much better performance this October. Hope that the market leader Maruti overcomes it bad times and lead the pack again...

The Cheetah is unleashed!

2011-09-29T11:00:00.000-07:00

The picture speaks for itself!!! And the offer seems just irresistible considering the competition-killer pricing.