Is Gold an Investment or Insurance ?

Picture Courtesy: digitalmoneyworld at flickr.com

Recently we have gold making big headlines  in both print and digital media.  There has always been big debate on whether gold is an investment or just a barbaric relic. While many big investors like Warren Buffett are against investing in gold as it is not a productive asset unlike say a real estate or any other business, there are other gold bugs who claim its supremacy.  I think both sides are taking very extreme positions and I am kind of somewhere in the middle.  As far as I am concerned, gold is not an investment, gold is a currency.  It should be only compared with anything that is considered a currency and should not be compared with any income producing asset.  If you keep your money under the mattress, it will not be productive and so is gold.

Basics of Money Creation And How Bankers Control The World

Eye opening videos about how money is created and the way bankers rule the masses by controlling money creation.  Watch this to understand how the game is played so you can be in the winning side in your life

Part1

Part 2

Part3

Secret Millionaires Club Videos for Kids

I came across this wonderful source for kids called Secret Millionaires Club.  Mr. Warren Buffett has rendered his voice for his cartoon avatar which covers finance in a way that kids can understand.  To be honest there is a lot of information that adults can learn as well because when it comes to investing, there is a lot to learn from Buffett.
What I like the best about these episodes are the teachings he has for kids about moral values. I think they are invaluable.  He applies all business principles to individual values which is great.
Tested the acceptability of these videos with my daughter and she simply loved it.

Click here to watch all Episodes of SMC

Mohnish Pabrai's Lecture at Columbia Business School - 2013

Video of Mohnish Pabrai delivering his lecture to the students at Columbia during spring 2013.  Talks about how he set his benchmark and his performance.

Mohnish Pabrai lecture at Columbia Business School -2013

Buy Stocks Like Groceries

Image Courtesy: The Consumerist

It is our natural tendency to avoid any losses and we all like prices to go up the moment we buy something.  We expect this to happen to any type of investment we make like Gold, Real Estate, and Stocks etc.  You can see this tendency every time the petrol prices are hiked by the oil companies.  If you filled up the petrol just the day before and then the price went up last night, we feel very happy that we filled it before the price went up.  While this provides short term happiness, very soon we would be filling up the gas at a higher price when it runs out.

Portfolio Update - March 2013

Buys:

BHEL, Axis Bank , VST Tillers, Mayur Uniquoters, Atul Auto,  Swaraj Engines, Lumax Auto and Wim Plast

Sells:

Patels Airtemp, Tide Water


Outlook: 

Midcaps valuations continued to correct last month.  Economic outlook continues to be weak with the current account deficit going greater than 6% last quarter.  Inflation continues to be sticky and all indicators point to a general slowdown of economy.  Auto numbers came down pretty low and bank credit growth has been lower than normal as well.  The outlook is currently pessimistic and that is what is making me happy.  As Warren Buffet said ‘ Be fearful when others are greedy and be greedy when others are fearful’.  I see this as an opportunity to pick good business at fair or below fair prices.

Thought on my holdings

Number of stocks in the current portfolio is 28.  Have been reducing Patels Airtemp and would soon exit this position fully.  Over the next few months, I will be consolidating the stocks in similar businesses and have the money invested in one that has better business value and growth potential for the price paid.

Most of my additions have been in mid caps.  Axis bank is the only large cap I am continuing to accumulate.  Axis, HDFC Bank and Yes bank are the only private banks that has decent asset quality and are well run with good growth.  I have preferred Axis than HDFC bank because of the price paid.  I prefer Axis bank than Yes Bank because Yes bank is new and the management does not have long track record. Also the CASA ratio of Yes bank is low and the cost of deposit is higher.  Axis bank has corrected a lot and I pray that the price keep going down while I accumulate a big position.  Now Yes bank is available at the same valuation like Axis bank and I may initiate position on Yes bank just to diversify the holdings.