The Sebi move to bar agents from using incentives to bait gullible investors is good--but not quite good enough.
Gautam Chikermane
POLICYMAKERS HAVE a problem. They can’t look beyond their noses–or, rather, the spreadsheets in which their noses are buried. Which is why even well-intentioned policy exercises, ostensibly aimed at protecting investors’ interests, do not come close to delivering the intended results. Take, for instance, the recent Sebi (Securities and Exchange Board of India) decision to make rebating illegal. Well-intentioned? Yes. Thought-through, well-executed? Definitely not.
Story in Outlook Money
Saturday, August 31, 2002
Should you dump Tata shares?
Accounting irregularities. Performance below par. Are the Tatas worth your money anymore, especially after the Tata Finance episode? The stock market has given its verdict by dumping Tata shares. What do you feel? Write in and share your views on the issue with others.
Gautam Chikermane
Integrity–we must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.
--One of the five core values of the Tata Group
IN THIS day and age, trust is a lost cause. From business to accounting to politics, everything is malleable, manipulable. And the
Rs 41,300 crore Tata Group, that stretches across 80 companies in seven sectors, is facing all these problems all at once. The question that today haunts more than 2 million shareholders of the 35 listed Tata Group companies is this: can we trust the Tatas?
Story in Outlook Money
Gautam Chikermane
Integrity–we must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.
--One of the five core values of the Tata Group
IN THIS day and age, trust is a lost cause. From business to accounting to politics, everything is malleable, manipulable. And the
Rs 41,300 crore Tata Group, that stretches across 80 companies in seven sectors, is facing all these problems all at once. The question that today haunts more than 2 million shareholders of the 35 listed Tata Group companies is this: can we trust the Tatas?
Story in Outlook Money
Thursday, August 15, 2002
Unearned income
It all boils down to a four-letter word called risk: find the inclination to court it, and you'll be on your way to riches.
Gautam Chikermane
WHY IS it that the rich keep getting richer and the poor poorer? What is it that prevents wealth from percolating down to the man of merit from the man of money? Why are the Bill Gates or Warren Buffetts, who have created immense wealth for themselves on their own steam, so few? In this age of knowledge, why is it that the knowledgeable person is found working for organisations either run or funded by the rich–why isn’t he wealthy? What is it that keeps money in the hands of the rich?
The answer: unearned income.
I owe this insight to a friend, who claims that the only way people become truly wealthy is when they don’t earn the money. What he is really saying is that people become rich only when they start making their money–rather than themselves–sweat for what they earn. Almost as if they had created an obedient, intelligent robot. When I examined this closely, I found myself nodding in agreement. This is a valuable lesson for us middle-class people, for whom the whole philosophy and process of wealth creation is relatively new, and one which has only recently got moral sanction. For decades we’ve lived in the belief that we have to earn our daily bread–daily.
Opinion in Outlook Money
Gautam Chikermane
WHY IS it that the rich keep getting richer and the poor poorer? What is it that prevents wealth from percolating down to the man of merit from the man of money? Why are the Bill Gates or Warren Buffetts, who have created immense wealth for themselves on their own steam, so few? In this age of knowledge, why is it that the knowledgeable person is found working for organisations either run or funded by the rich–why isn’t he wealthy? What is it that keeps money in the hands of the rich?
The answer: unearned income.
I owe this insight to a friend, who claims that the only way people become truly wealthy is when they don’t earn the money. What he is really saying is that people become rich only when they start making their money–rather than themselves–sweat for what they earn. Almost as if they had created an obedient, intelligent robot. When I examined this closely, I found myself nodding in agreement. This is a valuable lesson for us middle-class people, for whom the whole philosophy and process of wealth creation is relatively new, and one which has only recently got moral sanction. For decades we’ve lived in the belief that we have to earn our daily bread–daily.
Opinion in Outlook Money
Wednesday, August 14, 2002
Homelessly happy
A roof over the head does give security -- if it's your own. But taking on debt to fund that roof? In these times?
Gautam Chikermane
I’M BUYING a house.’ That’s my friend who, like me, would shudder at the prospect of using a credit card, leave alone taking a home loan. He’s not even looking at one of those EWS (economically weaker section) houses. The one he has in mind is worth Rs 24 lakh–a sizeable multiple of his salary. And his reasons are hardly original: the taxes and the rent I pay will get converted into a monthly instalment, though I could suffer for 15 to 18 months till I get possession. He reminds me of another friend, who just six months ago, moved from Mumbai to New Delhi, more specifically from a rented place in Bandra to a posh Rs 50 lakh apartment south of New Delhi. "I save taxes, I save on rent..." went the predictable argument, when I questioned her courage to take on such a huge loan.
They are not alone. If data is to be believed, amid the job losses and the recession and the business uncertainty and industrial slowdown, the one sector that has done well is housing finance. At a growth rate of about 35 per cent last year and an expected 50 per cent this year, this is one industry that seems oblivious of and untouched by the R-word plaguing the rest of India–from farmers and workers to entrepreneurs and bankers. As an industry, it is probably one of the safest in the financial sector-–individual households with so much of their wealth at stake in a single asset are least likely to default. Compare that to the Rs 75,000 crore of financial assets stuck with corporations, for which a new ordinance has had to be introduced. But I’m not interested in the profits or losses of companies.
Opinion in Outlook Money
Gautam Chikermane
I’M BUYING a house.’ That’s my friend who, like me, would shudder at the prospect of using a credit card, leave alone taking a home loan. He’s not even looking at one of those EWS (economically weaker section) houses. The one he has in mind is worth Rs 24 lakh–a sizeable multiple of his salary. And his reasons are hardly original: the taxes and the rent I pay will get converted into a monthly instalment, though I could suffer for 15 to 18 months till I get possession. He reminds me of another friend, who just six months ago, moved from Mumbai to New Delhi, more specifically from a rented place in Bandra to a posh Rs 50 lakh apartment south of New Delhi. "I save taxes, I save on rent..." went the predictable argument, when I questioned her courage to take on such a huge loan.
They are not alone. If data is to be believed, amid the job losses and the recession and the business uncertainty and industrial slowdown, the one sector that has done well is housing finance. At a growth rate of about 35 per cent last year and an expected 50 per cent this year, this is one industry that seems oblivious of and untouched by the R-word plaguing the rest of India–from farmers and workers to entrepreneurs and bankers. As an industry, it is probably one of the safest in the financial sector-–individual households with so much of their wealth at stake in a single asset are least likely to default. Compare that to the Rs 75,000 crore of financial assets stuck with corporations, for which a new ordinance has had to be introduced. But I’m not interested in the profits or losses of companies.
Opinion in Outlook Money
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