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basant
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Quote basant Replybullet Topic: We have a Government but no governance?
    Posted: 18/Dec/2011 at 3:33pm

You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time. - Abraham Lincoln.

When the UPA was elected to power the stock market saluted it with a 20% circuit up with a firm belief that this Govt. will put India on a strong growth path through a spate of developmental activities led by second generation reforms.  In retrospect the collective wisdom of the market as defined by stock indices was a classic case of fooling all the people some of the time. As time progressed all that the markets saw from the  Govt. was  mere  hope and talk with very little action bringing our belief for a sustained high single digit growth to a virtual standstill. “All talk and no work has made Manmohan a dull Prime Minister”

While all this happened the stock market bulls quickly set themselves up for a long haul. They saw the ticker race towards the earlier top of 21,000 and the first rule for a market participant is that anyone in this market can lie but not the ticker. So they piled up with gusto buying the old beaten down names, stocks that hadn’t moved and waited for the ones that made new highs to collapse –a classic case of what happens in the every market cycle. After two and a half years all that remains of those stocks are memories - both bitter and forgettable.

As  the markets kept postponing its expectations and pre-poning the celebration the Govt. kept disappointing through inaction with complete disregard to the irreparable damage that they have inadvertently done  to this nation and its economy. These include mindlessly raising interest rates to show en effort towards curbing inflation whereas the source of the problem was elsewhere, trying to be a green man by cutting down mining and developmental work to a point where the Power companies suffer from acute shortage of coal and the lending agencies from risks of non-payments, slowdown in infrastructure activities and finally statement by the RBI of its inability to defend the rupee have taken a toll on our growth momentum as we run the risk of sub 7% growth for the next two years.

A Govt. that is made up of Lawyers at the top seems to do just one thing -argue and postpone. Meanwhile our Prime Minister seems to follow a policy of avoid, delay and defer. Instead of clamouring for FDI in retail with limited support the PM should focus onthe  basics. POSCO’s US$ 10Bn project lies stuck between the files, several mining projects have been stopped because the Govt. has suddenly turned green? FDI in retail is a five year plan. How can Wal Mart improve delivery from farm to fork in the immediate future? We did not have FDI in retail when we clocked 9% growth in GDP? The proposed Food security Bill is another of those legislations being introduced with an eye on vote bank politics. It will encourage people to sit back at home and work for three days a week instead of five. This is a colossal waste of public money and is against the basic roots  of capitalism. I guess 2G was better because it was a one time expense but this one will continue for years because once done no party can reverse the process once it is done.

The only hope for an investor is that India will survive inspite of the Govt. and its policies and these times could be one of the better ones to invest in but only for someone who has a long term view but don’t ask me how long is the long term? How-ever there are a lot of landmines in the market with a few more live explosives in them so it is better to walk the concrete path (strong names) rather then take the shortcuts (beaten down stocks) even though it would mean  taking a little more  time in reaching to our destination.



Edited by basant - 18/Dec/2011 at 4:56pm
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rohit1889
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Quote rohit1889 Replybullet Posted: 18/Dec/2011 at 3:48pm
How-ever there are a lot of landmines in the market with a few more live explosives in them so it is better to walk the concrete path (strong names) rather then take the shortcuts (beaten down stocks) even though it would mean taking a more time in reaching to our destination.
If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.
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abhishekbasu
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Quote abhishekbasu Replybullet Posted: 18/Dec/2011 at 5:14pm
Your views on Food Security Bill is spot on. This, like any other subsidy, will be a huge debt burden that we will leave for our future generations, because no government will be bold enough to tackle the issue for fear of alienating the common man. And like all other subsidies, most of the money will be actually used to line the politicians' pockets!!

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paragdesai
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Quote paragdesai Replybullet Posted: 18/Dec/2011 at 5:22pm
Despite all these Gloom Doom in equity market & Govt statistics , there is no sign of any recession on street like 2008. May be it is coming.
Luck is what happens when preparation meets opportunity ....
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Quote cooldude Replybullet Posted: 18/Dec/2011 at 6:44pm
In spite of the socalled aam aadmi slant of the UPA, no one seems to be happy, neither the aam aadmi nor industrialists.  This government is complacent about everything.  As Basantji has already said, this government is led by lawyers.  As the old saying goes, "Give a man a fish  and you feed him for a day.  Teach him to fish and you feed him for a lifetime."   No one in the government seems to know this.  As the results in Tamil Nadu show, all the freebies promised by the DMK government could not save them from the anger of the people.  It seems that the government has taken leave of its senses judging from its arrogant response to black money, the Anna Hazare movement etc. 
You can't see the future through the rearview mirror - Peter Lynch
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Quote rohit1889 Replybullet Posted: 18/Dec/2011 at 6:59pm
The only problem is we'll have to wait till 2014 for the govt. to change. I hope it changes then. But still its not a guarantee that the new govt. will do much
If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.
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Quote TCSer Replybullet Posted: 18/Dec/2011 at 7:10pm
Beautifully put across Basantji
Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays
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Quote rajnsharma Replybullet Posted: 18/Dec/2011 at 8:22pm
Thanks Basantjee for summing up the sentiments of all of us. You have raised very pertinent points. The government is at it's best "Doing Nothing". There is no hope from this government left and certailnly the next government will be even similar in actions.
 
The only hope is that India has got some sort of traction and even with government's apathy will continue growing moderately.
 
 
Originally posted by basant

A Govt. that is made up of Lawyers at the top seems to do just one thing -argue and postpone.

 
On a side note, the way things are coming out many of these lawyers and turning into liars now.
Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett
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