Joined: 16/Jan/2008
Location: India
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Posts: 1624
Posted: 18/Jan/2010 at 4:10pm
Originally posted by kulman
A bubble like situation is getting created in LOAN AGAINST GOLD JEWELRY
Kulman ji,
Can you please elaborate on this?Some stocks like Mannapuram Gold finance have done quite well and as usual after having done well a lot of MFs are covering this stock.
Take your chances and keep them in a box until a quieter time.
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
Posted: 18/Jan/2010 at 4:22pm
People are thinking that Gold can only go up from here (they may be right) and are borrowing against jewelry. The worse part is that majority of the proceeds are getting used in chasing 'speculative investments' like Calls, Puts and Futures.
Joined: 13/Oct/2006
Location: India
Online Status: Offline
Posts: 3542
Posted: 18/Jan/2010 at 8:15pm
Originally posted by kulman
People are thinking that Gold can only go up from here (they may be right) and are borrowing against jewelry. The worse part is that majority of the proceeds are getting used in chasing 'speculative investments' like Calls, Puts and Futures.
May god bless them.
the irony of the matter is that a global recovery may spoil the party
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
I have built up my entire capital by using leveraging.Remember to save 10 lacs it will take ages but u can easily get a loan of 10 lacs.
Me too, now i consider myself leverage free because i have generated more than what i borrowed. The total profit has been locked in the FDs.
Pvt. Banks offer loan at 17% monthly reducing for 4 years tenure. The effective flat rate comes around 9.6% pa. which I think quite good.
However if all the petty/personal loans could be collaterlized against primary home then effective interest rate comes around 4-6% pa and loan tenure is equal to home loan tenure. This will have two benefits. Returns from the market & Tax Benefit on interest paid on loan.
Joined: 13/Oct/2006
Location: India
Online Status: Offline
Posts: 3542
Posted: 18/Jan/2010 at 8:20pm
Originally posted by FutureBull
I am following simple strategy..by saving as much possible and investing with some short term trading..as mentioned by fellow boarders one needs to build handsome surplus to hang boots.. i think one needs at least Rs 5 Cr(without own home) to stay comfortable for times to come which would include kids' education, home loans and keep following one's passion i.e. "investing"..as an ordinary investor one might be required to keep good amount in liquid/debt form to take care of 3-5 yrs of expenses for bear run or other shocks...
I did use ready credit facility provided by Citibank for a month with almost negligible cost..i drew arnd 1 lac from that facility and bought Lupin in delivery after giving some thought(in fact wanted to buy futures of Yes Bank).. and i got shock when it went down by 5% next day but by end of month made around 12% and paid back to Citi on last day of the month with 0.8% gross cost including tax & fees which was supposed to be free..anyway i decided not to do it again .. i was very sure about Lupin as it was going through very strong rerating.. it might have gone wrong but my luck was good enuf..
I have decided not to use leverage until i'm 110% sure..
bottomline is your savings have to outlive you and earn a reasonable risk adjusted return
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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