I know, all the factors i listed down in my earlier post, were already existing forever for India. But the good new factor is, the whole world is going into a recession for a pretty long time. Only one thing that can revive the world back is domestic demand of India and China.
We will get super-cheap commodities for a long time. Super-cheap oil. Super-cheap metals. Super-cheap machines. Super-cheap anything we want from the rest of the world.
Japan, never exported to grow. It started exporting after the crash, because there was no domestic demand left. Crash of US will happen within a year. Millions of NRIs with billions of dollars are going to comeback to India. They are going to add to the domestic demand.
I don't claim that great American companies will not remain after the crash. Some American companies have made world class products. Those companies are the only hope for America.
But lot of companies which just exist because US is booming will downsize or go bankrupt. Subways, PizzaHuts and Starbucks will find it difficult to make bucks. Lot of crappy books written by great American businessman's will never be read again.
People will now be reading stories of India. Great Indian leaders will be born.
If you become a CEO of some Indian company and take it to great heights, you must remember that it is not just your efforts which are working here. You must admire everyone, you must remember the positive feedback loop.
Everybody was running this race. Race for economic growth. Everybody was running like a hare. We were the tortoise. At the end of it tortoise always wins.
India is decoupled. We don't need FII investments. If Crude prices are at 30$ compared to 70$ over last year. That is equivalent to savings of 40$ per barrel of crude. Our daily crude consumption is 2.4 million barrel per day. That make an annual savings for @(70$-30$) equal to 35 billion$. This is just crude. Rest of the savings will come to be much higher than the FII investments over the complete year.
We will continue to grow. Grow at the speed of tortoise and we are going to beat all those hares.
Our domestic savings and investments will lead to our growth.
Only way Gulf can manage to get crude prices up are not production cuts, but they should learn that instead of spending their money on their useless infrastructure projects and havoc sized malls in Dubai. They should start investing in India's infrastructure. They should probably gift a car to every poor Indian families. Crude is going down below 25$ according to my new prediction.
India 2025 will be much bigger than what people would have ever thought.
It will be much easier to do business in India. Every business in India will grow. India will have a big consumption boom. We will be exporting lifestyle and food to the rest of the world.
When somebody gets rich, people start to listen to them. We were listening to US. We suddenly out of nowhere started liking their junk food and their life style. When India goes rich, people will start to become obsessed about yoga, about our classical music, about our life style.
I don't know what we have to teach to the rest of the world. But when we grow rich, we will definitely find a lot of things.
Ofcourse, be intelligent and become the part of the boom. Don't be part of a busting economy.
Sunday, December 28, 2008
Friday, December 26, 2008
Incredible India !!
For quite a long time, i was looking at signs, whether its India or China or Brazil or Russia.
I was clear it cannot be any developed countries.
Now, looking at these final changes in the world economy. I am clear now, its not China, Japan, Korea, Taiwan, Russia, Brazil or the rest of Europe. Ofcourse, its not America.
I am talking about the next biggest consumer of the world.
The next biggest economy of the world.
Celebrate resilient, redoubtable, incredible India !!
We have the the Youth to work.
We have the population to consume.
We have the best possible climatic conditions to grow food.
We have the sunlight for energy.
We have a resilient financial system.
We are least dependent on the rest of the world.
We have the savings.
We are the next !!
1950-1987 : It was Japan, Japan Economic Miracle
1980-2008: It was America.
2003-2025 : It is India. The next Economic Miracle.
I will write about what are the changes that will happen to India, when we become the next.
I will write about 'India 2025', in my next post.
I was clear it cannot be any developed countries.
Now, looking at these final changes in the world economy. I am clear now, its not China, Japan, Korea, Taiwan, Russia, Brazil or the rest of Europe. Ofcourse, its not America.
I am talking about the next biggest consumer of the world.
The next biggest economy of the world.
Celebrate resilient, redoubtable, incredible India !!
We have the the Youth to work.
We have the population to consume.
We have the best possible climatic conditions to grow food.
We have the sunlight for energy.
We have a resilient financial system.
We are least dependent on the rest of the world.
We have the savings.
We are the next !!
1950-1987 : It was Japan, Japan Economic Miracle
1980-2008: It was America.
2003-2025 : It is India. The next Economic Miracle.
I will write about what are the changes that will happen to India, when we become the next.
I will write about 'India 2025', in my next post.
Friday, December 5, 2008
Getting a MBA ?
With just 7 years of prosperity you have lived in from IT crash to subprime crisis, you are also a believer in the boom. You also believe that your salary is going to rise at 10-20% per annum for next 30 years.
Such assumptions at the times of boom has always landed human beings to worst financial crisis, especially when they leveraged and bought a house, under such assumptions. World is not so flat. You just cannot predict next 30 years of your life. You have seen too less. Life at the end of it, will teach you a lot, and most of it will be taught to you by supply and demand equation of the world.
Every boom has been followed by a bust, but nobody believes this one will bust ever.
Money has always changed hands, much faster than anybody imagined.
It never changes for people, just their price changes. We saw a technology boom, so price of technocrats was high. Every middle class parent was beating his child, to become an engineer.
This remained high, until the world produced so many technocrats, that they were not required anymore. Then people were required to manage those technocrats so the price of manager was high. Then people started to believe that managers will always remain in demand, they ran to get an MBA, for a high flying career. This belief produced so many manager, that they were not in demand anymore, their price goes low. Now, even a cashier at a bank is an MBA, people who pain you with those telemarketing calls are also MBAs, people sitting at Airtel counters are also MBAs. MBA became a worthless degree after all.
Then people believed Investment bankers will remain in demand. They ran to get CFAs, MS in Financial engineering until they realized they are not required anymore. People realized that artists are getting payed high. They ran to Arts school to learn Dance and Music, at that time every middle class parent was beating their child for reading about maths and physics, and were forcing them to become Artists. Big corporations were made, which hired artists, made them sit in a cubicle and draw paintings all day. Until that boom again busts. Then people realized that Farmers are getting paid high, they were beating their child for studying, and not doing physical exercise, so that he can become a good farmer.
Whenever you choose a career, which has existed for less than five years, then think again whether it is a boom or is it a sustainable long term career. Look at at least 10-15 years of performance across market cycles, then only you can choose a company/sector both for career or buying its stock.
Such assumptions at the times of boom has always landed human beings to worst financial crisis, especially when they leveraged and bought a house, under such assumptions. World is not so flat. You just cannot predict next 30 years of your life. You have seen too less. Life at the end of it, will teach you a lot, and most of it will be taught to you by supply and demand equation of the world.
Every boom has been followed by a bust, but nobody believes this one will bust ever.
Money has always changed hands, much faster than anybody imagined.
It never changes for people, just their price changes. We saw a technology boom, so price of technocrats was high. Every middle class parent was beating his child, to become an engineer.
This remained high, until the world produced so many technocrats, that they were not required anymore. Then people were required to manage those technocrats so the price of manager was high. Then people started to believe that managers will always remain in demand, they ran to get an MBA, for a high flying career. This belief produced so many manager, that they were not in demand anymore, their price goes low. Now, even a cashier at a bank is an MBA, people who pain you with those telemarketing calls are also MBAs, people sitting at Airtel counters are also MBAs. MBA became a worthless degree after all.
Then people believed Investment bankers will remain in demand. They ran to get CFAs, MS in Financial engineering until they realized they are not required anymore. People realized that artists are getting payed high. They ran to Arts school to learn Dance and Music, at that time every middle class parent was beating their child for reading about maths and physics, and were forcing them to become Artists. Big corporations were made, which hired artists, made them sit in a cubicle and draw paintings all day. Until that boom again busts. Then people realized that Farmers are getting paid high, they were beating their child for studying, and not doing physical exercise, so that he can become a good farmer.
Whenever you choose a career, which has existed for less than five years, then think again whether it is a boom or is it a sustainable long term career. Look at at least 10-15 years of performance across market cycles, then only you can choose a company/sector both for career or buying its stock.
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