feed/feed_name/ $now Thoughts From A Small Room by TheMoosra Hype Dark politics/890/ 2010-03-02T12:43:12Z 2010-03-02T12:43:12Z Apologies for the extended absence from my post as political/financial contributor to HD. Now for the business end of things:<br /> <br /> Growth stocks have outpaced income stocks in general over the last bull run 2001-2007. Cheap liquidity sloshed into growth stocks in the form of leveraged positions, and resulted in... well, growth. Income stocks were relegated to lower positions, as investors sought aggressive, active, alpha-origin returns rather than the more passive income from dividend yielding stocks. Those few which managed to be both, ie financial institutions, crashed horrifically over the GFC period (Great Financial Crisis, as it is now being called). <br /> <br /> Some investment managers are suggesting a shift in fundamental risk appetite towards income stocks, as investors look for a smaller yet more reliable source of capital growth. In theory this would be a good portfolio management move, and is a play that comes right out of the textbook. A stock with a yield of 6%, say Vodafone, could shift over +-20% per annum yet still pay out 6% year on year. For a longer term investor, long-dedicated fund manager, pension funds or other deep horizon investors, the interim beta doesn't matter as to them their investment is crystallised for the next 5-10 year period. Investors who thus have a fundamentally conservative outlook on financial markets (those who believe markets are always correct in the long term), combined with those who think that income is a safer capital growth stream than price increases, are likely to flock to dividend stocks. Correct?<br /> <br /> Well, in theory there are multiple drivers which determine where liquidity is directed. A massive contributor is government interference into market forces. <br /> On the 6th of April, new taxation laws will come into effect, meaning that the top 1% of income earners (150k+ total comp) will be subjected to a wealth destroying, punitive income taxation rate of 50% over and above other taxes. What effect will this have on investment patterns? There are two factors<br /> <br /> 1. Income from dividends that is taken out as income is considered "income" for taxation purposes, and will be hit by the 50% income tax. This means that the effective rate of taxation upon dividends will come to 42.5% after deductibles. <br /> <br /> 2. Capital gains are only levied on realised profits from capital growth. And even then, the rate of the levy is 18%, with the first 10k being tax free.<br /> <br /> <br /> Thus as we see dividend payouts being increasingly costly post 6th April, we must question which investor/ manager would be happy with returns that are instantly 10% lower post-tax? The tax bracket being hit by the chancellor and PM are overwhelmingly the upper-middle "investor" classes, who have a vast influence on stock beta due to active investment decisions either via brokers or wealth managers. Thus the effects of their liquidity directions could spark off a new trend.<br /> <br /> Under this path of thinking, liquidity would be siphoned out of income stocks and into growth stocks. Since income stocks are a fundamentally long-term play, it stands to reason that depressed asset prices will continue in perpetuity, or until a change in the tax regime. If this occurs, the prominence that investors and companies pay to dividends may diminish rapidly. A focus on stock price growth could factor in capital reserves under book value, or the capital saved from nonpayment of dividends could be used to expand the business and thus rally security prices. Perhaps, in time, dividends will become a thing of the past.<br /> <br /> NB This logic applied primarily to UK LSE listed securities. The effect on global equity markets is speculated to be minimal. journal/820/ 2009-11-23T15:14:11Z 2009-11-23T15:14:11Z List of places that I need to visit (for the first time) within the next ten years:<br /> <br /> 1. Norway<br /> 2. Sweden<br /> 3. Montenegro<br /> 4. Turkey<br /> 5. Russia<br /> 6. China<br /> 7. Lebanon<br /> 8. Israel<br /> 9. Armenia<br /> 10. Azerbaijan<br /> 11. Tajikistan<br /> 12. Iran<br /> 13. Afghanistan<br /> 14. Japan<br /> 15. Burma<br /> 16. Thailand<br /> 17. Vietnam<br /> 18. Indonesia<br /> 19. New Zealand<br /> 20. Morocco<br /> 21. DR Congo<br /> 22. Namibia<br /> 23. Madagascar<br /> 24. Honduras<br /> 25. Panama<br /> 26. Cuba<br /> 27. Jamaica<br /> 28. Peru<br /> 29. Boliva<br /> 30. Brazil<br /> 31. Argentina<br /> 32. Chile<br /> 33. Iraq politics/774/ 2009-05-16T11:19:26Z 2009-05-16T11:19:26Z So the results have just been coming in, with a huge surprise. While my favoured alliance in this election was crushed to pieces, the emergence of a strong UPA majority is most welcome.<br /> <br /> As for my predictions pre-poll, it was a mixed bag. The third front was totally routed, Mayawati was annihilated at the polls. My faith in democracy was partially restored.<br /> <br /> I predicted the huge upset in West Bengal + the smaller upset in Kerala, and the Indian voters duly followed. Have we seen the end of the Communists in their last bastions of West Bengal and Kerala?<br /> <br /> What I didn't see was INC(i) totally wiping the floor with their opposition in Rajasthan, Maharashtra and Uttar Pradesh. These "hindu heartlands" rejected the rhetoric of Varun Gandhi, the diffidence of LK Advani, the communal anti-brahminism of Mayawati and the left in-toto. <br /> <br /> So what does this hold for the future? India shall be left with a stronger parliament, controlled by the INC. Is that a bad thing? In days past I would have certainly said so. My critique of the INC is that they have ruled for over 50 of the 60+ years that India has been independent. Where did they deliver progress? In my mind only two: Indira and Manmohan have created progress in the agricultural and economic fields respectively.<br /> <br /> My view of Congress has changed from one of total loathing, to recognising that Congress is not really a true political party. They stand for nothing other than the Indian constitution and secularism. What separates the BJP from them? Nothing much... a few token anti-muslim statements is about it, and that's not much to base a government or a society on. <br /> <br /> Congress is the supreme monster of Indian politics. It is fed by the dutiful electorate, who have an intrinsic bias towards it. However the body of the beast follows its head. When the head is weak, Congress is weak. When the head is strong, Congress is strong. The only solution is to have a strong leader for Congress. Manmohan ably plays that role in an intellectual capacity now, but when Rahul Gandhi ascends to his "birthright"... what of India then? Which way will the beast turn?<br /> <br /> Whoever leads Congress, leads India. Its as simple as that. On paper, Congress is a noble party with solid fundamentals. The fact that they have rarely delivered is more a measure of the ineptitude of its leaders than of itself. politics/770/ 2009-05-05T14:13:22Z 2009-05-05T14:13:22Z Mayawati and BSP to expand seat base massively in UP<br /> <br /> Bihar to be split by RJD, JDU. Laloo's RJD to emerge with higher seat tally. RJD to support third front<br /> <br /> Tamil Nadu- insignificant in long run, seats to be split either way but leader to join third front<br /> <br /> Congress to increase seat share in andhra<br /> <br /> BJD to sweep comprehensive victory in Orissa. BJD to join third front<br /> <br /> Maharashtra to swing towards Shiv Sena and BJP in the aftermath of Mumbai attacks.MNS to be routed.<br /> <br /> Biggest upset set for West Bengal. Congress party to gain seats, Communists to be butchered in the polls<br /> (primarily driven by voter dissatisfaction over the handling of Tata's nano plant closure)<br /> <br /> Modi to consolidate power in Gujrat, expand vote share while maintaining seat ratios. <br /> <br /> Overall<br /> <br /> Congress : To do better in Kerala, West Bengal<br /> <br /> BJP : Consolidation of power bases. NDA to lose 10 seats<br /> <br /> Third Front : To emerge with 110 seats, challenging the other two parties for power. 3-way split followed by a <br /> coalition of Congress-Third Front, Manmohan to be ousted on wishes of third front. <br /> <br /> Mayawati assumes PM role. Prophecies of Kali Yuga fulfilled, Indian business decays as Dalit quotas enforced in private sector. Educational institutions' reputation in tatters resulting from increased OBC + shedule caste quotas.<br /> journal/767/ 2009-04-27T19:28:40Z 2009-04-27T19:28:40Z Many people deride Hinduism as a stupid quack religion, where people worship cows and a multitude of icon-gods. In a way, they are correct.<br /> Some people exalt Hinduism as pure philosophy on earth, the most incorruptible and wisest form of spirituality around. In a way, they are correct.<br /> <br /> So how can there be this duality within a religion? Well, Hinduism (ie the Vedas) are a framework for spiritual advancement and understanding. It's a bit like the Freemasons- they have no agenda or teachings of their own, but they allow you to explore and understand knowledge to find your own answers. The Vedas are the supreme collection of knowledge on earth, presented in a form that allows the user to draw his inferences based on his level of intellectualism and understanding.<br /> <br /> Someone of low intelligence will come to the conclusion that he ought to worship a certain god because it may rain if he does so. That's fine... that's his level of understanding and spiritual advancement. Perhaps when he reincarnates, he will be more evolved.<br /> <br /> Another person will understand the metaphysics and philosophy of the Vedas and conclude the answers to life- why he is on earth, what he should do to advance himself etc.<br /> <br /> The Aryans were a highly advanced spiritual and scientific culture. Their science was so advanced that it was able to reconcile the physical with the non physical; matter with consciousness, the subject with the object; science with art.<br /> <br /> If you read the Vedas scientifically you will discover pure science; if you read them spiritually; you will discover pure spirit; if you read them poetically; you will discover pure poetry. The Vedas do not favour any language. They speak to the scientist, they speak to the poet, they speak to the mystic and they speak to the ordinary person. They are eclectic and which is why the many paths they prescribe to self-realization are eclectic.<br /> <br /> The most important fact that I must share with you is that no two people need come to the same conclusions. They select their answers and their path based on their level of evolution. In time, they will all reach the goal of the absolute: enlightenment. In time, they will all understand the supreme truth. For the time being however, we must give each other space to determine our own beliefs. Unlike organised religion, there is no dogma, nor tenets, nor teachings within Hindu spirituality... there is only space for individual advancement and spiritual evolution. Proponents of big religion will look down on you, call you names and deride your beliefs and question your intellectual ability. Dismiss their words, for they know not what they say... in time, in another life, they too will understand.