MBA and the Great Indian CAT fight!!!

MBA has been the center of action, Life has been revolving around this 3 letter acronym for the past 8months. Time flies. MBA has been transformational experience. As I write this mail few of my classmates have secured several projects with major companies (Exaggeration!!) ok, respectable organizations across the world. Simultaneously few have also secured probable job promises from people who are plum positions!!! I hope you are getting what I'm talking about!!

Let me rewind my life 4 years. 4 years back, I came out of college after a BE and promised myself to pursue my love for Financial markets and joined into an Insurance Company into sales for 8k per month. That day I was not bothered who joined which soft-ware company and who got the best offer. I did not bother about the number of people who stopped talking to me as a consequence of my job profile nor did I really bother about all the girls who joined into Soft-ware as it was and may be still perceived 'SEXY' industry. Oh and finally how can I forget the ON-SITE opportunities ranging from A to Z (read America to Zimbabwe!!!).

At that time only thing important was to do what I liked, felt like a TIGER (Pantheris Tigris)

However, The last 4 years I have been working like the same tiger, doing things I liked, being with people who mattered, performing at the best level of my abilities, and as well making my own choices of living the way I wanted. So what? As a person of this behavior I belonged to a group which is quite unique and exclusive group.

Taking this behavior to the next step, I took up MBA and decided that I had to benchmark myself against the world an international experience, global in perspective (If you like such terms, god bless you!!). During MBA every one of us have gone through a phase of metamorphosis, gene-modification. Where everyday we get with the fear of another class mate securing a great job, good opportunity and finally beautiful chick (if unmarried), am I becoming a CAT??

This is what I called the great Indian CAT Fight, Am I getting domesticated by all the expectations to do well? Repay a huge student loan? To get a good job and a great salary? I see people talk on phone as if they are RAW or MI agents, printing off sheets and hiding them in suitcases which have locks!!! More over I came here with a MBA dream of getting into Finance but somehow I have applied to Projects and Jobs which are as irrelevant as Deepika - Siddharth Kiss and Kingfisher stock price performance!!!!

However, I get up everyday to fight such internal cat fights and in zeal of saving the TIGER in me, I reassure myself to focus on the big picture. There is a silver lining to all this. If securing a Finance project after rejecting many Marketing and Operations Projects is the first step of keeping the TIGER alive then the TIGER has survived in ME!!

If at anytime you feel being converted from a TIGER to a domestic CAT, Stop and think again!!! Love all the people who stood by me!!!!

" LET THE TIGER IN YOU SURVIVE!!!!"

Interesting Phase of Investment

As you have been watching, this is an important and interesting phase of Investment. Macro Economic factors like Inflation inching higher and higher day by day. As a consequence the 'Interest Rates' are also on the up move. Even the 'Gold' cannot be ignored.

However, word of caution on Gold.

Gold is generally treated to be a hedge (Insurance) against inflation. But, the emergence of HEDGE Funds, who borrow money and trade on margins (Buying house on loan type) are pushing the prices of gold higher and higher. Can the prices of Gold sustain at such high levels forever? May be or may not be. However, in all this hype on 'Gold', investors have ignored another metal called 'Silver', which has made more money than gold made. Bottomline: Make sure at least 4 - 8% of your portfolio is GOLD. As the saying goes, 'You hate it or you love it but you still can't ignore it".

Coming Back to INFLATION. In order to bring inflation under control, the RBI has increased Interest Rates. All the Retires, Fixed Deposit Investors are happy. So if you are looking for a long term of fixed income at high interest rates then this is probably the perfect time to LOCK-IN some part of the portfolio. So go for an " FD " or FD like any investment with longer period.

INFlation has been negative for banks (Give higher interest on FD, considerable lower interest on LOAN!!), large companies which borrow funds to grow and other business which borrow regularly. If interest goes up people will stop buying 'Luxury' goods like high end cars, houses, and other discretionary spending will get affected.

Inflation and interest rates increase are directly proportional. This cycle usually lasts for 1 - 3 years based on the trade off between Growth and inflation curb. The BANKS will be worst hit of all this because:

1. High rate on FD, Considerable low rate of LOAN (the difference become small)
2. People would not interested in taking loan at higher rate (Slowing Credit Growth)
3. If not much business, not much profits means lower and lower stock prices.

Based on this 'WE CAN TAKE A CONTRARIAN CALL' to buy BANKS NOW at cheaper prices and wait for the INTEREST RATE cycle to play out. Potential Avenues of investment into banks is to buy the BIG ones like SBI, ICICI, HDFC in no particular order. Or invest in BANKING SECTOR FUND which would give an exposure to nearly all major banks. This can be done either by a short horizon large investment SIP with paying period of 1 year.