Uncle Scrooge's Economics

   This guy has proved that you don't need to be a certified CA to find loopholes in the system. You just need the willingness within to achieve something big in your life. He has got no Harvard education, nor has he ever stepped in the IIMs. He is a self-taught man who has made a lot of money in the Indian equity markets and has been looked upon by his followers like ED, SFIO, CBI, Income Tax department, etc. Shocked to see his followers? Well, you should be because he is none other than Mr. Ketan Kumar Parekh.  According to the SFIO (serious fraud investigation officer), the scam committed by Mr. Ketan Parekh is supposed to be more than Rs 40,000 Cr. That's right. He surpassed his Guruji, Mr. Harshad Mehta. Ketan Parekh scam or K10 scam (as it is famously known as), is supposed to be 8X times the size that of Mr. Harshad Mehta's. He was a small stockbroker in Mumbai with big ambitions. Ketan was involved in manipulating the stock rates and taking the full benefit of the...

 What is the first thing that comes to your mind when I say Mumbai? It might be traffic jam for some, some might say humidity, Vada pav, Sea link, Antilia, fast life, cricket fans might say Wankhede stadium, the Gateway of India, Etc. But when you ask the same question to an investor, I am pretty sure that he would talk about the Rental yields and house rates. Why would anybody talk about stupid rental yields when you have the mesmerizing Marine Drive? The answer.  For more than a decade now, Mumbai remains the dominant player when it comes to the top 10 most expensive cities to live in India. The cost of living in India, on average, has increased at an annual rate of 5.5%. When we apply the same metric to Mumbai, the numbers would make your investment returns feel awful. There is a reason why Mumbai is called as the city that creates a hole in your pocket.  On the global basis, out of 227 cities spread across 5 continents, Mumbai holds the 127th spot of being the most ex...

  It is said that the Government of India owns at least 13505 Sq Kms of area. This land mainly includes the plants and machinery of PSUs, their headquarters, factories and many more. Some prominent examples include the land owned by the public sector chemical company, RCF (Rashtriya Chemical Fertilizers), whose value is 2X their market capitalization, the Defense PSU, Mazagon Dock shipbuilders, who own the Mazagon dock port, or the iconic SBI headquarters. All these investments sound great but, wait until I narrate to you the story of the man smiling above. He is none other than Mr. Adi Godrej, the son of Mr. Pirojshah Godrej and the chairman of one of the wisest, richest and the most profitable business groups in India, The Godrej group of Industries. Mr. Pirojshah Godrej started the business in 1897, when Mr. Ardeshir Godrej, co-founder of the Godrej group and brother to Mr. Pirojshah Godrej, read about rising citywide crimes and hence started selling locks. And the world knows t...

    So, what do captive finance companies do and why do I think they are bad-ass companies to invest? Let’s get into it. So, captive finance companies are an arm of a parent automobile company through which you can borrow money to finance your car. Basically, if you want to buy a car, you can approach these companies for loans to buy a car. Now, one would ask, why should I approach them when we already have established banks to finance our vehicles? Well, captive finance companies possess pricing power and hence they are able to provide loans at lower interest rates as compared to established banks. And normal banks lend money for all sorts of things, like buying house, car, educational loans, small business loans, etc., but captive finance companies specialize in writing loans for automobiles only. If market rate for car loan is say 8% then captive finance companies can offer you loans at 6%-6.5%, saving those extra 1.5-2% of your money. Being subsidiary of a parent company, ...

Was I the only one who thought that Ford was pronounced as Fird or we have some geniuses reading this blog who made the same mistake? Anyways, in the last blog we talked about Mr. Darwin and his "survival of the fittest" philosophy. Well, you guys are going to get the perfect example of that philosophy in this blog. Mr. Henry Ford commenced business on 16 June 1903.  After the LPG policy, Ford Motor company got access to enter one of the biggest consumer markets in the world and entered the Indian markets with a joint venture between the Ford Motor company and Mahindra.  Under this JV, they launched the Ford escort. Over the years, Ford set up 2 full-scale manufacturing plants which had a capacity to produce 444000 units per annum, a state-of-the-art engine factory, and also developed a deep supplier base that would give them the reach they wanted. And to make its investment pay off ($2 billion over 25 years), ford focused on the mass, sub-4-meter segment for economies of sca...