Uncle Scrooge's Economics

In a recent interview with the Business Standard, Mr. N Chandrasekaran said that he expects the Tata Group to grow at 20% year-on-year amid the global turmoil, irrespective of the fact that the business earns 65% of its revenue from overseas markets. The conglomerate, which began life in 1868 as a private trading firm founded by Mr. Jamshedji Nusserwanji Tata and then moved into hotels, steel, automobiles, power, IT, financial services, retail, and a myriad other business over the past century and more, now readies itself for a new world shaken frequently by large doses of disruption. Brian Tracy once said, "Sometimes you have to let things go, so there's room for better things to come into your life". The appointment of Mr. N. Chandrasekaran was a better thing for the Tata group. Today, the group is as strong as Hercules, but there was a time when the Tata group was facing survival issues. It was after the acquisition of JLR and the appointment of Mr. Cyrus Mistry. I hav...

    From 1921 to 1923, the Weimar republic suffered one of the greatest economic crises in German history: hyperinflation. During the "Golden Twenties" the German mark rapidly lost nearly all of its value, inflation turning into hyperinflation until a pound of butter cost millions of marks. There were multiple reasons for this hyperinflation: The Weimar economy was still suffering from the effects of World War 1, when the German government had printed more and more money to pay for the ever-escalating costs of the war, thus significantly devaluing the mark. The economy was put under further strain by the reparations demanded of the young Weimar republic in the Peace Treaty of Versailles. I know all of this sounds jargonish so let me simplify all of this.  A gradual rise in the cost of goods and services followed by a decrease in purchasing power is called inflation. Inflation is like alcohol: good when in limit, or the consequences will...

Seth Klarman is very famous among the value investor community. Barely would you ever find someone who hasn't read "Margin of Safety" or hasn't heard about this billionaire hedge fund manager. He is a proponent of value investing. He is the chief executive and portfolio manager at Baupost Group, a Boston-based hedge fund. Baupost has $25 billion under management. His book, The Margin of Safety, has been like the bible for value investors all around the world. Mr. Klarman is one of the very few investors who successfully shorted the 2008 financial crisis and profited big time. After the 2008 crash, he penned down some lessons that he thought were necessary for us to sink our teeth into. Here are some of the valuable lessons that every investor, regardless of experience or financial knowledge, can learn. These valuable lessons are worth millions, if not billions of dollars.  I try to re-read these lessons at least once a month so as to stay on track and to be aware of t...

  After 24 years of foundation, finally India has the privilege to host the G20 summit. The spirit of India’s G20 chairmanship is manifested in the theme of ‘One Earth, One Family, One Future’ enshrined in the ancient Sanskrit ethos as ‘Vasudahaiva Kutumbakam.’ The lotus emblem in the G20 logo illustrates hope in these troubling times. It is said that India will harness its G20 presidency to reach constructive solutions to various challenges, like reviving global growth, more decisive climate actions and robust global health architecture. It all sounds virtuous, but is the common man really compassionate about climate change? Does an average Indian student, who is deprived of basic public transport, care about global growth? Yes, the G20 is a great opportunity for India to manifest itself as a global leader and showcase its problem-solving skills to the world economy, but more importance should be given to resolving our own problems. Here are some of the problems which shoul...