Uncle Scrooge's Economics

  The following blog has been inspired by an article which I read in 'The Wealth'.  Charles Darwin was a famous biologist who had written one of the most influential books, "On the origin of Species". One of the most important concepts presented in his book was of the survival of the fittest. The fittest animal, or the animal who has what it takes to survive, will survive. Rest will die one day. Every animal needs to adopt to the changes presented by the nature or else, his death is confirmed. Since my brain is so hard coded with markets, I tried applying the "survival of the fittest" logic to the markets. The results were exactly what I had expected. Modern Europe holds the title for initiating the capitalism philosophy. Capitalism is an economic and political system in which a country's trade and industries are controlled by the private sector for profit motives. Basically, more profits and private companies' control is capitalism. The concept of c...

                    Indians have been programmed to have at least one pension fund in their portfolio, since the day they start working. Parents encourage their children to work for the government and then enjoy the pensions. That's why products like NPS are famous in India. Definitely, the pensions continue to help many individuals who have either suffered some financial losses or have lost the sole earner. But one question that always strikes me whenever I see any LIC poster or NPS related ads in the newspaper is, are the pensions really safe? Well, I wish the citizens of the UK had asked this question before investing.  A few days ago, some news broke out which probably stopped the heartbeat of the citizens of the UK. The news stated how the pension fund crisis in the UK has contributed to the financial crisis that is currently going on in the UK. More than 30 million British nationals invest in pension funds. The crisis was so b...

  We all know the business acumen of famous Indian businessmen like Mr. Mukesh Ambani, Sir Ratan Tata, Mr. Sunil Mittal, etc. but I think there is a businessman who, over time, has been forgotten. His business acumen may not be as good as the above-mentioned businessman, but he died as the richest duck with a fortune of more than $32 billion. Yes, I am talking about Mr. Scrooge Mc Duck. Mr. Scrooge or Uncle Scrooge, as he was famously called, was a Swedish businessman who made his fortune by running an oil company, followed by investing the surplus wisely in the markets. He started his career as a normal middle-class Swedish guy who also worked as a shoe polish guy, but he had the dedication to put in the work and pull himself out of that. He says that the worst thing about being a middle class is not the money problem, but a mindset problem. If your mindset is middle class, no one can help you get out of that zone.  Since the beginning, Mr. Scrooge was interested in adventure...

    Famous American writer Mark Twain once said that history never repeats itself, but it rhymes. One needs to know the history before he/she sets out to plan their future. One history that everyone should know is about the financial bubbles that have been present since the 1600s. The first ever financial bubble recorded was of the tulip mania. The event took place during 1630-37. Once planted, it took 3 years for the tulip to completely grow. Suddenly, after 1630, the demand for tulips skyrocketed. Instead of demanding the tulip flower, people started demanding the tulip bulbs. The speculation drove the price of tulip bubbles to an extreme. At the market's peak, the rarest tulip bulb traded for 6X the annual salary of average person. Humans are irrational, and when something good is going on, we tend to believe that it is going to last forever. People during the tulip mania thought the same and took out loans to buy the tulip bulbs. When leverage is involved, the game becomes...

24th February 2022, the day when Mr. Putin announced his invasion of Ukraine, Indian markets fell more than 4% in a single day. Since then, our markets haven't reached the pre-war stage. For the first half of this year, our markets were bleeding. Nifty fell around 15% in that time period. Today, just 9 months after that event, our markets have gained momentum and we are heading towards the 18000 mark once again. This is some kind of growth. But this has not happened for the first time. Time and again, Indian markets have proven the statement, "Indian markets are not meant to stay down for long". Let's look at the top 10 corrections that took place in the Indian markets and how long it took for recovery.  The below numbers represent fall in BSE index (SENSEX) In 1982, Indian markets fell more than 19%. It took only 90 days for our markets to recover fully. During 1986-1988, SENSEX fell more than 41%. It took 4 complete months to recover such a fall. During 1989-1990, m...

   George Soros, one of the most successful investors and traders of the 21st century, was born in poverty in Hungary and today has a net worth of more than $8 billion. It's a remarkable story. He left Hungary as he wanted to do something related to finance and he stumbled upon the US. After working for a few years as a trader on the trading floor in the US, he made up his mind to start his own investment fund in the UK. Soros started the Soros investment fund. His strategy was mostly macro, and he mostly tried to focus on timing the markets. He used to trade like there was no tomorrow. He used all sorts of assets to generate returns. On an annualized basis, Soros was able to generate a whopping 20% return. That's not the only reason why he is famous. Soros is called the man who broke the Bank of England. The story is available on YouTube. But apart from all his investment success, what George Soros is also famous for is running the open society foundation, micromanaging oppos...

  We all remember 2019 for something special. It might be a promotion, a vacation, or simply the happening year before the pandemic took all the fun away. But, for a car afficionado like me, 2019 was the year we saw a new rising power enter the Indian auto sector, soon to take over the current power. Yes, I am talking about KIA motors, the flagship company of Hyundai motors. Who knew that one day a car company would emerge into the Indian auto sector and disrupt the SUV and Mid-SUV game? One might have thought that like Ford, GM, Datsun, Chevrolet, KIA, would also enter the market and later, the management would realize their mistake and would eventually have to leave the country with huge losses. But who knew that KEI motors had planned something different, and they were here to stay? This is the story of KIA motor, a car company that dared to enter the Indian auto sector with courage and went on to create history.  KIA motors are a South Korea-based car manufacturer. It has ...