This is a constant discussion that I have been doing with people around me, People admire real estate and they are still the firm believer that real estate give better returns than any other asset class.
Here am breaking the myth with few examples and facts although the message was forwarded to me on a WhatsApp group and it really make sense:
Film actor Rajesh Khanna bought a bungalow in iconic Carter Road in Mumbai for Rs.3.5 lakhs in 1970. His heirs sold it recently for Rs.85 crores. The property has multiplied by 2428 times or an annualized return of 19.38% over 44 years. Continue reading “Equity Vs Real Estate”
Last month SEBI bared DLF from tapping capital markets for three years in one of the watchdog’s toughest punishments to date.
The order was related to non-disclosures in its 2007 IPO documents. The order was passed against DLF’s six top executives for lapses in disclosures made at time of IPO in 2007.
In the same year on the 30th April 2007 SEBI decided to make grading of all IPOs mandatory. Grading makes additional information available for the investors, in the sense that it is supposedly an objective opinion of a credit rating agency arrived at after analyzing business and financial prospects, management quality and corporate governance practices etc of the issuer. Continue reading “IPO’s and the Grading Market”
Before you proceed, there are some questions one should ask taking up any task in life.
If somebody asks me: “Should I buy a house?”
And my answer is always the same: “I have no idea.”
It is not for lack of familiarity with price-to-rent ratios or the benefits of the mortgage interest deduction. No matter how carefully and clearheadedly you approach the exercise, is more a starting point than a conclusion about your optimal living situation. It will give you a good look at the financial dimensions of your decision. But housing is about quite a bit more.
These are the 5 questions that one should answer before taking a call:
- How much is permanence worth to you?
One of the nonfinancial benefits of buying a home is that you know you can live in it indefinitely. You don’t have to worry that the landlord will raise your rent 20 percent, or demolish the building to turn it into something else. You can renovate the kitchen or paint the shutters according to your preference and yours alone. (O.K., maybe a historic preservation board or homeowners association may have some say, but you are pretty much on your own).
So what is that worth to you? It is purely a question of your preferences and priorities in life. Continue reading “Renting house v/s buying house”
Today, deviating from our routine post, we are trying to bring to you all an amazing quiz on finance. Let`s be fair to ourselves and give a challenge to our learning till date. So, here comes the show:
- This is a stringent test that indicates whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.
- This phrase is Latin for “according to value”. It is a tax based on the assessed value of real estate or personal property.
- An interest rate swaps whose notional value adjusts according to rising interest rates by indexing the floating portion to a Constant Maturity Swap (CMS). Continue reading “Finance Quiz”
Warren buffet: A good business that can be purchased for less than the discounted value of its future earnings.
George Soros: An investment that can be purchased (or sold) prior to a reflexive shift in market psychology/fundamentals that will change its perceived value substantially.
Benjamin Graham: A company that can be purchased for substantially less than its intrinsic value.
Some other examples are: Continue reading “Some Jargon’s of Good Investment”