© F I N O M I S T ™, One who has great interest in Finance and Economics!!

Economic Hitman

noreply@blogger.com (प्रगतिशील) — Fri, 04 Jun 2010 02:29:00 +0000

Healthcare Reform 101 with Prof:Jonathan Gruber

noreply@blogger.com (प्रगतिशील) — Mon, 22 Mar 2010 19:47:00 +0000

Over Past 15 months(or even decades) many things has been said for the support and against(sometimes with Lies and Deceit) the Healthcare reform in America. As usual many things coming out of the main stream media are coated with political dressing, which makes it harder to filter out the prejudice information. If you faced difficulty in deciphering the Healthcare reform and found it hard to answer the questions like, What it means for America? its Economy? and more importantly to You? Then I feel this Lecture is for you!

I am hereby attaching lecture by MIT Economist Johathan Gruber, he gives very academic approach to this important issue while removing the Political coating out of it.

Part I

Part II

Part III

Economist Rapper

noreply@blogger.com (प्रगतिशील) — Tue, 26 Jan 2010 20:51:00 +0000

Hayek and Keynes both are GURUs of Macroeconomics. Both view the Subject Slight differently. This Video will try to simplify the contradiction between these two Geniuses!!

Enjoy the Video :-)

for more info : http://www.econstories.tv/home.html

iPhone, iPod Touch 4G with Wi-Max

noreply@blogger.com (प्रगतिशील) — Mon, 30 Nov 2009 20:40:00 +0000

Past few days I have been undecided on buying an iPod Touch, the reason for my non decisiveness is speculating on when will Apple comes out with an iPod Touch 4G. One of my friend told me 4G will accompany with Camera, which the former version lacks. I knew his answer was based on broader speculation and comparing it with its cousin iPhone, which has camera. I agree with his explanation and superficial analysis but I suspect more is offering in iPhone/iPod Touch 4G!

Being a telecommunication engineer as profession, I began to wonder, "won't it be cool to run iPhone or iPod touch on 4G network like Wi-Max or LTE?" I had a small stint at Sprint, where I was briefly exposed with Wi-Max 4G technology. I must say I was quite impressed with its performance and the future it can hold! I started to envision Sprint /(Clearwire) will stop bleeding customer if Apple comes to its rescue by introducing Wi-Max iPhone/iPod Touch ( even though iPhone contract runs with ATT until 2012) [why do people buy iPhone on ebay ?? is it to run it on T-mobile to avoid ATT data charge?I would like to know the used iPhone's market capitalization, if you have any data please pass along!]

To keep on the edge of the portable media player market, I feel Steve Job will definitely keep up with his reputation and come out with something revolutionary . I believe he can't ignore the fact that, Wi-Max has started to leave a foot print into the major US cities. Since technology and markets are moving towards the media convergence and 4G technology, if he misses this opportunity then its his loss, as Google won't as they have already invested millions into development of Wi-Max technology. (and so did Intel)

Few Google search lead me to the Clearwire's You-tube page, where they flaunt their Portable Wi-Max equipped Wifi router. Its like carrying a broadband connection where every you go, you can use your laptop, and other devices to connect to the Internet with broadband speed. Also if you have an iPod Touch and Skype application in it, you can use the same as Cell Phone too (Breaking ATT bastion of iPhone), or Bastion of CELL PHONE Altogether!! I believe this is a healthy indicator to show where our technology is heading for.

Even if they Price their(Wi-Max) service at $30 (the same price ATT charge for its Data service for iPhone), I believe people will jump into this new technology, because of its SPEED, RELIABILITY and FLEXIBILITY. Oh yeah you can say goodbye to your home broadband service if you have Wi-Max service. (no wonder Cable/Telecom companies are pushing for Media Convergence these days). Not to forget Comcast has also invested millions into Clearwire's Wi-Max technology.

for an Example:

Target Group: Students

1. Students can Carry the portable Wi-Max Device in their bag, and get broadband access where ever they go.
2. device like iPod Touch can reduce (eliminate) the Cell Phone or iPhone's recurring monthly cost. ($40+$30 Voice +Data)
3. Eliminate the necessity for the new home broadband cable connection, since you have portable Wi-Max you are connected all the time. (~ saving of $40)

Bottom Line: Research into Clearwire company (Wi-Max provider, where Sprint has 51% Equity), please do Answer yourself on, why do companies like Google, Intel and Comcast have invested Billion Dollar into it? If you feel it has future growth potential, then why not BUYing its STOCK before WALL-STREET(crowd)notices it, so you can maximize your capital growth. (PLEASE INVEST RESPONSIBLY, don't blame me for your loss though :P)

to verify my claims (facts) on the companies, please feel free to Google search on the topics.

Devil named 'Tax'

noreply@blogger.com (प्रगतिशील) — Thu, 19 Nov 2009 03:38:00 +0000

In the world of Investment, you are bound to face two devils, Inflation and Tax!! You can run but you can't hide from these two. If you are careful, the ammunition you carry can minimize the intensity of these two but you can't eliminate them completely. In this blog I'll talk about TAX and in next I'll be dealing with Inflation.

Government likes to tax you all the time, When you Earn money, they TAX you, when you want to SPEND it, they'll TAX you and when you INVEST they TAX . There is no way you can escape them(and still they have budget deficit(wonder why? ;-)), but Like I said earlier you can minimize the damage though.

1. Holding your investment for more than 1 year : If you retain your investment for more than 1 year, you fall in different Tax bracket (Max 15%), else you are taxed at ordinary rate (Max 35%). Hence it makes sense to hold on to your Investment, even though it jumped more than 20% in less than a year. [also don't forget to DEDUCT 3% from your GAIN due to Inflation (yeah.. yeah ..another Devil)].

2.Investing in Municipal/Treasury Bonds: In case of Municipal Bonds(Munis) you are exempt from State(if you stay in the same state) as well as Federal taxes, and in case of Treasury bonds you are exempt from Federal tax. For an example if you are getting around 5% in these bonds which is equivalent to 7% (approx.) on other taxable investment. [divide the gain in municipal by (1-%your tax bracket)] (with 7% you can double your investment in ~10 years than with 5% in ~14 years).

3. 401(K) and IRA(ROTH/Traditional): I am spending less time on these investment tools, as I assume the reader knows that, investment on these funds grows TAX FREE, and the investment comes from PRE-TAX amount(also it is Tax deductible). [please consult with your accountant to know how much you can save by investing :-)]

Please share if you know more Tax saving Tips!

Personal Finance "Mantra" in One Page

noreply@blogger.com (प्रगतिशील) — Mon, 12 Oct 2009 19:47:00 +0000

Today I came across this Personal Finance book, it is about, everything one needs to know in personal finance but just in ONE PAGE. Apparently that is the name of the book too, and he does explains everything in just ONE PAGE!! Well the "Gist" is in "one page" but its 49 page book :-)

Best part is it is free to download, hence I have taken a liberty to upload it and share it with you. I hope you'll enjoy this book, if you like it you can say thank you to the Author Trent Hamm (he has his blog too The Simple Dollar)
One Page

Macro Economics 101

noreply@blogger.com (प्रगतिशील) — Sat, 26 Sep 2009 19:00:00 +0000

So what is Macro-Economics? Is it just the part of economics that deals with GDP, Inflation and employment rate of the nation? or its more than that?? Let me explain you with an example.....

Consider all the FISHES in the LAKE as BUSINESS FIRMS! and LAKE as ECONOMY in itself. If you have CLEAN LAKE, more fishes will flourish! In the similar manner, if the economy is good, Business firms produces more goods, more jobs and more growth (GDP increases, Less Unemployment and Inflation Increase). If the LAKE is dirty and toxic, fishes will perish, like business perish in bad economy time (GDP decrease, Unemployment increases and Inflation Decreases)! . If you consider more LAKES then it will be a GLOBAL ECONOMY.

In normal notion its been said that INFLATION is EVIL (as it reduces the value of your money). But this is a needed DEVIL, when there is growth there has to be an inflation. Something similar as part of the same coin. The challenge any government (FED in US) faces is to keep both in balance.( Inflation and Unemployment LOW and Growth HIGH)

Fiscal and Monetary are two policy that government/Fed uses to tweak our economy to keep Inflation and Unemployment under check.

Fiscal Policy= a. act of increasing/decreasing tax b. Government spending(Stimulus package).

Monetary Policy= Fed controls the supply of money in the economy . [Fed are independent, they are not answerable to government of their action]

(Above figure is used to derive "MAGIC EQUATION" in economics, but I have taken a liberty to tweak it, so layman reader can understand it too)

EXAMPLE: with movement of iPhone (cause mostly everybody loves iPhone).

Step 1: You have to work in BUSINESS FIRM to earn INCOME .
Step 2: You go-to market and buy iPhone for $599 (money goes to) Business Firm(Apple).
Step 3: You go-to BANK and SAVE the the rest . [You can take loan too]
Step 4: You pay your taxes to the Government. [Business firms too]
Step 5: Government gives you back TAX return (remember fiscal policy ??)
Step 6: Bank invests the money you deposit in the Business firms.
Step 7: Government uses services from Business firms (eg. to build a satellite/road/Airforce One)
Step 8: "Government Deficit: Government Spending is more than TAX collected, so to balance the difference it needs to take loan, so how they do it?US treasury issues T-Bills, bonds and securities in exchange of MONEY(and pays back with Interests).

If you are curious S+T≡G+I+NX is the "Magic Equation", to explain this is beyond my scope (at least in this blog, may be in later blog i'll try to explain)

≡ means True by definition.

S= Savings (Private)
T= Tax
G= Government Spending
I= Domestic Investment
NX= Net Import/Export

T-G= Negative (Deficit)/ T-G= Positive (Surplus)

In next blog i'll explain......Financial Meltdown of 2008 and what will happen if:
a. Government increase or decreases TAX.
b. Government increases or decreases Spending.

Investment 101

noreply@blogger.com (प्रगतिशील) — Sat, 26 Sep 2009 13:00:00 +0000

"No matter where you read it, or who said it, no matter if i have said it, BELIEVE NOTHING,
unless it agrees with your own reasons and your own common sense!!"
-Buddha

If you are veteran investor, most probably you'll agree with above quote. But if you are novice or newbie those lines should be your Mantra!!

Before we start this topic, I would like to make one thing clear I have written this blog keeping Investors in mind and not the Speculators (but you guys can enjoy too ;-)!! [always remember what Buddha said, (do your own analysis, before jumping into any conclusion), even in the investment market.]

So who are Speculators? "anybody who feels they can beat the market.", if you have this notion, "i'll buy when market goes down and sell when its high" then you are a speculator. So million dollar question remains who are investors then? Investors are those folks who thinks for long term investment gain and also who has done their homework by analyzing the company. Just like Benjamin Graham (Warren Buffet's Guru) puts in " Investor is one who invests after thorough analysis and in those investments which promises safety of principal and an adequate return."

I don't want to get into much details today, hence I'll just write about the few important types of investment options. They are arranged from LEAST risky to MOST risky types. [ if you see hyperlink, then that will lead you to detailed page about those investment options.]

1.Government issued bonds: These types of bonds are issued by the government or government's entity. Known to be the safest investment options as its backed by total faith and credit of the US government and few are even adjusted inflation . Even general public are allowed to buy these bonds. Annual reward rate ranges from 2-4%.

2.Savings Accounts/CD: They are provided by local banks, most convenient way of investment even though they are not backed by total faith of government but are insured by the federal government up-to $250,000/depositor. Annual reward rate ranges from 2-4.5%.

3.Corporate Bonds: Just like government bonds, but issued by corporates. At the time when company files for bankruptcy, you'll have the first priority on the property claim.(Share holders comes LAST). Annual reward rate ranges from 4-5%.

4. Mutual Funds: The fund managers (one who head particular mutual fund) collects the pool of money from small investors and then invests them into diversified stocks, bonds or into money market securities. Because of diversification, risk is slightly minimized than Stock Annual reward rate ranges from 4-5%.

5. Share of Stock: The method of owing a company without much hassle. If you are investing in the stock, it literally means you are buying a part of that company. Hence please choose your company (stock) responsibly, if your company if financially stable and has growth prospect you'll benefit from it, if not then your hard earned money might turn into ashes in matter of second. Annual reward rate ranges from INFINITY% (both direction)...but generally 7-10%

Also view Investment in One Page

How it Started

noreply@blogger.com (प्रगतिशील) — Sat, 19 Sep 2009 15:00:00 +0000

At first I would like to start with few words (well basically i took it from "Philip A. Fisher" one of the gurus of investment world)!

My blog is dedicated to all investors, large and small, who DO NOT adhere to the philosophy: " I have already made up my mind, don't confuse with facts"

It all started about TWO YEARS back (Fall of 2007), when I first came to US to pursue my post graduate degree (MS Telecom. to be exact). Till that point, I practically had very little knowledge about how the financial market functioned. All I knew was, you can make money and lose money in financial market, how they do it was a mystery to me?

Then that Winter I had an opportunity to go to NEW YORK CITY! Just like a normal tourist, I went to see NYSE ,the Bull, and was excited to see NASDAQ's ticker at Times Square. The biggest disappointment for me was when I reached "WALL STREET", I had heard a lot about it, but when I saw just "a stretch of road cramped between two buildings"(and the sign read "Wall St". "No flashy lights, No shops, no Bars no people (not many), just deserted road."

Certainly curiosity might have killed the cat, but I was just starting. Then came the news of financial debacle, corporate bail-out and finally "Financial Armageddon", which fueled my thirst. I decided I need to know more about this. [I guess the trait of being an engineer :-) ]

So I started with "Sit-in" class in under graduate introductory finance. It definitely helped me broaden my "Financial Horizon." I really enjoyed the Guest lecture speaker series, the knowledge I gathered in those lectures made me see "Wall Street" as grandiose super speed/highway.

Then I took "Macro-Economics" class, this completely changed me for good, i was enlightened, I achieved Nirvana, "If I would believe in God, he would certainly be an Economist." Keeping abreast with current events is my natural trait and this helped me a lot in understanding this subject. For me Macro-Economics is the juncture of "Social Science, Mathematics, Politics and Philosophy," all these topics I really enjoy keeping abreast with.

So this is how I started my journey.......(to be continued)

Email: finomist@finomist.com