The Three Little Investors

I watched as the minute hand of my clock raced
endlessly around the face. The prospect of choosing a
stock the next morning to invest my college savings in
was keeping me awake. I had decided to invest my money
in a stock because there was still a long time before I
went to college, and I knew that in the long run,
stocks could provide the greatest return on my money.


Eventually, I fell asleep. Suddenly, I was strolling
through a town, next to a stockbroker and the three
little pigs from my favorite children’s storybook.


“Where are we going?” I asked.


“Today we are going stock shopping to find the perfect
stock to invest our college savings in, just like you!”
explained the first little pig enthusiastically.


As we approached the first stock, I realized that the
stock was in the shape of a straw hut. “Pick me!” it
wailed. “I’m the least expensive, so you can buy more
shares of me than the more expensive stocks.”


“Say no more,” interjected the first little pig. “I
choose to invest in you.” I could tell this was a
mistake by the stockbroker’s irritated expression.


The other two little pigs, the stockbroker, and I
continued on our search. Along the way, I decided to
ask the stockbroker why he was upset.


“That stock was not a cheap stock,” he explained. “You
cannot tell how inexpensive a stock is by just looking
at its price. You must consider the price/earnings
ratio, which tells you how much you must spend to get a
dollar’s worth of the company’s earnings.”


We arrived at the second stock, which was also in the
shape of a house; however, this house was made of
sticks.


“Invest in me!” it begged. “My company is marketing a
new medicine to cure cancer.”


“Say no more,” interrupted the second pig, confidently.
“I choose to invest in you.”


The last little pig, the stockbroker and I resumed our
journey for the perfect stock. I had thought that the
second pig had made a wise decision, but immediately
after beginning on our journey, the stockbroker
elucidated why he was so upset by the second pig’s
choice.


“The second pig did not invest—he speculated. Investing
is for long-term profit, whereas speculating is for
short-term profit (not for investing for the future).
He didn’t know anything about that company or the
product. By speculating, the second pig took the risk
of the new medicine being a scam and losing all his
money. ”


The third stock, just as the last two, was in the shape
of a house. It looked much better than the other two
stocks. It was made out of brick and it looked strong
and sturdy. Immediately, I could tell the stockbroker
also agreed by the approving smile on his face.


“I am the Nationwide Insurance stock,” it informed.
Finally a stock whose company I was familiar with.
“Invest in me! Clothes, cell phones, and furniture go
in and out of style; however, insurance never goes out
of style. Everyone needs insurance if they want to own
a house, a car, or a business. Insurance protects from
tornadoes, fires, and even big bad wolves!”


I used my new knowledge to question the stock. “What is
your P/E ratio?”


“My P/E ratio is extremely low, which is extremely good
for investors.”


“I’m investing my future in the future of your company,
so how do I know that your future will be successful?”
I asked.


“Natural and man-made disasters are always occurring,
so people will always need insurance. Insurance is a
priority, not a luxury. When money is tight, people
stop buying clothes, computers, and other luxuries.
However, they always keep their insurance.”


Finally, I felt confident in investing in a stock. “Say
no more,” I said. “I would be happy to invest in you.”
The stockbroker smiled, and I knew I had made a wise
decision. The third little pig also invested in
Nationwide because it had a low price/earnings ratio,
and a bright future.


The next morning, I awoke knowing exactly what stock to
invest in: Nationwide because it’s a brick-strong
investment.

Olivia Goldberg’s winning First Place Investwrite Essay – Spring 2007, 6-8 Grade Division.

Contributed by Debashis Chand

Top 20 Internet Millionaires Under 30

Check out this list of young internet millionaires under 30.

1. Mark Zuckerberg [ Facebook ] 23 years old | $700M
2. Andrew Gower [ Runescape ] 28 years old | $650M
3. Blake Ross and David Hyatt [ Mozilla ] 22 years old | $120M
4. Chad Hurley [ Youtube ] 30 years old | $85M
5. Angelo Sotira [ Deviant ART ] 26 years old | $75M
6. John Vechey [ PopCap Games ] 28 years old | $60M
7. Alexander Levin [ WordPress ] 23 years old | $57M
8. Jake Nickell [ Threadless ] 28 years old | $50M
9. Sean Belnick [ Biz Chair ] 20 years old | $42M
10. Kevin Rose [ Digg ] 30 years old | $31M
11. Ryan Block [ Engadget ] 25 years old | $20M
12. Aodhan Cullen [ Stat Counter ] 24 years old | $18M
13. Tom Fulp [ Newgrounds ] 29 years old | $15M
14. Rishi Kacker and Matt Pauker [ Voltage ] 24 years old | $12M
15. Markus Frind [ Plenty of Fish ] 29 years old | $10M
16. Catherine and David Cook [ My Year Book ] 17 & 19 years old | $10M
17. Fredrik Neij [ The Pirate Bay ] 28 years old | $10M
18. David Hauser & Siamak Taghaddos [ GotvMail ] 24 years old | $8M
19. Jermaine Griggs [ Hear and Play ] 23 years old | $5M
20. Jay Westerdal [ Domain Tools ] 29 years old | $5M

read more | digg story

TECHNICAL ANALYSIS of RUPEE APPRECIATION

From March 2007, rupee appreciation becomes an apprehension for us. It’s like thunder storm for exporters of our country especially (SMEs). Rupee appreciated by 13%, in the value of the rupee over the US dollar since March 2007 and 7% against a basket of currencies including the yen and renminbi is an increase that does not reflect economic fundamentals and is seriously hurting Indian industry’s competitiveness, margins and exports. Initially it was taken as boon by the Indian business community but due to various reasons it becomes a curse for Indian export community.

According to various economists and experts, there are some factors which are boosting this issue like excess capital inflow, federal interest rate cut, poor government policies, political intervention etc.

Capital Inflow: if look at the statistics, Capital inflows have reached close to $16 b during Jan-Nov 2007 and around $8.2 b came in between the Fed rate cut in September and when the Indian govt. imposed curbs on foreign investors in mid-October. If we analyze the situation thoroughly, capital inflow in country is very good but due to its utilization or output is very subdued, it’s is creating a gap and supporting rupee appreciation. Few examples are given below:

• Indian railway plans to raise Rs 728 bn and partially from ECB (External commercial borrowing).
• Real estate and infrastructure sector accounted around $2.2 bn of investment and its climbing on top of top of PE funds.
• IT & ITES sector is all time hit for foreign investors.

Capital inflow is good for development of country but its returns are very slow because of non productivity and inefficiency of system which affects exchange rates and results a setback for Indian business community.

Federal rate cuts: Last year (2007), when US Federal Reserve decided to cut the interest rates, around $ 8.7 Bn portfolio investment flowed into Indian stock market.

Government Tussle: India is very lucrative market for investors and they are investing in it very well, at the same time our government become greedier and trying to pool so much of capital investment without any proper use of last investments.

Biggest Losers:

As per the estimation of FIEO, around 8 mn jobs likely to be lost in export intensive industries. There are few industries which are the heavily suffered from havoc (rupee appreciation) are given with available statistics:

Textile and garments	6 lakhs job lost, loss in production capacity-20-25%
Leather	7 lakhs job lost, reduced profitablity-75%
Processed agriculture products	around 20% job lost, cash loss of 15%
handicrafts	8 lakhs job lost, business loss-$ 7.5 bn
Engineering goods	16 lakhs job lost, cash loss- 12-17%
chemicals	reduction in exports-20-25%
Marine Products	reduction in exports-10%

Technical analysis of rupee appreciation:

Here I am trying to explain that how exchange rate affects exporters’ trade, derivation table of price elasticity of demand is given below just go through it once with pen and paper, then you realize quantitatively that how badly exchange rate affects exporters’ trade dynamics.

Look at the eq. 5 also brings out clearly how rising costs and an appreciating local currency can apply pressure on both the cost and revenue sides and render the export trade quite uneconomic.

Let me explain all this with one real time example:

Let’s assume that one Indian exporter exports only to the U.S. How this rupee appreciation affects his business.

P=C/S*(1-1/N) where P is price quote by exporter (in USD).

C is Cost incurred in producing one unit of product (in Rs).

S is Exchange rate Rs/$

N is price elasticity of demand

Year	S	C (in Rs.)	C (in USD)	P (in USD)
aug,2006	46.56	100	2.15	4.30
Jan,2007	44.35	110	2.48	4.96
May,2007	41.39	121	2.92	5.85
Sep,2007	40.9	133.1	3.25	6.51
Jan,2008	39.39	146.41	3.72	7.43

In the table given above, Price quote by Indian exporter is calculated by the formula given above, if we compare the cost of production (C in USD) to the exporter and price quote by exporter to its US customer (P in USD), there is margin that’s ok but I am trying to draw your attention toward the price P(in USD) quoted by Indian exporter to his US customer is increasing every quarter and its marginal change of price (P) in percentage is increasing in every quarter with rupee appreciation. The price quote change in last 16 months is increased by 73% just because of price value of rupee against dollar.

Compare the above workings with that for a Chinese exporter who has not experienced such cost side pressures and also, importantly, benefits from a relatively much more stable currency. The Chinese yuan, for instance, has been allowed to rise around 9 per cent against the dollar in the two years since July 2005 — from 8.28 to 7.51 now — but the Indian currency is up 13 per cent in just the last 9 months.

The Indian exporter will be literally priced out by his competitors who have not experienced such cost side pressures/local currency appreciation and have no bargaining power too.

It is obvious that the Chinese exporter will have a significant price advantage which can be extremely useful in increasing market share — particularly in low value-added items.

RELATED POSTS:

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Online Mohabbatein Earns Him Millions...

Markus Frind, 28 is a millionaire who works just 10 hours/week. He stuck gold by starting an Online Dating site Plentyoffish.com. He started it just to learn a new language ASP.Net he himself never knew that learning a new language would make his so rich. He Works out of his apartment in Vancouver, British Columbia,and he says he has net profits of about $10 million a year.Below is the image of the Cheque he received from Google AdSense, worth a million. This was his second check for 2 months, as the first one was rejected by his bank stating that the amount was too big !! Recently he hired an employee to maintain the site, until then he was the only one who was maintainign the site.

There are many dating sites, but what makes plentyoffish.com a success is that its totally free. The tag line says..100% free. Put Away Your Credit Card.The site has a few flaws though, very less or no customer service, poor look and feel, members photos get distorted as there is no feature to re size your photograph,in spite of all this his site has 500 million page views.Markus says as he gets visitors in spite of these flaws he considers them trivial and doesn't bother to fix them.


At a point it became difficult for him to scan the new members for spam, and to verify the pictures for nudity. He solved this by calling for volunteers from his members to do the job, and as people take good interest in looking at others picture and profile, it worked out well for him .Below are some of his facts as mentioned at moneygeek.


Markus Frind :
-- Age: 28 years old

-- Height: 6' 0" (183 cm)

-- Sign: Gemini [6]

-- He started Plentyoffish site because he had to learn ASP.NET and he doesn’t want to buy a book

-- He said Plentyoffish traffic = 3 X Digg.com traffic..

SALESMANSHIP

Since the time of birth of an individual, he is emphasized upon gaining his family values, beliefs and culture. Is it ever wondered that what could be the possible reason for this?
Well as far as generalization of the issue goes, the main motive of this is that the parents always want the child to represent the whole family and be an identity of it. How far are they correct in doing so? Now this is a question where arises the real essence of being joint as a family……
Getting confusing???

Well it is actually not. Now when a child is asked to adapt the family culture or its practices, there may be issues arising as the child may show a deviation in feelings and likings from the ones that the family has been practicing since years. So what could be the solution???

Here comes the effect of perseverance and mind work into play. It is not always helpful to fight for something that one feels is going against his likings. One needs to analyze things in depth so that some point of compromise resulting in a win-win situation could be aroused and an individual could happily carry the family identity instead of complaining about it and its inconvenience.

Now could this be applied somewhere in the organizational context?

Yes actually it could be very readily applied where the job of field sales force comes into play. Now generally there is no individual who is inclined towards going door to door for selling the product of his company. This belief is undoubtedly not incorrect as preferences differ and taking the Indian scenario into picture specially, where even shop salesmanship is considered to be a very low profile, going for door to door selling is very much looked down upon. Also every year it has been reported that the field sales force anywhere is hardly satisfied with their treatment or position in the company.

However as a matter of fact, there are jobs and requirement owing to the fact that there are many products and companies which are actually benefitting only with this mode of selling; so should they quit this and look for an alternative way of selling?? Obviously not.

As a matter of fact, any marketer for that manner starts with the job of selling initially and continues for not more than an average of 3-4 years, exceptions in the industry where this is the only major mode of selling like insurance etc. Now the experience of these 3-4 years however counts a lot in their career when they reach a level where they need to take strategic decisions for their customers. This is when they realize that how significant it is to first understand the bottom line of the market.

Thus whenever a person is to start with such a work, though it may be disappointing at times, the compromise could be made taking in view the future benefit that he may get, so that he could strike a balance and make the present effective.

Talking about the image of the company or carrying its identity, it is often found that employees do not fail to complain about their dissatisfactions regarding the company whenever given a chance to do so. However should this chance be grabbed even when it is before a , say even a converted customer (who has already bought the product). Not at all ….

In India specially, the customers are very smart in extracting information about the company from the filed sales staff because they know that these are the people who are not very satisfied with their work. This is not an assumption but a fact justified as a result of little practical exposure as well as few interactions with such field staff.

To quote one example, there was a salesman who was asked to visit a place which was around 40 – 45 kms from the office as a customer wanted greater details about the products (not to mention the details for the purpose of protecting any attack on any company or industry for that matter) of their company with demonstration . When the salesman reached the customer and all the formalities were done, closure of sales the customer posed a question, ‘ Don’t you guys get bugged up in coming so far for a single order that too when it is not confirmed?’ this was said in a bit mockery manner as the customer was of the view that it is the salesman who needs the order so as to achieve his targets.

So what was the reply then , the salesman knew that it was a fact and that his company had been putting him on such tasks since long. The answer that came now was, ‘ not at all sir, rather I m really over whelmed that the reach of the products of my company is so widespread and when companies nowadays are readily even crossing the geographical borders to satisfy its customers, why can I not reach you here… ‘

Little contradicting to the actual feelings right?? But there is a need to understand the fact that it is not only the salesman who needs to achieve his targets but undoubtedly it is the customer who actually has a need and requires a medium to satisfy it.

What the essence of all this is that it is not a single ended story. Being on a salesman side, one should understand that the job he is doing is not only for the monetary benefits that he would get, rather it is something that the person before him, that is the customer, also requires and thus he is needful. Nevertheless since he is the employee of an organization which is paying him for his work and mainly is giving him a corporate identity, he needs to maintain its image before the customers instead of complaining about the job, similar to family concept of maintaining identity along generations.

Also the customers need to upgrade the image that they have of the sales man specially the field selling staff. It is very imperative that even if the salesman is very smart and convincing, there is a hidden need in the customers’ mind without which he will never go for a purchase. Sometimes this need maybe identified by himself while sometimes the salesman may aid him in understanding about the need. Thus the customer should rather be grateful to the salesperson for his help and also then provision of his help in fulfilling the customer need.

Nivedita Singh
IBS Hyderabad

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Branding your 'SINGLEHOOD'

Are you shy? Do you have a problem dating the opposite sex? Don't know smart pick up lines? Or is the problem the other way round. You are a smart ass but always keep picking up engaged guy and gals. All that courage to break the ice at the bar becomes such a waste of time and energy [ reading the body language ] when find out she's waiting for somebody. You say where's my love guru ? Dr. Hitch help me please.

Branding may become your Dr. Hitch. Here comes the worlds best dating tool. SHI symbol. I am just amazed with the ways in which marketers brand and they keep finding new ways of branding. Marketers in Australia & UK have found a unique way of branding your relationship status. Whether you are single or not?

The Meet Your Match SHI Symbol concept was developed by Trevor Byng who thought that meeting and dating could be so much easier if Singles could recognize each other in everyday life. Many married people chose to wear a wedding band, so why couldn’t Single people, interested in meeting others show their status? Friend Christine Ezekiel, designed a symbol to do just that by linking the Male (Mars) and Female (Venus) gender symbols into a fashionable piece of jewellery to signify you are ‘Single, Happy and Interested’ in meeting others.

SECOND INNING: VIMAL SUITINGS

When I was small around 8-10 years, I went with my mom and dad for shopping and got irritated because my mom spent around 2-3 hours in selection of 2-3 sarees and she short my and dad’s time for shopping. In shop I saw various private labels and varieties but my mom was talking about only one name “VIMAL” and in the end she came out with only VIMAL POLYTHENE. In late 80’s or early 90's, this type of craze was there among ladies and gents about vimal suitings. Even today when you asked any “mom or dad aged” lady or gent about his/her most preferred brand, their answer will be Vimal. But slowly VIMAL was pushed back side by ready to wear garments.

REASONS FOR DEATH OF BRAND VIMAL:

• In late 90’s reliance focus was changed from textiles to petrochemicals and they were less concerned about their textile division.

• Marketing myopia, company hasn’t foreseen the shift in consumer’s preferences from suitings to readymade garments.

• Lack of marketing support

Vimal was known for its quality and style. Still people remember its simple baseline "Only Vimal". Lack of marketing support had virtually killed the brand. Now the position that Vimal occupied is now owned by Raymonds and Reid & Taylor.

REBIRTH OF VIMAL

After a decade long sleep, Vimal is making comeback in new avatar with a new logo, new product offerings, new stores, a new, focused target customer and a new advertising campaign.

REASONS FOR RELAUNCH OF VIMAL:

• Indian textile or garment market is expected to grow by 100% in next five years from Rs 95,000 crore to Rs 190,000 crore.

• Men’s wear market is booming and having Rs 22,000 crore market of which nearly 60 per cent was accounted for by branded apparel.

• According to Images Technopak, Men’s apparel (the largest segment with a 44.9 per cent share) shows a value growth of 12.7 per cent and a volume growth of 4.6 per cent, while the industry as a whole grew by 14.7 and 5.3 per cent, respectively, in 2006.

• High end technology set up and project management skill of Mukesh dhirubhai Ambani.

There is very tough competition for vimal in relaunch because of various well established players and no. of international brands. Indian brands like Park Avenue from Raymond, Madura Garments (Louis Phillipe, Allen Solly, Van Heusen), Arvind Brands (Arrow), Zodiac and Reid & Taylor.Meanwhile, premium international brands like Brioni, Alfred Dunhill and Ermenegildo Zegna have also entered the Indian market.

MARKETING STRATEGIES ADOPTED BY RELIANCE IN RELAUNCH OF VIMAL

DESIGNING: Company hired a famous Italian designer Maurizio Bonas to train Indian tailors on the latest in global styles and to launch a special range of premium apparel, Vimal Black.

PRICING STRATEGY: It’s very careful in pricing strategy too, so it has created three sub-brands that straddle all price points. Vimal Red offers basic formal wear for the popular segment (formal shirts for Rs 699-899), Vimal White, which is trendier apparel, is the mid-price range (Rs 799-1,099), while Vimal Black is the company’s premium offering (Rs 999-1,800).

ADVERTISING & PROMOTION: A 60 second commercial by Grey Worldwide shows the root values of company, “Ad shows- a father readying his son to take over his business empire. He picks his own brand — Vimal, of course and ends with original theme tune and tagline. First time any textile company showed its machinery etc in ads to boast that vimal fabrics were made in the most modern plant in India.

New Ad of VIMAL SUITING:

Company spent Rs 40 crore on promotion through television, radio spots and print ads, apart from extensive point-of-sale promotions for high visibility.

Company has changed its logo from to

DISTRIBUTION CHANNEL: Ready to wear range will be sold in the company’s exclusive stores and franchisees, it is also counting on Reliance Retail’s own stores to help promote the men’s wear brand, especially Vimal Red. Already, fabric sales have been initiated at Reliance Trendz and Reliance Mart stores.

Reliance’s vimal done its homework very well in every aspects i.e. advertising, promotion and distribution channel but don’t you think it will be very difficult for vimal to establish its brand as it was in late 80s and early 90s.

ALL THE BEST VIMAL.

Related posts:

Repositioning of Vimal suitings

Nano: A historic feat achieved by Ratan Tata and Indian automobile industry.

Losing sleep over dream projects seems to have become a habit with industry doyen Mr. Ratan Tata! The Tata Group chairman slept hardly two-and-a-half hours last night, as he remained engaged in the dry run for the big day - the launch of 'peop le's car' today. Nano is the world's cheapest car priced at Rupees 1 lakh (dealer price). Citing moments in history including the first manned flight by the Wright Brothers and man’s landing on the moon, Ratan Tata, the chairman of the company, revealed a cute, compact car designed to appeal to first-time car buyers in one of the world’s fastest growing car markets. “I hope this is a car that changes the way people travel in rural and semi rural India. We are a country of a billion people and most are denied connectivity,” he said. “This is a car that is affordable and provides all-weather transport for the family.” "Let me assure you and our critics the car we have designed will meet all safety norms and all foreign environmental criteria," Chairman Ratan Tata said as he proudly unveiled what had been dubbed the "People's Car" at the Auto Expo in New Delhi. There is a a story behind how this Target price of NANO was arrived at. A friend of mine who works with the Tatas told me about it. This is the story in the own words of Ratan Tata:

"It was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the [British newspaper] Financial Times at the Geneva Motor Show and I talked about this future product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car. My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don't we just take that as a target. When I came back our people were aghast, but we had our goal"

The aluminium car contains a rear-loaded 33 horse-power two-cylinder petrol engine and weighs about half a tonne. It is 3.1m long, 1.5m wide and 1.6m high and has four wheels pushed out to the corners to improve its manoeuvring. The standard version – which will cost 120,000 rupees on the road after tax and delivery – comes complete with most features in any ordinary car: four doors, a four-gear manual transmission, seatbelts, locking and a steering wheel. A small boot allows enough room for a duffle bag.

The deluxe version, costing slightly more, will have air conditioning and central locking, while features such as radios and sun visors can be added at extra cost. The Nano is about half the price of the cheapest car available. Both the Maruti 800 from India and China’s QQ3Y Chery sell at about $5,000. Although it’s the basic model costing Rs. 1 lakh is emotionally priced, Mr. Jagddish Khattar of MUL described this model a new segment creator. [ all 2 two wheeler makers go, run ,hide ]

Money

Money……………………. One of the greatest motivations of mankind.
Money Creates Heaven…………it gets you love………………it makes friend ….an enemy as well.

Money ..nothing but ..Piece of some papers…and so much strength…

Money is nothing ……..unless it represent effort…basically is it effort that has worth and not money.
Let’s say….Indian GDP ….about a trillion Dollar. In Fact it does not mean ..it is equal to a piece of paper but it represent the effort made by Indian.

See the beauty of this financial innovation………..You can store your effort in bank. Other wise effort is so intangible in nature………………………Storing it could have been imagination of a poet…..wired logic!!!!!!!!
Your bank balance is nothing but the saved (stored) effort.

A country gets its work outsourced, because the worth of Effort in outsourcing country is less than other.
See the cruel part of this…..we make easy and legitimized discrimination between different human race so proudly.
Unemployment…… under utilization of efforts..or better say wastage of the efforts.
Some people take the kickback…..it is nothing but stealing the effort.
Currency appreciation/devaluation…………in fraction of second change your worth of effort.



To be continued...........

Real Estate Investment Trust (REIT)

For most people investing in a property is like a dream, let it be residential, shopping mall, office building etc. what we generally mean by investing in real estate is either by owning them or purchasing shares of some real estate companies. But here we are talking about investor who wishes to invest directly in real estate. REIT offers investor who couldn’t afford to do so because of their financial capability to invest directly in real estate.

What is a REIT?

It is a corporation which primarily invests in real estate. But to get this designation they have to pay 90% of their income as dividends to share holders. By doing this they get exemption from corporate tax in most of developed countries.

Simply put, Indian real estate market is booming like any thing right now. Property prices are on exponential rise in tier I and tier II cities. Now you want to cash on this opportunity by buying some property. But is it possible for every investor like you and me?? This is a big question. So what you can do instead of this is to invest in some REIT (Just for explaining the concept, because as of now we don’t have any REIT in India). Now your money goes directly in real estate.

We can define REIT as a security that trades on major stock exchange and Invest directly in real estate.

Forms of REIT

Depending upon where they invest i.e. property, mortgage or a mix of them they can be classified as equity, mortgage or hybrid REIT respectively.

Equity REIT: They invest in their own property. This means they buy property, manage that and whatever profit earned pass back to shareholders. In this type of REIT rent from the property is main source of revenue. . Equity REITs tend to specialize in owning certain building types such as apartments, regional malls, office buildings or lodging facilities. Some are diversified and some are specialized.

Mortgage REIT: This kind of REIT primarily invests and owns property mortgages. They loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans.

Hybrid REIT: they combined feature of Equity and Mortgage REITs.

Apart from this classification REITs can also be classified on the basis of where they invest, like shopping malls, office buildings, apartments, warehouses and hotels.

Structure of REIT

(source: http://www.zerinproperties.com/)

Unit holders invest in REIT. REIT on behalf of investor appoints managers for Asset management service. Money pooled from investor then invested in property. There is a property manager who for a fee provides property management services. Trustee is appointed to look after interest of unit holders.

Property generates income, after all fee and expenses the remaining net income is in hand of REIT. REIT has to distribute atleast 90% of this to unit holders.

From shareholder’s perspective

Question arises why one should after all invest in REIT, what is the advantage and disadvantage that REIT investment has. Advantages are Stable and recurrent income, Diversification, Professional management, Liquidity, Affordability and Convenience. Risks: Distribution is subject to cash availability, Returns are not guaranteed, Loss of control over investment, Market factors.

Qualification for a corporation for REIT designation

In order to qualify for the advantages of being a pass-through entity for U.S. corporate income tax, a REIT must:

· Be structured as corporation, trust, or association

· Be managed by a board of directors or trustees

· Have transferable shares or transferable certificates of interest

· Otherwise be taxable as a domestic corporation

· Not be a financial institution or an insurance company

· Be jointly owned by 100 persons or more

· Have 95 percent of its income derived from dividends, interest, and property income

· Pay dividends of at least 90% of the REIT's taxable income

· No more than 50% of the shares can be held by five or fewer individuals during the last half of each taxable year

· At least 75% of total investment assets must be in real estate

· Derive at least 75% of gross income from rents or mortgage interest

· No more than 20% of its assets may consist of stocks in taxable REIT subsidiaries.

(Source Wikipedia)

REIT in India

India's combined commercial and residential real estate market is valued at $12 billion, which is around 2 percent of the country's GDP and 2 percent of total stock market capitalization. And it is only getting larger. The real estate market is growing at a rate of 30 percent per year and expected to reach $90 billion within the next 10 years.

India is right now in process of setting up legislation for this. Once introduced these Indian REITs (country specific/generic version I-REITs) will help individual investors enjoy the benefits of owning an interest in the securitized real estate market.

According to Reuters (28h Dec 2007) SEBI has proposed setting up of real estate investment trusts (REITs), paving the way for wider participation by retail investors in the country's booming real estate sector. Under the draft guidelines issued by Securities and Exchange Board of India (SEBI) scheduled banks, public financial institutions, insurance companies and corporate will be eligible to set up a REIT, with initial networth of 50 million rupees.

25 Things You Should Never Include on a Resume

Applying for a new job comes with its fair share of rejections, setbacks, frustrations and perhaps even lonely periods of unemployment. If you've been turned down for position after position, you could be getting desperate and may want to shake things up a bit so that your résumé will stand out from the piles of others stacked quietly in HR. Before you decide to get too creative, there are some rules to résumé etiquette that you should follow. Read below for the 25 things that you should never include on a professional résumé.

1. What You Hated About Your Last Job: If you turn your résumé into a ranting session, you're starting off on the wrong foot. During an interview, the hiring manager will most likely ask you why you left your last job, but you can use this challenge to remain positive. Explain that you wanted to work with a company that promoted more mobility within the business or that you felt your strengths weren't adequately utilized at your last job.

2.What You Hated About Your Last Boss or Co-Workers: Even if your last boss really acted like a tyrant or no one in the office could stand that jerk next to the water cooler, complaining about the past only makes you look like the bad guy. Showing that you are able to work with all kinds of people will take you far in the business world.

3.Irrelevant Job Experience: Job experience that is unrelated to the position you're applying for only clutters your resume and irritates the HR department. Did your lawn-mowing gig or high-school job as a checker at the grocery store really prepare you to be a PR professional? There are other ways to prove your people skills, so stick with the jobs and internships that are most relevant.....

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Personal Experience with Giants

Mostly we are talking about the training of sales executives to help our customers. There are so many cases in which customers didn’t get proper assistance from them, even though we as shoppers or company claimed that we are customer oriented. Few days back I have seen two incidents, one with my friend and other with myself.

I accepted that we are in progressing stage but we do not expect such mistakes from giants like biyani group or Sony stores. In metros, customers are more conscious about the services because they prefer branded things and best services.

In one big mall at Hyderabad, I and my friend visited for buying a camera but didn’t found any quality brands and models. In the meantime he saw an electronic microwave oven; we called sales executive for assistance about the product. Let me tell you that buddy (sales executive) was not well trained technically. Especially in case of electronic goods, gadgets we required technically sound executives but here the scene was completely opposite. He was simply trying to convince us for the product but unable to differentiate the product on the basis of features.

But there the scene was bit different, my friend was very much interested in the product so finally bought that oven but I am talking about a customer who is not in mood of buying that product but simply visited the mall and watching the product for time pass or he is dilemma. In that situation I can firmly tell you that company surely looses the customer.

On the same day when I visited Sony franchisee showroom, I was shocked when I was talking to sales executive about the digital camera (Sony cyber shot) features. Literally he was shocked and stucked while explaining the features and went to his incharge (seniors) to know about the particular feature and difference between two models.

Here the situation was same that I was predecided about the product so I bought it but if I was not very much sure then I will stuck into dilemma because of sales executive’s product knowledge .

Normally in techie goods, shoppers are required a very skilled and product knowledgeable sales executives. Here customers are much more knowledgeable than sales executives. Sometimes they are predecided about the product but simply want to check the SE’s knowledge. Here company will suffer and lose its customer.

For more sales articles visit: Sales Mantra Blog

Margin Trading

Suppose you want to buy shares of XYZ Company. You hope that in future the stock price will go up and you will make good profit. You have 50 Rs. with you. Stock is trading at 10 Rs. So with the money you have you can buy 5 share. Here your expectations are high on this stock. Hence you want to buy more than 5. But you don’t have the money. In this case you can take a loan from your broker. Suppose you buy 10 shares (50 Rs. borrowed from broker).

This mechanism of buying stock by borrowing money from broker is known as Margin Trading. It’s about borrowing money to buy more stock than you could own with your money. Investors generally indulge in margin trading because it provides opportunity to ramp up their profit by leveraging.

But margin trading is a risky proposition. As its increases returns so downside risk is also dramatically increases. To understand this mechanism lets take an example which we took on the first paragraph. Now suppose that as an investor you have bought shares worth 100 Rs. by borrowing 50 Rs. from your broker.

(1)Price at later stage	(2)Amount Paid back to broker	(3)Value of your Investment (1-2)	(4) Profit/ Loss ((3)-50)	(5) Profit/ Loss in % terms
140	50	90	40	80%
130	50	80	30	60%
120	50	70	20	40%
110	50	60	10	20%
90	50	40	-10	-20%
80	50	30	-20	-40%
70	50	20	-30	-60%
60	50	10	-40	-80%

So from above table we can say that for a 40% increase in price of stock has resulted in 80% profit !!!!! Isn’t it looks great but read a bit further for 40% decrease in price your loss is 80%..... Shocking ????

Mathematically we can put this formula for calculating profit/loss as follows:

Profit/Loss= Change in price(% terms)/(your own money in total investment in decimal terms)

Example: you bought 50,000 worth share by borrowing 20,000. Your own money is 30,000.

So your own money in total investment in decimal terms= 30000/50000= 0.6

Now lets take two cases, in first price goes up by 20% second price falls by 30%.

Profit in first case= 20/.6= 33.334 %

Loss in second case= 30/.6= 50%

Why this happens? Simple, broker doesn’t participate in your profit or loss. A broker only gets some fee for providing you this facility; you need a margin account to avail this facility apart from usual cash account. For the money you have borrowed from him, he takes your shares as collateral.

Margin accounts can be very risky. They are not suitable for everyone. Things one should keep in mind before going for margin trading:

* Money one can loose can be more than what he has invested;

* Your broker may ask you to deposit more cash or security in your account on short notice to cover market losses (Known as margin call);

* You may be forced to sell some or all of your securities when falling stock prices reduce the value of your securities.

One should check his risk appetite before venturing into margin trading.

Regulation in India (taken from SEBI/MRD/SE/SU/Cir-15/04)

In US Federal Reserve Board and individual self-regulating organizations, such as the NASD or NYSE regulates and issues guidelines for margin trading. In India SEBI is regulatory body for this.

On March 19, 2004 SEBI through its circular clarified regulations for margin trading:

Corporate brokers with net worth of at least Rs 3 crore are eligible for providing Margin trading facility to their clients subject to their entering into an agreement to that effect. Before providing margin trading facility to a client, the member and the client have been mandated to sign an agreement for this purpose in the format specified by SEBI. It has also been specified that the client shall not avail the facility from more than one broker at any time.

The facility of margin trading is available for Group 1 securities and those securities which are offered in the initial public offers and meet the conditions for inclusion in the derivatives segment of the stock exchanges.

For providing the margin trading facility, a broker may use his own funds or borrow from scheduled commercial banks or NBFCs regulated by the RBI. A broker is not allowed to borrow funds from any other source.

The "total exposure" of the broker towards the margin trading facility should not exceed the borrowed funds and 50 per cent of his "net worth". While providing the margin trading facility, the broker has to ensure that the exposure to a single client does not exceed 10 per cent of the "total exposure" of the broker.

Initial margin has been prescribed as 50% and the maintenance margin has been prescribed as 40%.

The arbitration mechanism of the exchange would not be available for settlement of disputes, if any, between the client and broker, arising out of the margin trading facility. However, all transactions done on the exchange, whether normal or through margin trading facility, shall be covered under the arbitration mechanism of the exchange.

External reference: http://web.sebi.gov.in/cis/circulars/2004/cirsmd152004.html