Smart ways to invest and attain early financial freedom

The Congress and BJP have joined hands to pass the Food security bill yesterday. There is a general belief that this bill is a vote security bill for politicians and will lead to massive leakage of tax payer’s money.  By spending INR 1.3 trillion per annum on this scheme, the govt would have less to spend on wealth creating assets like infrastructure, education and health. The massive govt purchases of food grains for this scheme will leave less food grains for the open markets and that would mean food inflation and the operational inefficiencies would also mean that the poor won’t get their food. Not surprisingly the Rupee saw its steepest single day decline in the past 17 years (of 2.84%) and the
This note is based on my 12 month predictions made in Dec 2012 – and to share with you my sense of where to invest now.  So here are the key predictions from my Dec 2012 blog –
One of the reasons I have a reasonably good track record in stocks is because I accept my mistakes and sell without any emotional involvement. So here I am, selling a few stocks in the coming days – the timing of the sell depends on the market. I am selling BHEL – where I have made a loss of 19% over two years.  So, assuming my expectations of 20% per annum, I have actually lost 60%. I was hopeful of the power sector story – but the coal scam is unlikely to be resolved till elections time - and I have lost my patience on this one. I have many friends in
Here is an act that I normally do not recommend - but I must confess that I am thinking about it.  To buy or not to buy India cements stock - the stock has gone down due to bad news from IPL. The stock has fallen from Rs. 87 to Rs. 71.5 in tha past 5 days -about 18%.   I believe that this price drop is reactive and I believe that there is an opportunity - a short term opportunity - over time I believe that the stock will stabilise at it's 200 day moving average of around Rs. 85 - but right now the stock is down. 
There is lots of low cost money floating around globally –searching for good investment opportunities.  US, EU, Japan, Australia, S Korea, and many more countries including India have reduced their interest rates or maintained low interest rates since Jan 2013. This low cost capital is an opportunity for companies to borrow at a low rate and invest in creating productive assets (read capacity expansion) –which will in turn create economic growth. It is happening to a small extent – but most of this excess cash is ending up in speculation and in high risk assets like stock markets.  A part of this cheap money is coming into Indian stock markets through the FII route and this is the reason for the highs that we saw yesterday.