Saturday, November 28, 2009

Dubai - Are The Good Times Are Just Starting?

I find it strange and amusing when people behave in such a shocked way when they hear about what is happening in Dubai. Anybody who has visited Dubai can see huge towers built and still being built, all lying vacant. You don’t have to be a rocket scientist or economic PHD to figure out that when properties are being built non-stop in spite of the earlier ones being empty that prices have to crash. And the bubble has to burst. Dubai isn’t really that bad, compared to a few other countries and supposedly world class institutions.

Everyone on the inside knew what is going to happen there – and now everyone on the inside already knows what is going to happen in the coming months with some major European and American financial institutions. The Swiss, Germans and British have a lot to lose in Dubai. A lot of fellow Happionaires have been asking me if they should exit Gold – the real global crash is yet to come and the real rally in Gold is yet to be realized. Have patience and Laxmi will reward you. Gold will be used to replace cash, but the real spurt in returns will come for those who pick up beaten down assets and dirt cheap prices.

The reason I shared gold so openly quite sometime back is because it is a commodity that cannot easily be controlled in terms of prices. My meetings with some of the worlds most powerful and secretive investors, had led me to invest in Gold. The real rise in Gold is yet to come and the real reasons will soon be revealed to the masses. Once that is revealed, people will be running and will enter a buying frenzy for it. Just like Gold even Silver will surprise lots of people.

Gold returns will be less in rupee terms compared to dollar terms, but still will be sizeable. The biggest returns will come to all those who will pick up undervalued companies as the Sensex crashes because of the global turmoil.

I rarely share individual stocks because a small company’s stock that is undervalued can easily rally upward if I share it with a larger audience – causing me to miss out the opportunity, but that is not the case with Gold.

Imagine what was to happen, if tomorrow America declared that it is unable to pay trillions of dollars to its creditors? When a small place like Dubai with only USD 60 or 80 billion can cause this type of panic, imagine what will happen when large skeletons come out of the cupboard?

Today not even China offers a worthwhile investment opportunity and the only oasis of real long term value and growth is India. I have friends who have shut down their manufacturing businesses in China and returned to India. The people doing business on the streets of India, China, Dubai and America always know the reality much before analysts on TV.

In India only thing that you need to worry about is real estate. Stay as far away as you can from property, because at this stage it will cause a lot of pain. Forget and ignore all real estate IPOs, debt floated by realty companies and buying commercial or residential real estate. All it needs is a small pin – that will cause the entire balloon too burst.

I’m also staying away from Indian companies that are trying to acquire assets aboard – specially by taking heavy debt. The opportunity is too huge in India, to worry about trying to enter saturated markets. Acquisitions in the West, Japan or even China made today in no way can reward investors if the same money is invested in India. Today by the grace of God and destiny, we have come to have the world’s most stable and secure financial system – and surprisingly an excellent environment for business growth, if you know how the system works.

The next time a foreign rating agency tells you emerging markets like India are risky, we should all laugh at their good sense of humor and ask a simple question: How many banks went bust in America? How many banks went bust in India?

How many people remember that not to long back companies like SAIL were quoting at Rs. 7, and went on to cross Rs. 300? At Rs.7 people were critical of it because it was an "Indian" government company that had ‘issues’ and the same people were surprisingly chasing it when it crossed Rs. 300. India has created real wealth for people who have had faith and conviction backed by knowledge.

Lord Krishna had told Arjuna that in battle, we are to have no fear and do our dharma. As investors it is our dharma to create wealth and make the most of opportunities. The truth is that the best of times for India are just about to begin. The true potential of India is yet to be realized – and when God is on your side no force can stop you. But then how many people will once again miss this opportunity?

Keep smiling and having fun!

Yogesh Chabria


junaid merchant said...

Thanks for clearing my query on Gold and I will continue holding onto it and also on making us aware once again on real estate in India. The TV news people change their view from positive to negative almost overnight and are very difficult to trust.

But it is sad what is happening in Dubai, I don't know how fair would it be to look at everything around you as an opportunity? Isn't it a bit, if I may use the word, 'ruthless' or maybe that is how the investment world works. I'm just two years old in it.

ramesh agarwal said...

Junaid, as Chabriaji said we are at war even when it comes to investing and our duty is to create wealth and make use of opportunities. That is what the best people not just in investing, but every other field have done. Also look at it this way, if people like Chabriaji don't buy when markets are at rock bottom, what will happen to people who desperately need money and are selling? Would you rather want things to go to zero or would you want the smart guys to buy it cheap? Wealth, life, success everything in life goes only to those who know when to strike the iron.

Anonymous said...

Dear sir,

share some stocks , its been long that we retail investor can benefit, awaiting your reply.

Kanak said...

Gr8 article. I hope and I m sure your logic will be 100% correct. Kanak jain Kolkata

Samant said...

" I rarely share individual stocks because a small company’s stock that is undervalued can easily rally upward if I share it with a larger audience – causing me to miss out the opportunity, but that is not the case with Gold. "

-- I thought happionaire was about US and not I :)

Please share some hidden Gems Yogesh, even if its paid subscription...

dinesh said...

Samant, I think you are missing an important point. Yogesh has always taught and encouraged all us Happionaires to think and learn for ourselves. He himself has said that he doesn't want to spoon feed and that I feel is excellent.This is one of the rare places where we are all stimulated to think for ourselves and take decisions. Also you need to understand that as a professional investor and someone managing a fund, needs to probably protect his own and investors interests as it is likely a lot of big hedge funds/MFs might simply steal his secrets. :-)

Ravi P said...

Dear Yogesh,

I think you must provide an insight here as now i am loosing my head abit. Though i am sitting patiently on cash waiting for market to crash, i am seeing on every dip market is coming back spectacularly.

If am thinking of buying, it is again looking like as if i am buying expensive and prices are damn expensive.

Is it like we are loosing a spectacular rally or we are showing signs of a real person having full control on himself? Please guide and assist. It would be really really helpful.

Sunil said...

Hello All,

As we all know that a kid falls several times before learning to walk properly ... similarly we have people out here who need to go through that phase, atleast once in the markets, to understand certain things

All the best for those who are waiting Patiently for the markets to fall and to those as well who are waiting to jump in current rally.

Shabu's said...


You are really doing a precious job.., Everyone have something to learn from your words, whether an investor or not..

I always suggests certain your posts to my clients/readers by mail towards their specific queries.. Now,I have made a post itself to introducing some genuine blogs like yours and they are getting the most they wanted there..

Thanks for the good work....

Shabu Thachat

Anonymous said...

Hi Yogesh,

I am a very keen follwer of your blog. Thanks for educating all of us Happionaire's.I think you should explain the logic for you predicting another global crash. Otherwise every body will be in confusion because people will belive you without knowing the reason.

Anonymous said...

Hi Yogesh
I have the same comment as the above. I have been waiting for a crash (or at least a correction) for quite some time now. But that doesnt seem to be happening. It has become very predictable and boring. (Goes down by a lot and then comes back by the same point). As you wrote in one of the posts, we can buy irrespective of the sensex if its available at a good price. However I am very reluctant to touch any stock since i lost a lot the last time when the sensex was at its peak at 21k. Could you write something on why you think it will crash?

Wayne said...

Hi Yogesh
first off big fan....but m sure u get that a lot....getting to the point...what would trigger the crash in your eyes is it just the US economy or are there other factors(signs)as well??


Anonymous said...


I am not sure if it is correct.. but I have heard that the great investor of all times "Waren Buffet" used to sit on cash for couple or more years.. when he saw the price is not good enough to invest... so may be that too apply.... look at the price at which you'll invest.. rather than what level sensex is....

Anonymous said...

i think you should never move out ALL money from the market.I guess Yogesh meant to keep taking profits if there is irrational exuberance in markets and keep some money still on.

By taking profits , that money can be reinvested if the markets crashes

kumar g. said...

Thanks for sharing the link Shabu. Very nice work.

Anonymous said...

i don't believe in Gold Investing.Gold has never given a better returns than Equity in the long term(inflation adjusted return)..May be for the comfort/asset diversification we can go for Gold other than that I don't see any "$/Euro coming to an end" kind of event..