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Economics Part 3

Economics Part 3

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Published by jagadishprasad

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Published by: jagadishprasad on Sep 05, 2011
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09/05/2011

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Finance Information  jagadish Bonds are they essential
Bonds are essential to an investor for getting fixed income for himself . beyond a certain point of time bonds become a liability to organization as recurring expenditure. hence it is advised to bekept minimum and fixed number of years for it to sustain bonds are used or should be used by companies only if they are out of cash or don't possessworking capital to solve their immediate cash problem. solution is 1 to 2 % of authorised capitalshould be sufficient . why 1 to 2 % it is because too much of interest payment makes company a huge debtor.convertible bonds are also essential to certain extent and is better preferred by me as it cansustain the loyal investors to continue with the company as per my judgement is concerned convertible bonds period shouldn't exceed more than 3 to 5years and within 3 to 5 years should be converted to shares. even that is debatable to releaseit as their is a scope of crash down of stock market if too excess convertible bonds are releasedwithout knowing the scope of jurisdiction of number of shares being in the market knowing how many shares are their gives a scope to the company an idea to release thesubscribed capital into the market . excess subscribed capital into market can lead to marketcapitalization crash . changing hands and too excess transfer of shares from bulls to bears.stags can actually work more during the times of convertible bonds by selling away sharesduring the process of conversion (speculative business ------- stags) hence jagadish advises that bonds are better than convertible bonds because stags don't comeinto picture. stags usually do daily sales and purchase making stock market volatile . giving alimit of sales per person can control stags otherwise market capitalization fluctuations can bringdown the share price drastically if not checked. bonds interest rates are paid quarterly, yearly. which one is safe bet : payment of interest ratemonthly is always feasible because it gives scope to the organization to know who their loyalcustomers are and what the demand for the sale is.bonds actual replacement is annuities butannuities is lifelong whereas bond interest payment is short lifeinvestors are usually asked by jagadish to go to mutual funds in indian scenraio in form of either hedging or balanced funds where their is shift between bonds and shares coexistence in case of economy turmoil. mutual funds usually taken care where public is in abundance and risk management isspreaded within investors and guaranteed safety is attached based upon the risk managementtaken up by investor within mutual fund. 
 
 
Thought for the day : types of bonds and its drawbacks
 
NEXT How can loans be got back intelligently from debtors of money in short span of time 
normally every bank hands over loans to those who need it and is always has to write off loansin abundance. During the phase of recession loans default is much more widespread thannormal. at this stage what can banks do to get back money lent to pay to savings employees of same bank1) give debtor a job2) ask him how can he contribute to society through his knowledge and groom up others3) how can the candidate be a role model to other debtors in getting back money 
thought for the day :i cant think beyond the three , best wishes for anyone to think out of box and help me out NEXT stock hedging :
 hedging is considered to be safest passage for any type of instrument for the investor where itguarantees you about loss and provides a cushion for not fall down of price beyond a certainminimum limit . this is usually seen in mutual funds in INDIA and is followed with a huge hit suppose the same hedging is kept in stocks what happens ? stock hedging can be defined as group of shares in a particular industry segment comingtogether to sell stock under a huge compilation of shares of different companies in a particular industry segment to get cushion for share price of company not fall down below a certain range stock exchange transactions are usually controlled and transfer of shares is stopped after aperiod of transactions where exchange sees a danger beyond a certain crash down of stocks ina particular industry if further transactions take place this particular event can be stopped for coming to crash down limit by keeping a hedging facilityin stocks for particular industry .
think is it true what i said ?
 suppose this is done all the investors would sell away shares and create a huge amountof sales leading to once again crash down . hence stock hedging should never take placeotherwise it leads to stag situation where below the limit of fall stock is sold off .only bear market would be interested but bear market area of job is limited in stock exchange
 
market. it is usually bull market which actually does more profit and salesstock exchange other area is bond hedging . what happens here is bonds can never have anhedging facility as it is time bound by nature . at the most it would get converted to shares under convertible bonds or else it would end once the tenure for the payment is over  
thought for the day is : Do shares and bonds if have hedging , which format would youagree
(mutual funds is one i thought) 
NEXT how to educate children whose parents are in poverty and cannot have more than 50 RSper day 
normally parents want their children to be better educated and have better lifestyle than thembut alas it is not possible because they can earn maximum 50 rs per day after toiling hard for the entire day. daily wages is the order in INDIAN scenario since decades . what can jagadish suggest to the problem , lets see education costs money so how can education be free for poor is the questionsponsorship can be given by wealthy people but it is not permanent cure because even wealthyguy looks for fast results to get mental satisfaction for himself and prove that he brought aboutresult oriented script to the poor and brag about it as quickly as possiblepeople look out for UNITED NATIONS for free education and hunger removal . can they sustain.they can but area of jurisdiction cannot satisfy entire geography map of earth. managing fundsby UNITED NATIONS even though is huge still cannot be managed holistically and many of areas both demographic and geographic is left outhow to give them road map of education .western nations that's why look out for technological breakthroughs to solve most of humanityproblems but they forget that technology is costly affair  
i thought of a brilliant problem solution ,
theatres 5 in 1 where you organise 3D books reading on mass scale and movies which are botheducational and time pass on cooperationmeaning group psychology reading and explanations by constructing 5000 mass seatingcapacity and ask them to read books together by projecting it to the output of theatre screen

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