meek-investor

Last year, virtually the entire financial sector in the world went belly up. 12 months on, Goldman Sachs reports a quarterly profit in excess of $3bn . Yes 3 BILLION DOLLARS. In one quarter. Profit Goldmans is the one bank everybody loves to hate. But even by their standards, this is something. The last two quarters have seen the highest quarterly profits in their 140 year history. Now, the economics I have been taught in college was that there is a positive correlation between risk and reward. If they have made such profits, they must have taken wild risks. Just a year after coming within an inch of annihilation, only a complete lunatic would take such risks so as to make this mind boggling profit. Or else, the economics I was taught is wrong. In the post meltdown world, there is easy money to be taken. Without taking undue risks. So the reward for bringing the world so close to an abyss, is to be able to make unbelievable money by just being around and counting the cash; and the r...

The recession has been brutal for many businesses, but perhaps none more so than small family run businesses. In the land of entrepreneurship, the United States, about 90% of all businesses are actually family owned and run; mostly small businesses with less than 20 employees. The mom and pop store, the restaurant round the corner, the self employed consultant. They have been the massively affected as this article lays out . This blog is not meant to be chronicler of the world’s woes, If the last couple of posts have left you thinking that way, its not meant to be for long. But its just that we, as the fortunate few who have jobs intact and can continue to take care of our families, perhaps ought to reflect more on what the less fortunate are going through. What family businesses have faced is a sudden steep fall in demand, complete drying up of credit and no robustness to weather such a storm. Any well run company will find it difficult to handle this, as is very evident these days. ...

When will the world come out of recession ? How will the recovery look like ? Questions that are in our thoughts all the time. Self appointed experts are falling over themselves predicting the answers to these questions. The flavour of the month seems to be to characterize the recovery after an alphabet. Some economists are predicting a ‘V” recovery – a straight rise after the steep down. Other think it will be a “U” – down, flat and then up again. Nouriel Roubini , an economist noted for being one of the few to have thought a recession was coming before it came, thinks it will be a “W” . As economists have to invent a term for everything, this will be a “double dip” recession. Now Sir Martin Sorrell, chief executive of WPP, an advertising giant, thinks it will be a “L”. Unfortunately, humility has not been a particular virtue of economists. The least they can do, after failing en masse to see a recession coming, is to keep quiet in penance. No. They are loudly proclaiming their abili...