A Canadian Doing Business in India

Investing in India is not as easy as thought...

I’ve been involved with what I consider to be a very large investment in India. Basically, a few partners any myself were intersted in getting into the financial industry and after thorough research India seemed to be the most Westernized and attractice BRIC (Brazil, Russia, India, China) nation. English is fairly predominant, people enjoy the likes of Dominos, Subway,  and Pizza Hut. Personally, I’ve grown up with many Indian people around me, I’m used to speaking to Indian call centers and I frequently run into Indian software developers (due to one of my core businesses). All in all, from Canada there’s only a positive experience and great expectations for India.

I want to start off by saying, don’t invest in India. If you have plans to invest in India, make sure you know exactly what you are getting into. You can have the best team in the world and significant financing but when you play ball in India, it’s not your team that matters, its theirs! Indian culture is slow, significantly slower then the Caribbean. Indian attitude is quite positive for the most part, but follow through does not exist. Without any follow through, nothing can happen.

For example, you can walk into a bank and ’try’ to open up an account (good luck!). One week later you will ask if your account is ready and they will say, ‘yes yes, any moment’. 4 weeks later your account won’t be open and you’ll have a stranger knock on your door to verify your address. 8 weeks later they finally say your account is open (assuming you called and visited 20x already). Then when you try to take your cash out, you’ll need to wait another 4 weeks for your PIN. This sounds crazy, but crazy is true in India.

In addition, sending financing to our Indian corporation was an absolute mess. Our bank needed to send multiple messages verifying who was sending the money, why were sending it, etc. The bank held our funds for weeks, then once they confirmed who sent the funds, there was an enornous amount of paperwork to withdrawal these funds or use them in any capacity. Frankly, India is a joke for business. This type of red tape doesn’t exist in the western world and if India wants to be like us, they have a mountain to climb.

We also investigated the possibility of opening a franchise in India, whether it be a Mcdonalds or Dominos, both options were not viable. In India, the only way you can become ‘part’ of a franchise is to buy the real estate and rent out your property to the Franchise. Meaning, you won’t run the franchise, you won’t make money off the franchise, you will only make money on a lease agreement for 15 years. Why do they call it a franchise!!?

Overall, India was a great experience. The people I worked with on our project were AAA guys and we all learned a boatload of things. The biggest message was DO NOT INVEST IN INDIA. Pick any place else, just not India. Being misled in India is common practice to avoid the feeling of shame or guilt. It just seems like there is an obsessive issue with pride and when doing business in India the attitude is always ‘let’s do it’ without actually doing it. In India, talk is cheap.

The Demise of the Dollar?

The Falling Dollar

Word has it that China, Russia, France, and Japan are working behind closed doors to take down the all mighty US dollar. The deal seems to be revolving around the energy sector and pushed heavily by the Arab corner. You probably guessed it by now, oil for the Euro. Or perhaps, oil for gold?

This is speculation, but the recent demand in gold is quite unexplainable. Inflation is not rampant, retail gold sales are actually declinging, but gold price is rising? The only knowledgeable explanation is institutional buying or some kind of unkown demand. Gold can’t rise without demand, and people are having a tough time figuring out where that demand really is. The Independent in the UK has quickly jumped onto this bandwagon and has written a great article worth reading: http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Now the big question is, will the US dollar fail? Personally I don’t believe so but with pressure from around the world as a united front, it certainly can. But it is also important to note that months before the US invaded Iraq, Saddam dropped the dollar for oil. Roughly 1 month ago, Iran has done the same and coincidentally criticism on Iran has climaxed. I’m not sure if I can say this is a coincidence, but its worth noting.

On a personal note, I have been short on the USD/CAD since about 1.28 and have made a hefty profit on my currency trading (I use QuestradeFX for my currency trading). All in all, the US dollar is going to get a lot worse before it gets any better. Enjoy trading everyone!

The Market Creates a Buying Opportunity

A new week has begun, earnings season is around the corner and the market has corrected the perfect amount. I see this as a perfect buying opportunity and I’ve been building positions in multiple stocks which I will outline below. First we must ask why this is the best opportunity to buy? No one can be 100% certain but I trust the technicals that I follow. I believe we have heavy support around 1000-1025 on the S&P and I don’t think our market can crack this point. If we do, all my bets are off and all my stops will be hit which is a minimal loss considering we are sitting at 1025 already.

The stocks which I will be looking at most specifically are Citigroup (C) and General Electric (GE). I like Citigroup at $4.25-45 and I love General Electric at $15.00-50. I’ve taken my first positions late on friday afternoon and I anticipate by the end of October the returns will be substantial. We may see-saw till mid October, but once mid October catches a drift, Citigroup should propell to $6 and General Electric should be at $19. There is one factor that sits in the way and might play against my technicals, and that is earnings. Both companies earn by mid month but since forecasts are fairly conservative, it will be difficult to negatively impact these stocks.

Lets wait and see. Enjoy trading everyone!