Recently I was speaking to the Chameleon. I’m sure all of you might be remembering him from my earlier posts here. He has sold almost all his Pound, Dollar and Euro holdings. He in fact even sold a couple of investment properties he owned in Central London, besides his stock holdings at the London Stock Exchange.

He jokingly told me that when even Standard Chartered is coming to India with an IDR to raise money it speak a lot. Standard Chartered was formed between two banks which were formed in the 1800s. This was the time when Britain was a colonial and imperialist power formed on the philosophy of plundering rich countries like India. Even today they have our jewels and treasures in their museums. It is high time we get them back to India, including the wonderful Kohinoor diamond. I wish our politicians were bolder and spoke and demanded what is and will always be rightfully ours.

All his money is now coming to India and I know for certain that wherever his money goes, it almost certainly ends up giving some very good returns. Today only a fool would want to keep his money in any of those currencies. If you do happen to live there, you will keep a small amount for your daily needs, but it would be best convert the rest and invest it wisely. Central Banks all over the world seem to be hell bent on printing more notes and destroying their economies.

Once again if you were to just convert your Pounds, Dollars or Euros to Rupees and do nothing else, you would once against lose money. With rapid growth of wealth in India, inflation too is rising. You need to make sure your money is invested in assets that will be desired by millions. Good company stocks are certainly one of them. Gradually more and more pension funds, hedge funds and trusts are sending money into India. The really smart people have already realized that India is going to outperform not just the West, but also China.

Investors like the Chameleon send their money wherever their money can grow and multiply. It isn’t emotional or personal. The world power is shifting from the West and this is a reality. One of our Happionaire family members was asking us about Africa, well it makes great sense to invest there - but in terms of capital and general security as well India is a better option. If someone has the time and inclination, there is nothing like starting your own farm - but make sure you are physically present or visit your farm at least once in a week. Best would be to grow basic fruits and vegetables, with rising food inflation you can really benefit. See the prices of just tomatoes -how much they have risen. If they go up from Rs. 20 to Rs. 40, you will have no option but to still buy.

Fellow Happionaires have been asking me a lot about Greece, America and the UK and bankruptcies and bailouts. The best thing would be for them to let the country go bankrupt. It doesn’t make sense to keep fueling a system that wastes money. Unfortunately in a bail out the smart, good and honest people suffer. The guys who saved wisely will now have to bear the costs of people who squandered money away.

For instance in India, how many people think Air India should be bailed out all the time? Honest people pay taxes, while Air India continues to burn fuel and money of the Indian tax payers. Inefficiency and an inability to compete shouldn’t be rewarded. Capital grows when the efficient are rewarded and the inefficient are allowed to die a natural death.

Governments run by politicians and bureaucrats who enjoy wasting public money, shouldn’t be bailed out. They should be punished. I wrote in details about this in Happionaire’s Cash The Crash, the same continues to apply, so irrespective of whether it is Greece or Air India, bankruptcies are good. The reason politicians enjoy bail-outs is because they have nothing to lose, it is the innocent tax payer who loses. At the same time, most common people think a bail-out is good and the politician gains popularity. The real world is not a popularity contest or a beauty contest, many times tough decisions need to be taken that will help create a better future.

For instance if Long Term Capital Management, the hedge fund, was not bailed out in 1998, almost certainly other financial institutions and hedges funds would be more careful. Ten years later, Lehman Brothers would have not gone bankrupt because they would have gotten their act together.

I can guarantee you that once the government sells Air India, it has the capability of once again becoming a great airline. Maybe the TATAs can buy it once again.

Let us allow countries to go bankrupt. They will arise out of it stronger and better. Let us allow people to feel a little bit of pain for the mistakes they have made, when a child burns his finger to a hot kettle he becomes more careful with fire. Were he to not experience any pain, he might have risked lives playing with fire.

Yogesh Chabria

Happionaire