Half way through the interview, I ask him where does he see the price of gold reaching in the days to come. “Well, I don’t see gold’s trajectory being typical of what you’d expect to see in a bull market….And I expect that physical gold will be repriced somewhere around $55,000 per ounce in today’s purchasing power. I have to add that purchasing power part because it will likely be concurrent with currency devaluation,” he replies. Meet FOFOA, an anonymous blogger whose writings on fofoa.blogspot.com have taken the world by storm over the last few years. In a rare interview he talks to Vivek Kaul on paper money, the fall of the dollar, the coming hyperinflation and the rise of “physical” gold.
The world is printing a lot paper money to solve the economic problems. But that doesn’t seem to be happening. What are your views on that?
Paper money being printed to solve the problems… this was *always* on the cards. It doesn’t surprise me, nor does it anger me, because I understand that it was always to be expected. The monetary and financial system we’ve been living with—immersed in like fish in water—for the past 90 years uses the obligations of counterparties as its foundation. These obligations are noted on paper. In describing the specific obligations these papers represent, we use well-known words like dollars, euro, yen, rupees and yuan. But what do these purely symbolic words really mean? What are these paper obligations really worth in the physical world? Ultimately, after 90 years, we have arrived at our inevitable destination: the intractable problem of an unimaginably intertwined, interconnected Gordian knot of purely symbolic obligations. A Gordian knot is like an unsolvable puzzle. It cannot be untangled. The only solution comes from “thinking outside the box.” You’ve got to cut the knot to untangle it. So the endgame was always going to be debasing these purely symbolic units. Anyone who expected anything else simply fooled themselves into believing the rules wouldn’t be changed.
Do you see the paper money continuing in the days to come?
Yes, of course! Paper money, or today’s equivalent which is electronic currency, is the most efficient primary medium of exchange ever used in all of human history. To see this you only need to abandon the idea of accumulating these symbolic units for your future financial security. They aren’t meant for that! They are great for trading in the here-and-now, not for storing for the unknown future. To paraphrase Silvio Gesell, an economist in favor of symbolic currency almost a century ago, “All the physical assets of the world are at the disposal of those who wish to save, so why should they make their savings in the form of money? Money was not made to be saved!” In hindsight, this statement is true whether money is a hard commodity like gold or silver, or a symbolic word like dollar, euro or rupee. In both cases, saving in “money” leads to monetary tension between the debtors and the savers. When money was a hard commodity, this tension was sometimes even released through bloodshed, like the French Revolution. So no, I don’t think we’re swinging back to a hard currency this time.
Do you see the world going back to the gold standard?
No, of course not! “The gold standard” means different things depending on which period you are talking about. But in all cases it used gold to denominate credit, the economy’s primary medium of exchange. Today we have a really efficient and ultimately flexible currency. Bank runs like the 1930s are a thing of the past. But that’s not to say that gold will not play a central role in the future. It will! The signs of it already happening are everywhere! Gold is not going to replace our primary medium of exchange which is paper or electronic units with those names I mentioned above. Instead, physical gold will replace paper obligations as the reserves—or store of value—within the system. Physical gold in unambiguous ownership has no counterparty. This is a much more resilient foundation than the tangled web of obligations we have today.
Can you give an example?
If you’d like to see this change in action, go to the ECB (European Central Bank) website and look at the Eurosystem’s balance sheet. On the asset side gold is on line 1 and obligations from counterparties are below it. Additionally, they adjust all their assets to the market price every three months. I have a chart of these MTM (marked to market) adjustments on my blog. Over the last decade you can see gold rising from around 30% of total reserves to over 60% while paper obligations have fallen from 70% to less than 40%. I expect this to continue until gold is more than 90% of the reserves behind the euro.
Where do you see all this money printing heading to? Will the world see hyperinflation?
Yes, this will end. I am pretty well known for predicting dollar hyperinflation. As controversial as that prediction is, I think it is a fairly certain and obvious end. I don’t like to guess at the timing because there are so many factors to consider and I’m no supercomputer, but ever since I started following this stuff I’ve always said it is overdue in the same way an earthquake can be overdue. As for other currencies, I don’t know. Perhaps yes for the UK pound and the yen, but I don’t know about the rupee. The important things to watch are the balance of trade and the government’s control over the printing press. If you’re running a trade deficit and your government can (and will) print, then you are a candidate for hyperinflation.
In that context what price do you see gold going to?
Well, I don’t see gold’s trajectory being typical of what you’d expect to see in a bull market. Instead it will be a reset of sorts, kind of like an overnight revaluation of a currency. I’m sure some of your readers have experienced a bank holiday followed by a devaluation. This will be similar. And I expect that gold will be repriced somewhere around $55,000 per ounce in today’s purchasing power. I have to add that purchasing power part because it will likely be concurrent with currency devaluation. So, in rupee terms, I guess that’s about Rs3.2 million per ounce at today’s exchange rate.
The price of gold has been rather flat lately. What are the reasons for the same? Where do you see the price of gold going over the next couple of years?
“The price of gold” is an interesting turn of phrase because I use it often to express “all things goldish” in the gold market. In today’s market, “gold” is very loosely defined. What passes for “gold” in the financial market is mostly the paper obligations of counterparties. These include forward sales, futures contracts, swaps, options and unallocated accounts. I often use the abbreviation “$PoG” to refer to the going dollar price for this loose financial “gold”.
The LBMA (London Bullion Market Association) recently released a survey of the total daily trading volume of unallocated (paper) gold. That survey revealed a trading flow of such magnitude that it compares to every ounce of gold that has ever been mined in all of history changing hands in just three months, or about 250 times faster than gold miners are actually pulling metal out of the ground. Equally stunning were the net sales during the survey period. The rate at which the banking system created “paper gold” was 11 times faster than real gold was being mined.
What is the point you are trying to make?
The point is that gold is being used by the global money market as a hard currency. But it is being treated by the marketplace as both a commodity that gets consumed and also as a fiat currency that can be credited at will. It is neither, and gold’s global traders are in for a rude awakening when they find out that ounce-denominated credits will not be exchangeable for a price anywhere near a physical ounce of gold in extremis—ironically failing at the very stage where they were expected to perform.
So what are you predicting?
But don’t get me wrong. It is not a short squeeze that I am predicting. In a short squeeze, the paper price runs up until it draws out enough real supply to cover all of the paper. But this paper will not be covered by physical gold in the end. It will be cash settled, and it will be cash settled at a price much lower than the price of a real ounce of gold, like a check written by an overstretched counterparty. It is a tough job to make my case for the future of the $PoG in just a few paragraphs. The $PoG will fall and then some short time later we will find that the market has changed out of necessity into a physical-only market at a much higher price. If you were holding paper you will be sad. If you were holding the real thing you’ll be very happy
Why is the gold price so flat these days?
Today’s surprisingly stabilized $PoG tells me that someone is throwing money into the fire to delay the inevitable. Where do I see the $PoG going over the next couple of years? Maybe to $500 or less, but you won’t be able to get any physical at that price. I think that today’s price of $1,575 is still a fantastic bargain for physical gold.
Franklin Roosevelt had confiscated all the gold that Americans had in 1933. Do you see something similar happening in the days to come?
Not at all! The purpose of the confiscation was to stop the bank run epidemic at that time. There’s no need to do it again. The dollar is no longer defined as a fixed weight of gold, so the reason for the last confiscation—and subsequent devaluation—no longer exists. Gold that’s still in the ground is a different story, however. Gold mines will likely be considered strategically important national assets after the revaluation, and will therefore fall under tight government control.
The irony of the entire situation is that a currency like “dollar” which is being printed big time has become the safe haven. How safe do you think is the safe haven?
Indeed, everyone seems to be piling into the dollar. Especially on the short end of the curve, helping drive interest rates ridiculously low. The dollar is as safe as a bomb shelter that’s rigged to blow up once everyone is “safely” inside. You can go check it out if you want to (sure, from the outside it might look like shelter), but you don’t want to be in there when it blows up. You’ve got to realize that it is both economically and politically undesirable for any currency to appreciate against its peer currencies due to its use as a safe haven. Remember the Swiss franc? As soon as it started rising due to safe haven use they started printing it back down. The dollar is no different except that it’s got a whole world full of paper obligations denominated in it. So when it blows, the fireworks will be something to behold.
What will change the confidence that people have in the dollar? Will there be some catastrophic event?
That’s the $55,000 question. It is impossible to predict the exact pin that will pop the bubble in a world full of pins, but I have an idea that it will be one of two things. I think the two most likely proximate triggers to a catastrophic loss of confidence are a major failure in the London gold market, or the U.S. government’s response to an unexpected budget crisis due to consumer price inflation. Most people who expect a catastrophic loss of confidence in the dollar seem to think it will begin in the financial markets, like a stock market crash or a Treasury auction failure or something like that. But I think it is more likely to come from where, as I like to say, the rubber meets the road. And here I’m talking about what connects the monetary world to the physical world: prices. I think these “worlds” are connected in two ways. The first is the general price level of goods and services and the second is the price of gold. If one of these two connections is broken by a failure to deliver the real-world items at the financial-system prices, then we suddenly have a real problem with the monetary side. So I think it will be a relatively quick and catastrophic event, but maybe not as dramatic as a major stock market crash. It will be confusing to most of the pundits as to what it really means, so it will take a little while for reality to sink in.
The Romans debased the denarius by almost 100% over a period of 500 years. The dollar on the other hand has lost more than 95% of its purchasing power since the Federal Reserve of United States was established in 1913, nearly 100 years back. Do you think the Federal Reserve has been responsible for the dollar losing almost all of its purchasing power in hundred years?
Yes, inflation was a lot slower in Roman times because it entailed the physical melting and reissuing of coins of a certain face value with less metal content than previous issues. This was a physical process so it occurred on a much longer time scale. The dollar, on the other hand, has lost nearly 97% of its purchasing power in roughly a hundred years. Do I think the Federal Reserve is responsible for this? Well, given that the lending/borrowing dynamic causes expansion of the money supply, I think the government and the people of the world share in the responsibility. But just because the dollar has lost 97% of its purchasing power doesn’t mean that any individual lost that much. How many people do you think are still holding onto dollars today that they earned a hundred years ago? How long would you hold dollars today? As long as the prices of things you want to buy don’t change during the time you are holding the currency, what have you lost? So imagine that you simply use currency for earning, borrowing and spending, but not for saving. Will it matter how much it falls over a hundred years? Your earning and spending will happen within a month or so, and prices won’t change much in a month. Also, your borrowing will be made easier on you as your currency depreciates. And your gold savings will rise. So with the proper use of money, there is no need for alarm if the currency is slowly falling at, say, 2% or 3% per year.
Do you see America repaying all the debt that they have taken from the rest of the world? Or will they just inflate it away by printing more and more dollars?
The debts that exist today can never be repaid in real terms. And as I mentioned before, they are all denominated in symbolic words like dollars, euro, yen, yuan and rupees. The debt of the U.S. Treasury, most of all, will of course be inflated away.
What are your views about the crisis in Europe? Will the euro hold?
Contrary to most of what we read in the Anglo-American press, I don’t think the euro currency is at risk from the sovereign debt crisis in Europe. They are two different things, the debt crisis and the euro. The euro currency faces none of the usual devaluation risks. Trade between the Eurozone and the rest of the world is balanced and the ECB has plenty of reserves. So aside from devaluation risk, which the euro doesn’t face, the only other risk is if the people decide to abandon the euro. Procedurally this would be so difficult for any country to do on a whim that I can confidently say it is virtually impossible aside from the most extreme situations like a revolutionary war or something like that. And I don’t see that happening. I think the euro survives come what may.
What does FOFOA stand for?
I remain anonymous because my blog is not about me. It is a tribute to “Another” and “Friend of Another” or “FOA” who wrote about this subject from 1997 through 2001. So FOFOA could stand for Friend of FOA or Follower of FOA or Fan of FOA. I never really stated what it stands for, so you can decide for yourself. 😉 Sincerely, FOFOA.
(The interview was originally published in the Daily News and Analysis(DNA) on July 2,2012)
(Interviewer Kaul is a writer and can be reached at [email protected])
Interview
…And That's How Government Sachs Rules the World
Bruce Wiseman is a man who wears many hats. He writes detective fiction under the pseudonym of John Truman Wolfe (www.johntrumanwolfe.com). He runs a market research, survey and positioning company (www.ontargetresearch.com). He has managed money for many Hollywood stars through the investment firm Wiseman & Burke. And if all this wasn’t enough he has recently written a bestselling book on the financial crisis titled Crisis by Design, The Untold Story of the Global Financial Coup. In this interview he speaks to Vivek Kaul on how the investment Goldman Sachs rules the world.
You talk about an incestuous link between Goldman Sachs and the American government. Could you explain that to our readers?
The Rolling Stone magazine recently published an article called “The Great American Bubble Machine,” a masterful exposé by Matt Taibbi revealing Goldman’s greed and corruption in the creation of several investment “bubbles” that have made the firm and its partners—the term filthy rich comes to mind—but which have been devastating to Americans and to the U.S. economy. I have no problem with people making money—barrels of the stuff. Boatloads. But this needs to be done with some sense of ethics, some sense of morals, some sense of responsibility toward one’s fellow man.
Could you elaborate on that?
The all too coincidental participation of Goldman executives in the creation of the financial crisis is something that Machiavelli himself would be proud of. Taibbi laid bare the army of Goldman alumni that have turned up at critical decision points in the universe of credit, investment and finance. His orientation was such that he omitted a few that I will tell you about. My focus has been exposing the actual cause of the worldwide financial crisis. And our paths have crossed at a few key junctures. Junctures that bring to mind the great Gordon Gekko—Michael Douglas’s character in Oliver Stone’s Wall Street. Douglas shares the philosophy of the successful investment banker:“Greed is good. Greed is right. Greed works. Greed clarifies and cuts through and captures the essence of the evolutionary spirit.” Yeah, baby.
Could you give us an example?
I could start this part of the story with Henry Fowler, who, after serving as the 35thSecretary of the Treasury, in 1969 became a partner at Goldman after leaving office. But that’s not how things worked in the nineties and beyond. Oh no. The current sequence is very different. Pictures of Robert Rubin always remind me of the cartoon character Droopy. He seems to be in a perpetual state of sad worry. More to the point of our story, having served 26 years with Goldman Sachs, ascending to the position of co-chairman, Rubin came to Washington with the Clinton administration as the Assistant to the President for Economic Policy. Bill must have dug the Wall Street touch, because in January of 1995, he appointed Rubin the 70th United States Secretary of the Treasury. This could be called the start of what the New York Times has referred to as the modern era of “Government Sachs.”
Government Sachs?
Allow me to explain. The hallmark of Rubin’s years in Washington was deregulation—specifically, deregulation of the financial industry. Turn the financial industry loose. Let the big dogs eat. Let them earn. They have Porsche payments to make. Working with Greenspan, he kept interest rates implausibly low and ensured that regulatory safeguards were gunned down like victims in an L.A. drive-by shooting. The Glass-Steagall Act is a prime example. A piece of the Great Depression-era legislation that kept investment banks and commercial banks from committing fiscal incest, it was repealed—charged with being out of touch with the global financial structure. What it was out of touch with was an agenda to open the floodgates to unbridled speculation by banks that set the industry up for a financial Hiroshima.
Would you like to add to that?
When Rubin was co-chairman of Goldman, the firm underwrote billions of dollars in bonds for the Mexican government. When the Mexican peso tanked a few years later, Rubin, as Secretary of the Treasury, arranged a multibillion-dollar taxpayer bailout, which, according to reports, saved Goldman a cool $4 billion. Even today, Goldman’s former co-chairman is advising Obama behind the scenes and his acolyte Timothy Geithner is in charge of the U.S. Treasury.
But Geithner never worked for Goldman Sachs…
Geithner worked for Rubin at Treasury during the Clinton administration and was a Rubin favorite. He then snagged the powerful presidency of the New York Federal Reserve Bank. It was Rubin who got Geithner the gig at the New York Fed and it was Rubin who hooked him up with Obama, who appointed him as his Secretary of the Treasury. In addition to Rubin, another former Goldman chairman,the controversial Jon Corzine, has been a top economic advisor to the current American President Barack Obama.
That’s quite a link…
Yup. And there is more to come. Given that Goldman employees gave more money to Obama ($994,000) than any other commercial enterprise in the United States, and that the White House is awash in Goldmanites. Even with the White House under control, Geithner beefed up his Goldman staff at Treasury. He named yet another Goldmanite as his chief of staff. Mark Patterson was selected to help him run the government’s financial circus. Patterson gave up his plum position as the vice president for Government Relations at Goldman—meaning he was the investment bank’s chief lobbyist—to become the number two man at Treasury.
What about Henry Hank Paulson, the Treasury Secretary of the United States, when the financial crisis broke out?
Before the news of the financial crisis began to go mainline in 2007, a new Goldman CEO descended from his throne on Wall Street to come to Washington and help his government manage the nation’s financial affairs. We love you, Hank. Viewed from the board rooms of Wall Street, Henry Paulson’s blitzkrieg of the nation’s capital was nothing short of stunning: a George Patton(a famous American World War II General) in pinstripes—except Patton was fighting a real enemy, not one that he himself had created. At first, he used PR spin to calm the multitudes. As the crisis began to unravel, in August 2007 Paulson assured the American people that the subprime mortgage problems were nothing to be concerned about, that they would remain contained due to the strong global economy. The stock market peaked two months later followed by a crash that wiped out trillions. In a television interview on Meet the Press on August 10, 2008, Paulson stated that he would not be putting any capital into Fannie Mae or Freddie Mac. Three weeks later, he took them over and committed $200 billion in bailout funds. When I was growing up, we’d call this kind of guy a “bullshit artist.”
Can you get into a little more detail?
Perhaps nothing so demonstrated this scam as the government bailout of American International Group (AIG), the country’s largest insurance company. On September 16,2008, Paulson coughed up $85 billion of your tax dollars to take control of AIG. The $85 billion loan got the government 80 percent ownership of the insurance giant. Just what I always wanted from my government, a bankrupt insurance company. It turns out the $85 billion wasn’t enough. AIG has continued to hemorrhage losses and Uncle has now poured a total of $182 billion into the insurance company. Sticky constitutional issues aside, many have found it more than curious that when the government granted the loan, AIG turned right around and paid it out to the investment banks to which it owed money. The bank that got the largest payout was . . . of course, Goldman Sachs—a cool $13 billion. The money simply passed from your paycheck to the U.S. Treasury, from the Treasury to AIG and from AIG to Goldman (and other banks). Paulson made sure the transfers would occur without any objection from AIG or unseemly negotiations with the banks. To do this, he tapped Goldman Sachs board member Ed Liddy to be the new CEO of AIG. The good-hearted Mr. Liddy took the gig for a dollar a year in salary from AIG. But he held on to his $3 million in Goldman stock.
That was one round about transaction…
Yup. Goldman made billions from AIG earlier as well. AIG didn’t know this. Neither did Goldman’s clients. You see, despite the fact that they had collected enormous fees selling financial products that were “insured” by AIG, Goldman simultaneously sold AIG short. You get this? On the one hand, they sold financial instruments to their clients, which carried high investment ratings because AIG insured the buyer against loss. At the same time, they made investment “bets” for their own account against AIG. Estimates are that they made $4.7 billion betting against AIG while selling the AIG-guaranteed products to their clients.
Anything else that you would want to point out?
Paulson pushed the Troubled Asset Relief Program (TARP) through the House and Senate—winding up with a cool $700billion to “save” the banks. Congress’s actions remind me of a bad Godzilla movie, with masses of panicked Japanese citizens fleeing the fire-breathing monster, which is lumbering through the city toppling buildings and devouring cars. The legislation drafted by our elected officials sounds like something issued to Stalin by the Politburo. They granted Paulson complete dictatorial powers over the bailout money. The TARP read in part: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
But where does Goldman fit in here?
Calling the multibillion-dollar bailout a “stimulus” program is but a cruel joke. This was nothing more complicated than a coup—a transfer of hundreds of billions of dollars from American taxpayers into the Armani-clad arms of major Wall Street banks. You won’t be surprised to learn, I’m sure, that Goldman Sachs got a cool $10 billion of TARP funds. And if you followed the billions pouring from your paychecks to Wall Street, you might remember that Bank of America at first received $25 billion. Then, in the midst of the chaos, they agreed to purchase Merrill Lynch. As it turned out, however, Merrill’s losses were $15 billion more than Bank of America had expected. This was due in part to $4 billion in bonuses paid out by Merrill’s CEO, John Thain, who pushed the bonuses through his books just before the Bank of America deal closed. Bank of America was taken by surprise by the losses and the purchase of Merrill Lynch started to go shaky, to which Comrade Paulson coughed up another $20 billion of your tax dollars. You guys are so cool bailing out these banks. I mean it. It brings tears to my eyes. Oh, I should mention that John Thain, the guy who pushed through the last-minute billions in bonuses, had been the president and co-chief operating officer at Goldman Sachs before becoming the president of Merrill Lynch.
So Goldman Sachs is everywhere?
Yup. Pretty much. Joshua Bolten, was the Chief of Staff of former President George Bush. Bolten had become Chief of Staff in April of 2006 and is credited with persuading the President to recruit Paulson as the Treasury Secretary. No surprise, since Bolten had been the executive director, Legal & Government Affairs for Goldman Sachs International before joining the Bush 2000 presidential campaign. The president of the World Bank is Robert Zoellick. Prior to joining the World Bank, Zoellick served as vice chairman, international, of the Goldman Sachs Group. Incest doesn’t begin to say it. From the White House to Treasury, from the New York Fed to AIG, from the Commodity Futures Trading Commission to the New York Stock Exchange, Goldman is there.
You talk about 19 men controlling the financial affairs of the whole world. Who are these people?
They are the Board of Directors of the Bank for International Settlements. They are listed on the Bank’s website, but Helicopter Ben Bernanke and Tim Geithner are on the Board, as was Greenspan. And it is the newly created Financial Stability Board, operating as an arm of the Bank for International Settlements, that now structures and dictates the rules and regulations to be carried out by the central banks of the world. And given the fact that central banks essentially operate independently of their national congresses or parliaments, the FSB now controls the monetary policy of the planet. It is now, for all practical purposes, the Politburo of international finance.
Where is Goldman Sachs in this?
Who is the chairman of this little known entity based in Basel, Switzerland? Mario Draghi. Draghi was a partner at Goldman Sachs until, like Henry Paulson, he left Goldman in 2006. Paulson took over the U.S. Treasury and Draghi became the governor of the Bank of Italy (Italy’s central bank) and in April of this year, chairman of the Financial Stability Board. Draghi is also a member of the board of directors of the Bank for International Settlements. In fact, the BIS board reads like a Goldman reunion committee. Mark Carney had a 13-year career with Goldman Sachs, where he became the managing director of Investment Banking before becoming the governor of the Bank of Canada and a member of the BIS board. William Dudley, president of the New York Fed and former partner at Goldman Sachs, is also a member of the board, along with Draghi.
So they are there everywhere…
Yup. Gary Gensler the current head of the Commodities and Futures Trading Commission in the United States spent 18 years at Goldman Sachs. In May of 2007, the granddaddy of stock markets, the New York Stock Exchange (NYSE), bought Euronext (a pan-European stock exchange with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom), which, now branded as NYSE Euronext, operates the largest securities exchange on the planet. To run the show, the newly combined entity brought in Duncan Niederauer and appointed him chief executive officer. Niederauer had been a partner and managing director at Goldman Sachs before joining NYSE Euronext. And there you have it. Complete financial control of U.S. financial policy and markets, from the White House and Treasury to the New York Fed, the New York Stock Exchange and the Commodity Futures Trading Commission (Control of the World Bank along with the most powerful member of the International Monetary Fund (the US Treasury Secretary Timothy Geithner), and at the top of the fiscal food chain, the Bank for International Settlements and its Financial Stability Board.
(The interview was originally published in the Daily News and Analysis(DNA) on June 25,2012. http://www.dnaindia.com/money/interview_how-government-sachs-rules-the-world_1706239)
(Interviewer Kaul is a writer and can be reached at [email protected])
By 2015, gold price will average significantly below $1,200 per ounce
Gold, the yellow metal, has been touching new highs in India. But the international price in dollars has been largely flat since the beginning of this year. Nikos Kavalis, Strategist in the Commodity Research Team of RBS feels “By 2015, we expect the gold price will average significantly below its current levels, at $1,200/oz. As the road-map to more normal macroeconomic conditions is laid, we believe that more attractive opportunities will emerge for investors and, eventually, higher interest rates will also reduce gold’s appeal.”
In this interview he speaks to Vivek Kaul.
The price of gold has been largely flat in dollar terms since the beginning of the year. Why is that?
For most of last year, gold behaved like a “safe haven” asset and was negatively correlated with risk. For example, it rallied by 28% from end-June to its all-time-high of $1,920/oz in early September, whereas the S&P500 fell by around 15% over the same period. Aft/er the sharp September correction, when gold dropped to a $1,600-1,650/oz range (per ounce, where one ounce equals 31.1grams), the story changed dramatically. Since then, gold has been trading in line with risk.
Can you explain that further?
2012 so far can be divided in two periods. The first period was the euphoria of the first two months of the year. A series of good economic data and hopes that the worst of the Eurozone crisis was behind us, pushed investors to risky assets. This helped gold, which was also boosted by a weakening US dollar at the time – gold has traditionally been negatively correlated with the US currency. By late February, gold had rallied to $1,790/oz, from around $1,560 at the start of the year. The period since the end of February has been the mirror image of the first two months. The first hit for gold came after Ben Bernanke’s speech at end-February, which hurt market expectations of QE3. Renewed concerns about the Eurozone crisis, poor economic data out of Europe and concerns that China’s growth is slowing boosted risk aversion over the following few weeks. Greece’s election added fuel to the fire and intensified fears of a break-up of the Eurozone. Gold trended downwards and by the end of May its price had virtually erased all the previous gains, returning more or less where it started the year. The price rebounded somewhat in early June, but remains far below the late-February high.
But it’s been going up in terms of rupees…”
Since its peak in September, the gold price has declined by 15%, in dollar terms. In rupee terms, and here I am looking at the nearest gold futures contract on the MCX, the price has recently made new highs! The story here is one of currency depreciation. As you know, the Indian rupee has been under pressure, partly because of fundamental reasons and partly due to the wider “risk off” environment hitting emerging markets currencies. It has depreciated by 5% against the US dollar since the beginning of the year and by more than 27% since the summer of 2011. This has boosted the Indian rupee denominated gold price. The rise in the rupee-denominated gold price has hurt Indian demand. High inflation eating into disposable incomes of local consumers has not helped either. This is evident in the World Gold Council data, showing weak jewellery and bar investment demand in the country, both in the fourth quarter of 2011 and the first three months of 2012. You no doubt will have also seen the numerous anecdotal reports that suggest demand has remained weak over the course of the second quarter.
How do you see the performance of gold in dollar terms during the course of the year?
I am moderately bullish towards gold for the rest of 2012. I think that the current uncertain macroeconomic environment still provides good reasons to own it, particularly against the backdrop of negative real interest rates. Moreover, we at RBS commodity research expect that the wider commodities sector will move upwards later in the year. We expect Chinese commodity demand to accelerate and I think that the latest interest rate cut and other steps taken by Chinese authorities towards a more accommodative stance will help in this. As risk appetite grows, flows into the space should also emerge. We believe that all this will benefit gold. Specific to the gold market, continued central bank buying should also help gold, both directly, by taking metal out of the market, and indirectly, by boosting investor sentiment. Lack of producer hedging and limited growth in scrap supply, are other positive factors.
Any target?
Finally, I want to note that at the moment speculator positioning in gold is very light. Look at the CFTC data on net positions in Comex futures for example – the net investor long is at the lowest since December 2008 and short positions are significant. When sentiment changes, I think this situation will be reversed and therefore believe there is some very good upside to be had. Our projections see gold average at $1,800/oz in the fourth quarter of this year.
What about the performance in terms of rupees?
We have a team of Emerging Markets economists at RBS and their outlook for the Indian rupee is cautious, owing to the imbalances (fiscal & current account) that weigh on the currency. The recent reduction in the petrol subsidy and the possibility for further fuel subsidy cuts are all steps in the right direction and some better news in Europe could also help, but our economists cannot see a material appreciation any time soon. Based on this and our forecast for a higher dollar-denominated price, we expect the rupee price to also rise in 2012.
What is the scene on the investment demand for gold?
There are a few different “segments” of gold investment and activity in them has varied. Investment in physical gold continues, although at a slower pace than last year. You still have the risk-averse retail players buying bars and coins in Europe and North America and of course the Indian and Chinese demand. We are seeing a lot less large scale metal account buying than in 2011 and before, but on the positive side, we have also not really much selling from these positions. We had some good inflows into gold ETFs earlier in the year, but these were in large part offset during the recent liquidations. Finally, as I mentioned earlier, positioning in Comex futures is very low and has declined year-to-date. Our outlook for investment demand in gold is positive and this assumption is an essential part of our bullish outlook for the price of the yellow metal. We think that, for reasons discussed earlier, investor appetite for gold will continue and actually grow later in the year. A very important driver for this growth will likely rising speculative investment in gold futures. These guys have actually been net dis-investors in 2012-to-date and many of them are now short gold (based on CFTC data).
Quantitative easing carried out by countries all over the world was one reason for the bull market in gold. Is that still a reason? I think that the expectation of QE3 in the US has been a very important driver of gold investment in the past. This was illustrated by the sharp correction following Ben Bernanke’s statement in late February that dampened expectations of further quantitative easing. Recent developments continue to suggest that QE3 is very much in gold investors’ minds. For example, look at the early-June rally (from ~$1,550/oz to ~$1,640/oz); it came after the poor US payrolls data on 1st June and dovish comments by Federal Reserve officials, which rekindled QE3 expectations. Similarly, the sharp correction that followed was triggered by Ben Bernanke’s latest testimony, which, again, lacked any clear indication that QE3 is on the way.
What are the chances of QE III happening, and that in turn pushing up the price of gold?
Our US economists ascribe better than even (60%) odds of Federal Reserve action, but think that an extension of “Operation Twist” is more likely than outright QE3. Having said this, if QE3 were to materialise, I think that gold would clearly benefit, for a number of reasons: the risk-on trade that would follow; the negative impact on the US dollar; and rising inflationary expectations (perhaps to a lesser extent now than in the past).
What can be the newer reasons for a bull market in gold?
As I mentioned earlier, we are only modestly bullish on gold, for the reasons I explained earlier. Moreover, our projections see the end of the gold bull market is in sight and we see a downtrend emerge from next year onwards. By 2015, we expect the gold price will average significantly below its current levels, at $1,200/oz. As the road-map to more normal macroeconomic conditions is laid, we believe that more attractive opportunities will emerge for investors and, eventually, higher interest rates will also reduce gold’s appeal.
If a country like Greece were to decide to leave the euro zone, do you see that having any impact on the price of gold?
Absolutely. I think the immediate reaction would be for gold to fall sharply, as investors sell all risky assets and there is a flight to cash. Further down the line, “after the dust settles”, I would expect that such an event would re-ignite safe haven buying of gold and as such drive the price higher.
What can pull down the price of gold?
I think the biggest headwind for gold at the moment is the strength of the US dollar. If the US currency continues to strengthen, gold will remain under pressure. Further into the future, there are a number of potential factors which we indeed expect will push gold down, such as flows into other asset classes and, eventually, higher interest rates.
Do you see more central banks buying gold in the time to come?
Yes, we expect central banks will continue to be net buyers of gold and that purchases will amount to 400 tonnes overall in 2012. As I mentioned earlier, we think that this is supportive for the gold price both directly, as these purchases take bullion out of the market, and indirectly, as central bank buying confirms gold’s status as a key reserve asset and boosts investor sentiment towards the metal.
What sort of retail consumption of gold does China have?
Chinese demand for high-carat gold jewellery and for investment products is huge and in 2011 was the second largest, after India. Chinese jewellery demand amounted to nearly 500 tonnes and bar investment to 250 tonnes last year. Importantly, it is a market with potential for further growth and I would not be surprised if in 2012 Chinese demand surpassed India, particularly given the recent weakness of demand in the latter.
There is a lot of speculation about how the Chinese central bank is quietly buying up gold. How true is that?
In 2009 China did publish revisions to its official gold reserves which suggested it had been buying and there indeed is much speculation that this continues. In April, net imports of 67 tonnes were one of the highest figures on record and twice the average of the previous three months. As I do not believe there was a similar increase in jewellery and investment demand, this does suggest more gold entered the country than was consumed privately and one possible explanation for this could be official sector buying, although it is also possible that local commercial banks were building inventory. Ultimately, I can only comment with certainty on published information and, as you know, there is no data or announcements confirming Chinese official sector purchases of gold have taken place recently.
(The interview originally appeared in the Daily News and Analysis (DNA) on June 18,2012)
(Interviewer Kaul is a writer and can be reached at [email protected])
'The best thing that can happen to Google is that all its new products fail early'
Michael Brandtner is one of the leading branding and focusing consultants in Europe. and Associate of Ries & Ries. Beside his consulting work he is a frequent speaker on the topics of branding and positioning. “All my presentations start with “Brandtner on Branding”. But “focusing” is still the most important job to do in branding. A brand without a focus has no power at all in the long term. Take Sony! What does Sony stand for? Fifteen years ago Sony was a brand superstar. Today it is a burned out brand,” he points out. In this interview he speaks to Vivek Kaul.
You are a focusing consultant. What does a focusing consultant do?
I help companies to find the right focus for their brands. Most brands today are unfocused. That means that they try to stand for many different attributes at the same time. In a typical brand statement you will find phrases like this: Our brand stands for high quality, great service and innovation. Maybe this makes sense in a brand or positioning statement. But it sure makes no sense in the mind of the customer. Today, if you want to be successful, you need a powerful focus like “driving” for BMW, “breathes” for Geox or “search” for Google. The most powerful brands today are built around a single idea or even better a single word. That is the focus of a brand. And in my consulting work I help companies to find this one word.
What does it take for a company to be focused?
It takes strategic long-term thinking. You really must decide what your brand should stand for. Here in Europe Ryanair is focused on “low fare” airline. Today Ryanair is the most successful airline in Europe. Most other airlines are unfocused. They try to appeal to everybody. Of course most other airlines are in trouble today. Or take the Automobile industry. The brands in the so-called mushy middle are in trouble. The real successful brands are at the high end like Porsche, BMW. Mercedes-Benz, Audi or Lexus or at the low end like Hyundai or Kia. The brands in the mushy middle are unfocused. The brands at the high end or at the low end are focused. So I predict that Hyundai will become the largest Automobile brand in the world.
How does it help if a company is focused?
For most managers it seems not logical to focus. They still believe that the more you have to sell the more you will sell. It sounds so logical. But it isn’t. Marketing is not a battle of products. It is a battle of ideas. So if you want to win the marketing war, you have to focus on the right idea. Here is an example from Germany: In 1988 Dr. Best was just another toothbrush with a market share of about five percent. Then the brand becomes the first “flexible” toothbrush. This idea is the focus of the brand. They only make flexible toothbrushes. The advertising is focused on the flexible idea. They developed a powerful key visual or better called visual hammer with a tomato to dramatize the benefits of a flexible toothbrush. Dr. Best is flexible, flexible and flexible. Today the market share is over 40 percent. This is the power of a clear defined focus. A focus is more than an idea, it also a long term direction for the brand. It is the single idea that helps a brand to dominate a category.
Any other examples?
Take Opel. Opel is a European car manufacturer that makes a lot of different car models. But Opel has no focus. Why should anyone buy an Opel? I don’t know. Most people don’t know. In the mind of the prospect Opel is just another manufacturer of different car models.
What does it take a company to be all over the place?
Not much! A brand becomes successful with a single idea even a single product like Red Bull as the first energy drink. Then the management starts to add a “sugarfree” Red Bull and even a Red Bull Simply Cola. In most companies this is a natural way to grow a brand. And it is the perfect way to lose focus. This does not happen overnight because it is not easy to change the mind of the prospects. And that is the big problem with the issue of brand- and line-extensions. You can expand a brand over a long period of time and you are still clearly positioned. Then one morning you wake up and you have to realize that your brand does not stand for anything anymore. It takes time to build a brand and it takes time to destroy a brand. Take Sony! What does Sony stand for? Fifteen years ago Sony was a brand superstar. Today it is a burned out brand.
How does it hurt if a company is not focused?
If a brand has no focus, it will end up standing for nothing. That is the problem of Sony today. And maybe it will be the problem of Samsung tomorrow. Samsung is also unfocused. But today Samsung has the Galaxy. The success of the Galaxy is the main reason why most people think that Samsung is a hot company and brand. But Samsung as a brand does not stand for anything specific. Do you know what Samsung stands for? I do not. Fifteen years ago many people thought that Sony was a hot brand because of the success of products like HandyCam, CamCorder and Trinitron. These products faded away and Sony was left as an unfocused brand that stands for nothing specific. Now Sony is in deep trouble. It is like in the political world: If a political candidate tries to appeal to everybody, he will appeal to nobody. Take Barack Obama in 2008! He really did a brilliant move by focusing his entire campaign on one word, on “change”. “Change we can believe in” became his battle cry. That is the power of a focus.
Since everybody is talking about Facebook these days, how focused is a company like Facebook?
Today Facebook is a focused brand and company. Facebook stands for “social network”. It is the leading social network in the mind.
What about Google?
Google as a company is in the process of becoming unfocused. Google as a brand is still focused, because it still stands for “search” in the mind of the customers. It is still the ultimate search engine. But if Google is successful in expanding the company, it will destroy the focus of the brand. The best thing that can happen to Google is that all the new products under the Google brand will fail early.
How do you view the potential of Facebook when it comes to brands advertising themselves?
Facebook is not an advertising medium. It is much more an information medium. To but it even better: It is an interactive information medium. On Facebook people are interested in information, in conversation, in gossip, in buzz. But they are not really interested in advertising. On Facebook marketers have to think more like editors than like classical advertising people.
How does a marketer market in the world of Facebook, Twitter, blogs, and what not? How do you see social media changing marketing?
Social media today is totally overhyped. For many people it is a medium that will change the world of marketing as we know it. Here is my point of view: Social media is an important medium, but it is still only a medium. How important is television as a marketing channel for a company or a brand? It depends on the company, on the brand, on its strategy, on its messages and so on. How important are Facebook or Twitter or blogs as marketing channels for a company or a brand? It depends on the company, on the brand, on its strategy, on its messages and so on. For some companies and brands social media will become very important, for other companies and brands social media will only be another information medium like the web-site. For a car brand like BMW or Audi Facebook may be a great medium, because both brands have a lot of fans and a lot of relevant news for these fans. For a tissue brand Facebook is more like an additional web-site to give some basic information about the brand. Every company has to find out for itself how important Facebook, Twitter or blogs are in the media mix.
What’s the biggest branding mistake that a company can make?
(1) Believing that brand- or line-extension is the ultimate strategy to grow a brand.
(2) Believing that the better product will win
(3) Believing that it is easy to change the perception of customers with advertising.
Especially companies in trouble are doing these three things at the same time. Typical example here in Europe is Opel! Opel is in trouble. The typical reaction: We have to launch new models under our brand name to win market share. We have to build better products than the competition, because customers prefer better products. We have to change our logo and we have to launch a new advertising campaign to change the perception of our brand. Will it work? Of course not. Opel needs a new focus. Take Apple! About 15 years ago Apple was in trouble. What did Steve Jobs? He launched the iPod in 2001. He focused his efforts on a new brand to rebuild Apple. The success of the iPod did more for Apple than all other marketing efforts combined. It was also the base for the iPhone and the iPad. Steve Jobs knew about the power of a clear defined focus. He built three leading focused brands in only one decade, the iPod, the iPhone and the iPad. By doing this he made Apple the most admired company and brand in the world.
What are the areas of marketing according to you which marketers have the most trouble with? How can they address it effectively?
Still many management and also marketing people confuse reality with perception. That`s why they believe that the better product will win. Not true. The better brand will win. New Coke was the better product. Coke Classic is the better brand. Who wins? Coke Classic. Marketing is not a battle of products. Marketing is a battle of perceptions.
Could you elaborate on this point a little more?
Most companies are still building or investing in better products. But they should invest in better brands. Take Nokia! Nokia is the dominant brand for mobile phones. But Nokia is a weak brand in smart phones. Nokia stands for mobile phone, not for smart phone in the mind of the customer. So what is Nokia doing? They try to build better smart phones like the Nokia Lumia. Maybe the Lumia is a great smart phone in the factory. But in the perceptions of the customer it is just another smart phone on the market. Nokia should stop building better smart phones and start building a better smart phone brand. To achieve this they have to do two steps: Step one: Nokia has to create a new category of smart phones with a new powerful app. Step 2: Nokia has to give this smart phone a completely new brand name.
Why are big companies unable to launch successful new brands? They usually end up buying other brands. Like Google bought Orkut or Facebook bought Instagram recently.
The reason behind this is the so called corporate ego. If a company has a powerful brand name, it will tend to use this “powerful” name for all products. That is good thinking inside the company, but it is bad thinking outside the company. For the Kodak management is was logical to use the Kodak name also for the digital products. But this does not make any sense outside the company. Why should anyone buy a digital camera from a photo film company or brand? Kodak is not perceived as an expert for digital cameras. That`s the point. So it is not a bad strategy for big companies to buy new brands. If Google had launched a web-site for video search on its own, they would have probably called it Google Video. Instead they bought YouTube. Google now owns two strong brands and also market leaders in the search engine business. Google is the ultimate search engine. YouTube is the ultimate “video” search engine. Additionally Google has also Android. That is a great multi brand strategy. Google+ on the other hand is only a me-too social network. That’s a bad brand strategy.
So what does that mean?
That means: Companies have to overcome their corporate ego to launch second brands. But there is one very important point. It is not enough to launch a second brand first of all you need a new category. Take Microsoft in the search engine business! It is regardless whether the call the search engine MSN Search or Bing, because the strategy “launching a me-too search engine” is wrong. That means: If you launch a second brand, you first will need a new category. Without a new category you should not launch a second brand at all.
(Interviewer Kaul is a writer and can be reached at [email protected])
(The interview was originally published in the Daily News and Analysis(DNA) on June 11,2012. http://www.dnaindia.com/money/interview_the-best-thing-that-can-happen-to-google-is-all-its-new-products-fail-early_1700670)
‘I’ve never found a good pick by reading a news story’
Aswath Damodaran is one of the world’s premier experts in the field of equity valuation. He has written several books like Damodaran on Valuation, Investment Fables, The Dark Side of Valuation and most recently The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit, on the subject. He is a Professor of Finance at the Stern School of Business at New York University where he teaches corporate finance and equity valuation. . In this interview he speaks to Vivek Kaul.
How did you get into the field of valuation?
I started in finance as a general area and then I got interested in valuation when I started teaching. Valuation is a piece of almost everything you do and I was surprised how ill developed it was as a field of thought. It was almost random and not much thinking had gone into thinking about how to do it systematically.
A lot of valuation is basically compound interest when you discount the expected cash flows. So how much of it is math and how much of it is art?
Much of it is not the compound interest or the discount factor it is really the cashflows you have to estimate. So most of it is actually is in the numerator. It is about figuring out what business you are in. Figuring out how you make money. Figuring out what the margins are. What the competition is going to be. So numerator is where all the action is and it is actually very little to do with mathematics. It is more an understanding of business and actually getting it into numbers.
Can you give us an example?
So if you are trying to value Facebook getting the discount rate for Facebook is trivial. It is easy. It is about 11.5%. It is about the 80th percentile in terms of riskiness of companies. The trouble with Facebook is figuring out, first what business they are going to be in, because they haven’t figured it out themselves. How are they going to convert a billion users into revenues and income? And second, if they even manage to do it, how much those revenues will be, what will the margins etc. And those are all functions where you cannot think just Facebook standing alone. It is going to compete against Google. It is going compete against Apple. It is going to compete against other social media companies. So you have to make judgement calls of how it is all going to play out. It is numbers but the numbers come from understanding business. Understanding strategy. Understanding competition. Understanding all the things that kind of come into play.
You just mentioned that the discounting rate for expected cash flows from Facebook was at 11.5%. How did you arrive at that?
I have the cost of capital for by every sector in the US.
So this is the cost of capital for dotcoms?
This is actually the cost of capital for risky technology capitals. So basically I am saying is that I could sit there and try to finesse it and say is it 11.8% or is it 11.2%. But it doesn’t really matter. Getting the revenues and margins is more critical than getting the discount rate narrowed down.
This 11.5% would be from a combination of equity and debt?
For a young growth company it is almost going to be all equity. You don’t borrow money if you are that small and when you are in a high growth phase it is not worth it. It is almost all equity.
I recently read a blog of yours where you said that you have sold Apple shares even though they were undervalued. Why did you do that?
There are two parts to the investment process. One is the value part to the process. And the other is the pricing part to the process. To make money you need to be comfortable with both parts. You want to feel comfortable with value and you have to feel comfortable that price is going to converge on the value. In the case of Apple for 15 years I was comfortable with my estimate of value and I was comfortable that the price would converge on value. In the last year the Apple stockholder base has had a fairly dramatic change. There has been influx of a lot of institutional investors who have coming in as herd investors and momentum investors who go wherever the price is hottest. You have also got a lot of dividend investors who came in last year because they expected Apple to start paying dividends.
What happened because of that?
So you got this influx of new investors with very different ideas of what they expect Apple to do in the future. They are all in there. And right now they are okay for the moment because Apple is able to keep them all reasonably happy. But I think this is a game where I have lost control of the pricing process because those investors turn on a dot. Like they did, when the stock went from $640 to $530 for no reason at all. You look at any news that came out. Nothing came out. So why is the stock worth $640 and eight weeks later $530? But that’s the nature of momentums stocks. It is not news that drives the price anymore, it’s the herd. Basically if it moves in one direction, prices are going to go up $20. If it moves in the other direction, it is going to go down $30. And I looked at the pricing process and said I have lost control of this part of the process. I am comfortable with the value still. But I am leaving not forever. If these guys keep pushing it down, sooner or later they are going to push it to a point where these guys leave and then I can step in buy the stock. So it’s not permanent but I think at the moment it has become a momentum stock.
You have talked about the danger of purely relying on stories while investing. But that’s how most investors invest. What are the problems with that?
Even momentum investors want a crutch. Basically stories give them a crutch. You have decided to buy the stock anyway because everyone else is doing it. You don’t want to tell people because that doesn’t sound good so you look for a story to convince yourself that you area really doing this for a good reason. The power of the story is very strong, I am not denying it. But I am saying that if there is a story my job is to bring it into the numbers and see if that story holds up to scrutiny.
Any example?
You can talk about user base. Facebook the story is that they have lots of users. My job is to take those billion users and talk about what that might mean in revenues and margins and operating income and cash flows. And not just say that there are lot of users therefore the company must be worth a lot. If a Chinese company says we are going to be valued. There are a billion Chinese. Okay. What does that mean? You have a billion Chinese but how much will be you able to sell? How much will they buy your product? So I think you need to get past the macro big story telling because it is easy to fall into saying that hey this company is worth a lot.
Can smaller investors make money by piggybacking on investment decisions of big investors?
If you look at institutional investors they do things so badly why do you want to piggyback on them.
Someone like a Warren Buffett and Rakesh Jhunjhunwala in the Indian context?
You could but I think by the time you get the information it is usually too late. It is not like you are the only one who finds out that Warren Buffett has bought a stock. Half the world has found out. So when you get to lineup to buy the stock, everyone else is buying the stock and price has already moved up.
George Soros once said that most money is made by entering a bubble early. What are your views on that?
Everybody is guilty of hyperbole when it comes to bubbles and Soros is no exception. Soros has never been a great micro investor. He has made his money on macro bets. He has always been. He has never been a great stock picker. For him it is got to be massive macro bubbles, an asset class that gets overpriced or underpriced. You’re right if you can call macro bubbles you can make a lot of money. John Paulson called the housing bubble made a few billion dollars. So he is right and he is wrong. He is right because if you can call a macro bubble you can make a lot of money. He is wrong because if you make your investment philosophy calling macro bubbles, you better get lucky, because everybody is calling macro bubbles and most of them are going to be wrong.
You have talked about buying the 35worst stocks in the market and holding that investment and making money on it. How does that work?
It’s called the classic contrarian investment strategy where you buy the biggest holders and you hold them for a long period. There is evidence that if you hold them for a long period that they tend to be the best investments. But it comes with caveats. One is that if you buy the 35 biggest losers they often tend to be low priced stocks because they have gone down so much which increases the transaction cost of your trading. The other is that it is very dependant on your time horizon. It turns out that if you buy the lowest price stocks for the first 18 months they actually underperform. It is only after that they turnaround. This means that if you buy these stocks you are going to get about 18 months of heart burn and stomach aches. And for many people they don’t have the patience to stay in. So they often buy the worst stocks after reading these studies. About 12 months in they lose patience they sell it. It is very dependant on both those pieces of puzzle falling in.
How much role does media play in influencing investment decisions of people?
Media and analysts are followers. None of the media told us last week that Facebook was going to collapse. Now of course everybody is talking about it. So basically when I see in the media news stories I see a reflection of what has already happened. It is a lagging indicator. It is not a leading indicator. I have never ever found a good investment by reading a news story. But I have heard about why an investment was good in hindsight by reading a news story about it.
I am not a great believer that I can find good investments in the media. That’s not their job anyway.
(The interview was originally published in the Daily News and Analysis(DNA) on June 2,2012. http://www.dnaindia.com/money/interview_ive-never-found-a-good-pick-by-reading-a-news-story_1696935)
(Vivek Kaul is a writer and can be reached at [email protected])