Sucheta Dalal :Gold run (30 Nov 2003)
Sucheta Dalal

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Gold run (30 Nov 2003)  

If gold prices in India have soared past Rs 6,000/10 gm, it is not exactly an Indian wedding phenomenon. The world gold market is looking extremely buoyant. In fact, the octogenarian market forecaster, Richard Russell, is so bullish that wrote in his November 15, 2003, newsletter: ‘‘There are a few times in an investor’s life when the opportunity for huge profits lies ahead. Such periods in the stock market occurred in 1932, 1942, 1949, 1974 and 1980-82. People who loaded up with common stocks at those times and held those stocks made fortunes. I believe another such a time is now. And I’m referring to the current young bull market in gold’’. According to Russell, ‘‘I believe gold below and even somewhat above $400 an ounce is dirt cheap”. In fact, he insists that it is the cheapest thing going over a five-year period. That’s because, ‘‘The US government, states, cities, corporations and individuals are currently loaded with $32 trillion in debt. On top of that, the US government has additional unfunded liabilities of around $44 trillion, all of which will have to financed’’, says Russell. To the Indians the Rs 6,035 plus price per 10 gm may seem very high, but since India produces very little of its insatiable demand for the yellow metal it cannot escape the impact of a global flare up in prices. Those planning a wedding in the next five years should take special note of Russell’s prediction.

Security issues

Police protection at taxpayers’ expense clearly need a review. At a time when one police commissioner is served a show cause notice in the Telgi scam, his predecessor has a dozen gun-toting policemen and a wireless Qualis protecting him with taxpayers’ money. At least a dozen high profile MPs and MLAs from the Congress, Shiv Sena and BJP also strut around with heavy police protection, which is so clearly just a prestige symbol. It is not clear if the alleged threat to them is ever reviewed. Contrast this with some others whose lives are certainly more precious to the national interest. N.R. Narayana Murthy, Chief Mentor of Infosys Technologies, who had been provided heavy police protection by Karnataka after threats to industrialists, has asked the government to withdraw the security, saying that he will take care of himself. ‘‘I will put my trust in the Almighty’’, he says. Then there is Manohar Parrikar, the IIT engineer, turned Chief Minister of Goa. Parrikar zips around the State and pays surprise visits to various offices with only the red beacon on his car indicating some official status. Last week, he stunned a group of ex-IITians and journalists accompanying him, when he jumped out of his car and strode into the crowded, newly constructed vegetable market in Panjim. The modern market with a huge collage by Mario Miranda as its focal point was constructed in just four months. Before the surprised vegetable vendors could register Parrikar’s presence, he completed his brisk tour and was out of the place.

Good news? Last week we wrote about how Karvy Consultants compensated two Mumbai doctors for wrongly processing their applications to the UCO Bank public issue. One was paid Rs 10,000, the other Rs 5,000. Soon after, the doctor had another problem with Karvy. It messed up the despatch of a Rs 8,000 dividend warrant from Gujarat Ambuja Cements to one of the same doctors and again paid him a compensation of Rs 990 and apologised. The matter would have ended there, but for the fact that the doctor discovered that the Rs 990 had been debited to his own depository account at Karvy. He dashed off another furious letter and received yet another abject apology for the ‘grave clerical error at our end’. Karvy also rectified the account immediately. Funnily enough, although Karvy seems astonishingly accident prone, its quick amends and willingness to compensate investors works well in its favour. From an investor’s perspective, if you can’t have fault-free service, an alacritous intermediary is the next best thing.

Tailpiece: The Shiv Sena is one political party that is completely unabashed about its duplicity. While the party goons went on a rampage and bashed up ‘Bihari’ job seekers in Mumbai, the Sena has no problem bestowing its highly coveted Rajya Sabha seats on non-Maharashtrians. Ironically, its most vocal MP, Sanjay Nirupam, is a Bihari. Its Page 3 representative, poet and MP is Pritish Nandy—a Bengali. And its third representative is the Marwari businessman, Rajkumar Dhoot. But such contradictions are not new to the Sena. A few years ago, when its mobs went around blackening shop boards written in English, the three favourite restaurants of its leaders, located cheek-by-jowl to its Mumbai headquarters, sported anglicised names, written in English and had no Maharashtrian food on their menu.

-- Sucheta Dalal