My latest piece in MONEYLIFE
Thoughts for the discerning armchair investor
A very valuable lesson in investing I learnt was from the father of one of my friends. His basic advice was that I should buy two residential houses. One should be for living in and the other for getting a steady rental income. The logic was very simple—one cannot be very sure about any financial instrument or inflation. If inflation goes up, rentals will go up. When one stops working, there is a house to live in and another one that will fetch a rental income. He also mentioned that the second home should be in a good locality and command excellent resale value, while the first one can be in a poor area. This was in the early 1980s. In those days investment in real estate made sense.
Stocks were not very popular then; though, looking back; they were perhaps the best times to buy MNC stocks. Today, it is very tough to take a call on any company and expect it to deliver multiple returns. Going by pure faith, the choices get restricted to the HDFC-type of companies or MNCs. I expect more fairness from these companies than from family-owned Indian enterprises.
To me, the one big difference between family-owned companies and government ones is that the former are driven by profits and are aware of the need of capital markets to thrive, whereas government companies have no articulated profit-making goals.
Mutual funds as an investment vehicle seems okay to me, but one cannot expect anything spectacular from them. Over the long term, perhaps, the returns could be around 15% per annum. Of course, a lot will also depend on how, when and where I invest. Market conditions will have a lot to do with my returns as well, whether I adopt the SIP route or not.
Choosing between a mutual fund route and direct equities is a personal call. Mutual funds offer us diversification of portfolio and investing in many mutual fund schemes simply diversifies fund managers’ skills. I would rather pick on a basket of six to 10 companies and build up a portfolio of those.
The index, to me, is a very poor benchmark to aspire for. The making of an index is not based on quality or prospects but on other criteria that are irrelevant to returns. My basic expectation would be to get a bit more than the GDP growth (say 5% to 6% per annum over the long haul). Therefore, I will have to pick stocks from sectors that will grow faster than the GDP.
In terms of sectors, I will pick those which are driven by consumer spending. Logically, the choices would be sectors like automobiles, FMCG (fast moving consumer goods) and pharmaceuticals. I will avoid sectors which are dependent on government action or intervention as the risk is too high. Those are merely speculative opportunities and do not create wealth.
I am a big fan of cash flow analysis. I like companies that pay taxes (not merely make provision for deferred taxes) and generous dividends. Hence, I will not go near high-debt companies that show abnormal ‘profit’ growth, and engage in frequent dilutions. Take time off to read balance sheets, or be safe and stick to companies with the positive attributes, namely: no debt, normal tax payout and generous dividends.
An important avenue is the facility given by the Government of India to let us invest overseas. I believe that, over time, the Indian rupee is going to be a loser, unless we strike oil, and thus keeping some of our wealth in foreign currency should be a good defence. In this, I will go straight for the US dollar. No matter what happens to it, the world still has no option but to trust the greenback. It would provide me with a hedge against inflation as well.
Ultimately, each one has to be comfortable with the risk appetite he/she has. I am not a believer in creating an excel sheet to plan my savings and investments. I save what I can and invest what I wish to.
Skyfall: No. 23, after 50 years
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NARASIMHAN BALAKRISHNAN | 06/11/2012 05:38 PM |
Skyfall is the perfect way to commemorate 50 years of Bond on the silver screen. It is not only the best Bond movie to date, but also the best action movie of this year
Around 50 years ago, Sean Connery was chosen to play the lead in a movie, whose franchise would be the second highest grosser ever and probably the first after a couple more titles. Coming to the 21st century, James Bond movies have had their shares of highs and lows. Over 23 movies, six actors in the lead role and 12 and a half billion dollars grossed (inflation adjusted), the James Bond movie series is one of the most iconic ever.
Skyfall, the 23rd Bond film, Daniel Craig’s third outing as 007, is probably the most awaited film this year after The Dark Knight Rises. And after the rather mediocre Quantum of Solace, fans would certainly hope for a much better movie. Delayed by a year due to MGM’s financial woes, Skyfall may be late but is certainly worth the wait. Skyfall is the Bond movie that takes the character so wonderfully introduced in 2006’s Casino Royale to another level.
The plot of Skyfall is unlike that of any previous Bond movie. The 23rd time around, things are a lot more personal. MI6’s list of operatives in terrorist organizations is stolen and names are released publicly, five every week. M is haunted by a certain person from her past and it is up to an aging and slightly haggard Bond to clean things up. It all leads up to the climax, where one understands why the film is named so.
What happened with the reboot of the Bond franchise in 2006 was that grandiose action sequences aside, the movies became more connected to the real world than the times of pen grenades, watch embedded grappling hooks and the over-the-top Armageddon schemes. James Bond is much more human and quite fallible too. Long gone is the one-liner spewing, un-woundable super spy-cum-killing machine who never missteps.
Helmed by Sam Mendes (Road to Perdition, American Beauty), Skyfall is THE definitive Bond movie for the 21st century. The movie’s strengths are quite a few.
First and foremost, the cinematography. The man behind the lens is Roger Deakins, who adds Skyfall to his already reputable list that includes movies like The Shawshank Redemption and A Beautiful Mind. The camera work is excellent throughout and shines particularly in a dimly-lit fight sequence in Shanghai and the climax. A big plus is that Deakins consciously avoids the use of shaky-cam, which would certainly feel out of place in a Bond movie. The locales are all captured wonderfully, be it the stunning opening sequence in Turkey, the Macau Casino or the climax in the Scottish countryside. Lighting is pitch-perfect in all scenes too. Never unnecessarily dark or too bright, this movie deserves an Oscar nomination for the cinematography. It is probably the best shot movie of the year.
Next, the screenplay. With Neal Purvis and Robert Wade (Bond regulars) as the screenwriters, the screenplay’s missteps, if any are few and minor. A complaint could be made about the movie being too long but personally, I felt it was correctly paced. While the movie opens leisurely with the introduction of characters, the pace quickens and the tension is sustained very well. It goes to show that style and substance can co-exist in a Bond movie, which one certainly hasn’t seen in movies like Die Another Day or the immensely forgettable Living Daylights. Each character is well written and some characters given a new dimension too. The plot, while containing sufficient action, has a fair amount of emotional content too, something rarely seen in the Connery or Moore movies. While the movie has a serious undertone to it, there are some genuinely funny moments too.
Moving on to the cast. Daniel Craig as Bond is the closest anyone has come to Ian Fleming’s character so far. Craig portrays Bond as a flawed man who seems to be losing his edge, but has an unwavering sense of duty. His performance is immaculate and it is clear that he has given his all to the role. He breathes life into Bond. While Oscar considerations are unlikely, it is certainly a top-notch performance. Every Bond movie has two heroines, one a damsel in distress who is seduced by Bond and mostly dies somewhere in the movie. And then there’s one that carries on till the end. This time around, the second job is done by Judi Dench, as M. She is consistently excellent and brings an extra dimension to the character and is unlike cold-hearted decision maker she has portrayed in earlier Bond films. It’s nice to see M get her hands dirty for once.
Craig and Dench aside, the biggest strength of the movie is the antagonist Raoul Silva, played by a blond Javier Bardem. Javier Bardem is tremendous as the agent-turned-terrorist with unresolved mommy issues. There are moments where Silva is charming and humorous. There are some where is emotional. And some in which he’s downright menacing. Bardem pulls off all these scenes with consummate ease. One can safely say Silva is the best Bond villain ever. Bardem follows up his negative turn in No Country For Old Men with a completely different but nevertheless outstanding portrayal of Silva. His screen presence is outstanding. Oscar worthy performance, surely. Other cast members include Ralph Fiennes as Mallory, head of the British Intelligence Services, Naomie Harris—the inexperienced field agent and Ben Whishaw as the quartermaster.
The action scenes are superb. No other word for them. Each action sequence has been choreographed painstakingly and the end result is amazing. Right from the opening chase in Istanbul to the pyrotechnics heavy climax, the scenes are uniformly stunning. In particular, a chase sequence in London followed by a shootout is exhilarating. The music, done by Thomas Newman who has worked with Mendes before, is top notch. Every scene has music that complements it. The opening track by Adele is also quite good.
While the film boasts of so many positives, it has a few minor faults. The character of Severine (previously mentioned victim-heroine) is rather weak and Berenice Marlohe is not very good in the role. An argument could be made against pacing, as mentioned before, but these issues are few and far between. It is as close to the perfect Bond movie as one could hope for.
While this is Bond in the 21st century, Skyfall does pay enough reverence to the Bond of the sixties and seventies and should keep old Bond loyalists happy too. The addition of two new characters which I won’t reveal should bring a smile to the faces of Connery-Moore fanboys. And the way the movie plays out in the end, it ends up as a perfect mix of old and new.
Skyfall is not only the best Bond movie to date, but also the best action movie of this year and one can only hope the next Bond movie reaches the heights this does. It is the perfect way to commemorate 50 years of Bond on the silver screen. Bond certainly will be back, and I’m looking forward to it.