Tarun Bhatia's Blog

Fear the Boom and Bust

tarunbhatia85@gmail.com (Tarun Bhatia) — Thu, 28 Jan 2010 00:11:00 +0000

The end of Tdraconian.com

tarunbhatia85@gmail.com (Tarun Bhatia) — Tue, 26 Jan 2010 16:18:00 +0000

Lately I have been contemplating the end of Tdraconian.com. Sometimes you have to look at the real numbers and face the facts.

Firstly, the bounce rate has been dwindling each year and very few new visitors are coming by.

In addition, lets face it, with school starting, I will have even less time to post new blog entries.

Lastly, Tdraconian.com was my first attempt to create a website and a blog. It was a long process where the website took many shapes and forms keeping the original HTML look. Times have changed and I think that I need to work on the next version of my website and pick a better more professional name. I never thought that the name Tdraconian will ever catch on or even that people will try to understand its true meaning. It was a 'personal' website and more or less like a journal than anything else. This space will expire in a week and after that anyone coming straight to tdraconian will be forwarded to another website, whose name I will post in a few days.

If this move upsets you, let me know your concerns or advice. I will keep an open mind.

The Strangest Secret

tarunbhatia85@gmail.com (Tarun Bhatia) — Fri, 08 Jan 2010 20:43:00 +0000

New Year Goals

tarunbhatia85@gmail.com (Tarun Bhatia) — Tue, 05 Jan 2010 03:58:00 +0000

Each year we set out to make some New Year Resolutions. Then in few weeks, we are back to the same old routine of whimpering, whining and cutting corners. Maybe this year, you want to set goals instead of resolutions? Maybe this year you want to track your progress every step of the way? How about keeping a log, writing your thoughts down and having an accountability partner who you can rely on when you start slipping? Don't make 2010 just another year of mediocrity; Do It!

Was your College Education Worth it?

tarunbhatia85@gmail.com (Tarun Bhatia) — Tue, 29 Dec 2009 22:22:00 +0000

Source: Online Colleges and Universities

India - The Land of Tiger

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 28 Dec 2009 21:05:00 +0000

Is gold a good investment after all?

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 21 Dec 2009 19:56:00 +0000

From Comprehensive Wealth Management -

"In recent months financial news organizations have been teeming with articles and exposés on gold and the expected large gains in value for that particular asset. For most, the reasoning is that with all the paper money being created by the world’s governments (which is devaluing existing currencies) that inflation must be just around the corner. The high inflationary times of the 70s was what eventually led to gold’s all time high price in the 1980s. Gold buyers obviously are hoping that the current loose monetary policies around the world will lead to another such high inflation scenario. However, gold is not the only asset type that benefits from this situation and in fact, it may not even be the best asset in such a case. Therefore, it is important to determine the timing of when gold may be a prime investment choice, as well as comparable alternatives.
From a portfolio management standpoint, in the theme of falling paper currency values and higher inflation, gold may not always be the best way to invest. The last year has seen a substantial double digit drop in the value of the US dollar yet gold was not the best performing commodity asset. For example:

Agora Financial’s 5 Minute Forecast¹

Gold fared quite poorly when compared to several basic materials (industrial metals) and some agricultural products. Much of this is likely due to increased demand from countries like China. By being invested in silver rather than gold an investor could have made twice as much money this year. The major difference between the two precious metals is that gold does not have much industrial use outside of jewelry manufacture, which limits its value for true business. Silver on the other hand has a variety of industrial uses and, just like gold, also serves as an inflation hedge (protection) or anti-currency investment. If the current trend continues then gold may not be the best material asset to invest in."

"What seems like continuously dropping U.S. dollar value is causing many a sleepless night for foreign holders of the currency. Around the world, “roughly 65% of the total foreign exchange reserves of foreign governments are held in U.S. dollars.”¹ Asian and emerging governments hold especially high amounts of their reserves in dollars. These high reserve amounts and angst over dropping value has led some to call for more diversification in their reserve holdings. This has resulted in “the first time in a quarter century (where) central banks are buying more gold than they’re selling.”³ During the 20 year period between 1980-2000 central bank gold selling was a large inhibitor of upside price movement. Goldman Sachs provides the following synopsis of this situation:

“Although central banks have historically been net sellers of gold, we have witnessed a significant slowdown in the pace of sales since 2008 with the latest data suggesting an outright halt in aggregate sales. Compared to the late 1990s when many central banks viewed gold as a low-yielding asset and their gold sales put downward pressure on gold prices, the more recent movement among central banks is to view gold reserves as an important source of diversification away from the US dollar in their reserve holdings.
Furthermore, emerging market central banks have explicitly stated their intentions to gradually diversify reserves into gold as well as currency reserve assets other than the US dollar. From a positioning point of view, Asian nations as a group hold only a small percentage of their reserves in gold vs. the major European nations holding more than half their assets in gold (56% as of October). China, for example, holds only about 1.49% of its reserve assets in gold and surprised earlier this year when it announced that it had increased its gold holdings by 76% since 2003 to 1,054 tons, mostly from buying from their domestic mine production. Similarly, only 4.7% of Russia’s reserves are in gold and it has stated its intention to increase its gold holdings and has done so by 19% this year alone. Furthermore, the recent announcement that India was to purchase 200 tons of the 403 tons of gold the IMF plans to sell has substantially reduced the outlook for central bank sales in 2010 and 2011. Net, we expect selling by central banks and other official sector institutions to remain near subdued, less than 100 tonnes per year on net (0.25 million toz per month). Should Central Banks continue to be net buyers of gold in the next two years, the upside risk to gold prices would be considerable.”²

Interestingly enough these same central banks are also one of the largest potential risks to gold’s value.
The last gold price spike in the early 1980s ended, “as the dramatic tightening of US monetary policy under Chairman Paul Volcker drove US real interest rates dramatically higher and drove gold prices down substantially.”² Increasing rates normally cause a spike in the valuation of the nation’s currency. A dollar rally would not be a good thing for gold’s value. If the Federal Bank should raise rates, or if the dollar rally’s on its own, it should be expected that gold and similar assets will lose value. Therefore “an earlier than expected tightening of US monetary policy is the primary downside risk to gold.”² Fortunately low interest rates are expected to remain for the extended future. The outlook from Goldman Sachs is that, “the gold price-real interest rate cycle will turn when the US Federal Reserve begins to raise interest rates, but do not expect that to happen this year or next.”² In other words, for at least the time being, the risk to gold from this action should be minimal. This opinion is likely formed around the continuing market turmoil and the Feds desire to support growth through low rates. However, everything is always subject to change in the investing world."

Sources:

Mathias, Ian. Gold Forecasts, The New Reserve “Currencies,” Climategate, Alt Energy Investing and More!. Agora Financial’s 5 Min. Forecast. December 2nd, 2009. http://5minforecast.agorafinancial.com/gold-forecasts-the-new-reserve-currencies-climategate-alt-energy-investing-and-more/

Durden, Tyler. Goldman on Gold: $1,450. www.zerohedge.com. December 3rd, 2009. http://www.zerohedge.com/article/goldman-gold-1450oz

Read the rest of the article here

This article made me wonder how I faired in a "booming" economy against those who claim Gold to be the beat all inflationary hedge fund. Well, I found interesting statistics -

If you look closely, overall I only made 24.36% gains much less than gains made by gold but, that is only because my portfolio has 25% bond investment and 75% stocks. Had it been complete stock infusion in my portfolio, the gains would have been 35.22% clearly beating the Gold market gains. At my work 401k, I had made almost 40% gains rendering investment in Gold pretty obsolete in a booming economy scenario. Needless to say, same might not be true in a bearish economy and with the every country looking at Gold as a tool for diversification, Gold might be going up for a little longer than my funds. Market as they say, is ever in flux.

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 14 Dec 2009 23:20:00 +0000

How much of who you are today is because of your family? According to my wife, it is a lot for an Indian. What about you?

Quote

tarunbhatia85@gmail.com (Tarun Bhatia) — Fri, 04 Dec 2009 21:14:00 +0000

"Our society at its core does not appreciate that if life spans are going to be 90 or more years, managing money properly through a lifetime is critical. Someday they will."

David Wray, Profit Sharing/401(k) Council of America

Deliverance

tarunbhatia85@gmail.com (Tarun Bhatia) — Wed, 02 Dec 2009 17:19:00 +0000

tarunbhatia85@gmail.com (Tarun Bhatia) — Wed, 02 Dec 2009 01:37:00 +0000

The one who is going through fire, how do you tell him the pain will make him pure?

Belief: Something you work hard for

tarunbhatia85@gmail.com (Tarun Bhatia) — Tue, 01 Dec 2009 16:54:00 +0000

Quote

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 23 Nov 2009 22:05:00 +0000

"He is richest who is content with the least, for contentment is the wealth of nature."

This is interesting

tarunbhatia85@gmail.com (Tarun Bhatia) — Wed, 18 Nov 2009 22:51:00 +0000

Building a room for Pirates of the Burning Sea

tarunbhatia85@gmail.com (Tarun Bhatia) — Wed, 18 Nov 2009 16:22:00 +0000

A lot of people wonder how hard or easy it is to create the environment for a Game. Weather it is console or PC, a lot of work is involved before any room ever see the light of a Live game. Our Content and Design Lead wrote a devlog about all the work that's put in to create one room(port battle and fort).

"Defining the Goals for the Space / Brainstorming the Design

This phase is really the most important part of the process for the Design team. Defining the goals at the beginning sets the foundation for all subsequent work. We start by brainstorming and answering a battery of questions to focus on what is most important for the goals of the space. Design, Content and Art departments start working through the questions and generating ideas for the functional and visual aspects of the environment. We discuss some of the high level directives and usually walk away with a rough layout of the environment on a whiteboard or a piece of paper. Then we collect visual references and data to flesh out the design."

Read the rest of the article here, where he talks about how we take the room from Prototype to Production and then finally to test and polish!

tarunbhatia85@gmail.com (Tarun Bhatia) — Fri, 13 Nov 2009 22:16:00 +0000

Its amazing how a quick walk during the middle of chaos can clear your head

Finally: A bill with proper customer protection

tarunbhatia85@gmail.com (Tarun Bhatia) — Thu, 12 Nov 2009 18:15:00 +0000

AP Economic Writer, CHRISTOPHER S. RUGABER reports - "WASHINGTON – Banks will have to secure their customers' consent before charging large overdraft fees on ATM and debit card transactions, according to a new rule announced Thursday by the Federal Reserve.

The rule responds to complaints from consumer groups, members of Congress and other regulators that the overdraft fees are unfair because many people assume they can't spend more on a debit card than is available in their account. Instead, many banks allow the transactions to go through, then charge fees of up to $25 to $35.

For small purchases, such as a cup of coffee, the penalty can far exceed the actual cost of the transaction.

Under the Fed's new rule, which will take effect July 1, banks will be required to notify new and existing customers of their overdraft services and give customers the option of being covered. If customers don't "opt in," any debit or ATM transactions that overdraw their accounts will be denied, Fed officials said."

Read the complete article here

This means if you are going negative with a latte purchase, your bank will notify you before they authorize that negative purchase and charge you with overdraft fee. Perfect, now banks will have to make you feel guilty and this will add that extra accountability that most individuals need before they make financial blunders. Also, the greedy bankers will be scratching their heads after July 1, on how to squeeze their customers for more money, since all their vicious venues are closing one after another.

This probably also means that US Economy is closing itself in a financial cocoon, stopping excessive credit flow, which would inevitably lead to a healthier but slimmer economy. Way to go, President Obama!

New Cars not a whole better than Clunkers

tarunbhatia85@gmail.com (Tarun Bhatia) — Thu, 05 Nov 2009 00:04:00 +0000

Associate Press reports - "WASHINGTON – The most common deals under the government's $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that got only marginally better gas mileage, according to an analysis of new federal data by The Associated Press.

The single most common swap — which occurred more than 8,200 times — involved Ford 150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford 150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford 150 and Chevy Silverado — along with Ford's Escape midsize SUV — climb into the Top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million."

So the question really remains how effective was this 'auto-bailout' for the environmental bottom lines since that's how it was marketed?

Read the complete article here

Latest fees on your Credit Card

tarunbhatia85@gmail.com (Tarun Bhatia) — Thu, 22 Oct 2009 15:40:00 +0000

Think you are saving money and building credit by paying off your Credit Card at the end of each month? Think again.
Sandra Block from USA today reports "

Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.

Citigroup, meanwhile, has started charging annual fees to card holders who don't put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don't use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt."

So if you don't use a certain amount of credit in a year you'll be charged a fee. If you do, you might be charged anyway. Credit cards have become to economic health of an individual/country what cigarettes are to physical health.

Read the complete article here.

Honeymoon to Hawaii

tarunbhatia85@gmail.com (Tarun Bhatia) — Sun, 18 Oct 2009 04:07:00 +0000

For those of you wondering where I have been for the past couple of weeks? Well the answer is Hawaii! We waited for a whole year after our marriage to go to our honeymoon and we saved for the trip throughout the year. We wanted this to be, well, we wanted this to be special and well worth it! And boy, did we had a good time.

Expect normal blogging to resume soon...

Forgiving student loans to boost the economy?

tarunbhatia85@gmail.com (Tarun Bhatia) — Tue, 08 Sep 2009 19:18:00 +0000

Do you think this is a good idea?
Yes! Well read on...

"Mark Kantrowitz, publisher of FinAid.org, crunched some numbers. Kantrowitz says there is $730 billion in outstanding student loans — $598 billion in federal loans; $132 billion in private loans."

So 'forgiving' them will put more money in your pocket so you can go spend it, hence stimulating the economy right?

Well, you are wrong and here's why...

"A little less than 4 percent of outstanding debt — or $28.8 billion a year —is now being repaid, Kantrowitz says."

“So assuming that the borrowers would spend this windfall instead of saving it or using it to pay down other debt, this proposal would involve the government spending $730 billion now in order to increase consumer spending by $28 billion,” Kantrowitz writes. “Since less than 4% of the cost of this proposal would be spent by consumers in the first year, it will clearly not have the “immediate stimulating effect” claimed by the proposal’s proponents.”

Read the complete article here

The Governemnt Can

tarunbhatia85@gmail.com (Tarun Bhatia) — Wed, 26 Aug 2009 16:42:00 +0000

Denial is not a plan

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 24 Aug 2009 23:17:00 +0000

Too many people use extreme denial to cover up the financial problems they're facing. If you sit down each year, and do your finances and find out that you're credit cards are maxed out and you are spending more than you make, it should be a wake up call! But most people and I know few people who are really close to me are in the extreme denial stage when it comes to their finances. Here are few ways to tell that either you or your spouse is in denial -

Using Religion as a denial -
"God will fix our lives", "God has got us in this hole, and He will get us out of it", "I've left everything in HIS hands". These are the most common words used by people who use religion as their denial shields. Same people also say, "God will fix my health", "God will fix my relationship". These people are scared out of their living bones and they step in their cocoon called house or apartment and don't come out to face whatever problems they might have to face. Most of these people have tried and given up on dealing with their finances and are just waiting for the big train wreck. Bhagavad Gita says, "Do your duty, to the best of your abilities, for the Lord without any selfish motive, and remember God at all times - before starting a work, at the completion of a task, and while inactive". It doesn't mean, "Stay in your house, avoid the bank calls, stay in bed till noon and avoid your bank manager at all costs, and let God fix your books and finances". The Bible's proverb 10:4 says "Lazy hands make a man poor, but diligent hands bring wealth.".

When you're broke, the best place to be, is at work.

Using time as a denial -
"Time will fix everything"; "We weren't poor in the past and we won't be poor in the future";these people have done little to keep up with the changing times. Still following the 20-30 year old ways of doing things they haven't kept up with the times and now, since the whole business model is changed but not them; they are suffering. Yet like a mouse in a trapped wheel with nowhere to go, they're convinced that their luck will change. Zig Ziegler a motivational speaker used to say, "If you keep doing what you are doing, You will keep getting what you've been getting".

Using Need as a denial -
"I work so hard, everyday and night. I put so much at work, at home, and in our lives. I deserve (new clothes, makeup, pedicure, gold pen, tools, kitchenware, china cabinet, couches, day at the spa, truck, golf clubs, ) fill in the blanks." Well, what you really DON'T deserve is not being able to send you kids to college without them taking huge amounts of debt. Or to retire broke, working all your life and having nothing to show for it but a new car and a negative balance sheet. You can't afford to live to keep up with the Jones while others are putting 20-30% of their income in retirement savings or for future purchases.

Just being in denial -
When you're in denial, its like a toddler in his dirty diapers. He won't give it up cause he knows its warm and its his! Change is hard, and being in denial is easy. But when do you wake up knowing that what you've been doing is not working? When do you wake up and really accept that you're cheese has moved and you've to come out of your rat wheel and look for it one more time like you did the first time? It might be scary, and unpleasant, but most of the time, change is for the better!

tarunbhatia85@gmail.com (Tarun Bhatia) — Thu, 20 Aug 2009 00:15:00 +0000

what would the readers think about having podcast on the website?

Do you really want a cat? Then watch this...

tarunbhatia85@gmail.com (Tarun Bhatia) — Mon, 17 Aug 2009 15:46:00 +0000

They are mean little things. Think again!