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Ramesh Damani’s view of the market

Source:Deena Mehta

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Realty

Can Mumbai realty prices crash by 100%?

Earlier,I had blogged about a Research Report by Ambit Capital which discussed the possibility of Mumbai realty prices crashing by 50%

Now comes a study on climate change which discussed the possibility of Mumbai and other coastal cities going underwater in the next few decades:

In what may prove to be a turning point for political action on climate change, a breathtaking new study casts extreme doubt about the near-term stability of global sea levels.

The study—written by James Hansen, NASA’s former lead climate scientist, and 16 co-authors, many of whom are considered among the top in their fields—concludes that glaciers in Greenland and Antarctica will melt 10 times faster than previous consensus estimates, resulting in sea level rise of at least 10 feet in as little as 50 years. The study, which has not yet been peer reviewed, brings new importance to a feedback loop in the ocean near Antarctica that results in cooler freshwater from melting glaciers forcing warmer, saltier water underneath the ice sheets, speeding up the melting rate. Hansen, who is known for being alarmist and also right, acknowledges that his study implies change far beyond previous consensus estimates. In a conference call with reporters, he said he hoped the new findings would be “substantially more persuasive than anything previously published.” I certainly find them to be.

To come to their findings, the authors used a mixture of paleoclimate records, computer models, and observations of current rates of sea level rise, but “the real world is moving somewhat faster than the model,” Hansen says.

Hansen’s study does not attempt to predict the precise timing of the feedback loop, only that it is “likely” to occur this century. The implications are mindboggling: In the study’s likely scenario, New York City—and every other coastal city on the planet—may only have a few more decades of habitability left. That dire prediction, in Hansen’s view, requires “emergency cooperation among nations.”- from Slate

 

As an aside,I always wondered why our ancestors did not build any coastal cities.Minor ports aside, all the major capitals (Delhi, Pune, Mysore, Hyderabad, Lahore, Murshidabad etc) were miles away from the sea. All our major coastal cities such as Mumbai,Chennai,Kolkata,Karachi etc were built by the British.

Is it possible that our ancestors learnt from the experience of ancient India where cities like Dwarka, Lothal etc perished under the waves?

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Excerpts

Rules of thumb

Rules of thumb aren’t perfect, of course. But that’s their advantage. By starting with a strategy you know isn’t perfect, you naturally leave yourself room for error, and are more flexible in accepting the market’s whims.

So I don’t use fancy valuation models to calculate how much stocks should return over the next 10 years. I assume 6% a year after inflation over the long haul. I figure that’s good enough.

I don’t forecast what the market will do this year. I assume the market will go down half of all days, a third of all years, and a fifth of all decades. That’s probably good enough.

I don’t predict what the economy will do this year. I assume we’ll have a recession every five to seven years. Good enough.

Don’t bother me with calculators that show me how much money I’ll have in 30 years. I don’t know what my bills will be next month. I save as much money as I reasonably can while living a lifestyle that I’m content with. I figure that’s good enough.

Spare me with your analysis of why I should own stocks from some country because of economic trends. I’m diversified, and accept part of my portfolio will always be doing worse than others. I figure that’s good enough. –from Motley Fool

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Links

Linkfest:July 21,2015

Some stuff I am reading today morning:

Sack Jaitley as FM (Firstpost)

Mutual Funds:Asset managers or asset gatherers? (Mint)

The old problem of new mutual funds (VRO)

$1000 /oz Gold on the horizon (FE)

Why gold is on the cusp of a new bull market (Daily Reckoning)

How Bisk Farm is giving biscuit heavy-weights a run for their money (OB)

HDFC Sec Research Report:ACC (MyIris)

What is the biggest risk right now? (Common Sense)

What is so great about Warren Buffett? (Quora)

A visual history of market crash predictions (Funds Reference)