Friday, December 14, 2007

Things I read this week

1) Read this really cool article about the 'alpha' and 'beta' and how they should be interpreted. Written very nicely. I feel it gives a very negative view of the market particularly the hedge funds by calling the search for alpha as a zero sum game. Sad but true kinda article.
2) Read some really cool articles in the economist about the Indian economy and the currency. Here are my take aways from them: With the rupee strengthening by 16% this year the factors that have driven the growth of the economy are under great stress. With the dollar falling the the advantage of high profit margins that Indian companies enjoyed in shrinking by the day. What needs to be seen is, if Chidambaram and Montek and the gang bring in tighter regulatory reform to stem the flow of $$ into India. But with the wave of liberalization that India has gone through can India do what China has been successful in doing. Bring in tighter currency controls and stricter rules for the banks. Hopefully the humongous work force India will bail out the country from the crisis that lies ahead. There is no doubt that the Indian services industry has to redefine itself to stay in the race and mere price advantage will not let India sustain it's phenomenal growth. Also, if India can keep up it's internal consumption high and develop a good internal market that will help in sustaining growth.
3) Also read the a bit of the "Kite runner". Beautifully written. More on this later...