Desi's Blog:
I will be writing in this thread in my member capacity.
Those not interested can put me on ignore list - that is a facility afforded by vBulletin or not subscribe to this thread using the thread subscription mechanism.
My postings in the thread will not be just finance, but will be on diverse topics that interest me and as time permits.
If someone wants to comment on my posts, they may open a separate thread "Comments on Desi's blog"
English is my second language, so you may find errors etc, please excuse them.
And for those who do not know, yes Mahesh is Desi and Desi is Desibabu19. Desi was my original handle on the MSN groups till I did some experimentation and MSN would not allow me to change back to Desi, so DB19 is what I am known to members who joined later.
Any comments can be posted at the following thread:
Comments on Desi's Blog (3M)
Mahesh\'s Musings and Miscellania (3M)
Mahesh's Musings and Miscellania (3M)
Government and its Interference:
The one thing that bugs me a lot is the level of government interference in the lives of people. From wanting to legislating prayers in school to teaching my children creation. From criminalizing drugs to capital punishment to criminalizing prostitution ? my rant will go on. A legitimate question is what is the role of government? How much should it infringe on my personal freedoms and why?
Let us take the case of prostitution for now and other issues in later weeks. Many countries have legalized prostitution. Saner minds prevailed. Canada, Mexico, Australia, Netherlands and so on, all have legalized prostitution.
Why should prostitution be illegal? Any activity between two consenting adults that does not infringe on the rights of others should not be any business of government or society or should it? I do not think so.
What two consenting adults do should be no do gooder?s business. Aah, but Mahesh, you forget that women are exploited and it is the job of society and the government to prevent exploitation and to protect. Pardon me ? most that make that statement would probably not even be able to identify one, let alone having met one. Protect who? and from what?
When women are forced into prostitution, that is an issue of someone exercising control over another person against their will and should be dealt by society by appropriate means. When there is a willing seller of services and a willing buyer in a free market economy, the government should butt out, even if those services are sexual.
The explotiation of women is an issue separate from prostitution and is an issue of control over the unwilling, an issue more akin to bonded labor.
A few countries do have pockets where women are forcibly traded. Some areas of sonagachi in Kolkotta or Kamatiputra in Mumbai do have that ? that needs to be separately and individually dealt with. There is trading of women from Nepal and other areas etc. This is a human trafficking issue that government has to deal with.
How many people do not know what goes on in the Soi2 and Soi3, and soi4 and soi5 and soi6 and all the way to the 20th street in Pattaya or what goes on in Sukhimvit in Bangkok. Guess what? - Prostitutes (both male and female and transgenderd) openly ply their trade from one beer bar to next. Hundreds of beer bars. And prostitution is officially illegal in Thailand!! That law is sheer nonsense in Thailand. And same goes for USA or India too. Go to Hong Kong, same scenario, illegal but business openly plied. Women from India go over there, sell their services for 3 months and go back. Because it is illegal, they are subject to financial exploitation.
Go to Macau, get a nice chilled beer and sit on the patio bar at the Holiday Inn and you see many street vendors selling food etc. What you also see is prostitutes openly plying their trade ? you see so many on the street beckoning to you while you have beer.
When it is allowed openly, why then make it illegal?
Move a little west and south now to India. Prostitution ? officially illegal. Why? Because it makes politicians and police rich. These are the real exploiters. In Mumbai, go by Juhu beach and on Juhu Tara Road, the business goes on openly in autos. Move further North to Hotel Bawa International and you find women charging 10,000 rupees. These women are here by choice not by force. Some of them walk away with a lakh rupees or more tax free a week and others in dance bars walk away with 1000 to 2000 rupees a night or more. The police and government want their dibs in this money.
Lest, someone tell me that these women are in here because of poverty, I would ask them how many do they know that are in because of poverty. They are in by choice. A vast majority of them. Regarding poverty, let me tell you, the maid, or the dishwasher at the local restaurant are also not there by choice but they are there to sell whatever services they can sell for the money that it will get.
So which country has really curbed prostitution by making it illegal? USA ? give me a break, just open Craig?s list or telephone directory for massage and escort services. And if you know which strip bar to go to, then you get whatever services you want. So what does making it illegal do? Just more money to politicians and keeping the Bible belt and right wing happy. Speaking of right wing, how many know of Jim Baker being caught in a motel room with Jessica Hahn (I think that is what her name was if I remember correctly). But on other hand who can blame him if he had to live with Tammy Faye. The real problem was that on one hand he was carousing and womanizing and on other hand he was evangelizing.
No, no, - they don?t do it for poverty. It is for easy money. Hey free market economy ? more power to them. I know a gal who has an SUV (don?t remember the brand) and a Lexus, is building a 450K house and works as a stripper. Another gal I have met, who worked in porn movies told me she makes $1000 a day. These women will not work for $10 and hour, I guarantee you that.
In India, they banned the dance bars in Maharashtra ? jeez, they don?t know the difference between service bars, dance bars and disco bars as they are called in Ammchi Mumbai. Dance bars by far are the tamest, tamer than a Bollywood movie, I kid you not. Any way this rant about dance bars and the supreme court appeal for a later post.
It is time, USA, India, Thailand, Honk Kong and other countries legalized prostitution. Legal or not, prostitution goes on. Criminalizing only makes cops and politicians richer - time for people to vote in the liberals.
Mahesh
The one thing that bugs me a lot is the level of government interference in the lives of people. From wanting to legislating prayers in school to teaching my children creation. From criminalizing drugs to capital punishment to criminalizing prostitution ? my rant will go on. A legitimate question is what is the role of government? How much should it infringe on my personal freedoms and why?
Let us take the case of prostitution for now and other issues in later weeks. Many countries have legalized prostitution. Saner minds prevailed. Canada, Mexico, Australia, Netherlands and so on, all have legalized prostitution.
Why should prostitution be illegal? Any activity between two consenting adults that does not infringe on the rights of others should not be any business of government or society or should it? I do not think so.
What two consenting adults do should be no do gooder?s business. Aah, but Mahesh, you forget that women are exploited and it is the job of society and the government to prevent exploitation and to protect. Pardon me ? most that make that statement would probably not even be able to identify one, let alone having met one. Protect who? and from what?
When women are forced into prostitution, that is an issue of someone exercising control over another person against their will and should be dealt by society by appropriate means. When there is a willing seller of services and a willing buyer in a free market economy, the government should butt out, even if those services are sexual.
The explotiation of women is an issue separate from prostitution and is an issue of control over the unwilling, an issue more akin to bonded labor.
A few countries do have pockets where women are forcibly traded. Some areas of sonagachi in Kolkotta or Kamatiputra in Mumbai do have that ? that needs to be separately and individually dealt with. There is trading of women from Nepal and other areas etc. This is a human trafficking issue that government has to deal with.
How many people do not know what goes on in the Soi2 and Soi3, and soi4 and soi5 and soi6 and all the way to the 20th street in Pattaya or what goes on in Sukhimvit in Bangkok. Guess what? - Prostitutes (both male and female and transgenderd) openly ply their trade from one beer bar to next. Hundreds of beer bars. And prostitution is officially illegal in Thailand!! That law is sheer nonsense in Thailand. And same goes for USA or India too. Go to Hong Kong, same scenario, illegal but business openly plied. Women from India go over there, sell their services for 3 months and go back. Because it is illegal, they are subject to financial exploitation.
Go to Macau, get a nice chilled beer and sit on the patio bar at the Holiday Inn and you see many street vendors selling food etc. What you also see is prostitutes openly plying their trade ? you see so many on the street beckoning to you while you have beer.
When it is allowed openly, why then make it illegal?
Move a little west and south now to India. Prostitution ? officially illegal. Why? Because it makes politicians and police rich. These are the real exploiters. In Mumbai, go by Juhu beach and on Juhu Tara Road, the business goes on openly in autos. Move further North to Hotel Bawa International and you find women charging 10,000 rupees. These women are here by choice not by force. Some of them walk away with a lakh rupees or more tax free a week and others in dance bars walk away with 1000 to 2000 rupees a night or more. The police and government want their dibs in this money.
Lest, someone tell me that these women are in here because of poverty, I would ask them how many do they know that are in because of poverty. They are in by choice. A vast majority of them. Regarding poverty, let me tell you, the maid, or the dishwasher at the local restaurant are also not there by choice but they are there to sell whatever services they can sell for the money that it will get.
So which country has really curbed prostitution by making it illegal? USA ? give me a break, just open Craig?s list or telephone directory for massage and escort services. And if you know which strip bar to go to, then you get whatever services you want. So what does making it illegal do? Just more money to politicians and keeping the Bible belt and right wing happy. Speaking of right wing, how many know of Jim Baker being caught in a motel room with Jessica Hahn (I think that is what her name was if I remember correctly). But on other hand who can blame him if he had to live with Tammy Faye. The real problem was that on one hand he was carousing and womanizing and on other hand he was evangelizing.
No, no, - they don?t do it for poverty. It is for easy money. Hey free market economy ? more power to them. I know a gal who has an SUV (don?t remember the brand) and a Lexus, is building a 450K house and works as a stripper. Another gal I have met, who worked in porn movies told me she makes $1000 a day. These women will not work for $10 and hour, I guarantee you that.
In India, they banned the dance bars in Maharashtra ? jeez, they don?t know the difference between service bars, dance bars and disco bars as they are called in Ammchi Mumbai. Dance bars by far are the tamest, tamer than a Bollywood movie, I kid you not. Any way this rant about dance bars and the supreme court appeal for a later post.
It is time, USA, India, Thailand, Honk Kong and other countries legalized prostitution. Legal or not, prostitution goes on. Criminalizing only makes cops and politicians richer - time for people to vote in the liberals.
Mahesh
Mahesh's Musings and Miscellania (3M)
Legalizing prostitution is not a complex subject, but generally people make a lot of comparisons to other situations etc that may or may not be comparable.
At the heart of this subject is governmental infringement on personal freedoms that do not infringe on others.
In any case, I thought a second posting is necessary. I am penning my further thoughts below. After this, I end this topic and will move on to a finance topic.
I meet a woman and we strike a deal. She is going to come to my house for an hour and cook meals for me for $25 bucks. Anything illegal about this? Nothing (except may be in Iran, Saudi Arabia and Afghanistan). People hire cooks all the time.
I meet a woman and we strike a deal. She is going to give me company for a few hours. I take her for dinner and drinks and to a company party as my date. For this I pay her $100. Anything illegal about it? Nothing, simple hiring of escort and companian services - non sexual.
I meet a woman at a bar and she ends up at my place and we have consensual sex. Anything illegal about it? No, nothing. Happens all the time.
I meet a woman and we strike a deal. She provides sexual services for an hour and I pay her $200. Anything illegal about this? Yes!!! Why? Compare this to above situations - what makes this different?
Getting non sexual service from a consenting provider for money is legal.
Getting sexual service from a consenting provider for no money is legal.
Getting sexual service from a consenting provider for money is illegal!!!
Something that is between two consenting adults and does not infringe upon others should be no business of government to legislate (this means Kevorkian should have walked also)
I am not making the argument that prostitution should be legalized because government cannot stop it. No that was just a factual observation.
The reason it should be legalized is that it is not government's business, if I smoke in my house, watch porn, drink or pay someone to cook or pay someone to have sex. It should be no one's business, certainly not the government's.
Arguments are put forth by conservatives that legalizing prostitution harms family and kids and therefore should be criminalized. Should smoking and drinking be criminalized too on the same grounds? What about a guy who screams at home and has a hot temper? Should that be criminalized? It does harm family and kids - does it not? What about a guy who does not come home for a couple of days and is somewhere where no one knows - perhaps with a girl friend or with a illegally operating hooker? Should that guy be hauled to jail and tossed in with the illegally operating hooker? What about his girlfriend? Throw her in jail too. How far are you going to let government into your house? At what point are we going to say " Hold off, Mr. Government, that is my business and not yours!"
re, arguments that legalizing prostitution has liabilities. Advertising, police, tribunals issues etc? Is that not the job of government to have zoning where certain businesses can be conducted? Where and when certain advertizing would be allowed or not? Where and where not and how recruitment would take place. Are not the ads for hard liquor restricted even today? Are not certain shows and language restricted from public airwaves? Government is going to collect revenue and this is no different than regulating any other business.
It is immoral, you say. Morality is very personal and varies from person to person and from society to society. When I was young in India, a woman smoking was seen as immoral or chalu. If she wore a short skirt - wow, the whistles would fly that she is immoral. Here I walk through doors of a building and I see men and women standing and smoking outside with women in dresses that in Indian context would be looked at as immoral. Morality is personal and should not be imposed. Just like vegetarianism or religion or lack thereof. Sex between two consenting adults whatever their relationship should be none of government's business.
Strip joints. Whose morality are we talking about? Stripper's or the person visiting the stripper? Saudi Arabia says women should not dress like in Indian movies. It is immoral, they say. Shall we all adopt that standard? Whose standard should we adopt? Plain and simple, each person should mind their own business and live life per their morals as long as no infringement of others occurs.
We do not shut down banks because there are bank robbers - do we? We focus on apprehending bank robbers. Each country has defined a certain age where by they consider a person as an adult. In some countries it is 16 and in others it is 18. I personally am more comfortable with 18. The society has to cut the umblical somewhere and 18 is reasonable age to consider people as adults (granted some will be children even at 25). So when one is underage, a minor, then it is society's job to protect the minor. If there is underage prostitution, make appropriate arrests. I am not advocating underage prostitution. I have repeatedly used the words " Two (for that matter three or four or whatever) CONSENTING ADULTS".
Someone raised the question of incest. Incest and prostitution are two entirely separate issues. Legalizing prostitution does not mean tolerating incest or that legalizing prostitution will increase incestous relationships. If anything legal outlets will help reduce other forced relationships.
Incest is a much more complex subject. If the two adults consent, it should be no one's business - If an adult A and an adult B have sex with each other and fully consent with each other, why is it any of my business or yours or government's? So what if it is incest? If A and B as adults agree to it without coercion, should be no one's business - right? What complicates the sitution is that if incest were to be made legal, how does one manage how a parent molds the child during formative years and during the years where parent exercises control over the child. This cannot be managed and parents of minors can mold their thinking in a manner to lead incestous relation later on. This raised the question that if an incestous relation were to occur - was that of free choice. This one issue is what goes against incest in a very large way, else the government has no business.
If we legalize prostitution, should we legalize cannabis, heroin, etc ? While prostitution and drugs each have to be looked at their own merits, my immediate answer is SURE? Why should drugs be made illegal?. As long as we have proper laws to apprehend someone driving under the influence and such, it is not government's business to tell me that I should not smoke, drink alcohol, eat meat, believe in God, shoot up heroin and neither should it be my business or yours to dictate to others that they should not do that or what "morals" they should have. What next? Making Gulab Jamun illegal because it clogs up the arteries. No thanks, let me eat my Gulab Jamun or have sex with a hooker or with someone of same sex or opposite sex while you live to your morals. We do not need no Taliban.
This is not third world only I am talking about. I am talking about countries across the globe, from USA, to India, to Thailand to Hong Kong to you name it.
Pre-marital sex? What about it? It is not illegal as far as I know in most places. Who the hell are we to dictate one way or other regarding pre marital sex. Child marriages - of course they should be illegal. It is our job to protect children. Once they are adults, they can make their own choices.
Some one mentioned Sati - don't know if we are talking 19th century and early 20th century in 21st. If a woman is forced it immolate herself against her will, that my friend is murder. On the other hand if someone wants to kill themselves of their own free will, then it should be no business of government.
In most countries where prostitution is illegal, the government spends a lot of money to go after prostitution. However, they are unable to shut it down. This happens for a variety of reasons, one big one being the corruption. Still raids, sting operations to nail Johns and hookers take valuable resources away to combat real crime, murder, mayhem etc. This money could be used to focus on apprehending child molestors ( all right, the priests).
That governments cannot curb it, that it leads to corruption, that it diverts crime fighting resources away from serious crimes are all factual observations and not grounds for legalizing prostitution.
The grounds are plain and simple that government has no business in what goes on between consenting adults.
Sorry to have bored you with the lengthy topic. My next rambling next week will be on Finance.
At the heart of this subject is governmental infringement on personal freedoms that do not infringe on others.
In any case, I thought a second posting is necessary. I am penning my further thoughts below. After this, I end this topic and will move on to a finance topic.
I meet a woman and we strike a deal. She is going to come to my house for an hour and cook meals for me for $25 bucks. Anything illegal about this? Nothing (except may be in Iran, Saudi Arabia and Afghanistan). People hire cooks all the time.
I meet a woman and we strike a deal. She is going to give me company for a few hours. I take her for dinner and drinks and to a company party as my date. For this I pay her $100. Anything illegal about it? Nothing, simple hiring of escort and companian services - non sexual.
I meet a woman at a bar and she ends up at my place and we have consensual sex. Anything illegal about it? No, nothing. Happens all the time.
I meet a woman and we strike a deal. She provides sexual services for an hour and I pay her $200. Anything illegal about this? Yes!!! Why? Compare this to above situations - what makes this different?
Getting non sexual service from a consenting provider for money is legal.
Getting sexual service from a consenting provider for no money is legal.
Getting sexual service from a consenting provider for money is illegal!!!
Something that is between two consenting adults and does not infringe upon others should be no business of government to legislate (this means Kevorkian should have walked also)
I am not making the argument that prostitution should be legalized because government cannot stop it. No that was just a factual observation.
The reason it should be legalized is that it is not government's business, if I smoke in my house, watch porn, drink or pay someone to cook or pay someone to have sex. It should be no one's business, certainly not the government's.
Arguments are put forth by conservatives that legalizing prostitution harms family and kids and therefore should be criminalized. Should smoking and drinking be criminalized too on the same grounds? What about a guy who screams at home and has a hot temper? Should that be criminalized? It does harm family and kids - does it not? What about a guy who does not come home for a couple of days and is somewhere where no one knows - perhaps with a girl friend or with a illegally operating hooker? Should that guy be hauled to jail and tossed in with the illegally operating hooker? What about his girlfriend? Throw her in jail too. How far are you going to let government into your house? At what point are we going to say " Hold off, Mr. Government, that is my business and not yours!"
re, arguments that legalizing prostitution has liabilities. Advertising, police, tribunals issues etc? Is that not the job of government to have zoning where certain businesses can be conducted? Where and when certain advertizing would be allowed or not? Where and where not and how recruitment would take place. Are not the ads for hard liquor restricted even today? Are not certain shows and language restricted from public airwaves? Government is going to collect revenue and this is no different than regulating any other business.
It is immoral, you say. Morality is very personal and varies from person to person and from society to society. When I was young in India, a woman smoking was seen as immoral or chalu. If she wore a short skirt - wow, the whistles would fly that she is immoral. Here I walk through doors of a building and I see men and women standing and smoking outside with women in dresses that in Indian context would be looked at as immoral. Morality is personal and should not be imposed. Just like vegetarianism or religion or lack thereof. Sex between two consenting adults whatever their relationship should be none of government's business.
Strip joints. Whose morality are we talking about? Stripper's or the person visiting the stripper? Saudi Arabia says women should not dress like in Indian movies. It is immoral, they say. Shall we all adopt that standard? Whose standard should we adopt? Plain and simple, each person should mind their own business and live life per their morals as long as no infringement of others occurs.
We do not shut down banks because there are bank robbers - do we? We focus on apprehending bank robbers. Each country has defined a certain age where by they consider a person as an adult. In some countries it is 16 and in others it is 18. I personally am more comfortable with 18. The society has to cut the umblical somewhere and 18 is reasonable age to consider people as adults (granted some will be children even at 25). So when one is underage, a minor, then it is society's job to protect the minor. If there is underage prostitution, make appropriate arrests. I am not advocating underage prostitution. I have repeatedly used the words " Two (for that matter three or four or whatever) CONSENTING ADULTS".
Someone raised the question of incest. Incest and prostitution are two entirely separate issues. Legalizing prostitution does not mean tolerating incest or that legalizing prostitution will increase incestous relationships. If anything legal outlets will help reduce other forced relationships.
Incest is a much more complex subject. If the two adults consent, it should be no one's business - If an adult A and an adult B have sex with each other and fully consent with each other, why is it any of my business or yours or government's? So what if it is incest? If A and B as adults agree to it without coercion, should be no one's business - right? What complicates the sitution is that if incest were to be made legal, how does one manage how a parent molds the child during formative years and during the years where parent exercises control over the child. This cannot be managed and parents of minors can mold their thinking in a manner to lead incestous relation later on. This raised the question that if an incestous relation were to occur - was that of free choice. This one issue is what goes against incest in a very large way, else the government has no business.
If we legalize prostitution, should we legalize cannabis, heroin, etc ? While prostitution and drugs each have to be looked at their own merits, my immediate answer is SURE? Why should drugs be made illegal?. As long as we have proper laws to apprehend someone driving under the influence and such, it is not government's business to tell me that I should not smoke, drink alcohol, eat meat, believe in God, shoot up heroin and neither should it be my business or yours to dictate to others that they should not do that or what "morals" they should have. What next? Making Gulab Jamun illegal because it clogs up the arteries. No thanks, let me eat my Gulab Jamun or have sex with a hooker or with someone of same sex or opposite sex while you live to your morals. We do not need no Taliban.
This is not third world only I am talking about. I am talking about countries across the globe, from USA, to India, to Thailand to Hong Kong to you name it.
Pre-marital sex? What about it? It is not illegal as far as I know in most places. Who the hell are we to dictate one way or other regarding pre marital sex. Child marriages - of course they should be illegal. It is our job to protect children. Once they are adults, they can make their own choices.
Some one mentioned Sati - don't know if we are talking 19th century and early 20th century in 21st. If a woman is forced it immolate herself against her will, that my friend is murder. On the other hand if someone wants to kill themselves of their own free will, then it should be no business of government.
In most countries where prostitution is illegal, the government spends a lot of money to go after prostitution. However, they are unable to shut it down. This happens for a variety of reasons, one big one being the corruption. Still raids, sting operations to nail Johns and hookers take valuable resources away to combat real crime, murder, mayhem etc. This money could be used to focus on apprehending child molestors ( all right, the priests).
That governments cannot curb it, that it leads to corruption, that it diverts crime fighting resources away from serious crimes are all factual observations and not grounds for legalizing prostitution.
The grounds are plain and simple that government has no business in what goes on between consenting adults.
Sorry to have bored you with the lengthy topic. My next rambling next week will be on Finance.
Mahesh's Musings and Miscellania (3M)
RISK:
Some quotes on risk:
Like it or not, everyone of us is assuming an inflation risk. This one is forced upon us. There will come a time when the gallon of milk will be $12 and a loaf of bread $10 ( and don't you doubt this one - 30 years from know, that is what the price will be if not more) and we may be in a wheel chair and that is exactly when you don't want to run out of money. That is when you really should have enough money to hire Anna to nurse you (no, no, not Anna Nicole, get your mind out of the gutter, I mean Anna the nurse, the one with the glasses, wrinkles, a bedpan in her left hand and an antiseptic smell to her).
Risking too much and risking too little or nothing both can leave you without the nurse when you may need her the most. A 30 year old, saving a reasonable amount every year can easily run into problems if he takes the refuge of CDs and money markets, if inflation were to catch him unawares. Not possible you say. In USA in 1981, interest rates were at 20%. Builders were buying down mortgages to sell houses and after buying down the mortgage, the mortgage rates were 18%. In 1983, mortgages were at 12 to 13%.
Gold was at $800 an ounce, when a gallon of milk was less than a dollar. That was the result of double digit inflation in USA.
Risk is probability of a loss of some type or a probability of an undesirable outcome.
What if you go home today and your spouse says, he / she had a wager with a friend, or a bet on cricket or was at the casino or was playing teen patti with friends and lost $200. How would you feel? Would you just smile a little and say "no big deal". You have been putting off buying that nice suit or wanting to buy that IPod and have been unwilling to part with $200 and poof, your spouse blows it up!! You are not going to eat out for the next week - OK make it next 3 months:emsad: .
Now think what happens if your spouse says, it was really not $200 but $2000? Would you blow your top ?
What if your spouse really really confides and says "Honey, sunti ho, maine bitya ke education ke paise jua me haar diye" ( Honey, I lost the daughter's education fund in gambling).
What if he/she lost $40,000 in the casino or at the races (believe me it happens)? Are the pots and pans flying?:emwink:
This is serious. Now think that this loss happened not in gambling in the casnio or betting with friends or anywhere else, but what if your $160K portfolio is worth $120K now. Cannot happen? Absolutely it can - how much risk is in your portfolio?
What would you do? Pull all the money out of market? Borrow and dump more good money after bad or just sulk and not look at the portfolio anymore paralyzed into inaction.
These are real possibilites. Thinking about will allow you to think how much loss are you really willing to tolerate. But can you actually afford to tolerate that much loss is another issue that you have to contend with also. To contend with this one, you need to put feelings aside and use one of the many retirement calculators using conservative numbers and a reasonable amount of inflation. Once you have a good handle on the absolute loss you are willing to tolerate say over a year, then you can compute it as a percentage of your current portfolio. Once you have that, you have a good starting point in building a portfolio as you have assesed your risk tolerance and can now attempt to match it to market risk of different types of investment.
But, but, Mahesh, the probability of that is low in the market, you say!!
Think again. I had written these thoughts a few days back, but seeing the action in the market today, I am adding this sentence. No need to think again, just watch the news today. What happens tomorrow in the market, no one knows. It may be a bounce back or a blood bath.
What if I gave you a loaded revolver with 200 chambers and one chamber loaded with a bullet and will give you 50K to pull the trigger putting it to your head - would you do it? :emteeth: - Russian roulette! The risk of death is only 1 in 200 - less than 1%. Come on, less than 1%. Think hard, visualize the revolver in your hand and the 50K and one in 200 chance. What if it upped to $500K if you sruvive. Think about it, two kids and a wife standing in front and you have a loaded revolver in your hand. You win 500K is yours, you lose, you lose only say 20K and the life. Now think instead of your life this is your financial life, your retirement future. How much risk would you take? Investors, many a time get dazed by returns and start chasing the next hot tip, forgetting the amount of risk they are taking and the impact on their retirment years if the risk materializes - that dear friends is playing Russian roulette with your finances. Some risks just are plain not taken, if one is sane. Like next time you visit Amsterdam, make sure you have protection - don't worry the other party will make sure of that, whether in Mumbai or Bangkok.
There will come a time when you no longer will work for money, but your money will have to work for you - you better have enough at that point in time.
Assess risk tolerance, then decide the mix. A portfolio weighted beta can be easily computed. Look at historical volatility of your investments and can you tolerate that volatility. You can tolerate more, you say!!!, Well that makes a case for greater stock allocation or more in small caps or - you get the point.
Here are some links that you may have fun with and read up on the Monte Carlo analysis.
http://www.moneychimp.com/articles/volatility/retirement.htm
http://www.moneychimp.com/articles/volatility/montecarlo.htm
I may later edit this post and add more links.
Some quotes on risk:
If we listened to our intellect, we'd never have a love affair. We'd never have a friendship. We'd never go into business, because we'd be too cynical. Well, that's nonsense. You've got to jump off cliffs all the time and build your wings on the way down.
( Not with your retirement assets or kid's education funding, please)He that is over-cautious will accomplish little.
I would rather fail in a cause that will ultimately triumph than to triumph in a cause that will ultimately fail.
A ship in harbour is safe, but that is not what ships are built for.
Like it or not, everyone of us is assuming an inflation risk. This one is forced upon us. There will come a time when the gallon of milk will be $12 and a loaf of bread $10 ( and don't you doubt this one - 30 years from know, that is what the price will be if not more) and we may be in a wheel chair and that is exactly when you don't want to run out of money. That is when you really should have enough money to hire Anna to nurse you (no, no, not Anna Nicole, get your mind out of the gutter, I mean Anna the nurse, the one with the glasses, wrinkles, a bedpan in her left hand and an antiseptic smell to her).
Risking too much and risking too little or nothing both can leave you without the nurse when you may need her the most. A 30 year old, saving a reasonable amount every year can easily run into problems if he takes the refuge of CDs and money markets, if inflation were to catch him unawares. Not possible you say. In USA in 1981, interest rates were at 20%. Builders were buying down mortgages to sell houses and after buying down the mortgage, the mortgage rates were 18%. In 1983, mortgages were at 12 to 13%.
Gold was at $800 an ounce, when a gallon of milk was less than a dollar. That was the result of double digit inflation in USA.
Risk is probability of a loss of some type or a probability of an undesirable outcome.
What if you go home today and your spouse says, he / she had a wager with a friend, or a bet on cricket or was at the casino or was playing teen patti with friends and lost $200. How would you feel? Would you just smile a little and say "no big deal". You have been putting off buying that nice suit or wanting to buy that IPod and have been unwilling to part with $200 and poof, your spouse blows it up!! You are not going to eat out for the next week - OK make it next 3 months:emsad: .
Now think what happens if your spouse says, it was really not $200 but $2000? Would you blow your top ?
What if your spouse really really confides and says "Honey, sunti ho, maine bitya ke education ke paise jua me haar diye" ( Honey, I lost the daughter's education fund in gambling).
What if he/she lost $40,000 in the casino or at the races (believe me it happens)? Are the pots and pans flying?:emwink:
This is serious. Now think that this loss happened not in gambling in the casnio or betting with friends or anywhere else, but what if your $160K portfolio is worth $120K now. Cannot happen? Absolutely it can - how much risk is in your portfolio?
What would you do? Pull all the money out of market? Borrow and dump more good money after bad or just sulk and not look at the portfolio anymore paralyzed into inaction.
These are real possibilites. Thinking about will allow you to think how much loss are you really willing to tolerate. But can you actually afford to tolerate that much loss is another issue that you have to contend with also. To contend with this one, you need to put feelings aside and use one of the many retirement calculators using conservative numbers and a reasonable amount of inflation. Once you have a good handle on the absolute loss you are willing to tolerate say over a year, then you can compute it as a percentage of your current portfolio. Once you have that, you have a good starting point in building a portfolio as you have assesed your risk tolerance and can now attempt to match it to market risk of different types of investment.
But, but, Mahesh, the probability of that is low in the market, you say!!
Think again. I had written these thoughts a few days back, but seeing the action in the market today, I am adding this sentence. No need to think again, just watch the news today. What happens tomorrow in the market, no one knows. It may be a bounce back or a blood bath.
What if I gave you a loaded revolver with 200 chambers and one chamber loaded with a bullet and will give you 50K to pull the trigger putting it to your head - would you do it? :emteeth: - Russian roulette! The risk of death is only 1 in 200 - less than 1%. Come on, less than 1%. Think hard, visualize the revolver in your hand and the 50K and one in 200 chance. What if it upped to $500K if you sruvive. Think about it, two kids and a wife standing in front and you have a loaded revolver in your hand. You win 500K is yours, you lose, you lose only say 20K and the life. Now think instead of your life this is your financial life, your retirement future. How much risk would you take? Investors, many a time get dazed by returns and start chasing the next hot tip, forgetting the amount of risk they are taking and the impact on their retirment years if the risk materializes - that dear friends is playing Russian roulette with your finances. Some risks just are plain not taken, if one is sane. Like next time you visit Amsterdam, make sure you have protection - don't worry the other party will make sure of that, whether in Mumbai or Bangkok.
There will come a time when you no longer will work for money, but your money will have to work for you - you better have enough at that point in time.
Assess risk tolerance, then decide the mix. A portfolio weighted beta can be easily computed. Look at historical volatility of your investments and can you tolerate that volatility. You can tolerate more, you say!!!, Well that makes a case for greater stock allocation or more in small caps or - you get the point.
Here are some links that you may have fun with and read up on the Monte Carlo analysis.
http://www.moneychimp.com/articles/volatility/retirement.htm
http://www.moneychimp.com/articles/volatility/montecarlo.htm
I may later edit this post and add more links.
Mahesh's Musings and Miscellania (3M)
Just some thoughts, not necessarily a solution for every case and not necessarily an examination of every scenario. This is where the ethics committess in the hospitals come in.
Euthanasia:
From Dictionary.com http://dictionary.reference.com/browse/euthanasia
Also called mercy killing. the act of putting to death painlessly or allowing to die, as by withholding extreme medical measures, a person or animal suffering from an incurable, esp. a painful, disease or condition.
Cases:
1. A person deemed by a team of medical professionals to be brain dead. Should life sustaining measures be witheld? Is that murder?
A brain dead person is dead in my book. Definition of death is what matters. Is it murder if one shoots a dead person? Is a person capable of breathing but with a dead brain dead? How do we define dead?
My contention is that a brain dead person is dead - period, a la Terri Schiavo.
Extending any "life " sustaining measures is keeping a vegetable alive - the human has been dead already. What differentiates us from a plant? Nervous system for one.
What about mentally retarded? Are we heading into the Nazi territory? Yes we are.
Mentally retarded are not brain dead!! They are live humans!! What are the hallmarks of a live human? Emotions, nervous system i.e. brain. That would be murder.
What about those brain dead - should witholding of life sustaining measures is all that should be supported? Should lethal injections be allowed in such a case by a panel of professionals from various disciplines primarily medical?
What if that person is my parent, my child, my spouse? Should emotions be allowed to play a part? Should their feelings be considered? What if they do not want the "life" of their near and dear one to be ended from the vegetable state? Should they have a say? If yes, then who pays for sustaining the vegetable?
2. A person suffering terribly and wants to end his / her life - should he / she be able to avail services of a medical profesional.
Suicide - should a person who wants to commit suicide be allowed to do so?
What if the person is evaluated and deemed fully sane? Should then he / she be allowed to - now I know some might argue that a person who wants to commit suicide can never be fully sane.
Yes, government has no business regulating if someone wants to live or not. There is a different scenario where those with various types of delusions want to end their lives - these are the mentally ill. In such situations, they should be prevented from suicide. As a society we are duty bound to protect them from themselves.
Should a physician assist suicide actively or provide the means so that the person can kill themselves at a place and time of their own choosing?
Absolutely, yes. (should then medicines be on prescription or all medications over the counter - hmm - revolutionary thought!!!)
3. What about an animal? Should we be allowed to put animals to rest?
No question in my mind - un equivocally yes.
I know some arguments may go as following - " Who died and made you God? ", My response - " What God? Which one? The Allah, The Brahma, Jesus - no he was the son of God!"
Ten years later, Oregon takes stock of 'right to die' law
Euthanasia:
From Dictionary.com http://dictionary.reference.com/browse/euthanasia
Also called mercy killing. the act of putting to death painlessly or allowing to die, as by withholding extreme medical measures, a person or animal suffering from an incurable, esp. a painful, disease or condition.
Cases:
1. A person deemed by a team of medical professionals to be brain dead. Should life sustaining measures be witheld? Is that murder?
A brain dead person is dead in my book. Definition of death is what matters. Is it murder if one shoots a dead person? Is a person capable of breathing but with a dead brain dead? How do we define dead?
My contention is that a brain dead person is dead - period, a la Terri Schiavo.
Extending any "life " sustaining measures is keeping a vegetable alive - the human has been dead already. What differentiates us from a plant? Nervous system for one.
What about mentally retarded? Are we heading into the Nazi territory? Yes we are.
Mentally retarded are not brain dead!! They are live humans!! What are the hallmarks of a live human? Emotions, nervous system i.e. brain. That would be murder.
What about those brain dead - should witholding of life sustaining measures is all that should be supported? Should lethal injections be allowed in such a case by a panel of professionals from various disciplines primarily medical?
What if that person is my parent, my child, my spouse? Should emotions be allowed to play a part? Should their feelings be considered? What if they do not want the "life" of their near and dear one to be ended from the vegetable state? Should they have a say? If yes, then who pays for sustaining the vegetable?
2. A person suffering terribly and wants to end his / her life - should he / she be able to avail services of a medical profesional.
Suicide - should a person who wants to commit suicide be allowed to do so?
What if the person is evaluated and deemed fully sane? Should then he / she be allowed to - now I know some might argue that a person who wants to commit suicide can never be fully sane.
Yes, government has no business regulating if someone wants to live or not. There is a different scenario where those with various types of delusions want to end their lives - these are the mentally ill. In such situations, they should be prevented from suicide. As a society we are duty bound to protect them from themselves.
Should a physician assist suicide actively or provide the means so that the person can kill themselves at a place and time of their own choosing?
Absolutely, yes. (should then medicines be on prescription or all medications over the counter - hmm - revolutionary thought!!!)
3. What about an animal? Should we be allowed to put animals to rest?
No question in my mind - un equivocally yes.
I know some arguments may go as following - " Who died and made you God? ", My response - " What God? Which one? The Allah, The Brahma, Jesus - no he was the son of God!"
Ten years later, Oregon takes stock of 'right to die' law
Mahesh's Musings and Miscellania (3M)
RULES ARE MEANT TO BE BROKEN!
The law is an ass!! (No, I do not mean J. Lo trunk - with all that junk in the trunk ( courtesy - Black eyed peas).)
If someone wants to rationalize something, we can generally find a way. We can always find ways to justify our ways of thinking and action perhaps even when deep down we may know them to be wrong. Human ingenuity or the selfish gene?
Mr. Bumble had little use for judicial reasoning. In Dickens' Oliver Twist, he put it rather bluntly: "'If the law supposes that', said Mr. Bumble, 'the law is a ass ? a idiot.'"
Mr. Bumble was, understandably, very irritated when he made this statement. He had been accused of stealing jewelry belonging to Oliver's mother; and, after making sure his wife had left the room, he responded: "It was all Mrs. Bumble." Brownlow, the solicitor, advised Mr. Bumble "that is no excuse" because: [INDENT]"'You were present on the occasion?and, indeed, you are the more guilty of the two, in the eye of the law; for the law supposes that your wife acts under your direction.[/INDENT][INDENT]"'If the law supposes that,' said Mr. Bumble, squeezing his hat emphatically in both hands, 'the law is a ass ? a idiot. If that's the law, the law is a bachelor; and the worst I wish the law is, that his eye may be opened by experience ? by experience.'"[/INDENT]Rules are meant to be broken. If no one broke the rules, we wouldn't need them would we?
.. All right, all right - perhaps a lame attempt at justification. No one can say, I didn't try. Do we really need a COC if everyone remains within its unstated confines?
Seriously, on one hand we have such personalities as Mahatma Gandhi of Civil disobediance, the Dandi yatra and breaking of the laws that were perceived unjust.
If tax on salt is unjust, then is a much higher than normal tax on cigarettes just? What about higher tax on alcohol? Boston Tea Party was another protest.
We have hallowed personalities such as Martin Luther King, Nelson Mandela, Bhagat Singh breaking laws and on another we have poor John Doe crossing state lines to save money on cheaper gas and bringing in cartons of cigarettes and alcohol from the neighboring state because it is cheaper.
No. No I will never buy Arafat as in the same league as Martin Luther or Mohandas Gandhi. Arafat moved into conflict at age 17 and being vocal he got into places and situations that just propelled him forward in the direction he ended as - a terrorist. No that Nobel Peace Prize as all politics and nonsense. He did not deserve it.
There are idiotic archaic laws on books that never get changed ( In Maharashtra, if one speaks out against a CM, a warrant for arrest can be issued). (And you know what the police can do - third degree is totally accepted - ain't no such a thing as police brutality there).
A stretch of road through non residential area but speed limit still set at 25 to keep it as a speed trap - should the speed limit be violated? Would you?
Would you bring a year's supply of prescription medicines say for your sister from India because they are a lot cheaper there and not declare those at customs where they will be thrown out.
Would you buy a flat somewhere if there is no other way to buy other than deal with black money for some portion?
Would you pay 50 rupees to a clerk to get something expedited which he is obviously intentionally delaying.
Would you answer a cell phone while driving in those cities where this is against the law?
Would you pay a bribe to end harassment?
Is it ethical to break a law which is deemed "unjust"? Well we can justify many things, but "unjust" as perceived by a large segment of the society. Yes?? How would you personally draw a line - you obviously cannot poll the society.
Chewing gum is banned in Singapore - would you chew gum while in Singapore?
What is your yardstick to violate law or do you always obey the law or is it more without thinking?
The law is an ass!! (No, I do not mean J. Lo trunk - with all that junk in the trunk ( courtesy - Black eyed peas).)
If someone wants to rationalize something, we can generally find a way. We can always find ways to justify our ways of thinking and action perhaps even when deep down we may know them to be wrong. Human ingenuity or the selfish gene?
Mr. Bumble had little use for judicial reasoning. In Dickens' Oliver Twist, he put it rather bluntly: "'If the law supposes that', said Mr. Bumble, 'the law is a ass ? a idiot.'"
Mr. Bumble was, understandably, very irritated when he made this statement. He had been accused of stealing jewelry belonging to Oliver's mother; and, after making sure his wife had left the room, he responded: "It was all Mrs. Bumble." Brownlow, the solicitor, advised Mr. Bumble "that is no excuse" because: [INDENT]"'You were present on the occasion?and, indeed, you are the more guilty of the two, in the eye of the law; for the law supposes that your wife acts under your direction.[/INDENT][INDENT]"'If the law supposes that,' said Mr. Bumble, squeezing his hat emphatically in both hands, 'the law is a ass ? a idiot. If that's the law, the law is a bachelor; and the worst I wish the law is, that his eye may be opened by experience ? by experience.'"[/INDENT]Rules are meant to be broken. If no one broke the rules, we wouldn't need them would we?
.. All right, all right - perhaps a lame attempt at justification. No one can say, I didn't try. Do we really need a COC if everyone remains within its unstated confines?Seriously, on one hand we have such personalities as Mahatma Gandhi of Civil disobediance, the Dandi yatra and breaking of the laws that were perceived unjust.
If tax on salt is unjust, then is a much higher than normal tax on cigarettes just? What about higher tax on alcohol? Boston Tea Party was another protest.
We have hallowed personalities such as Martin Luther King, Nelson Mandela, Bhagat Singh breaking laws and on another we have poor John Doe crossing state lines to save money on cheaper gas and bringing in cartons of cigarettes and alcohol from the neighboring state because it is cheaper.
No. No I will never buy Arafat as in the same league as Martin Luther or Mohandas Gandhi. Arafat moved into conflict at age 17 and being vocal he got into places and situations that just propelled him forward in the direction he ended as - a terrorist. No that Nobel Peace Prize as all politics and nonsense. He did not deserve it.
There are idiotic archaic laws on books that never get changed ( In Maharashtra, if one speaks out against a CM, a warrant for arrest can be issued). (And you know what the police can do - third degree is totally accepted - ain't no such a thing as police brutality there).
A stretch of road through non residential area but speed limit still set at 25 to keep it as a speed trap - should the speed limit be violated? Would you?
Would you bring a year's supply of prescription medicines say for your sister from India because they are a lot cheaper there and not declare those at customs where they will be thrown out.
Would you buy a flat somewhere if there is no other way to buy other than deal with black money for some portion?
Would you pay 50 rupees to a clerk to get something expedited which he is obviously intentionally delaying.
Would you answer a cell phone while driving in those cities where this is against the law?
Would you pay a bribe to end harassment?
Is it ethical to break a law which is deemed "unjust"? Well we can justify many things, but "unjust" as perceived by a large segment of the society. Yes?? How would you personally draw a line - you obviously cannot poll the society.
Chewing gum is banned in Singapore - would you chew gum while in Singapore?
What is your yardstick to violate law or do you always obey the law or is it more without thinking?
Mahesh's Musings and Miscellania (3M)
Payday Loans,
Holy smokes!!
http://www.paydayloan.com/new_fees.html
http://www.cashadvancenetwork.com/how-payday-loans-work.asp
http://financialplan.about.com/od/creditanddebt/a/PaydayLoans.htm
Excerpt follows:
What Are the Fees for Payday Loans? Fees charged for payday loans are usually a percentage of the amount borrowed or so much for every $100 you borrow.
If you extend or "roll-over" the loan, you'll pay additional fees each time. The fee may not sound too bad, but studies show that interest rates on payday loans range from 390% to nearly 900% and that most lenders don't quote accurate interest rates.
---------------------------------------------
400% and 900% APR.
These guys should be roasted. This is outrageous ripoff - a bloody murder.
Loan Sharking legalized.
The govt has its priorities messed up. Instead of focussing on trying to criminalize smoking in a private restaurant, they need to go after these usurios sharks. These interest rates are usury.
Sure, it is a free market economy, it is a civilized society as well and society needs protection from sharks, who engage in ripoffs under legal protection - Absolutely clear and direct exploitation.
These guys should be Tasered at about 150 volts.
Holy smokes!!
http://www.paydayloan.com/new_fees.html
http://www.cashadvancenetwork.com/how-payday-loans-work.asp
http://financialplan.about.com/od/creditanddebt/a/PaydayLoans.htm
Excerpt follows:
What Are the Fees for Payday Loans? Fees charged for payday loans are usually a percentage of the amount borrowed or so much for every $100 you borrow.
If you extend or "roll-over" the loan, you'll pay additional fees each time. The fee may not sound too bad, but studies show that interest rates on payday loans range from 390% to nearly 900% and that most lenders don't quote accurate interest rates.
---------------------------------------------
400% and 900% APR.
These guys should be roasted. This is outrageous ripoff - a bloody murder.
Loan Sharking legalized.
The govt has its priorities messed up. Instead of focussing on trying to criminalize smoking in a private restaurant, they need to go after these usurios sharks. These interest rates are usury.
Sure, it is a free market economy, it is a civilized society as well and society needs protection from sharks, who engage in ripoffs under legal protection - Absolutely clear and direct exploitation.
These guys should be Tasered at about 150 volts.