CONTENTS
LETTER
ISSUE CONTENTS
3 May 2012
FROM THE
EDITOR
18
AIR TRAVEL
52 Credit Cards
Vijay Mallya: Habitually broke? SEBI: Curious property buying binge; Bad advertising: End of tolerance; TV channels: Throwing in the towel?
Scam after Scam
Now, get travel benefits
HEALTH DIFFERENT STROKES
I
ndians are living in an age of scams. The 2G scam, the coal scam, the IPL scam, and so on, have rattled us. Among the financial scams, the best known is the Harshad Mehta scam or the securities scam. Sucheta Dalal, who exposed it 20 years ago, talks about the lingering scars of the scam, and how inadequately regulators and the judicial system have handled the resultant hundreds of cases. In an eerie coincidence, we had barely finished the Cover Story, recounting Dr RH Patil’s seminal role in modernising the Indian markets when we got the news of his sad demise. Dr Patil was grossly under-recognised by the system during the past decade when regulation and enforcement has gone downhill. He would have been a great SEBI chairman. In our Fund Pointer section, we highlight the best performing equity funds over different time periods. By narrowing down the universe of mutual funds, we have made it easier for you to invest in the right schemes. You are hearing a lot about alternative assets these days. The Earning Curve section gives you a glimpse of cutting-edge research that has proven that alternative investment assets, such as hedge funds and private equity, rarely outperform traditional investment vehicles such as mutual funds and stocks. Our Insurance Trends section carries a lot of insightful and useful information on the impact of the Union Budget 2012 on insurance and policyholders. This is important for those who have invested in insurance, or are planning to do so. Turn to page 46 to find out how you might be affected. Our free two-day Summer Special financial literacy programme, due to be hosted on 20th and 21st April, has been fully booked within a day of its announcement, proving the crying need of financial literacy from a neutral perspective. We thank our readers and participants who have enrolled. We are even more committed to giving the best and plan to host more such initiatives in future. If you have any specific ideas, please mail them at mail@mlfoundation.in and don’t forget to complete your profile by clicking on the link “Join 10,000 Others”, on www.moneylife.in.
MONEYLIFE | 3 May 2012 | 10
20
Bees Saal Baad: Markets at the Crossroads
Neither vision nor strategy in sight
SMART MONEY
26 Cover Story
22
Fund Performance
STOCKGRADER 42 Medium Term
Ajanta Pharma gained 13%, Bajaj Finance rose 6%, while Exide Industries tanked 7%
Long Term
MRF gained 8%, PTC India increased 6%, while Hero MotoCorp fell 1%
Fooled by randomness
of 54 Confession Diabetes Mellitus – If diabetes could speak, what would it say? – Pulse beat: Medical developments from around the world
TRAVEL
Mexico’s 58 Yucatan: Homeland of the Mayans
Bees Saal Baad It is 20 years since the securities scam broke. Sucheta Dalal recounts how she broke the story and how hundreds of court cases have meandered with no end in sight. Debashis Basu tracks the market reforms
13
Your Interest
3.7 million houses unsold; No drinking water for industrial projects; Rs55 crore loss in ration card project; Builders attract maximum complaints; Cancel ATM charges for senior citizens, differently-abled
14 Your Money SIP: No takers? 1gm gold coins from e-Gold units; Federal Bank: Hike in term deposit rates; Equity savings scheme: Lock-in period may be reduced; Funds through IPOs slump 82%; Alternative investment: New norms; SEBI to check systemic risk; New ethics code for brokers
16
Current Account
European Union: No heels for hairdressers
17 LOOSE CHANGE Moneylife Quiz; Soundbites Disclaimer: Moneylife has a policy of not allowing its editorial staff to buy and sell stocks that are written about in the magazine. All personal transactions in individual stocks are subjected to internal disclosure rules.
INSURANCE
FUNDS
To Choose 23 How Winning Equity Funds
46 Insurance Trends
Look for 1-year, 3-year and 5-year performance, as Jason Monteiro explains
– Life insurance: New challenges – Own-damage premium: Increase along with third-party motor cover – Fine Print: New India warned for overcharging; Undercutting among insurers to reduce? New India warned for delay in claim payment; Aegon Religare iTerm App
STOCKS
36 Street Beat Amara Raja Batteries is a good buy for the long term; Madras Cements: Tight control on costs has contributed to excellent performance
WHICH WAY
39 Glass Half-full Bulls and bears both confused, for now
LEGALLY SPEAKING
48 State & Citizens
Yucatan is a legendary land that offers impressive archaeological sites, historical stately cities, cenotes and beaches
ML FOUNDATION EVENTS
61 Detoxifying Our Body BV Gokhale addressed 70 people on using chelation to treat many ailments
Does India have ‘Rule of Law’? BEYOND MONEY SAVING AND INVESTING
49 Earning Curve Alternative investment: Not much of an alternative
66 Protecting Childhood Samatol Foundation saves children from straying into crime and tries to send them back to their homes
STOCKS: REPORT CARD
44
Weathering the Storm
Moneylife’s method of stock-picking has weathered the downdraft of 2011 and is poised to do better with a changed methodology
AUTO
50 Death Trap The most dangerous thing in a car is the steering lock inside the wheel
DEPARTMENTS Letters............................. 4 Book Review.....................56 Living .............................62 Money Facts.....................63