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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Money Mantras….(7)

Posted by Muthu on January 13, 2009

On Sunday we heard about the government’s nominees in the Satyam Board. Government is taking whatever right steps possible in the given situation. Mr. Deepak Parekh is a professional of very high calibre, integrity and a face of corporate governance in India. This would give a strong boost to the sullen image of Satyam. I’m confident that with right board, taking right steps to  retain the customer’s confidence and ensuring that the employees morale level are high may salvage Satyam.

 

But what I’m unsure is about the ‘economics’ part of Satyam. What is its actual balance sheet? Does it have a positive net worth, especially in the context of real estate nexus with Maytas Infra & Maytas Properties? What are going to be its legal liabilities and damages for all the misdeeds of the past to various stake holders? Whether the organization can survive despite all these? Or will it be forced into a bankruptcy?

 

Being a Buffett admirer, I am reminded of one of his quotes ”When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact”. Unless we know the extent of Satyam’s ‘bad economics’, which would take more time to fully unravel, it is very difficult to predict the future of Satyam.

 

If I’m  a Satyam employee or a shareholder, I would prefer to follow this maxim of Buffett “Should you find yourself in a chronically leaking  boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks”. But as employees, in the present market scenario, changing vessels is also a daunting task.

 

Some one asked me yesterday whether the government would take over Satyam to protect the 53,000 employees. Government is doing all the possible help it can, but taking over is highly unlikely. Then what about  the lakhs of workers who have already lost employment in thousands of textile companies in Tirupur, diamond cutting companies in Surat and Auto Ancillary companies across India?. Government can only prevent further damage, appoint high calibre professionals and infuse temporary liquidity. We’ve to wait and watch if this salvages Satyam. 
 
Glad to be back with the Money Mantras series. This is the first set of Mantras for the New Year. This is the only series of articles wherein 100% of my readers say they are able to understand, enjoy and appreciate it. Though my other articles are also well read and appreciated by many, there are some (especially who have less orientation towards personal finance) who say that certain aspects of some of my articles are beyond their understanding. I do not blame them for this and instead trying to do my best to make my articles understandable for everyone so that financial literacy spreads and grows.
 
I may also repeat some of the money mantras (which appeared before) in my series. This I will do it consciously so that we’ve opportunity to go through some important pearls of wisdom again, which may provide us fresh insights. However I would ensure that a) every new series have fresh set of Mantras too so that you do not find these articles merely repetitive b) I would give sufficient gap before repeating a Mantra. Now let’s go for today’s mantras.
 
1) “You can’t make a good deal with a bad person.” – Warren Buffett
 
2) “If you let yourself be undisciplined on the small things, you will probably be undisciplined on the large things as well”.- Warren Buffett
 
3) “The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do”.-Warren Buffett
 
4) “It’s easier to stay out of trouble than it is to get out of trouble.” – Warren Buffett
 
5) “Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.” – Benjamin Graham  
 
6) “When it is a question of money, everybody is of the same religion.”  -Voltaire
 
7)  “Money is like manure.  You have to spread it around or it smells.” -J. Paul Getty
 
8) “Money is neither my god nor my devil.  It is a form of energy that tends to make us more of who we already are, whether it’s greedy or loving.”  -Dan Millman
 
9) “There is a very easy way to return from a casino with a small fortune:  go there with a large one.”  – Jack Yelton
 
10) “Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” -Sam Ewing

 

One Response to “Money Mantras….(7)”

  1. SATYAMaa a good article, taking thoughts to basics of success.

    Rgds

    Vivek Karwa
    http://www.VRIDHI.co.in

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