Real Estate-Sector Gone Bust
Towards the end of 2005 I was travelling to New York-little realising I was to miss the biggest blow-out rally in Real Estate stocks. A broker friend had been persuasuve-dont Sell Unitech at any cost. The price then was a princely Rs 900 and I sold...only a few months back I had seen the same at Rs 100 and so the price had seemed outlandish. When I returned in April 2006, the price was Rs 65000 and the post split price Rs 360 upper circuit. Today it is Rs 5.
There is obviously no link between the stock and the underlying at least in India. I have 2 examples at direct contrast-a family member was selling his abode in Hong Kong and moving to the US. Both deals were concluded online and Deeds of ownership with the new transferees delivered in 7 days flat.
So when PM Modi targets jewellery, Gold, Valuables and Land-he might just look up the process. Nothing moves without open graft at Land Registry. Everything except Gold and Land including Luxury Cars have zero value. You would be lucky to find a Buyer. That is why all Audis and Benz's are funded by NBFC and reposted with them for re-sale.
Money spent on anything except Gold and Land is zero and not worth chasing. However, in the current moment of chest thumping and adventurism-even Gold and Land are useless. If you Sell Land and turn to Gold-the Gold stocks being known to Revenue, you are getting trapped. If you do vice a versa, there is no one who will accept old notes or Gold in settlement.
The result-land will halve and then halve again. And Gold too shall become worthless. Worse, all the 80,000 tonnes of Gold owned by Indians now has zero value. It also cannot be thrown into temple donations,as CCTV is recording the donors. While the reasoning and thought might have been a greater benefit-this substantial sum of capital has now become zero. A sum accumulated by households over 7 decades turned to nought. Do I have an alternate? Sadly, No!. Except people will shortly feel more impoverished than they already are-the impact will be severe on lower and middle classes which slave 14 hours a day, hanging for dear lives on DTC buses just to save their jobs will be ever more insecure.
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