About investment decisions

A periodical, published from here in Singapore, regularly interviews celebrities and upwardly mobile couples. One of the standard questions that is asked to these people, is to ask them to list their best and worst investment decisions, which they have made in their life. Since I do not fall in either of these two categories; celebrity or upwardly mobile; there is virtually no chance of me getting interviewed for this column ever and therefore no one is going to ask me about my best and worst investment decisions as well.

I therefore thought of asking this question to myself and realize that it is fairly simple to answer this, but somehow while trying to answer, what I recollect most are the missed opportunities or in other words; the investments I never made but should have. But let me first answer about my best and worst investments. All my worst investments were done in the early days of my trading endeavour on the stock market. And I am proud to say that every single investment I made in shares was a mini disaster by itself with losses ranging between 50 to 75% of the investment. But I suppose that it is part of the learning curve and slowly I learned not only how to loose money but actually earn it. Coming to my best investments, there are three investments that stand out as my best investments. Sometimes in 1970's, I bought a small plot of land for about 16 Indian Rupees per square foot. About 25 years later, I could resale this land for a price exceeding 100 Indian Rupees per square foot, a handsome return. Similarly, some shares of and Indian company that makes cigarettes, consumer products and is in hotels also, is another of my best investments.

However, I am not writing this post to talk about my investments really, but rather the missed opportunities. In early 1970's, I used to work in Indian mega city of Mumbai and used to stay in a decent locality in a good neighbourhood in an rented apartment. Subsequently, I decided to relocate in the city of Pune. I went to see the owner of my apartment and informed him about my decision. He then told me that anyway he owns two apartments, which he does not need and can sell the apartment, where I was living, to me, because I am an honest man with straight forward dealings, for a price of 30000 Indian Rupees. I came home and discussed things with my wife. We felt that, it was far beyond our reach, to raise that kind of money and we should just return the apartment to the owner. Would you believe that the market price of that apartment today, is more than 10 Million Rupees and every time when I pass by that area, since then, I have always felt extremely sad for having lost such a golden opportunity, that had come my way so early in my life.

1970's also saw arrival of my younger daughter in our family. We naturally celebrated the new arrival. On that occasion, my wife and I received cash gifts or “Ang Pau,” as Singaporeans would describe it. The total amount of money we received was more than a 1000 Indian Rupees; a princely sum in those days. We decided to invest this amount in a long term bank deposit of 22 years, so that we would get a large sum that can be useful for meeting expenditure required for her education or marriage. After 22 years, we got the money back but the amount was no longer a large sum with an yearly inflation of those 22 years, eating away the value of the Rupee. This was another one of my missed opportunities. If I had invested those 1000 Rupees in shares for example, I would have earned a much better return no doubt.

The point I am trying to make is that we all make investment decisions in our life, some turn out to be correct and some disastrous. Instead of repenting about that, we should see that no opportunity is ever lost. We should always grab the opportunity. Our decision may turn out to be right or wrong. It does not matter. We can always cut the losses later if our decision proves wrong. But, we should not miss the opportunity for any reason.

29 June 2013

Mystery of Czar’s treasures

During the days of the First World War (1914-1918), the Czar of the Russian empire in those days, Nicholas II had moved his treasures from his capital St. Petersburg to the city of Kazan, so that these would remain safe from the invading German armies. These treasures were so huge that they contained 500 tons of Gold. The treasures were packed in 5000 boxes and about 1700 sacks. The estimated price of these treasures was 650 million rubles. Even before the First World War could end in Europe, Bolshevik revolution erupted in Russia led by Lenin. The civil war between Bolshevik revolutionaries and forces loyal to the Czar, Nicholas II, had continued till year 1922.Only in that year Bolsheviks were able to establish their complete control over entire Russia. In 1919, in the midst of the civil war, a senior commander of the forces loyal to Nicholus II, Admiral Alexander Kolchek had waged a war against the Bolsheviks in the Ural mountains with the help of Czech soldiers and had captured the city of Kazan after evicting Bolshevik soldiers from that city. His Czech soldiers are known as white guards in Russian history.

 

 

Substantial portion of the treasure of Nicholas II fell into the hands of Admiral Kolchev and his white guards.  They moved the treasure by means of 40 railway wagons. Yet, for last 90 years no Russian has been able to find as to where the treasures were moved by white guards and solve this mystery. After his victory at Kazan, Admiral Kolchev, who was the Admiral of Czar’s navy, tried his best to unify the forces that were fighting against the Bolsheviks and tried to establish his own autocratic rule in the Ural mountain region. He however did not succeed and lost the fight with Bolshevik Red guards. He was caught and was shot dead later.  Admiral Kolchev’s Czech soldiers or White Guards managed to escape to Czechoslovakia by bribing Russians with some of the gold they had. However, how  and where the railway wagons containing Czar’s gold were moved and how the bulk of the gold was disposed of by these Czech soldiers was never  known. Many theories have been propounded during last 90 years about the whereabouts of Czar’s gold. Some people say that this gold was smuggled out by the Czech soldiers to Czechoslovakia and the general affluence in that country during the decade of 1920 came about because of this gold. Some others claim that this gold was deposited by Czech soldiers in the bank vaults in England and Japan.  

A sweet water lake known as lake Baikal exists to the south of Siberia in the eastern region of Russia. This is considered as the largest sweet water lake in the world. During the mutiny days of Admiral Kolchev, this lake was frozen solid completely. According to some historians the white guards laid rails over frozen lake Baikal and tried to pull the railway wagons over the icy surface. However since the wagons were extremely heavy because of gold ingots, the surface ice on the lake cracked and all the wagons just sank to the bottom of the lake. This theory has some historical backing as it is recorded that during1904-1905 war between Russia and Japan, such railway tracks were indeed laid over lake Baikal.

 

 

For last 2 years,  2 miniature submarines known as ‘Mir’ and  developed for scientific investigations by Russia have been deployed in Lake Baikal. The same ‘Mir’ miniature submarines were in the international limelight because of their discovery of the wreck of ‘Titanic’. Usually these submarines are deployed either in Atlantic  or Indian oceans.  Because of their deployment in lake Baikal, a great opportunity has opened up to solve the mystery of Nicholas II gold treasure.

When their investigation in the lake Baikal was in final stages, one of the submarines located huge steel girders of the type used on railway bridges at the bottom of the lake around 400 meters below surface on a sloping ground. In  Further investigations, the girders appeared to be the part of a railway wagon. Near this steel girder, Bear Streynov and his two associates could locate some gold bars, shining in the head lights of the submarine. Streynov is a scientist involved in the environment retention and protection of the lake Baikal.

Roman Fonin, an associate of Bear Stryenov says that these gold bars were deeply embedded in the mud  and hence it was not possible for them to remove any of the gold bars. He appears quite confident about solving the mystery Nicholas II gold with help of some more submarine dives. He however feels that even if they recover some gold, people may no not forget the fable of white guards and the gold. On the contrary, it may become more deeply rooted into people’s memory.

Treasures of the Java Sea – Part I

Cirebon Coast shipwreck

Cirebon is a medium sized city with a population of 0.3 Million on the island of 'Java' in the Indonesian archipelago. The only fact of historical significance or importance about this town is that it was an independent state under the control of a Sultan. This Sultan gave up his independence in 1705 to become a vassal or a feudatory king under the Dutch colonists and Cirebon's independent existence came to an end. After Indonesia became independent from the Dutch, this city became part of Indonesia. Even though Cirebon has no historical significance, it is a town of great geographical significance because of it's strategic location. Right from historical times, enormous volume of shipping traffic has been passing near it's coast. In ancient days, Cirebon was an important mercantile harbour for trade between middle east, India, Java, Sumatra and China.

 

About a decade ago, some fishermen found out about an ancient shipwreck in the Java Sea off the town of Cirebon. They reported the matter to Indonesian authorities. However, lacking necessary salvaging equipments and also due to paucity of funds, the Indonesian Government was not able to take up any steps regarding any salvaging operation on the shipwreck. A Belgian treasure hunter specializing in salvaging the treasures on such old shipwrecks, Luc Heymans came to know about the shipwreck. His company Cosmix Underwater Research Ltd; and his Indonesian partners, Paradigma Putra Sejathera PT, made a joint offer to the Indonesian Government about salvaging the shipwreck. Indonesian Government responded positively and an agreement was signed in due course. According to this agreement, Luc Heymans's company was allowed to survey the sea bottom at that point and take out any valuables found near the shipwreck. From the salvaged valuables, if any items, which could be considered as Indonesia,s national heritage, are found ,those would be kept by the Government. The balance materials that are salvaged could be sold by Luc's company and profits would be shared on equal basis. Indonesian Government issued necessary permits to Luc's company.

Luc Heymans collected about 10 Million US$ from his investors in US and started his search operations at the site of the shipwreck. The wreck was spread at a depth of 45 meters over a 40 meter square area on the sea bottom. Luc Heymans says that at the shipwreck site, they found no remnant broken down wooden planks or pieces of the ship itself, but only a mountain of broken chinaware. A french deep sea diver, Daniel Visnikar, employed by Luc, says that on the second day of the hunt, he found a golden dagger hilt, under a chinaware scrap heap that was 1 foot high. Between February 2004 to October 2005, Luc Heymans and his team consisting of 13 deep sea divers (3 Australian, 2 British, 3 French, 3 Belgian, 2 German) found an unbelievable quantity of two hundred and fifty thousand pieces of rare Chinaware like jars, plates and bowls made in the tenth century, precious jewels and other valuable items. To salvage these items, Luc Heyman''s team made in all, about 22000 to 24000 deep sea dives. Since the Chinaware was found to be made in tenth century CE, it was obvious that the ship was wrecked around that time only. The archeologists were able to confirm from this find that substantial trade was being carried out between China, Java, Sumatra, India and Egypt by this sea route as early as tenth century. Since the ship manufactured from wood was underwater for more than 1000 years, the wood had completely rotted and decayed away and not a single speck of wood was found anywhere at the shipwreck site. What was left was the chinaware and items made from bronze and gold.

The precious cargo being carried by the ship and now salvaged from the bottom of the sea, contained many valuable items like Chinaware from the times of Liao dynasty rule in China ( 907-1125 CE ) and Five dynasties period (907-960 CE). There were chinaware plates with polished edges and having pictures of birds and dragons, plates with greenish colour, teapots with lotus motif and a large vase. The cargo also contained, famed Persian glassware and Egyptian quartz-ware. Besides this, 11000 pearls, 4000 rubies, 400 dark red coloured sapphires and 2200 garnets were also found. Luc and his team numbered each and every item together with information as to which part of the site these were found. They also prepared a DVD giving all these details along with photographs of all items and have handed over this DVD to Indonesian authorities.

Luc Heymans says that salvaging the valuables from the sea bottom was the easiest part of the whole operation. His problems were all caused by other humans. When it was known that Luc Haymans team has located the treasures, divers from some other company suddenly appeared at the site. It took lot of effort to call police and prevent others from salvaging the treasures. In spite of having all permissions and licenses in hand. 2 divers from Luc's team were arrested by Indonesian Navy and put in jail. It took quite an effort to get them released.

As per the agreement with the Indonesian Government Luc Heymans is allowed to auction and subsequent export of the valuables from the wreck. However it was found out by the Government later, that there were no laws in Indonesia, that could deal with exploration and export of such shipwreck treasures. Because of the red tape and procedural delays the treasures have been lying in a warehouse.

Finally in the middle of 2010 an auction of the valuables was finally announced. Indonesian Government expected a price of 80 Million Dollars for the valuables. As per terms of the auction, a security deposit of 16 Million Dollars was required from the bidders. Finding these terms unacceptable, no bidders turned up at the day of auction and the entire auction plan turned into a fiasco.

Luc Haymans and his investors have invested lot of money in this operation and can only hope now that at least during next auction, someone or a museum from some country of the world, would bid for the valuables.

The Staffordshire Treasures

 

There are people, who always hope to find a hidden treasure under ground or inside a wall of a ruin. Mr. Terry Herbert of Burntwood in Staffordshire, England is one such person. He however looks for hidden treasures with a metal detector. For this purpose, he uses a state of the art metal detector.

 

Terry was looking for hidden treasures under a farm, belonging to his friend. The exact location of this farm has not been disclosed, for obvious reasons. All of a sudden, the metal detector started buzzing. With a feeling of great anticipation and expectation, Terry and his friend started digging the ground on that very spot. They fond several wooden boxes, buried at that spot. They lifted the boxes out of the ground and opened them. They just could not believe their eyes with what was stacked in the boxes.

 

All the boxes, which Terry and his farmer friend had dug out from the farmland, were packed with gold and silver weapon fittings and warfare paraphernalia, including sword pommel caps and hilt plates inlaid with precious stones. The collection contained articles weighing about 5 kilograms of gold and about 2.5 kilograms of silver. In al,l there were 1500 items including a gold strip with a Biblical inscription.
Terry and his friend immediately called Mr. Duncan Slarke, liaison officer for Staffordshire. He says that he was wonderstruck with what he saw and could not even utter a word for some time. All the boxes contained articles, which were superlative examples of Anglo-Saxon workmanship. What really surprised him was the total absence of any article of feminine use such as dress fittings, brooches or pendants.

Work on cataloguing and valuing the treasures is now going on in the Birmingham Museum under expert guidance of Dr Kevin Leahy. He says that all the archaeologists who have worked with the treasures have been awestruck. He also felt that it has been actually quite scary, working on this material, which is of such great wealth.  The treasures appear to be from a period around 700 A.D.
It appears that after a war fought in that period, the victorious army must have removed all the weapon trappings and other articles from the defeated soldiers and their generals. They might not have been able to carry the war trophies or the loot with them at that time for some reason or other and must have buried it for safekeeping for the time. Due to some unknown reasons, they were never able to retrieve the trophies again, the treasures were hidden underground until Terry, and his friend found it. There is also another theory, that some person must have buried his lifetime collection of these articles for safekeeping. Birmingham museum would keep the exhibits open for viewing by general public until 13 October 2009.
Mr.Terry Herbert feels that some dead souls or spirits of yesteryear tell him, where to find gold coins. That day, instead of coins, they told him about gold.

Tata's Gold

The National Museum in New Delhi is a veritable treasure house for the students and lovers of ancient Indian culture, The museum has a huge hall displaying objects related to earliest known Indus valley culture of India. Few months back, I was viewing exhibits in this hall, watching with wonder the amazing progress and development made by the Indus valley civilizations some six thousand years ago. I was particularly enmoured by a wide range of personal jewelery consisting of earrings, necklaces and bracelets or bangles, made form ivory, beads, stones, silver and above all pure gold. Some of the designs are so exquisite that many ladies would love to wear these designs even today. Humans have always loved to wear jewelery or ornaments. Many types of metals, beads, precious and semi-precious stones, pearls and jewels are being used to make ornaments since days of Indus valley civilizations till today. Still, Gold was and is, always preferred to make jewelery.

Gold prices and Kanchipuram Saarees

Few years back, I was traveling in the Indian state of Tamul Nadu on a sightseeing trip. On our itinerary, was a visit to a town known as Kanchipuram. We (which meant in reality, my wife) had planned to buy few famed Kanchipuram saarees, woven on the hand looms, near about this place. After reaching the town, we visited few of the Saaree shops. We were however astonished to find the price tags well beyond our budget. As a rule, I do not carry large amounts of cash, when I am traveling, to avoid unnecessary risks. Surprisingly, Kanchipuram shops even flatly refused to accept credit cards for the purchases and insisted on cash payments. We had no choice but to give up our plans for shopping and proceed further on our journeys. 

Few months back,  we had similarly traveled to another town, famous for Saarees, Irkal. Because of our previous experience at Kanchpuram, we warily asked about the saaree prices here in Irkal town. Surprisingly, Irkal shops had a range of saarees, that would fit in any one's budget. Since Irkal shops offered saarees right from about seven or eight hundred Rupees, my wife could happily shop here. I was at a loss to understand tha,t why the shops in Kanchipuram could not show the same business acumen as their brothers in Irkal showed?.