Ten commandments of William T. Ziemba on Investing.
1. Only bet when you have an edge.
2. Those who win on every trade are losers or liars. Making a profit involves taking small losses.
3. Know what you expect to gain from a trade before you enter, and know your exit point.
4. Do your research. The markets are predictable, but use the most contemporary data in models to achieve the best results.
5. Correlations between stocks and bonds are situational, and will not be replicated in all circumstances.
6. Evaluate the impact of all possible scenarios.
9. Have deep pockets – you need enough cash in reserve to survive crises. Follow a risk control system. If you focus on not losing, rather than on winning, you are more in control.
10. Accept small losses and exit before losses become too big.
What is Hawala
It’s the most efficient money exchange system in the world, but it’s illegal.
It works by-passing the goverments and laws of the land.
Let me explain you with an example. Lets suppose A is working in US and his relatives are in India. A needs to send out money for investment in India and for family expenses in India. The official exchange rate between USD to Rupee is 1$-50Rs.
Now an business C exports and imports merchandise between US and India. Business C advertises Hawala services through friends and the word of mouth reaches A. C provides and rate of 1-52Rs. Using the services of C, A can get more for his dollar.
A gives the cash to C and then C asks it’s export counter party D in India to give the money to person authorized by A. Now, how does the D get his money. He gets is by over invoicing for the goods exported to US.
If the money were to move the other direction, then D would under invoice for the good imported fromn US.
How Sivaji.. the BOSS converted all the black money to white money.
Treasury Report on Hawala