Biocon plans IPO of research unit by Mar 2009

India's top biotechnology firm, Biocon, is looking at overseas acquisitions for about USD 10 million to boost its sales globally and gain access to innovative drugs, its chairman said on Wednesday.
Biocon, which makes insulin, cholesterol-lowering statins and other branded drugs, had earlier this month agreed to buy 70 percent of German marketing firm AxiCorp GmbH for 30 million euros (USD 45 million) to boost distribution and marketing of pharmaceuticals in Europe.
"I am looking at smaller companies where even if I have to invest and get a majority or controlling stake it won't cost me more than USD 10 million or thereabouts," Kiran Mazumdar-Shaw said in an interview.
The targets are marketing firms in Europe and research-focused biotechnology companies in the United States, Australia and New Zealand, she said.
Last month, Biocon said its quarterly profit rose more than five times after one-off gains from sale of its enzymes unit to Denmark's Novozymes, and forecast more growth despite recession concerns in its key U.S. market.
Bangalore-based Biocon has been looking to acquire firms to boost its marketing and drug discovery muscles, after it sold off its enzymes business in July last year for USD 115 million.
"For Europe, it's a totally marketing strategy that we are looking at," said Mazumdar-Shaw, who set up Biocon in her garage in Bangalore in 1978. "At the same time we are also looking at acquisition opportunities in say innovation."
She said a plan to launch an initial public offer of its contract research unit, Syngene, was on track by the end of the fiscal year that begins in April. The company has not yet finalised details of the offer.
A 12 percent drop in the stock market this year, caused by a global equities rout, knocked out a few IPOs in the Indian market in recent weeks, including a USD 1.6 billion issue from Emaar MGF Land, the Indian unit of Dubai's Emaar Properties.
Oral Insulin
Clinical trials for Biocon's innovative oral insulin is making good progress and the company should be able to sign a licensing deal to launch the product in global markets early next year, Mazumdar-Shaw said.
Brokerage ICICI Securities said in a Feb. 19 research report that Biocon might generate "windfall revenue" through the licensing of oral insulin. It has assumed the deal size to be between USD 100 million and USD 300 million.
"We believe we are actually in a very good position because you can see that number of recent diabetic drugs have had safety concerns associated with them," the Biocon chief said.
"That's why we believe an oral insulin could have a very, very interesting opportunity in managing diabetes very effectively with no safety concerns."
Biocon sees prices of statins, which contributes a quarter of its revenue, stabilising on waning competition. The United States and Europe are its main markets for the statins used to lower cholesterol levels.
Investment on research and development activities in the year to March 2009 will be 15-20 percent higher than this year's spending of over 1 billion rupees, said Mazumdar-Shaw, who earned a master's brewing degree in Australia before pioneering Biocon.
Shares in Biocon, which has a market value of more than USD 1 billion, ended 0.3 percent higher at 441.05 rupees on Wednesday in a Mumbai market that edged up 0.1 percent. The stock is down about 24 percent so far this year, reports Reuters.

Budget '08: India to maintain GDP growth at 8.8%

Finance Minister, P Chidambaram, in his Budget speech presented before the Parliament today, confidently assured that India would maintain its GDP growth at 8.8%. He added that the keeping inflation under check has been the cornerstone of the Government policy. The FM pointed out that the country has seen 8% GDP growth in 12 successive quarters.

Capital inflows:
The global markets are weak since August, Mr. Chidambaram observed, adding that the impact on local markets is yet unclear. The Government will monitor foreign fund inflows, he said. He said that there is a need to take steps on foreign inflows to ensure stable markets. The current capital inflows are in excess of economic deficit, the FM informed. The Government and the RBI will jointly take temporary steps to manage capital inflows, he said. There is a need to be vigilant on global risks, he added.

Health:
Mr. Chidambaram has proposed to allocate Rs16,534 crore for the health sector for FY09. He has also hiked the allocation to the National Rural Health Mission by 15% and has announced a health cover of Rs 30,000 for every worker in the BPL category.

In his budget speech for FY07-08, the Finance Minister had said that the healthcare sector will contribute around 7-8% by the next five years, if considerable importance was given to the sector. He had hiked the allocation to health sector by 21.9% to Rs 15,291crore.

Agriculture & farm growth:
The FY08 farm growth is seen at 2.6%, the FM informed. Agricultural credit doubled in the first two years of UPA government, he stated. The Bharat Nirman programme has got an allocation of Rs 31,280 crore.

The agricultural credit target has been set at Rs 2,80,000 crore for 2008-09. The government aims to hike farm contribution to GDP to 1.6% in the 11th plan. Around 75% farm credit is by scheduled commercial banks, said Chidambaram.

In Union Budget 2007, the target set for farm credit was Rs 2,25,000 crore. There was a provision of Rs 1,677 crore for short-term crop loans. A special plan was announced which was to be implemented over a period of three years involving an amount of Rs16,979 crore. Of that amount, Rs12,400 crore was to be spent on water-related schemes. The special plan included a scheme with proposed provision of Rs 153 crore for induction of high yielding milch animals and related activities.

Education:
Mr Chidambaram has upped the education and health allocation by 20% at Rs 34,400 crore. The Midday-Meal Scheme has been extended to upper primary classes in all blocks.
The Finance minister has proposed to setting up 16 central universities and 6,000 high quality schools which will be built by FY09.
3 IITs will be set up in in Andhra Pradesh, Bihar and Rajasthan. He has also setting up of 3 IISCs in Bhopal and Trivandrum.
The Government will also allot Rs 100 crore to IT Ministry to Link Knowledge Institutes.
Women Welfare:
The FM has offered Rs 500 crore for a corpus fund to subsidise all women Self Helf Groups, or SHGs, for LIC cover for permanent disability.
Power:
The FM has created a plan worth Rs 800 crore for accelerating power reform in FY09. There would be a national fund for power transmission and distribution. A coal regulator would be established and there would be more reforms in coal and electricity, Mr. Chidambaram said. The FM has urged for an open bidding for five more Ultra Mega Power Projects (UMPP).

Oil & Natural Gas:
The Finance Minister estimated that the NELP-VII would attract investments worth USD 5-8 billion.
PAN/Securities:
In the 2007 budget, The FM made PAN mandatory for all security transactions and the sole identification for all participants in the securities markets. He also made it mandatory for all high value transactions to be supported by PAN identification numbers.

In his Budget 2008-09 speech, the FM has proposed the launch of an excange traded Forex and a rate derivative market. He added that PAN would continue to be the sole identification in the securities market. He has also extended PAN requirements to all financial markets.

The FM has also asked states to help develop a National Securities Market. He added that differences in state duties and levies are hampering the securities market.
Excise duty
India has one of the highest incidences of indirect tax on goods, where most of the manufactured products attract 16% excise duty and 12.5% VAT.

In Budget 2008-09, the excise duty on buses and chassis has been cut from 16% to 12%, on 2-wheeler and small cars, it has been cut from 16% to 12%. Meanwhile, the excise duty on some paper types has been cut from 12% to 10% and the excise duty on all Pharma good is down to 8% from the prevalent 16%. The FM also reduced excise duty on bulk cement to Rs 400/tonne.

Customs duty

There is no change in peak customs duty. Customs duty on steel scrap has been cut to 0% versus 5% and the customs duty on project imports has been cut to 5% versus 7.5%.

The customs duty on a few bulk drugs have been cut to 5% versus 10% while the duty on life saving drugs has been cut from 10% to 5%.

CENVAT has been reduced from 16% to 14% on all goods.

Customs exemptions will continue only for Naptha for fertilizers. The duty on crude/unrefined sulphur has been cut to 2% versus 5%.

Union Budget 2007 reduced peak rate for non-agricultural products from 12.5% to 10% and duty on chemicals and plastics from 12.5% to 7.5%.

The previous Budget had reduced peak rate for non-agricultural products from 12.5% to 10%. The duty on most chemicals and plastics was reduction from 12.5% to 7.5%. There was also a reduction in the general rate of import duty on medical equipment to 7.5%.

Corporate Tax:
The FM has not tinkered with the corporate tax levels in Budget 2008. Corporates will be paying the same rates of tax this year as well, additionally there is no change in surcharge on corporate tax. Surcharge also did not see any change; as per the current norms, corporate income has been levied a flat surcharge of 10% in the case of domestic companies and 2.5% for foreign companies.

Income tax:
the FM has hiked the personal income tax exemption limit to Rs 1.5 lakh from the prevalent Rs 1.10 lakh. The personal income tax exemption limit for women is up from Rs 1.45 lakh to Rs 1.8 lakh and for senior citizens, it’s up from Rs 1.95 lakh to Rs 2.25 lakh.

Income above Rs 5 lakh will attract 30% income tax and income in the range of Rs 1.5 lakh to Rs 3 lakh will attract 10% income.

He has however, left unchanged corporate tax and the surcharge on corporate tax.

DTT/ STT:
The Finance Minister, P Chidambaram has left the Dividend Distribution Tax or DDT rates unchanged at 15%. While presenting the Union Budget before the Parliament today, he also announced that the Government would introduce commodities transaction tax, like the Securities Transaction Tax, or, STT.

The STT rates have also been left unchanged. Mr. Chidambaram said that the levy of STT would only on option premiums.

Short-term capital gains:
The short-term capital gains have been hiked to 15%, the FM announced.

CST:
Mr. Chidambaram has reduced the the Central Sales Tax, or CST, rates to 2% from 3%.

Other tax announcements:

The Finance Minister has withdrawn the banking cash transaction tax. He has also given a five-year tax holiday for setting up hospitals in non-urban cities.

End of the Oil Age

Bill Reinert, an innovator of Toyota's gasoline-saving Prius, says carmakers aren't moving fast enough to cope with global warming and $100-a-barrel crude. Hybrids, plug-ins and electric-only vehicles must take center stage to help the planet avoid environmental and economic disaster.
By John Lippert and Alan OhnsmanBloomberg Markets March 2008
Bill Reinert, who helped design Toyota Motor Corp.'s Prius hybrid, hovers in a helicopter 1,000 feet over Fort McMurray, Alberta. On this clear November morning, he's craning for a look at one of the world's largest petroleum reserves where there's not an oil well in sight. Instead, in a 2-mile-wide pit below, trucks head to refineries with loads of sand weighing more than Boeing 747s. Yellow flames shoot skyward as 900-degree-Fahrenheit (482-degree- Celsius) heat liquefies any embedded petroleum. Floating scarecrows and propane-powered cannons do their best to chase migrating birds from lethal wastewater ponds. Eventually, nuclear reactors may surround the crater 270 miles (435 kilometers) northeast of Edmonton, Alberta, delivering the power required to wring oil from sand.
"This is what the end of the age of oil means," says Reinert, 60, who plans the vehicles Toyota will make in a quarter century as national manager for advanced technology at the U.S. sales unit in Torrance, California. "The car-based culture, the business-as- usual of building cars and trucks, is going to change dramatically."
Since Henry Ford introduced the moving assembly line in 1913, the world's automakers have relied on a single source of power--the gasoline-dependent internal combustion engine. Today, the twin threats of $100-a-barrel oil and global warming are convulsing an industry addicted to cheap, abundant petroleum. Auto companies, already hurt in 2007 by the lowest U.S. demand in a decade, are struggling to perfect cars that run on ethanol, diesel, natural gas, hydrogen and household electricity. They're under the gun from California and more than a dozen other states to cut carbon exhaust by 2020 with vehicles that must get 44 miles per gallon (19 kilometers per liter) of gasoline, about double today's average. On Dec. 19, President George W. Bush signed a law that mandates fuel-efficiency of 35 mpg nationwide by that year.
Reinert says automakers are endangering themselves by basing sales and profits on the big, fast cars that many U.S. customers say they want in 2008. In five years, as oil shortages and global warming intensify, car companies may be out of step with drivers' demands for fuel-efficient vehicles. Even worse, degrading stretches of the planet like Fort McMurray will only delay--not prevent--the time when the world must function in a post-peak- petroleum economy.
Canada's oil sands region may eventually provide a quarter of U.S. crude oil demand, currently at 21.3 million barrels per day, Reinert says. "At that point, the environmental impacts are totally irreversible," he says. "You turn this area into an ecological sacrifice zone."
Toyota investors, whose shares tumbled 27 percent to 5,630 yen in the 12 months ended on Jan. 11, say the company's priority must be weathering a weak U.S. market, not chasing breakthroughs in green technology. Last year, U.S. sales declined 2.5 percent to 16.1 million vehicles industrywide. "There's cake, and there's frosting," says Jeffrey Scharf, president of Santa Cruz, California-based Scharf Investments, a fund firm that owns Toyota stock among its $700 million in assets. "Hybrids are more into the area of frosting."
Shareholder ambivalence about clean cars is only one hurdle to surviving the end of easy oil. Reinert, a former Navy submariner who stands 6 feet 1 inch (1.85 meters) tall, says he lies awake at 2:30 a.m. wondering whether he's making the right recommendations for the future of Toyota--and the planet. His suggestions run from building lightweight compacts and plug-in hybrids to redesigning smog and people-choked cities and populating them with electric- only cars.
Reinert says nobody can say for sure how the separate tailpipe emission, fuel economy and manufacturing regulations promulgated worldwide by multiple levels of government will affect the environment. There's no blueprint for the impact of increasingly scarce oil on a U.S. economy already laboring with a mortgage crisis and a dropping dollar. Add industrialization in China and India, and the number of cars and trucks worldwide may double to 2.1 billion by 2030, according to the Paris-based International Energy Agency.
"We don't have a past, a history or a database that allows us to explore the simultaneous impact of recessions, disruptions to the energy supply and climate change," says Reinert, who spent six years in the 1980s maintaining solar and wind-powered telephone towers in Colorado's Rocky Mountains. "We don't have the legislative, regulatory, financial or product planning tools." Toyota is making excuses for not moving faster on fuel-efficiency, says Daniel Becker, a Washington lawyer and former head of global warming programs at environmental group Sierra Club. Since Toyota's 2003 hit with the second-generation Prius, which gets as much as 45 mpg in city driving, the company has slid backwards, he says. In early 2004, Toyota and other carmakers refused to negotiate with state legislators before California developed its carbon restrictions. In December 2004, they sued to strip California of its ability to enact its own limits, prompting counterclaims that may end up in the U.S. Supreme Court. "People like Bill Reinert understand the issues," Becker says. "That hasn't stopped the company from turning to large trucks and SUVs to boost sales."
Reinert defends toyota's need for sport utility vehicles, minivans and pickups, which contributed 42 percent of its 2.6 million U.S. vehicle sales in 2007. The company earns about $6,000 before taxes in the U.S. on an SUV. That compares with a $1,000 profit on a Corolla and a small loss on a Prius, says David Healy, an analyst at New York-based Burnham Securities Inc. The Toyota City, Japan-based company made ?450.9 billion ($4.1 billion) in the three months ended on Sept. 30 compared with ?405.7 billion a year earlier. Sales rose 11.3 percent to ?6.49 trillion.
"Without these profits, where does the investment capital come from for our research on plug-ins or fuel cells?" Reinert asks. Yet he fears Toyota and other carmakers may be too bureaucratic and profit driven to prepare for the energy-constrained future. Toyota's U.S. sales headquarters employed 400 people when Reinert was hired in 1990; today, 8,000 work there, and the U.S. is Toyota's most profitable market.
"There's a tension between pickups and hybrids within Toyota," says David Schearer, chief scientist for California Environmental Associates and a consultant on the Prius. "They want to do the right thing, but the Prius is a relatively small piece in terms of overall sales volume." Prius sales totaled 181,221 in the U.S. last year compared with 30,000 in Toyota's original forecast when the car went on sale in 1997.
Toyota may have become the world's largest automaker in 2007, building 9.51 million cars and trucks versus an estimated 9.26 million for General Motors Corp. The U.S. automaker planned to announce final results on Jan. 23. Given Toyota's craving for growth and profits, Reinert says he feels like a 21st-century Cassandra, endowed with the gift of prophecy about the oil-related crises to come but fated not to be believed.
The environmental desecration at Fort McMurray and the dangers in petroleum-rich countries such as Iraq and Saudi Arabia show why it's foolish to brush off warnings about an energy-depleted future, says Jan Kreider, an engineering professor at the University of Colorado at Boulder who had Reinert as a graduate student. "We're going to have to have crisis on top of crisis before energy policies change," he says. "Americans have this shock mentality where they do what they want to do for as long as they can and then set up massive programs to fix everything in a few years."
So far, Americans are embracing small steps such as switching to fluorescent light bulbs. Meanwhile, at Fort McMurray's pit mines, it takes 2 tons of sand, 250 gallons (947 liters) of water and 1,400 cubic feet (39.6 cubic meters) of natural gas to produce one barrel of synthetic crude, says Peter Wells, director of research firm Neftex Petroleum Consultants Ltd. in Abingdon, England. That's enough water for a day's use for a U.S. family of four and enough natural gas for 5.6 days. The gas is burned to power a process that extracts a tarry substance called bitumen from the sand and then refines it into synthetic crude.
In turn, each barrel generates as much as 110 kilograms (240 pounds) of carbon dioxide equivalents, the same as refining three barrels of traditional light crude.
"When you're schlepping around two tons of sand for a barrel of crude, it shows that conventional oil is already well into depletion," says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto. "Price will ultimately ration demand. People won't be able to afford to drive."
Canadian Association of Petroleum Producers Vice President Greg Stringham generally agrees with Wells's numbers. He says each barrel of synthetic crude requires only 900 cubic feet of natural gas and puts out about 96 kilograms of carbon dioxide equivalents. "It's definitely true that the era of cheap and easy oil is over,'' says Brad Bellows, spokesman for Suncor Energy Inc., which opened Fort McMurray's first commercial oil sands mine in 1967. "Industry is looking offshore and to unconventional sources like oil sands."
Oil sands facility operators are working to minimize environmental harm by recycling water faster and using the refining process to produce heat that's now generated with gas, Stringham says. They're also trying to sequester carbon dioxide emissions underground and quickly restore land to its original condition.
Wells predicts world oil production will peak at about 100 million barrels a day in about a decade. By 2030, output will fall to today's level of 87 million barrels. Declining production will collide with rising demand, which could hit 118 million barrels a day by 2030 if trends were to continue, the U.S. Energy Information Administration forecasts. "When production levels off, if the price is $200 or $300 a barrel, then that's what people will pay," Wells says.
Reinert says that although oil may drop in price because of a global recession, it's likely to gyrate between $75 and $125 a barrel for the next five years. Crude oil for February delivery traded at $92.51 a barrel on the New York Mercantile Exchange on Jan. 11. It hit $100 for the first time on Jan. 2. "Peter's scenarios for future energy are the ones I embrace," Reinert says.
Toyota's rivals are struggling with the same predictions. "The biggest risk is the risk of a recession, of a shock to the global economy," says Larry Burns, vice president of research and development at General Motors Corp. "The second risk is China.
China's growth is unbelievable, and it depends on energy. In every country that's providing China with commodities, you're seeing record years in car sales."
GM plans to sell 16 models of gas-electric hybrids in North America by 2011. One of these, a Silverado pickup, gets 40 percent better fuel economy in city driving than the gasoline version, which gets 15 mpg.
At Nissan Motor Co., 25 percent of sales in five years may come from electric cars, hybrids and clean-burning diesels,up from 5 percent today, Chief Executive Officer Carlos Ghosn says. "I don't consider climate change or oil prices as a threat," he says. "I consider it an opportunity."
In an industry first, Honda Motor Co. will start leasing its Clarity fuel-cell car in California this year. Fuel cells create electricity in a chemical process that combines hydrogen and oxygen, with water vapor as the only byproduct. The Clarity has a top speed of 100 miles an hour, a range of 270 miles and lease payments of $600 a month.
Such advances may not come soon enough, says Reinert, who counts Toyota Executive Technical Adviser Norihiko Nakamura as an ally who shares his urgency. Nakamura, one of a handful of occupants on the top floor of Toyota's Higashi Fuji Technical Center near Mt. Fuji, says he worries the world's oceans could get so hot that they'll release carbon instead of storing it--with catastrophic consequences for human life. Nakamura takes his own measurements of atmospheric pollution and is scouring the world for alternative fuels. He's targeting hydrogen, electricity or ammonia as replacements for petroleum to ensure that auto, aircraft and ship builders remain viable for another century.
"Oil and natural gas are getting scarce, and there's global warming, so we need something that's carbon free," says Nakamura, 65, whose white hair almost reaches his shoulders. "Toyota has a sense of crisis that there are only several years left to do something about this."
The United Nations' Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize with former U.S. Vice President Al Gore, says carbon emissions must peak in 2015 to avoid irreversible climate shifts. In its November 2007 report, the panel concluded that emissions of greenhouse gases at or above current rates will cause changes in the 21st century that are likely to be larger than those in the 20th century. Among them are probable increases in heat waves, heavy precipitation and cyclones; reduction in the size of areas covered by snow; and a decrease in Arctic sea ice.
Reinert says that without action, oil may become so expensive that the world would resemble the one in Blade Runner. In the 1982 film, the rich live hundreds of stories high and the poor walk dark, rain-soaked streets. Or the lack of oil may cause the breakdown of social order depicted in the 1979 movie Mad Max. Reinert says Fort McMurray provides a window into such fictional portrayals. He predicts that the clamor for energy security will trump all environmental concerns worldwide. And he forecasts that most alternatives to conventional petroleum, such as oil sands and ethanol, will make climate change and water shortages worse.
Signs of indelible change already are emerging at Fort McMurray, whose soil was saturated with petroleum when landmasses collided to form the Rocky Mountains millions of years ago. Oil-related development has displaced 330 square kilometers (127 square miles) of previously untouched forest rich with spruce trees and peat bogs. The population has doubled to 64,441 in 10 years, with another 20,000 people living in mining and construction camps. Refineries, mines and so-called in situ extraction, in which underground oil sands are melted with high-pressure steam or set afire, have drawn investments totaling 155.6 billion Canadian dollars (US$152.6 billion) since 1997.
"It's an enterprise of epic proportions, akin to building the pyramids or China's Great Wall," Canadian Prime Minister Stephen Harper said at a Canada-United Kingdom Chamber of Commerce meeting in London last year.
In total, 175 billion barrels of recoverable oil exist in an area the size of Florida, Stringham says. That compares with 259 billion barrels in Saudi Arabia. "It won't be a lack of resources that causes a shift away from oil," Stringham says. "There's lots of oil."
Daily output of oil from Fort McMurray may reach 6 million barrels by 2050, up from 1.2 million last year, Wells says. Some of the natural gas to fuel production could come from the proposed $16 billion Mackenzie Valley Pipeline running 800 miles from Alberta north to the Beaufort Sea. Today, most of Fort McMurray's oil is transformed into gasoline, diesel and jet fuel in a network of refineries stretching to Edmonton, Denver, Chicago and Houston.
Reinert says it's not too late to mitigate the environmental toll of such development. Part of the answer lies in more Corolla-style compacts with light materials and four-cylinder engines. Part lies in hybrids such as the Prius and the Camry. Governments and corporations will have to get better at setting priorities. Carbon emissions from buildings can be reduced for $50 a ton with measures like insulation. In comparison, it costs $2,000 a ton to cut carbon tailpipe emissions by redesigning cars, he says. Cities must be redesigned too. People need to rely on mass transit and live closer to where they work. "In a place like New York, there may not be a role for our traditional product--I don't mean today but 20 or 30 years from now," he says.
Right now, Reinert's main job is designing the features that will attract customers to plug-in hybrids. In the prototype stage, plug-ins resemble the Prius with a small door on their side for hooking to an electrical outlet. "The transportation sector worldwide is 95 percent dependent on liquid hydrocarbons," says Gary Kendall, a World Wildlife Fund energy analyst in Brussels. "The way to reduce this dependence is with a grid-connected vehicle." Electricity from nuclear power could be sent directly to the vehicles instead of digging up oil sands to produce liquid fuel, he says.
"I'm confident there will be an industry-leading plug-in from Toyota," Reinert says. The company plans to start leasing plug-ins to global fleet customers by 2010, he says. Plug-ins can't arrive sooner because Toyota hasn't figured out how to mass-produce lithium-ion batteries that are affordable, durable and powerful enough for cars, Toyota President Katsuaki Watanabe said in Detroit on Jan. 14.
Kendall says the company can work faster. "Toyota could bring plug-ins to market very quickly, but perhaps it'snot in their business interest," he says. "They're milking the technological edge they have now with the Prius."
The delay in consumer sales until after 2010 means Toyota must endure taunts from GM Vice Chairman Robert Lutz. He told reporters at the Los Angeles auto show in November that his company will test-drive plug-ins in March 2008 and mass-produce them in November 2010. "We'll find out who is right--and whose credibility takes a serious dent," Lutz said.
Menahem anderman, president of Advanced Automotive Batteries, a consulting firm in Oregon House, California, predicts Toyota will introduce plug-ins first. Toyota spent $7.7 billion on research and development in 2006, the most of any public company surveyed worldwide by Booz Allen Hamilton Inc., a New York-based management consulting firm. To move beyond automakers' lead-acid and nickel- metal batteries, Toyota has as many as 300 in-house engineers studying the chemistry of lithium batteries, Anderman says. GM has no in-house researchers for lithium chemistry, relying instead on suppliers, according to Joseph LoGrasso, GM's engineering group manager for plug-ins. GM spent $6.6 billion on research in 2006.
For all of the recent research, the Prius may still be the world's cleanest car. During its lifetime, it emits 110,000 pounds of carbon dioxide equivalents, including the amount put out during manufacturing, says Kreider, the Colorado professor. That compares with 180,000 pounds for a Camry and 310,000 pounds for a Tundra pickup.
"Toyota's leading position in the hybrid arena remains one of their key competitive advantages, especially given the recent high-oil-price environment," says Wendy Trevisani, who manages Santa Fe, New Mexico-based Thornburg Investment Management Inc.'s $17.4 billion International Value Fund. As of July, the fund held 8 million Toyota shares.
Some new Toyota vehicles are less friendly to the environment. The 2009 Corolla with a 1.8-liter engine is 193 pounds heavier than its predecessor, with just a 1-mpg improvement in highway fuel economy. The Lexus RX400h hybrid SUV gets 24 mpg on the highway, 2 miles more than the gas-only version, and, at $42,689, costs 10 percent more. "We're focused on increasing our profits, and the U.S. is key," Reinert says. "This necessarily limits some of the options we might have pursued, especially as we move toward being a volume manufacturer, and especially in a down market."
If Reinert is sure of anything, it's that Toyota can't go into reverse. Since 1950, the world has been blessed with an eightfold increase in oil production. Yet the peak discoveries for new oil came in 1962, petroleum consultant Wells says. Total production outside the former Soviet Union and the Organization of Petroleum Exporting Countries topped out two years ago, he says. Oil in the former Soviet Union will reach its highest level in about five years; OPEC will peak in about 10, he says.
In the interim, nations will be more dependent on the Middle East, where getting oil is complicated by war, political turmoil and declining output from mature wells. "After a series of incidents in the Persian Gulf, or a low-level nuclear exchange that shuts off oil supplies, you wouldn't have a short-term disruption like Katrina," Reinert says. "You would have a profound one- or two- or three-year period in which economies and governments fail."
Even when he's delivering dire assessments, Reinert speaks in the easygoing tones of a popular college professor. His interest in science came in fits and starts. During the early 1950s, when he was growing up in Parcoal, West Virginia, he was poor enough to see running water and a telephone installed in his house. He moved to Kansas City, Missouri, after his mother, who'd been divorced, married a Ford Motor Co. assembly line worker. Instead of following his buddies to Vietnam after high school, Reinert joined the Navy and ran engine rooms in nuclear submarines under the polar ice cap.
Reinert says his life fell apart after the Navy. His darkest day came while he was working at the Ford plant. He was put in shackles in front of his stepfather's friends for buying $6 worth of marijuana. After three weeks in jail, he enrolled in the University of Colorado and got a bachelor's degree in biopsychology. In 1979, when the fall of Iran's Shah Mohammed Reza Pahlavi sparked an oil crisis, he joined the university's master's program in energy engineering.
Reinert graduated and was hired by Kreider. His job was to attach solar panels and windmills to microwave telephone towers that were otherwise dependent on diesel fuel airlifted into the Rockies. He became a pioneer in so-called power electronics, coordinating electricity from wind and the sun with a battery and diesel engine. He maintained the towers via helicopters based in Grand Junction, Colorado. The flights took him over the Piceance Basin, a 1,200-square-mile area atop natural gas deposits and as many as 1.1 trillion barrels of recoverable oil embedded in shale.
Reinert joined Toyota to run energy operations at the California sales headquarters in 1990. He spent eight years badgering top brass to let him use power electronics to design cars. He helped imbue the Prius with a hatchback and fold-down back seats for maximum cargo space and acceleration of 0-60 miles per hour in 10.4 seconds--4 seconds faster than its predecessor.
Reinert won the assignment of chauffeuring actress Charlize Theron in 2004 on the night she won an Oscar for Monster. He remembers how she hugged her mother when paparazzi pounded on their fuel cell-powered SUV. The Prius earned Reinert the right to speak on environmental trends inside Toyota and to outside groups. "Having a voice that may not be the company line is ultimately good for Toyota," says Jim Lentz, president of Toyota's U.S. sales unit. Reinert believes in changing individual behavior. After the oil tanker Rebecca sank off the Galápagos Islands in 2001, he, Toyota and the World Wildlife Fund joined Ecuador in a multiyear cleanup. They designed an oil delivery dock to replace the leaking structure built during World War II. They set up recycling centers for motor oil that would otherwise be dumped into the ocean and household trash that would be burned. "We could actually make a measurable difference in a geographically defined area," Reinert says.
There's evidence in his personal life that such efforts may not be enough. Reinert and his wife, Pam, can't walk their dogs around their home in Rancho Santa Margarita, California, because forest fires exacerbated by drought and global warming are driving coyotes down from the nearby Saddleback Mountains.
When reinert lies awake, he worries about the Piceance Basin, where he put his life back together after doing jail time and learned to be a hands-on scientist. Petroleum hovering around $100 a barrel is rekindling the 1970s oil shale boom. Roads and tunnels are snaking into the mesas around Grand Junction; natural gas derricks dot the horizon. Shell Oil Co. is testing ways to heat underground shale to 400 degrees Celsius and capture the melted oil inside rock frozen solid by pumped-in refrigerants. Daily output of synthetic crude from Colorado, Utah and Wyoming may reach 1 million barrels a day by 2040, Wells says.
Flying over the Piceance in a Cessna 182 in November, Reinert searches for the bald eagles, wild horses and elk he knew in his youth. He can't find any. He studies the creeks that used to feed the Colorado River from melting snowpacks and finds them dry. The river, which would nourish oil shale extraction and the growing populations in Las Vegas, Los Angeles and Phoenix, is narrower than the I-70 freeway alongside it. Strip mines cut straight down into solid rock even after 30 years of reclamation. Another oil shale boom would further deface the Piceance. "I feel an abject sense of hopelessness that I can't do anything to stop this," he says. "I feel like I've lost part of myself, like something's been amputated."
Toyota's technical triumph with the petroleum-saving Prius shows carmakers can be a force in mitigating the environmental damage Reinert worries about. He says that's only a start. As threats from the end of easy oil multiply and global warming accelerates, the desecrated forests and scarred earth at Fort McMurray may be harbingers of what's to come if automakers and politicians fail to act.

Microsoft Fined a Record $1.35 Billion by EU for Violating Antitrust Order

European Union regulators fined Microsoft Corp. 899 million euros ($1.35 billion) for failing to comply with a 2004 antitrust order, the largest EU fine ever imposed against a single company.
Microsoft overcharged for patent licenses that rivals needed to connect products to the Windows platform, the European Commission said. The fine brings the total penalty against the company to 1.68 billion euros in the case.
``Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision,'' European Competition Commissioner Neelie Kroes said in a statement today in Brussels. ``I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance.''
Microsoft has tried to allay European antitrust concerns, announcing last week that it will help competitors' software work better with some products, such as Office. While today's ruling ends the 2004 antitrust case, for which the company was fined a then record 497 million euros, last month the EU opened two new probes into Microsoft's business practices.
Microsoft, the world's largest software company, said in a statement that it would review the decision. The Redmond, Washington-based company sought to limit potential EU fines by agreeing in October to make network data available to open- source software developers so server software can connect to the Windows operating system.
`Past Issues'
``These fines are about the past issues that have been resolved,'' the company said. ``As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future.''
Microsoft shares traded in Germany fell 0.6 percent to the equivalent of $28.22 at 2:45 p.m. in Frankfurt, from the close of $28.38 in Nasdaq Stock Market trading yesterday.
The EU fine isn't as important to Microsoft as its proposed $31-per-share bid for Yahoo! Inc., said Robert Jacobsen, an analyst at Jyske Bank A/S in Silkeborg, Denmark who has an ``accumulate'' rating on Microsoft shares
``Investors aren't reacting because it was well communicated in the market that the EU wasn't happy with Microsoft,'' Jacobsen said. ``This isn't a fundamental issue. The acquisition of Yahoo has taken on much more importance.''
Other Antitrust Cases
The commission, known for vetoing General Electric Co.'s proposed $47 billion merger with Honeywell International Inc. in 2001, has ramped up its oversight of U.S. technology companies such as Intel Corp., Rambus Inc. and Qualcomm Inc. in recent years. Last July the regulator charged Intel with abusing its dominance in the computer-chip market. It's also probing potential antitrust abuses by Rambus and Qualcomm over royalty rates on chip-technology licenses.
On March 1, 2007, the EU threatened Microsoft with millions of euros in daily fines backdated to December 2005 for failing to fully comply with the 2004 antitrust order.
Under that decision, Microsoft had to provide data to rivals to allow servers to connect to the Windows platform. When patent licenses were necessary for that network data, Microsoft was required to charge ``reasonable'' royalties.
New Investigations
Last month, EU regulators opened investigations into whether Microsoft is using its dominance in word processing and spreadsheets to thwart rivals and whether the company illegally tied an Internet browser to Windows. Today's fine isn't related to the new probes.
Kroes said at a press conference that the commission would take into consideration ``any changes'' Microsoft makes to its business practices that are relevant to the two new cases. She said that it's the fifth time that Microsoft has made an announcement about improving interoperability.
``Talk is cheap,'' Kroes said. ``Let's wait and let's find the reality in this case. They have to deliver and implement.''
In July 2006, the EU also imposed a 280.5 million-euro penalty on the software company for failing to license information to rivals on how Windows communicates over a network. It was the first time that the EU had fined a company for failing to comply with an antitrust order.

Food Is a Great Asset -- Minus the Fund Manager

Investors can't afford to ignore food. As a hedge against a possible U.S. recession, and direct exposure to rising urbanization and wealth in Asia, it's an asset class that's tailor-made for the present times.
As Jim Rogers of New York-based investment firm Rogers Holdings puts it: ``If you're in agriculture, you don't know that there is a recession, you don't care.''
That may be as true for investors in agricultural commodities as it is for farmers, provided the former don't rely on the expertise of fund managers to beat the futures markets.
The worldwide boom in agricultural commodities, fueled partly by the growing use of food crops as alternative fuel and partly by soaring Asian demand, is proving to be a hard nut for professional money managers to crack.
According to a report last week by Merrill Lynch & Co. commodity strategist Francisco Blanch and other analysts, many of the actively managed funds focused on agriculture are failing to outperform gauges such as the S&P GSCI Agriculture and Livestock Total Return Index, which, when tracked passively, returned an impressive 28 percent last year.
By comparison, the Barclay BTOP50 Index, which monitors the performance of the largest traders, gained 8 percent in 2007.
``The promise of generating total returns by investing in agricultural commodity-related instruments has up to now failed to significantly differentiate from passive rule-based indices,'' the Merrill analysts noted. ``Fund managers are likely to find increasing competition from low-cost rule-based investment strategies.''
Active Versus Passive
For now, money is rushing toward a perception of competence, regardless of eventual performance.
The ``managed futures'' business already has about $190 billion under supervision, almost a fourfold gain since the beginning of 2003, according to Fairfield, Iowa-based Barclay Hedge, which researches the industry.
But where is the compensation for investors for hiring the skilled fund managers, paying them hefty management charges (1.5 percent of capital) and performance fees (a 20 percent cut of profits)? Relatively inexpensive exchange-traded funds, which even retail investors can access, seem to be making more money.
The PowerShares DB Agriculture Fund, which tracks a Deutsche Bank AG index, gained 32 percent last year.
Such bumper returns are only to be expected.
Global food inventories are running thin.
The amount of wheat, rice, corn, barley and other grains stored at warehouses around the world is enough to meet less than 60 days of global demand, a 35-year low, according to Merrill's analysis.
High Returns
Shortages are also emerging in the supplies of soybeans, palm oil and other oilseeds.
Slaughter rates are rising as cattle-feed prices soar.
All this should mean tidy profits for those investing in agricultural-commodity futures, provided they have the appetite for the higher risk of price volatility that's often seen in commodities where the stockpiles are small.
Gary Gorton, a University of Pennsylvania finance professor, recently demonstrated that inventories play a significant role in determining returns on commodity futures.
Gorton and his colleagues studied the performance of futures contracts on 31 commodities from 1969 through 2006, grouping them in portfolios of lower-than-normal and higher- than-usual inventories; the former returned more than 13 percent annually, while the gains from the latter were less than 5 percent.
`Chindia' Effect
Eventually, food supplies will rise to match the present elevated levels of demand. But it may take time because of the ``Chindia'' effect.
Millions of Chinese and Indian households are becoming a little more prosperous every year, and demand for protein is very income-sensitive.
That's bound to put further pressure on stretched food supplies. Investors have a chance to profit from agricultural commodities because their prices are still ``relatively low,'' Marc Faber, the Hong Kong-based investor and publisher of the Gloom, Boom & Doom report, said earlier this month.
To extract the excess returns for agricultural commodities, investors may have to bypass the active fund manager and find an exchange-traded fund that tracks an index passively.

Scale of US slowdown still uncertain: Alistair Darling

LONDON: The world economy is facing uncertain times because policymakers can still not be sure about how deep the current slowdown in the United States will be, British finance minister Alistair Darling said on Tuesday. "Growth has remained stable and close to trend for the past two and a half years. But these are uncertain times. We do not yet know the full extent of the slowdown affecting the United States," Darling said in a speech to a financial audience. "We all recognise that the global economy is facing its biggest test in more than a decade." Speaking two weeks ahead of his first budget, Darling said fiscal policy has room to support monetary policy. "So in the Budget in March I will continue to take the decisions necessary to ensure the stability of the economy; to raise growth and to effectively manage our public finances

Sensex may hit 29,000 by June 2009

Like Mumbaikars caught unawares by the recent spell of cold wave, investors have been struggling to adapt to the recurring bouts of volatility on the bourses over the last one month. But the weathermen of Dalal Street are expecting sunny skies by the end of this calendar year. Five of the six participants at the ET Round Table see the bellwether BSE Sensex between 20-22,000 then.

The panelists included Narayan Ramachandran, MD & Country Head, Morgan Stanley; Pankaj Vaish, MD & Head equities and fixed income, Lehman Brothers; Ved Prakash Chaturvedi, MD & CEO, Tata Asset Management; Gaurang Shah, MD, Kotak Life; Rashesh Shah, CEO, Edelweiss Capital; and Motilal Oswal, Chairman, Motilal Oswal Securities. The session was moderated by Ramesh Damani, director, Ramesh S Damani Finance.

Only one participant, Ved Prakash Chaturvedi felt that the market was likely to be around 18,000 levels on December 31, 2008. “But that does not mean that mutual fund investors will not make money,” he added.

Mr Ramachandran expects a modest performance by the Sensex in the current calendar, but expects the benchmark to touch 29,000 by June next year. Slowing corporate earnings is one factor that most market watchers feel could hold back the market. However, the ET panelists are not too worried about it.

According to Mr Ramachandran and Mr Vaish, interest rates are showing signs of slackening and that could provide a support to corporate earnings over the next couple of years. “These (recent outflow of FII money) are not big things...they are just minor....India has attracted a lot of money and most of it came because of the fact that India is an attractive destination for money,” said Mr Ramachandran. “The real thing that will decide is where fundamentals are going. I feel that they (fundamentals) are solid,” he added.

Mr Shah felt that issue was not about whether earnings will grow 18% or 12%, but about the rate at which the Indian GDP would grow. ”If you expect corporate earnings growth of 11-12%, it means we are looking at a GDP growth of 4.5 to 5 to 6%. But if you expect GDP growth rate to be around 8%, give or take 200 basis points, then a 17-18% corporate earnings growth is not difficult. And I haven’t seen anybody—Indian or global—question India’s 8% GDP growth rate,” Mr Shah said.

While foreign funds have pulling out over the last few months, domestic liquidity has been a strong pillar of support and this trend is expected to continue, feels Mr Chaturvedi. “The kind of money we have seen that has flown in from the domestic investors in the last one year is certainly heartening,” said Mr Chaturvedi. “My guess is that if you combine insurance and mutual funds and other (domestic) sources of inflows into the market, close to $2 billion of fresh money is coming into the market every month,” he added.

Mr Gaurang Shah sees more investors tapping the stock market through Unit Linked Insurance Plans (ULIPs), mainly because of the handsome returns these products have delivered in the last four years of the Bull Run.

He excepts inflows of roughly $5 billion through various insurance schemes during the current quarter, a significant portion of which will be accounted for by ULIPs.

“I think relative disadvantage of insurance as a instrument vis-à-vis other fixed interest products has come down, which is also because real interest rates have reduced across the world over the last 10 years. So I see money continuing to come in,” he said.

MCX to enter global league with IPO

Commodity exchanges have come of age. Mumbai-based MCX’s decision to file for an IPO marks India’s entry into an exclusive global club of listed exchanges, whose members include biggies like the Chicago Mercantile Exchange, the Chicago Board of Trade and Euronext-Liffe and Bursa (Malaysia). As exchanges guard street credibility with their lives, opening themselves up for even more stringent public scrutiny only adds to trader trust. Though MCX is already a demutualised exchange, it will now be opening itself to even more regulation by getting listed. MCX will be regulated both, by the Forward Markets Commission, which is the commodity trading regulator, and Sebi, which keeps an eye on India’s 10,000 listed companies. Once the MCX IPO is through, the exchange would be listed on both, the NSE and the BSE. But even though the NSE has a 2% stake in the company, it is unlikely to create any conflicts of interest between its roles as shareholder and regulator of MCX. Experts say the matter has been investigated and settled more than 20 years ago. “The Kania committee in India, which included renowned names like justices MH Kania, M N Chandurkar and YH Malegam deliberated on these issues and that it would be desirable for a demutualised stock exchange to list its shares on itself or on any other stock exchange,” said an observer. More importantly, as the seventh largest exchange in the world, NSE itself has sufficient credibility and effective regulatory mechanisms in place to deal with such potential conflicts. “When NYSE, LSE and NASDAQ can be self-listed and be trusted by their regulator to manage a conflict situation of 100%, we see no reason why the same cannot be replicated in India as well,” he added. Companies that promoted NSE and on its board of directors are also listed on it. NSE had had no problems till now in regulating them as it does any other company. “There is no reason to believe that any information sent by MCX to NSE and BSE will be released to the public only by the BSE and not by the NSE due to conflict of interest. After all, the promoters of NSE are already being regulated by NSE for the last 10 years,” said an industry observer. Getting listed is also unlikely to create any conflict of interest within MCX itself. While it will continue to act as regulator of the trading on its platform, it will simultaneously further shareholder value by improving business prospects. “When MCX is listed on the NSE and the BSE, they will only regulate MCX only as a company for its financial performance as per the listing agreement. The NSE and the BSE will have nothing to do with the trading on MCX,” said an analyst here. “If MCX as a corporate has gone in for voluntarily listing, then it displays its readiness for greater scrutiny and compliance, which could have easily been avoided by just avoiding listing,” he added.

Sensex may test 14K, then slip to 12K: Marc Faber

According to Investment Guru, Marc Faber, the emerging markets may get oversold in the next six months and then see a rally. New highs are pretty much out of question, he told CNBC-TV18. Some EMs can still drop 30-40% from the current levels, he added.

Precious metals are still relatively attractive, Faber said. The Sensex may test 14,000 before slipping to 12,000 levels he said.

Excerpts of CNBC-TV18’s exclusive interview with Marc Faber:

Q: It’s been a tough start for the year for emerging markets. What do you expect 2008 to show up for us as a performance?

A: In general, markets won’t perform particularly well, whereby bear markets are characterized by stronger rallies from time to time. I think we can get oversold sometimes in the next few months and then have a rally. But I think that new highs are pretty much out of the question. That would eventually be lower everywhere than what we are now in emerging markets.

Q: Would you say, from what you have seen, that there are signs of a bear market developing across many equity markets?

A: What we had so far is actually a relatively minor decline, we have been going down in the S&P in the US for about 20%. In emerging markets, we are also down to something like 20%. But the difference is that, the S&P, when it went down 20%, hadn’t gone up all that much. Whereas, emerging markets, they are essentially way overboard and way over their long term trend lines. So I think that in many cases, some of the emerging markets could still drop about 30-40% from the present levels.

Q: That would include India I imagine, what do you think will be the catalyst for this deep correction mark that will take it so much lower?

A: Markets move up and down and sometimes it doesn’t take much of a catalyst to make the move down. But in general, what we had in the period 2001 - 2007 is ultra expansionary monetary policies in the US that led to a very strong credit growth responsible for that. We shouldn’t forget about the Federal Reserve’s irresponsible monetary policies. So during the credit expansion, leverage increases. asset prices go up and risk appetite increases and it drives all asset prices.

In particularly what also happened is that the current account deficit in the US was growing very rapidly and created the so called excess liquidity in the world from which all asset markets, including commodities and real estate stocks. Now, because of essentially slower credit growth and in some sectors even a credit contraction, we have the opposite, we have a process of tightening lending standards and of de-leveraging. That in general leads to lower asset prices although the Fed is doing its best to essentially create money, to print money which is the cause of the problem in the first place.

But the Fed is out of its mind, they try to solve the problems with money which created the problems in the first place. I think the private sector is essentially tightening lending standards and reducing risk appetite and that leads to essentially lower markets.

Q: There are some who argue, that in a situation that is developing in the US that you eluded to, and with the Fed cutting rates, there is probably more safety or less risk in investing in an emerging market that is still holding its growth levels. How would you react to that argument?

A: I think this is a total misconception. In general, emerging economies have of course faster growth rates, if we look at 5-10 years henceforth. But the markets can be very volatile and they co-relate closely with the S&P, certainly in the last couple of years. If you look at India, we went from an index of 3,000 to 21,000 between 2003 and this January.

We can easily have a 40% correction from the 21,000 levels or even a 50% correction and that would not necessarily mean that the long-term upward trend in Indian equity is disturbed. You can easily have 50% corrections in bull markets. But to sit there and say, the US has problems and we don’t have any problems is ridiculous.

Q: The other facet of what’s happened across asset classes is that commodities have had a very big run, whether it’s crude or gold. Do you think for 2008, this will be generally the best asset class or the highest out performing asset class?

A: I think that gold is still attractive, I don’t think it’s terribly overvalued. If you have a money printer like Mr Bernanke at the Fed, who really doesn’t understand anything about economics, who essentially just prints money whenever there is a problem, of course that lowers the value of paper money against say money that can't be multiplied as easily.

The gold supply is limited and so obviously, the dollar goes down against gold or, if you turn it around, you can say gold goes up against the dollar. But in general, I think precious metals are still relatively attractive, but all these are also overbought now and probably due at some point for a correction.

Q: At these levels and prices, for now, emerging markets would be an avoid for you or would you look at some of them, selectively?

A: I mentioned a while ago that the Indian markets have formed kind of a wedge between November 2007 and January 2008. Then it broke out on the upside above 20,000 to 21,000, but the minute it broke down below 20,000, it was a perfect sell signal. Usually, when you have a false upside break out, the reaction on the downside will be very strong. I think in India, we could easily revisit around 14,000 first and then probably eventually between 13,000 and 12,000 on the index.

NSE's Certification in Financial Markets (NCFM)

Taking into account international experience and the needs of the Indian financial markets, with a view for protecting interests of investors in financial markets and more importantly, for minimising risks of losses arising out of deficient understanding of markets and instruments, National Stock Exchange introduced in 1998 a facility for testing and certification by launching NSE's Certification in Financial Markets (NCFM).NCFM is an online testing system, a revolutionary concept in administration of examinations and the only one of its kind today in the country. It tests the practical knowledge and skills required to operate in the financial markets in a secure and unbiased manner and awards certificates based on relative merits thus ensuring that the calibre of persons entering this field is kept high in the best interests of a mature and vibrant market. The entire process of testing, assessing and scores reporting in the NCFM is fully automated. The system is operated through an intranet facility by using a central World Wide Web server with terminals located at each of the designated test centres to be used as an examination front end. Communication between the central server and the test centres is achieved through VSAT/leased line network. The Test is also offered through the Internet to enable candidates outside the designated test centres to take tests at their convenience. This allows flexibility in terms of testing centres, dates and timing and provides easy accessibility and convenience to candidates. The easy accessibility as well as flexibility involved in the NCFM programme has resulted in its wider acceptance among market intermediaries, students and regulators.

For more information Visit:http://www.nseindia.com/

BSE TRAINING INSTITUTE(BTI) INFORMATION

BSE has carved out a unique position among the stock exchanges in the world in respect of knowledge development and management. It set up an exclusive training facility 15 years ago, that has now emerged as a leading facility in financial and securities market training in India.BSE Training Institute, which is famously known by its acronym BTI, enjoys the patronage of the entire spectrum of financial community in India. Recently, BTI has expanded from ½ Floor, to 1 ½ Floor at P.J.Towers, i.e. 18th Half and 19th full floor which includes state of the art 50 Seater Certification Center, which includes TFT Monitor and Linux Virus Free Operating Platform, along with we have the additional facilities of 80 Seater Classroom, 50 Seater Classroom, 30 Seater Classroom, 30 Seater Computer Lab, 20 Seater Conference Hall, Reference Library and a Dinning Hall, providing the best of the amenities to our participants.

It currently offers 36 courses on which about 183 programmes are conducted that are attended by over 6,500 participants a year. International participation includes representation from a number of regions such as South Asia, Central Asia, Eastern Europe, Middle East and Africa. BTI’s endeavours are now towards developing the training facility as a leader for knowledge management in the South Asian region that would cater to the requirements of a rapidly growing financial sector. BTI also conducts various customise programmes for leading corporate and financial institutions.BTI runs a three month part time Certificate Programme on Capital Markets jointly with the Jamnalal Bajaj Institute of Management Studies, which is highly popular programme in the Indian financial markets. Successful participants of this programme are awarded certificates by the University of Mumbai. Any graduate stock broker, sub-broker, Investment Consultant, Portfolio Manager, professional from the Depository, DPs, Banks, Insurance Companies, Mutual Funds, Custodians, Clearing houses, Financial Institutions and Management students is welcome to take advantage of this comprehensive programme.

BSE TRAINING INSTITUTE

18th & 19th Floor, BSE, Bombay Stock Exchange Limited,

P.J.Towers, Dalal Street, Mumbai – 400 001

Tel.: 22721126 / 27 / 1233 / 34 Fax: 22723250

Ext. 8303,8246,8247,8161,8197,8184,8464,8175,8121, 8859, 8813

Email: training@bseindia.com

Visit:http://www.bseindia.com/

US SEC deepens ties with India's SEBI

The US Securities and Exchange Commission said on Tuesday it was deepening its ties with India's market watchdog, the Securities and Exchange Board of India. SEC officials said the two market regulators had agreed to boost their cooperation on policing stock markets and cracking down on securities fraud. "As financial services and investment continue to grow and expand beyond the United States and India, the SEC and SEBI are increasingly working together to facilitate our aims of investor protection and healthy markets," said SEC chairman Christopher Cox. The SEC said the broader ties would include regular meetings between American and Indian regulators, as well as increased information-sharing between the two agencies. The market watchdogs intend to focus on oversight of companies operating in both countries, accounting and auditing standards and corporate governance among other issues. The enhanced ties were announced following a series of meetings and workshops in India last month. SEC officials conducted training sessions for their Indian counterparts which covered several topics including insider trading and market manipulation. "Given the role that emerging and recently emerged markets play in an increasingly globalized financial world, it is only befitting that the SEBI and SEC work closely," said SEBI chairman M Damodaran. The SEC already has close links with other foreign market regulators, including Britain's Financial Services Authority.

25% public holding may drive out IPOs

Indian primary market is likely to witness a huge flow of public issues if the government's proposal for listed companies to maintain a minimum public holding of 25 per cent is implemented, Assocham has said. "Implementation of the proposed changes in the Act will lead to a huge flow of IPOs and Follow-on offers by a large number of companies into the primary markets," Assocham President Venugopal Dhoot said. The Assocham Eco Pulse study has revealed that only two companies among Sensex and Nifty scrips satisfy the proposed criteria of 25 per cent of 'public' shareholding namely Bajaj Auto and Larsen & Toubro, which have a public shareholding of 27.7 per cent and 35.5 per cent respectively.

The average individuals' holding in Public Sector firms is 1.81 per cent, while the same in private sector is 13.56 per cent, the chamber said. The Finance Ministry had early this month proposed to maintain a minimum public holding of 25 per cent, from the existing 10 per cent, in all listed companies to reduce the scope of price manipulation on bourses. The proposed guidelines assume significance as many companies are just diluting about 10 per cent of their stake through public offers at a high premium. An analysis of Nifty and Sensex companies done by the Chamber has found out that while 94 per cent of the companies satisfy the minimum 25 per cent of non-promoter share criteria along with holdings of qualified institutional bodies, a few meet the public quota as proposed by the Finance Ministry. The study also pointed out that FIIs occupy the maximum share of non-promoter holdings, between 60-40 per cent, followed by insurance companies 20-5 per cent and between 3-1 per cent by the mutual funds. Among the Sensex firms, the average retail shareholding estimated by Assocham was at 11.89 per cent while it was 10.08 per cent among the Nifty companies. If the proposal is implemented in one go, public sector companies such as BHEL with the least percentage of public shareholding of 0.37 per cent, ONGC (1.99 per cent), NTPC (2.03 per cent) and SBI (2.86 per cent) would have to shed their promoters stake, the study revealed. Among the private sector companies, Bharti Airtel with the least percentage of individual shareholding would have to dilute 23.65 per cent of its promoter's stake. While for Maruti Suzuki and TCS, it is 2.46 per cent and 5.34 per cent respectively. The study also found that promoters of the company own over 70-80 per cent stake in most of the energy, IT and telecom companies like TCS (77.78 per cent), Wipro (79.50 per cent), Reliance Petroleum (75.38 per cent), ONGC (74.14 per cent) and NTPC (89.50 per cent).

Investors need new techniques to stay right

If 'The Street' used to feel like a well-paved avenue, these days it’s more like a pothole-riddled mountain road. Investors need new techniques to stay on the right path and ensure a smooth ride. Here’s how to make money in volatile times. Know yourself. Write down your own financial policy statement. Include points like how much you can stand to lose before you can’t sleep at night and the time horizon for your investments. Hire a fee-only adviserto manage your money, or move more of it into safe bank ‘certificates of deposit. If you’re investing for a future that is at least 10 years away, train yourself to worry less. Then you can think of every free-fall as a buying opportunity for the future. Take short-term money off the table. If you’re going to need it within five years, put it in a bank account, a money market fund, or a bond with a maturity that matches your schedule for wanting access to the money. Use techniques that minimise risk. One is called value averaging. This is a way of moving money into a diversified MF gradually, and it helps you make the most of a wild market. It works like this: Set a guideline for how much you’d like your total investment to grow every month. Over time, this forces you to put more money in when prices are weak and less money when prices are high. It’s buy low, sell high on autopilot. Diversify, diversify, diversify. If your money is invested in realty, foreign stocks, commodities, bonds and in different kinds of stocks, you’ll bleed less. Sell aggressively. Take tax losses whenever you find them, like now. By the end of the year you may have gains you’d like to offset with losses you are building up in the first part of the year. Just remember not to buy back the same securities within 30 days, or you’ll jeopardise the tax break. Sell more aggressively to protect yourself during routs, too: You can set stop-loss orders with your broker that automatically sell you out of a stock that’s dropped by, say, 10%. — Buy more aggressively. Recessions and bear markets don’t last forever. Solid companies get taken down with the problems when the whole market sells off. Keep a shopping list of solid-company stocks you’d like to own five years down the road, and buy them when they’re getting beaten down.

What's short-selling of shares?

What is short-selling?

Short-selling, in the context of the stock market, is the practice where an investor sells shares that he does not own at the time of selling them. He sells them in the hope that the price of those shares will decline, and he will profit by buying back those shares at a lower price. In India, there is no prohibition on short-selling by retail investors. Institutional investors —domestic mutual funds and foreign institutional investors registered with the Securities and Exchange Board of India (Sebi), banks and insurance companies — are prohibited from short-selling and are mandatorily required to settle on the basis of deliveries of securities owned and held by them.

How is short-selling beneficial?

Short-selling is considered an essential feature of the securities market not just for providing liquidity, but also for helping price corrections in over valued stocks. Supporters of short-selling claim its absence distort efficient price discovery, gives promoters the unfettered freedom to manipulate prices and favours manipulators than rational investors. Securities market regulators in most countries, and in particular, all developed securities markets, recognise short-selling as a legitimate investment activity. The International Organisation of Securities Commissions (IOSCO) has also reviewed short-selling and securities lending practices across markets and has recommended transparency of short-selling, rather than prohibit it.

Are there any drawbacks of short-selling?

Critics of short-selling feel selling, directly or indirectly, poses potential risks and can easily destabilise the market. They believe that short-selling can exacerbate declining trend in share prices, increase share price volatility, and force the price of individual stocks down to levels that might not otherwise be reached. They also argue that declining trend in the share prices of a company can even impact its fund raising capability and undermine the commercial confidence of the company. In a bear market in particular, short-selling can contribute to disorderly trading, give rise to heightened short-term price volatility and could be used in manipulative trading strategies.

Will institutional investors in India be allowed to short-sell securities?

Sebi is working on a proposal to introduce a stock borrowing and lending mechanism. This will allow institutional investors to short-sell by borrowing shares. Under this arrangement, an investor A, who feels that a certain stock is overpriced, borrows those shares for a charge from investor B, who is willing to lend those shares. Investor A then sells those shares in the market, hoping that the price declines so that he can buy cheap and return them to investor B.

What is the difference between covered short sales and naked short sales?

Covered short sales are those in which the seller arranges for the delivery of shares he has sold by borrowing them. Naked short sales are those in which the seller does not intend to provide for the delivery of shares he has sold. Most international securities market regulators have prohibited naked short-selling and require the client to have documentary evidence of borrowing/tie-up with lenders before executing the sale transaction. This is because naked short sales in huge quantities can destabilise the market.

How does the stock lending and borrowing mechanism function in other markets?

World over, securities lending and borrowing transactions are, by and large, over-the-counter (OTC) contractual obligations executed between lenders and borrowers. International securities market regulators do not directly regulate the lending and borrowing transactions. In many international markets, entities like custodians and depositories run the lending and borrowing scheme and have their own screens for meeting the demand and supply of securities from their clients.

SUBPRIME LOSS: $70bn and counting....

Check the amount of losses due to the subprime crisis for big guns of the financial sector. And remember.... its just the beginning.
Bank : Loss
Citigroup: $18.0 billion
UBS: $13.5 billion
Morgan Stanley: $9.4 billion
Merrill Lynch: $8.0 billion
HSBC: $3.4 billion
Bear Stearns: $3.2 billion
Deutsche Bank: $3.2 billion
Bank of America: $3.0 billion
Barclays: $2.6 billion
Royal Bank of Scotland: $2.6 billion
IKB: $2.6 billion
Freddie Mac: $2.0 billion
Credit Suisse: $1.0 billion
Wachovia: $1.1 billion

The list, complied by BBC from company reports and reported on its website, totals over $70 billion declared losses to date.The list does not include the $2bn loss reported by SocGen, and smaller losses such as BNP Paribas, Bank of Tokyo-Mitsubishi UFJ and others many of whom are reporting $500 milllion or more losses.According to a report on the BBC website, it is estimated that ultimately losses suffered by financial institutions could be between $220 billion and $450 billion as the $1 trillion in subprime mortage bonds is revalued.

Best website to track Global Market

hi friends,
All we know Indian Market is depend on the Global market.So we can predict the Sensex movement before it opens. For that track the global Market

1)Before opening of Indian Market just see how American market is performed in previous day .
2)JAPAN and Many Asian countries Market open before Indian Market timing,so Indian market will depend (80%) on the global Market.

To track Global Market Bloomberg is the best website:

http://www.bloomberg.com

INVESTAR Software to track Indian stock Market

What is Investar ?

Investar is an integrated investment tool for doing Fundamental Analysis, Technical Analysis and Portfolio Management. It is currently available with End-Of-Day Data for the Indian Market. Users of Investar get free access to the InvestarIndia.com site which allows them to share investment ideas and stock tips, learn from top-rated investors (or InveStars) and eventually become an InveStar themselves!! For Brokers and Technical Analysts, it provides a platform to showcase their expertise by posting Stock Tips that are rated by a proprietory algorithm and hence increase their clientele.

How can Investar help me?

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• Get new stock ideas every day.
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To download free Visit this website:

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Movies related to global market

1)WALL STREET
2)BOILER ROOM

WALL STREET:

User Rating: 7.2/10

Overview

Director: Oliver Stone

Writers: Stanley Weiser (written by) &Oliver Stone (written by)

Release Date: 11 December 1987 (USA)

Plot Outline: A young and impatient stockbroker is willing to do anything to get to the top, including trading on illegal inside information taken through a ruthless and greedy corporate raider whom takes the youth under his wing.

Awards: Won Oscar. Another 6 wins & 2 nominations

BOILER ROOM:

User Rating: 6.8/10

Director: Ben Younger

Writer (WGA): Ben Younger (written by)

Release Date: 18 February 2000 (USA)

Genre: Thriller / Drama / Crime

Tagline: Where would you turn? How far would you go? How hard will you fall? more

Plot Outline: A college dropout gets a job as a broker for a suburban investment firm, which puts him on the fast track to success, but the job might not be as legitimate as it sounds.

Awards: 1 win & 7 nominations

Movies related to Indian Stock Market

1) GAFLA:

Critics Rating:	(3.0/5)
Language:	HINDI
Director:	Sameer Hanchate
Producer:	Sameer Hanchate
Cast:	Vinod Sharawat, Shruti Ulfat, Purva Gokhle,Brijendra Kala, Shaktee Singh
Music:	Karthik shah
Lyrics:	Irshad Kamil

Download link:http://blogs.ibibo.com/ViewComments.aspx?blogid=3402a597-66e4-4638-973d-
a6862f86cf37&mid=465402c6-9b26-4abb-a725-fc988cc9c6c8&ReadComment=1
The movie is about stock market scam happened in 1992 and is based on life of Big Bull of stock market, Harshad Mehta. Subodh Mehta (Vinod Sherawat) who stays in chawl with his parents and sister always thinks of dreaming big and doing something which will fetch him good money in short period of time.

He decides to jump into share market and become top in the market. He starts with working in a company as share sub-broker and takes risks by purchasing shares out of his savings.

After going through lots of ups and downs, he forms his own company which makes him touch the sky and makes him known as Big Bull of share market. But his success is not liked by some of the old players in the market and they try to diminish him by hook and crook.

The movie shows lot of instances from Harshad Mehta's life. Things like selling his house to his boss to repay dues, starting a company, 400 Crore Indian Bank scam etc. were part of Harshad Mehta's life too.

The movie also shows a love affair between Subodh and Vidya (Shruti Ulfat).

Director does his job very well in narrating the story. Each character is given adequate share of the role. But in some of the scenes I felt that, few things could have shown in simple manner (especially the period when Subodh gets his first success). A person, who does not have knowledge in the stock market, might not get some of the points. But that's understandable by looking at the nature of the movie.

The only thing which lacks about the movie is proper promotion. If the promotion was carried well, then the movie could have fetched few more audiences.

So to sum things up:

Story: Based on life of Harshad Mehta, narrated very well.

Acting: Vinod Sherawat impresses with his acting. Shruti Ulfat does her part well. Purva Parag didn't have much to do. Rest of the cast is good.

Music: There were no songs in the movie except the one shown in the beginning of the movie.

So overall, the movie was very good and worth watching. I would give it 3 stars out of 5. The movie might not succeed at box office but might do average business by word of mouth publicity. I wish they had put more time on the strong marketing of the movie.

Beginners guide for indian stock market

The following site i mentioned will helpful for the beginners to invest in Stock Market

1)http://content.icicidirect.com/learning/LearningCenter/coursemap.htm

2)http://www.traderji.com

3)http://www.tradersedgeindia.com

Best Website to track Stock Market

I am mentioned below sites are helpful to track Indian stock Market.

1)www.bseindia.com

2)www.nseindia.com

3)www.moneycontrol.com

4)www.bgse.co.in

5)www.valuenotes.com

6)www.chittorgarh.com

7)www.equitymaster.com

Warren buffet's Histroy and investment idea(One of the best invester in the world)

Warren Edward Buffett (born August 30, 1930, Omaha, Nebraska) is an American investor, businessperson and philanthropist.

Often called the "Sage of Omaha" or the "Oracle of Omaha", Buffett has amassed an enormous fortune from investments managed through the holding company Berkshire Hathaway, of which he is the largest shareholder and CEO. With an estimated current net worth of around US$56.9 billion, he was ranked by Forbes as the second-richest person in the world as of September 2007, behind Bill Gates.

Buffett is known for his unconventional style and frugality despite his immense wealth. His 2006 annual salary of about $100,000 is tiny by the standards of senior executive remuneration in other comparable companies, and when he spent $9.7 million of Berkshire's funds on a corporate jet in 1989, he jokingly named it "The Indefensible" because of his past criticisms of such purchases by other CEOs. He continues to live in the same house in the central Dundee neighborhood of Omaha, Nebraska that he bought in 1958 for $31,500, today valued at around $700,000.

Buffett is also a noted philanthropist. In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill and Melinda Gates Foundation. The donation will amount to approximately US$30 billion, at the time of the announcement enough to more than double the size of the foundation. In 2007, Buffett was listed among Time's 100 Most Influential People in The World.

Overview

Warren Buffett was born in Omaha, Nebraska to Howard Buffett, a stock broker and United States Representative, and his wife Leila Buffett. Warren Buffett displayed an extremely keen understanding of business and mathematics at a young age, easily doing complex mathematical computations in his head. He was also known as a bookworm who displayed an insatiable hunger for knowledge pertaining to business and capital markets. He began working at his father's brokerage at the age of 11, and that same year made his first stock purchase, buying Cities Services shares for $38.25 each. He sold them when the price reached $40, only to see them rocket to $200 a few years later.This taught him the importance of investing in good companies for the long term. At the age of 14, he and a fellow high school student began installing pinball machines in barber shops, and he eventually spent his take of $1,200 to start a band. He and two friends played in the band for 2 years until they disbanded.

Although he excelled as a student, he felt college would be a waste given his success as an entrepreneur. He already had money coming in from a number of newspaper routes he ran, as well as from Wilson Coin Op, a pinball machine company he had started with a friend, and from the passive income streams coming from a farmer paying rent to him for the use of his farm. He had saved $5,000 and graduated near the top 20 in his class at the age of 16. He eventually yielded to his father's advice and decided to attend college.

Following his graduation from Washington, DC's Woodrow Wilson High School in 1947, Warren attended the prestigious Wharton School at the University of Pennsylvania for two years, then transferred to the University of Nebraska. There he began his interest in investing after reading Benjamin Graham's The Intelligent Investor.

He obtained a Master's degree in economics in 1951 at Columbia University, studying under Benjamin Graham, alongside other future value investors including Walter Schloss and Irving Kahn. Another influence on Buffett's investment philosophy was the well known investor and writer Philip Fisher. After receiving the only A+ Benjamin Graham ever handed out to a student in his security analysis class, Buffett wanted to work at Graham-Newman but was initially turned down. Instead, he went to work at his father's brokerage as a salesman until Graham offered him a position in 1954. Buffett returned to Omaha two years later, when Graham retired.

Buffett established Buffett Associates, Ltd., his first investment partnership, in 1956. It was financed by $100 from Buffett, the general partner, and $105,000 from seven limited partners consisting of Buffett's family and friends.

Buffett created several additional partnerships which were later consolidated as Buffett Partnership Limited. He ran the partnerships out of his bedroom, adhering closely to Graham's investment approach and compensation structure. These investments made in excess of 30% compounded annually between 1956 to 1969, in a market where 7% to 11% was the norm.

Buffett employed a three-pronged approach:

1. Generals: undervalued securities that possess margin of safety and meet expected return-to-risk characteristics
2. Arbitrages: company events that are not related to broader market changes, such as mergers and acquisitions, liquidation, etc.
3. Controls: build sizable holdings, ally with other shareholders or employ proxies to affect changes in companies

In 1962 Buffett Partnerships began purchasing shares of Berkshire Hathaway, a large manufacturing company in the declining textile industry that was selling for less than its working capital. In 1969, Buffett would dissolve all his partnerships to focus on running Berkshire Hathaway. At the time, Charlie Munger, Berkshire's current Vice Chairman, remarked that purchasing the company was a mistake, due to the failure of the textile industry. Berkshire, however, became one of the largest holding companies in the world, as Buffett redirected the company's excess cash to acquire private businesses and stocks of public companies. At the core of his strategy were insurance companies, due to the large cash reserves they must keep on hand to pay out future claims. Essentially, the insurer does not own the reserve, but may invest it and keep any proceeds.

Under Munger's influence, Buffett's investment approach moved away from a strict adherence to Graham's principles, and he began to focus on high-quality businesses with enduring competitive advantages. Buffett described such advantages as an economic "moat" that kept rivals at a safe distance, as opposed to commodity businesses, which sell undifferentiated products and face direct competition. A classic example of a wide-moat company is Coca-Cola, because consumers are willing to pay more for a Coke than for a generic beverage with a similar taste. On the other hand, salt is considered a commodity product because consumers generally have no preferences for one brand of salt over another.

Investment in wide-moat businesses has become a hallmark of Berkshire Hathaway, particularly when buying whole companies rather than public stocks. As a result, it now owns a large number of businesses which are dominant players in their respective industries, specialize in various niche markets, or possess other unique characteristics to separate them from their competitors.

Management style

Warren Buffett views himself as a capital allocator above anything else. His primary responsibility is to allocate capital to businesses with good economics and keep their existing management to lead the company.

When Buffett acquires a controlling interest in a business, he makes clear to the owner the following:

• He will not interfere with the running of the company.
• He will be responsible for hiring and setting the compensation of the top executive.
• Capital allocated to the business will have a price tag (a hurdle rate) attached, usually a requirement of a return on capital in excess of fifteen percent. This process is to motivate owners to send excess capital that does not return more than its cost to Berkshire headquarters rather than investing it at low returns.This cash is then free to be invested in opportunities that offer higher returns.

Buffett's hands-off approach has held strong appeal and created room for his managers to perform as owners and ultimate decision makers of their businesses. This acquisition strategy enabled Buffett to buy companies at fair prices because the sellers wanted room to operate independently after selling.

Besides his skills in managing Berkshire's cash flow, Buffett is skilled in managing the company's balance sheet. Since taking over Berkshire Hathaway, Buffett has weighed every decision against its impact on the balance sheet. As of 2005, he has succeeded in building Berkshire into one of the nine companies that are still rated by S&P as AAA, the highest credit rating achievable and thus, with the lowest cost of debt. Buffett takes comfort in his belief that, for the near future, his company will not be one of those shaken by economic or natural catastrophes. He has repeated over the years that his catastrophe insurance operation is the only one he knows of that can keep the checks clearing during a financial turmoil.

Investment approach

Buffett's philosophy on business investing is a modification of the value investing approach of his mentor Benjamin Graham. Graham bought companies because they were cheap compared to their intrinsic value. He was of the belief that as long as the market undervalued them relative to their intrinsic value he was making a solid investment. He reasoned that the market will eventually realize it has undervalued the company and will correct its course regardless of what type of business the company was in. In addition he believed that the business has to have solid economics behind it. Buffett's investment style is also heavily influenced by Phil Fisher.

The following are some questions to determine what business to buy, based on the book Buffettology by Mary Buffett:

• Is the company in an industry with good economics, i.e., not an industry competing on price. Does the company have a consumer monopoly or brand name that commands loyalty? Can any company with an abundance of resources compete successfully with the company?
• Are the Owner Earnings on an upward trend with good and consistent margins?
• Is the debt-to-equity ratio low or is the earnings-to-debt ratio high, i.e. can the company repay debt even in years when earnings are lower than average?
• Does the company have high and consistent Returns on Invested Capital?
• Does the company retain earnings for growth?
• The business should not have high maintenance cost of operations, high capital expenditure or investment cash outflow. This is not the same as investing to expand capacity.
• Does the company reinvest earnings in good business opportunities? Does management have a good track record of profiting from these investments?
• Is the company free to adjust prices for inflation?

Buffett also concentrates when to buy. He does not want to invest in businesses with indiscernible value. He will wait for market corrections or downturns to buy solid businesses at reasonable prices, since stock market downturns present buying opportunities.

He is known for being conservative when speculation is rampant in the market and being aggressive when others are fearing for their capital. This contrarian strategy is what led Buffett's company through the Internet boom and bust without significant damage, although critics have also noted that it may have led Berkshire to miss out on potential opportunities during the same period.

He also asks at what price is the business a bargain, and his answer typically is when it provides a higher rate of compounded return relative to other available investment opportunities.

Warren Buffett's letters to shareholders are a valuable source in understanding his investment style and outlook.

Philanthropy

In June 2006, Warren Buffett gave approximately 10 million Berkshire Hathaway Class B shares to the Bill & Melinda Gates Foundation (worth approximately USD 30.7 billion as of June 23 2006; making it the largest charitable donation in history. The foundation will receive 5% of the total donation on an annualized basis each July, beginning in 2006. Buffett will also join the board of directors of the Gates Foundation, although he does not plan to be actively involved in running the foundation.

Buffett also announced plans to contribute additional Berkshire stock valued at approximately $6.7 billion to the Susan Thompson Buffett Foundation and to other foundations headed by his three children. This is a significant shift from previous statements Buffett has made, having stated that most of his fortune would pass to his Buffett Foundation. The bulk of the estate of his wife, valued at $2.6 billion, went to that foundation when she died in 2004.

His children will not inherit a significant proportion of his wealth. These actions are consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next. Buffett once commented, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing".

The following two quotations from 1995 and 1988, respectively, highlight Warren Buffett's thoughts on his wealth and why he long planned to reallocate it:

I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you find out how much this talent is going to produce in the wrong kind of soil... I work in a market system that happens to reward what I do very well—disproportionately well. Mike Tyson, too. If you can knock a guy out in 10 seconds and earn $10 million for it, this world will pay a lot for that. If you can bat .360, this world will pay a lot for that. If you're a marvelous teacher, this world won't pay a lot for it. If you are a terrific nurse, this world will not pay a lot for it. Now, am I going to try to come up with some comparable worth system that somehow (re)distributes that? No, I don't think you can do that. But I do think that when you're treated enormously well by this market system, where in effect the market system showers the ability to buy goods and services on you because of some peculiar talent—maybe your adenoids are a certain way, so you can sing and everybody will pay you enormous sums to be on television or whatever—I think society has a big claim on that. (Lowe 1997:164–165)

I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die. (Lowe 1997:165–166)

Since 2000, Buffett has raised money for the Glide Foundation through online auctions. Bidders have donated up to $650,100 for the chance to have one meal with him.

In September 2006, Buffett auctioned his Lincoln Town Car to support Girls, Inc. The vehicle sold for $73,200 on eBay.

Writings

Warren Buffett's writings include his annual reports and various articles. In his article The Superinvestors of Graham-and-Doddsville, Buffett condemned the academic position that the market was efficient and that beating the S&P500 was "pure chance" by highlighting a number of students of the Graham and Dodd value investing school of thought. In addition to himself, Buffett named: Walter J. Schloss, Tom Knapp, Ed Anderson (Tweedy, Brown Inc.), Bill Ruane (Sequoia Fund, Inc.), Charles Munger, Rick Guerin (Pacific Partners, Ltd.), and Stan Perlmeter (Perlmeter Investments) as having beaten the S&P500, "year in and year out".

Public stances

• Buffett has repeatedly criticized the financial industry for what he considers to be a proliferation of advisors who add no value but are compensated based on the volume of business transactions which they facilitate. He has pointed to the growing volume of stock trades as evidence that an ever-greater proportion of investors' gains are going to brokers and other middlemen.

• Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

• Buffett stated that he only paid 18% of his income for 2006 ($46.9 million) in total federal taxes, while his employees paid 33% of theirs despite making far less money. Others explained this difference by saying lower tax rates for dividends and capital gains are necessary to avoid punitive double taxation, since the dividend income was already taxed at the corporate level, and the capital gains were from after-tax income that was invested.

• Buffett believes that the U.S. dollar will lose value in the long run. He views the United States' expanding trade deficit as an alarming trend that will devalue the U.S. dollar and U.S. assets. As a result it is putting a larger portion of ownership of U.S. assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States. Buffett invests in PetroChina Company Limited and in a rare move, posted a commentary on Berkshire Hathaway's website why he will not divest from the company despite calls from some activists to do so.

• Buffett's speeches are known for mixing serious business discussions with humor. Each year, Buffett presides over Berkshire Hathaway's annual shareholders' meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from both United States and abroad, giving it the nickname "Woodstock of Capitalism".

• Berkshire's annual reports and letters to shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett's writings are known for containing literary quotes ranging from the Bible to Mae West, as well as Midwestern advice and numerous jokes. Various websites extol Buffett's virtues while others decry Buffett’s business models or dismiss his investment advice and decisions.

• Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics". In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy.

• Buffett has been recognized as most responsible for FASB 123 (r), or Stock Option Expensing on the GAAP Income Statement. When asked about the subject at Berkshire Hathaway's 2004 annual meeting, he compared the United States Congress and the Securities and Exchange Commission's decision to override FASB, who wanted to consider company-issued stock-option compensation as an expense, to a bill proposed in the Indiana house for Pi to be changed from 3.14...to 3.20.

• Buffett has held fundraisers for both Hillary Clinton and Barack Obama for president. He has not indicated who he will vote for, but he has expressed that both would make "great Presidents".
• Mr. Buffett was inducted into the Junior Achievement U.S. Business Hall of Fame in 1997.

Historical timeline

Education: Woodrow Wilson High School, Washington D.C. in 1947 The Wharton School, University of Pennsylvania, 1947–1949 B.S. University of Nebraska, 1950 M.S. in Economics, Columbia University, in 1951. Employment: 1951–1954 Buffett-Falk & Co., Omaha - Investment Salesman 1954–1956 Graham-Newman Corp., New York - Securities Analyst 1956–1969 Buffett Partnership, Ltd., Omaha - General Partner 1970–Present Berkshire Hathaway Inc, Omaha - Chairman, CEO

1943: (13 years old)

• Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.

1945: (15 years old)

• In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

1949: (19 years old)

• In 1949, he was initiated into Alpha Sigma Phi Fraternity while an undergraduate at the University of Pennsylvania. His father and uncles were also Alpha Sigma Phi brothers from the chapter at Nebraska, where Warren eventually transferred.

1950: (20 years old)

• Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.

1951: (21 years old)

• Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO's headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.
• Buffett graduated from Columbia and wanted to work on Wall Street. Buffett offered to work for Graham for free but Graham refused. He purchased a Sinclair gas station as a side investment, but that venture did not work out as well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, "Investment Principles." The average age of the students he taught was more than twice his own.

1952: (22 years old)

• Buffett married Susan Thompson.

1954: (24 years old)

• Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.
• Susan had her second child, Howard Graham Buffett.

1956: (26 years old)

• Benjamin Graham retired and folded up his partnership.
• Buffett's personal savings are now over $140,000.
• Buffett returned home to Omaha and created Buffett Associates, Ltd., an investment partnership.

1957: (27 years old)

• Buffett had three partnerships operating the entire year.
• Buffett purchased a five-bedroom, stucco house on Farnam Street for $31,500.
• Susan was about to have her third child.

1958: (28 years old)

• Buffett had five partnerships operating the entire year.

1959: (29 years old)

• Buffett had six partnerships operating the entire year.
• Buffett was introduced to Charlie Munger.

1960: (30 years old)

• Buffett had seven partnerships operating the entire year.
• The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
• Buffett asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

1961: (31 years old)

• Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships' assets.
• Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at "minus $20" per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing.
• Buffett reveals that he earned a spot on the board of Sanborn.

1962: (32 years old)

• Buffett's partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett.
• Buffett merges all partnerships into one partnership.
• Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share.

1965: (35 years old)

• When Buffett's partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).
• Buffett took control of Berkshire Hathaway at the board meeting and named a new President, Ken Chace, to run the company.

1966: (36 years old)

• Buffett closes the partnership to new money.
• Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”
• In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn, and Co, a privately owned Baltimore department store.

1967: (37 years old)

• Berkshire paid out its first and only dividend of 10 cents.

1969: (39 years old)

• Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

1970: (40 years old)

• As chairman of Berkshire Hathaway, began writing his now-famous annual letters to shareholders.

1973: (43 years old)

• Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.

1979: (49 years old)

• Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.
• Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 40 for the first time.

1988: (58 years old)

• Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which he still holds.

1999: (69 years old)

• Buffett is named the top money manager of the 20th century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.

2002: (72 years old)

• Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

2004: (73 years old)

• His wife, Susan, dies.

2006: (75 years old)

• Buffett announced in June that he would give away more than 80%, or about $37 billion, of his $52 billion fortune to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.

2007: (76 Years old)

• In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Personal life

Buffett married Susan Thompson in 1952. They had three children, Susie, Howard, and Peter. The couple began living separately in 1977, though they remained married until her death in July 2004. His daughter Susie lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc.

On his 76th birthday Buffett married his longtime companion, Astrid Menks, who had lived with him since his wife's departure. Interestingly, it was Susan Buffett who arranged for the two to meet before she left Omaha to pursue her singing career. All three were close, and holiday cards to friends were signed "Warren, Susie and Astrid" (as per Roger Lowenstein's book, Buffett: The Making of an American Capitalist). Susan Buffett briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.

Buffett is an avid player of the card game bridge. He has said that he spends 12 hours a week playing bridge.He often plays with Bill Gates and Paul Allen.

In 2006, he sponsored a bridge match for the Buffett Cup. In this event, modeled on the Ryder Cup in golf (and held immediately before it and in the same city), a team of twelve bridge players from the United States took on twelve Europeans.

Buffett's favorite place to eat is Gorat's Steak House in Omaha, where he favors the T-bone steak (cooked rare), a double order of hash browns, and Cherry Coke. According to U.S. News and World Report, he drinks about five Cherry Cokes a day. He used to drive a 2001 Lincoln Town Car which he auctioned on eBay to raise money for Girls Inc. He currently drives a Cadillac DTS.

Warren Buffett is currently working with Christopher Webber on an animated series with DiC Entertainment chief Andy Heyward. According to information presented by Buffett at the Berkshire Hathaway annual meeting on May 6, 2006, the series will feature Buffett and Munger in roles and the series will teach children healthy financial habits for life. Cartoon drawings of Buffett and Munger were displayed throughout the events during the weekend and the special movie before the meeting began was in animation form by Heyward.

In December 2006 it was reported that Mr. Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own car. However, in May 2007 Richard Santulli, CEO and Chairman of NetJets, stated on the Nightly Business Report that Mr. Buffett now uses a cell phone, however he still does not use email.

He has described himself as agnostic.

Buffett's DNA report revealed that he is not related to the singer Jimmy Buffett and that his paternal ancestors hail from northern Scandinavia, while his mother's side most likely has roots in Iberia or Estonia.