Want to earn like Warren Buffett?- 24 tips

"An investor needs to do very few things right as long as he or she avoids big mistakes. " Warren Buffett

One of the world's most successful investors, Warren Buffett is the richest man on earth. Chairman of the Berkshire Hathaway, Buffett's wealth jumped by $10 billion to hit $62 billion during 2007. Buffett's life is an inspiration for investors across the globe.

So what makes the world's wealthiest man so rich? Buffett believes that successful investing is about having common sense, patience and independent research.

'How Buffett Does It', by James Pardoe is a great guide for investing in any market. A look into Buffett's simple, yet intelligent mantras for investing and minting millions.

1. A frugal billionaire Buffett believes in simplicity. He advises investors to take easy decisions. Never buy when you are doubtful. Invest only if you understand the businesses well.

2. Focus on not losing money rather than making it. Don't own any stock for 10 minutes that you wouldn't own for 10 years.

3. A proponent of value investing, he believes that one must take decisions on his own. He doesn't believe in listening to analysts or brokers. The best investing decisions come from oneself.

"It is not necessary to do extraordinary things to get extraordinary results."

4. Buffett advises to invest in 'old economy' businesses, companies, which have been around for fifty years and will continue to have a long innings.

5. We have often heard of people suffering heart attacks when markets crash. Well, Buffett advocates a sound temperament for stock market success.

6. You don't need to be a genius to succeed in the stock markets. People who can stay cool will succeed in the long run. Always keep in mind the hidden costs, from commissions on active stock trading to high mutual fund fees.

7. Buffett always looks at businesses he can understand, look at the profits in the past, long-term potential of the company, good top level management of the company and companies that have a good value proposition. The strategy is to think about the business in the long term.

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

8. Invest in businesses with great management. Always keep a track of the management of the company. The top decision makers have a lot to do with the company's performance.

9. One of Buffet's biggest strengths is independent thinking. Many people go by what the experts says or what others do but belief in one's own judgement is the key to stock market success.

10. Patience pays, says Buffet. He says one must not worry too much about the price of the stocks. What's more important is the nature of business of the company, earnings capability and its future potential.

11. Don't target just stocks, look at businesses. How a company performs is key to its stock market performance. You must know the track record of a company before you invest in it.

"Price is what you pay. Value is what you get."

12. Prices keep changing. Don't get worried by the ups and downs. Investing is all about creating wealth. It's important to understand the value of a stock than its price.

13. He believes that franchisee businesses are good opportunities to invest in. Avoid hi-tech, complex businesses. Look for businesses that are set to diversify and grow.

14. Never be disappointed when markets fall. Take it as a buying opportunity. Buffet says one must have lesser number of investments with more money in each lot.

15. He advises to avoid diversification. Invest in companies with sound business models. Choose a few good ones and stay invested, it will give you the benefits.

16. Doing nothing pays at times! One must not jump at price fluctuations and take impulsive decisions.

17. Don't get carried away by market forecasts. Ignore market swings and remain an investor with a good business sense.

18. Buffett advises to be fearful when others are greedy and greedy when others are fearful. Buy when people are selling and sell when people are buying.

19. Make a list of companies, sectors that you find safe to invest in and try to stick to the list.

20. A sound business, strong management, good fundamental and low stock price should be a must-buy.

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."

21. Try to ignore stock charts, says Buffett. They may not give the right indicators. A stock which may have done well earlier may not do so in future.

22. Buffet spends a lot of time on reading and more importantly thinking. Reading helps investors, so spend a lot of time reading about the stocks, companies and markets. A good investor must have a good knowledge base.

23. A good investor also needs to be efficient. Investors may have great capabilities but many do not make use of it. One needs to hone skills to meet the targets.

24. Good investors never rush to make money. They give time, thought and work on investment decisions. The mistakes that others make should be a lesson for you.

RBI faces tough choice on rates as economy slows

MUMBAI: India's central bank must decide on Tuesday whether to ramp up its inflation fight amid warnings that imposing too harsh credit conditions could damage an already slowing economy.

Overly aggressive monetary tightening by central bankers at their policy meeting could tip Asia's third-largest economy into a longer-term downturn after posting scorching average annual growth of nearly nine percent over the past five years, economists say.

Upward interest "rate moves will have a bigger depressing impact on growth than on inflation," which has been mainly driven by soaring global commodity prices for food and fuel, said HSBC senior economist Robert Prior-Wandesforde.

But while India's economic engine has been losing steam, inflation holds centre stage after more than doubling in four months to hit 7.33 per cent last week -- a more than three-year peak and far above the central bank's comfort level of five percent.

Curbing prices has become the key goal of the left-leaning Congress-led government, which fears a voter backlash with general elections due in a year.

Economists are unanimous the Reserve Bank of India (RBI) will keep up its tough anti-inflation talk but are split on whether it will raise so-called "signal interest rates."

"We think the RBI will continue its tightening stance in the near term, and in particular, hike the repo rate by 25 basis points on Tuesday," said Goldman Sachs economist Tushar Poddar.

"Demand pressures are still rampant due to growth running above potential for the past few years," he said.

The repo rate is the bank's main inflation-fighting tool through which it lends cash to banks and influences commercial borrowing costs. It is now at a six-year high of 7.75 per cent.

Other economists expected the bank to take a wait-and-see stance after forecasts last week of record grain harvests.

"There have been some positive domestic developments," said Dharma Kriti Joshi, principal economist at Crisil credit rating agency.

"If the bank is extra cautious, it could raise rates but with the adverse global scenario and the tightening already taken, economic growth is already on a downward trajectory and so demand pressure is easing up on its own," he said.

"My view is they will maintain a very hawkish stance but stand pat on rates," he said.

JP Morgan Asia economist Rajeev Malik also said the bank was "likely to hold fire" on raising rates but sound "hawkish."

Last week's inflation figure came days after the RBI stepped up its inflation battle by reducing cash available for commercial loan in a bid to cool demand.

It hiked by 50 basis points the funds commercial banks must park in its coffers -- the so-called cash reserve ratio -- to a seven-year high of 8.0 per cent.

The bank has been tightening aggressively since late 2004 to keep a lid on prices.

Now, with the global downturn, some economists say growth could fall as low as 7.0 per cent in this fiscal year to March 2009 from around 8.7 per cent last year and 9.6 per cent the previous year -- still robust but too low to make a big dent in India's crushing poverty.

Stocks in U.S. Rally on Citigroup, Google Earnings; European Shares Climb

(Bloomberg) -- U.S. stocks rallied after results at Citigroup Inc., Google Inc. and Caterpillar Inc. topped analysts' estimates, pushing the Standard & Poor's 500 Index to its first four-day advance of the year.
Citigroup, the biggest U.S. bank by assets, rose to the highest since February after its $5.11 billion loss was less than the most pessimistic estimates. Google, owner of the most popular search engine, posted its best gain since 2004 as overseas growth helped the company top the earnings estimates of 25 of 26 analysts surveyed by Bloomberg. Caterpillar, the largest maker of bulldozers, climbed the most in a month on profit that was helped by higher sales in China and India.
``The panic is overdone, and before you know it things are going to be just fine,'' said Michael Williams, who helps oversee about $2.8 billion as managing director of Genesis Asset Management in New York. ``The world's ticking along just fine.''
The S&P 500 added 20.32, or 1.5 percent, to 1,385.88 at 10:28 a.m. in New York and has risen 4 percent on the week. The Dow Jones Industrial Average rallied 185.07, or 1.5 percent, to 12,805.56. The Nasdaq Composite Index increased 48.53, or 2.1 percent, to 2,390.36. Five stocks rose for each that fell on the New York Stock Exchange. European shares advanced, while Asia's benchmark index retreated.
Profits have exceeded analyst estimates for 56 of the 95 companies in the S&P 500 that released first-quarter results through yesterday, even as earnings fell an average 24 percent from a year earlier, according to Bloomberg data. Overall, earnings are forecast to decline 12.3 percent in the first quarter, marking the third straight decrease.
S&P 500 Rebound
While the S&P 500 has rebounded 8.5 percent from a 19-month low on March 10, the benchmark for American equities is still down 5.9 percent in 2008. Companies in the index trade for an average 14.8 times estimated profits, the cheapest in 18 years when prices are compared with historical earnings.
Citigroup increased $1.39, or 5.8 percent, to $25.42. The bank said revenue fell 48 percent to $13.2 billion, topping the average estimate of $11.1 billion from analysts surveyed by Bloomberg. The first-quarter net loss of $1.02 a share compared with the $1.66 loss predicted by Merrill Lynch & Co's Guy Moszkowksi, Institutional Investor's top-rated brokerage analyst.
`Positive Surprise'
``A lot of people were worried that we'd have a big negative surprise, and when we didn't have a big negative surprise that was a positive surprise,'' Edgar Peters, chief investment officer at PanAgora Asset Management in Boston, which oversees $25 billion, said in a Bloomberg Television interview.
Google rallied $78.50, or 17 percent, to $528.04 for the biggest gain in the S&P 500. The company said excluding costs from stock options, profit was $4.84 a share, topping the $4.52 average estimate from analysts. Sales excluding revenue passed on to partner sites surged 46 percent to $3.7 billion. That beat the average forecast of $3.59 billion in a Bloomberg survey.
Caterpillar Inc. rose $3.51 to $82.10. First-quarter earnings rose 13 percent, topping analysts' estimates, as sales to China and India increased. Caterpillar reported first-quarter profit of $1.45 a share, higher than the $1.33 average in a Bloomberg survey.
The dollar has fallen 5.7 percent against a basket of six major currencies this year following an 8.3 percent decline last year, making U.S. products cheaper overseas and increasing the dollar value of sales denominated in those currencies. Coca-Cola Co. and International Business Machines Corp. this week reported profits enhanced by the dollar's drop.
Dollar Advantage
Companies in the S&P 500 garnered 44 percent of their sales from outside the U.S. in 2006 and an estimated 47 percent to 48 percent in 2007, according to Standard & Poor's. The U.S. currency weakened to a record low of almost $1.60 per euro on April 16.
Honeywell International Inc. climbed $2.55 to $59.95. The world's largest maker of cockpit displays said first-quarter earnings rose 22 percent, more than analysts estimated, on sales of aircraft and building controls. Record oil prices led to more sales of refining equipment produced by Honeywell's specialty- materials division. The company said annual profit will be at the high end of the range it predicted in December.
Schlumberger Ltd., the world's biggest oilfield contractor, added $1.20 to $96.50. The company said first-quarter profit rose 13 percent as record oil prices prompted increased drilling by customers worldwide.
E*Trade Financial Corp. rose 27 cents to $3.89. The online brokerage that posted a first-quarter loss of $91.2 million said it expects to return to profitability this year.
Newmont Mining Corp., the world's second-largest gold producer by volume, slid $1.72, or 3.6 percent, to $45.80 for the biggest drop in the S&P 500. Gold tumbled 3 percent in futures markets to $913.90 an ounce.

AT&T Plans to Eliminate 4,650 Jobs Following $100 Billion in Acquisitions

(Bloomberg) -- AT&T Inc. is firing about 4,650 workers, trimming the managerial ranks in its fading home-phone business after more than $100 billion in acquisitions.
The cuts equal about 1.5 percent of the workforce, San Antonio-based AT&T said today in a regulatory filing. The firings at the largest U.S. phone company are in addition to the 10,000 reductions announced with the $86 billion purchase of BellSouth Corp. in December 2006, spokesman Walt Sharp said.
Most of the cuts apply to the local-phone business, Sharp said. That unit lost 1.6 million residential lines last year as customers switched to cable and wireless phone service. AT&T has sought to reduce overlap in its operations since buying BellSouth and the former AT&T Corp., with plans to slash annual costs by about $7 billion by 2009.
``The economy may be to blame,'' Credit Suisse's Christopher Larsen said in an interview. ``Wireless substitution is probably a bigger issue. Headcount reductions are a fact of life in a business where you've got certain areas that are shrinking.'' The New York-based analyst is neutral on whether to buy AT&T shares.
Economists predicted this month that the U.S. economy won't grow in the first half of the year, the weakest performance since the 2001 recession, as consumers grapple with falling home prices and increasing energy costs.
AT&T is scheduled to report first-quarter earnings on April 22. In the previous quarter, the company's sales fell short of analysts' estimates after some customers failed to pay their bills, hurt by slowing economic growth.
More Costs
AT&T rose 19 cents to $37.76 at 10:36 a.m. in New York Stock Exchange composite trading. The shares had dropped 9.6 percent this year before today, compared with a 16 percent decline in the Standard & Poor's 500 Telecommunication Services Index.
AT&T plans to book a pretax cost of about $374 million for the cuts in the first quarter. The phone company had about 310,000 employees as of Jan. 31. With new hires in other parts of the business, the company expects overall headcount to remain stable this year, according to the filing.
A minority of the employees affected by the cuts work in the global unit, which serves large corporate customers, Sharp said.

Citigroup Has $5.1 Billion Loss, Cuts 9,000 More Jobs; Sales Top Estimates

(Bloomberg) -- Citigroup Inc. posted a $5.11 billion loss, less than analysts' most pessimistic estimates, and cut 9,000 jobs, sending its shares higher and sparking a rally in U.S. stocks and the dollar.
Citigroup, the biggest U.S. bank by assets, reported almost $16 billion of writedowns and increased bad loan reserves as customers fell behind on home, car and credit-card payments. Merrill Lynch & Co's. Guy Moszkowski, Institutional Investor's top-rated brokerage analyst, had predicted an $18 billion writedown. The first-quarter net loss of $1.02 a share compared with Moszkowski's estimated loss of $1.66.
``People are assuming the worst,'' Walter Todd, a portfolio manager at Greenwood Capital Associates, said in an interview on Bloomberg radio. ``Expectations are low enough that you can have some positive stock performance even off a bad number.''
Citigroup climbed $1.64, or 6.8 percent, to $25.66 at 11:10 a.m. in New York Stock Exchange composite trading, after surging as high as $25.80 earlier today. The Standard & Poor's 500 Index rose 1.7 percent and the dollar gained the most against the euro in more than four weeks.
The bank's writedowns and credit losses from the collapse of the subprime mortgage market now total almost $40 billion, more than Zurich-based UBS AG and Merrill. Vikram Pandit, Citigroup's chief executive officer, has bailed out about 10 investment funds, replaced his chief risk officer and raised $30 billion to replenish capital since he succeeded Charles O. ``Chuck'' Prince in December.
`No Silver Bullets'
Pandit's finance chief, Gary Crittenden, said today that the bank would eliminate 9,000 jobs in the next twelve months. That includes 2,000 of the 6,200 cuts the bank has already announced.
Revenue fell 48 percent to $13.2 billion, compared with the average estimate of $11.1 billion from analysts surveyed by Bloomberg. Results included $7.6 billion of writedowns and credit costs on mortgages and bonds, $1.5 billion on leveraged buyout loans and $1.5 billion on auction-rate securities. The bank wrote down the value of assets it absorbed last year from so-called structured investment vehicles by $212 million.
The company also marked down the value of bond insurance contracts by $1.5 billion. Citigroup set aside about $1.8 billion to increase reserves for bad consumer loans.
The bank cited increased delinquencies on mortgages, unsecured personal loans, credit cards and auto loans, as well as the ``housing market downturn and rising unemployment,'' in the U.S.
Tier 1 Capital
``This is a difficult business environment,'' Crittenden said on the conference call. ``There are no easy solutions here, no silver bullets.''
The bank's Tier 1 capital ratio -- a financial measure regulators use to monitor a bank's ability to withstand loan losses -- rose to 7.7 at the end of the quarter from 7.1 percent at the end of 2007. The minimum for a ``well-capitalized'' rating from U.S. regulators is 6 percent. Citigroup sets its own target at 7.5 percent, partly to assure its AA- rating from Standard & Poor's.
Standard & Poor's said today it is reviewing Citigroup's rating for a possible downgrade, noting that earnings may be further depressed by loss reserves on the bank's loan portfolio. Fitch Ratings lowered the company's rating one level to AA- from AA today, with a negative outlook. Fitch cited deteriorating earnings in the consumer business and investment bank losses.
Pandit's Path
Credit-default swaps tied to Citigroup's bonds dropped 22 basis points to 95 basis points, according to broker Phoenix Partners Group, the lowest in more than two months. The contracts, which gauge investors' belief in the company's ability to repay its debt, fall as confidence improves.
Created a decade ago from the merger of Citicorp and Travelers Group Inc., Citigroup slumped 54 percent in New York trading during the past year as credit-market losses piled up. The decline led to the ouster of 58-year-old Prince, who served as CEO for four years, as Citigroup's market value fell below those of Bank of America Corp. and JPMorgan Chase & Co. New York-based JPMorgan reported first-quarter earnings earlier this week of $2.37 billion, matching analysts' estimates.
Pandit, 51, is close to the end of a six-month companywide review that has taken him to offices in Warsaw, Istanbul and Seoul. He put former Morgan Stanley colleague John Havens in charge of trading and investment banking, moved U.S. consumer head Steve Freiberg to head a new credit-card division and recruited former Wells Fargo & Co. executive Terri Dial to oversee consumer banking in the U.S.
Capital Cushion
He also is taking steps to free up capital by selling assets such as $12 billion of leveraged-buyout loans and announcing a plan to pare U.S. mortgage holdings by $45 billion this year. Under Prince, Citigroup's balance sheet swelled by $689 billion, an amount larger than the entire balance sheet of Wells Fargo & Co., the fifth-biggest U.S. bank. Total assets stood at $2.2 trillion at the end of last year.
``Pandit is doing what needs to be done, focusing on capital management, allocating capital to areas that he wants to grow and exiting businesses that he doesn't think are core to the overall franchise,'' said Peter Kovalski, portfolio manager at Alpine Woods Investments in Purchase, New York, which oversees about $12 billion and holds about 32,000 Citigroup shares. ``The variable he has no control over is the global economy.''
Dividend Cut
Oppenheimer & Co. analyst Meredith Whitney wrote in a March 27 report that Citigroup's growing consumer-loan losses may force it to raise more capital. The prospect of such infusions can weigh on a stock price because they dilute the earnings of existing shareholders. Citigroup already has sold stakes to investment funds controlled by the governments of Abu Dhabi, Kuwait and Singapore.
Citigroup finance chief Crittenden said in January that the bank wouldn't need to raise more capital, and that its assumptions were ``stress-tested'' against a range of economic conditions, including ``multiple recessionary scenarios.''
Asked today if the bank might seek an additional infusion, Crittenden said, ``You can never say never.''
Merrill analyst Moszkowski has said he believes Citigroup has a capital cushion of about $17 billion ``above and beyond'' what was needed to offset writedowns recorded last year.
The bank had its rating cut one notch from AA in January. A lower credit rating implies a higher risk of default, forcing companies to pay higher interest rates on borrowings.
When it announced year-end earnings in January, Citigroup slashed its dividend for the first time since the 1998 merger. The 41 percent reduction allowed the bank to retain about $4.4 billion of additional capital per year.
Citigroup may soon have to cut its dividend again, according to Whitney, who was one of the first analysts last year to predict the depth of the credit crisis.

International Business Machines Corp. posted first-quarter profit that topped analysts' estimates and said earnings this year

Crude oil and gasoline rose to records after the Energy Department reported unexpected declines in U.S. crude inventories and refinery operating rates.

Oil climbed to $115.21 a barrel in New York, the highest since futures began trading in 1983. Oil inventories fell 2.36 million barrels to 313.7 million in the week ended April 11, the department said yesterday. Refinery capacity was 81.4 percent, the lowest since October 2005 following hurricanes Katrina and Rita.

``Refiners are probably not ordering crude oil because they don't need it,'' said Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago. ``This is a time of year when refineries are supposed to be focusing on gasoline production, but they have no incentive this year because demand is anemic and refinery margins are poor.''

Crude oil for May delivery rose as much as 28 cents in after-hours electronic trading on the New York Mercantile Exchange and was at $114.84 a barrel at 10:23 a.m. Sydney time. Yesterday, oil futures gained $1.14, or 1 percent, to settle at $114.93 a barrel, a record close.

Prices are up 4.4 percent this week and 82 percent from a year ago.

The median price of crude oil will be $92 a barrel this quarter, according to 30 analyst forecasts compiled by Bloomberg News. The median price for the entire year will be $91.71 a barrel, the estimates show.

Refinery Margins

Lower refinery margins, or crack spreads, reduced the incentive for refiners to process oil into products, including gasoline and diesel fuel. U.S. refineries ran at 81.4 percent of capacity last week, down 1.6 percentage points from the week before.

The margin for making a barrel of crude oil into one of gasoline was negative on March 17 for the first time since February 2005, according to closing futures prices. The spread rose as high as $7.804 a barrel yesterday compared with more than $25 a year ago.

Crude-oil stockpiles were forecast to rise 1.8 million barrels last week, according to the median of responses by 15 analysts surveyed by Bloomberg News.

Supplies at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is stored, rose 860,000 barrels to 18.4 million last week. Stockpiles on the West Coast fell 2.77 million barrels to 52.1 million, the report showed. The West Coast oil market is isolated from other parts of the U.S., making it difficult for supplies to move between it and other regions.

`Buy Gasoline'

``Refineries aren't buying crude oil and they certainly aren't using it to the extent they were expected to,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``The decline was on the West Coast and there was a build at Cushing, which blunts some of the impact of this report.''

Gasoline inventories dropped 5.52 million barrels to 215.8 million barrels, the report showed. It was the fifth straight fall and the biggest decline since August. A 1.8 million-barrel decline was forecast in the Bloomberg News survey.

``The clear message of this data is buy gasoline,'' Evans said.

Gasoline for May delivery was up 0.46 cent to $2.9436 a gallon at 8:46 a.m. Sydney time. Earlier, it touched $2.9457, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005. Yesterday, it rose 5.8 cents, or 2 percent, to $2.939 a gallon, the highest-ever settlement price.

U.S. pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 1.3 cents to a record $3.399 a gallon, AAA, the nation's largest motorist organization, said yesterday on its Web site

IBM First-Quarter Profit Rises 26% on International Sales; Shares Advance

International Business Machines Corp. posted first-quarter profit that topped analysts' estimates and said earnings this year will exceed its previous goals, pushing the stock up 2.4 percent.

Net income at the world's biggest computer-services company climbed to $1.65 a share, beating the $1.46 average of estimates compiled by Bloomberg. Armonk, New York-based IBM also said today that full-year profit will advance to at least $8.50 a share, compared with the $8.25 projection announced in February.

Chief Executive Officer Samuel Palmisano said he's confident IBM will withstand a U.S. economic slowdown that has threatened companies' technology budgets. This week Goldman Sachs Group Inc. predicted ``disappointing'' results for U.S. companies, saying they probably will slash their earnings targets through 2008.

``This is telling investors that the bigger, more diversified companies in tech have been able to power their way through,'' said Louis Miscioscia, a New York-based analyst with Cowen & Co. ``Sure, there's spottiness, but it's not across-the- board weakness.'' He has a ``neutral'' rating on the company and said he doesn't own the shares.

The declining U.S. dollar helped boost the value of sales from overseas, where IBM gets about two-thirds of its revenue. The currency fell 7.6 percent against the euro during the quarter. Adjusting for the currency effect, revenue from Europe, Africa and the Middle East rose 4 percent, while the Asia-Pacific region posted a 3 percent increase.

U.S. Sales

U.S. sales rose 6 percent in the first quarter, triple the pace of the previous period. IBM Chief Financial Officer Mark Loughridge said companies in the insurance, banking and telecommunications sectors all helped bolster U.S. orders.

Net income climbed 26 percent to $2.32 billion from $1.84 billion, or $1.21 a share, a year earlier, IBM said today in a statement. Sales rose 11 percent to $24.5 billion, beating the average projection of $23.6 billion.

IBM advanced $2.93 to $123.40 in extended trading after closing at $120.47 on the New York Stock Exchange. The stock has gained 11 percent this year, compared with a 13 percent decline in the Standard & Poor's 500 Information Technology Index.

Without adjusting the currency impact, sales in Europe, the Middle East and Africa surged 16 percent as IBM won contracts with companies such as Transalliance, a French freight hauler. Asia-Pacific revenue climbed 14 percent.

Sales in IBM's technology services unit, which manages computer systems and data centers for corporate clients, climbed 17 percent to $9.68 billion. Revenue from software advanced 14 percent to $4.85 billion.

Feeling Good

``We feel good about the rest of the year,'' Palmisano said in the statement. ``These results reinforce our confidence in IBM's ability to perform well in a dynamic global economy.''

Hardware revenue fell 6.7 percent to $4.22 billion. IBM has shed hardware businesses such as the personal-computer and printing units in the past three years to stem slowing growth.

IBM has cut its dependence on U.S. clients by expanding in faster-growing countries such as Brazil, Russia and China, where sales climbed 26 percent last year. In December, Palmisano said IBM will spend an extra $1.6 billion on sales and marketing in those areas through 2010.

Companies in Asia and Europe may increase spending on technology by 6 percent and 3.9 percent this year, compared with 2.3 percent for their American counterparts, according to Stamford, Connecticut-based researcher Gartner Inc. Economists on average estimate that U.S. economic growth slowed to 0.1 percent in the first quarter, one-sixth the pace of the previous period.

Software Gains

Palmisano, 56, has sought to fuel growth at IBM by wooing customers for software, its most profitable business. The unit's gross margin, or percentage of sales left after production costs, amounted to 85 percent last year, more than double the rate of its largest division, the services business.

The executive also has reduced costs in the company's pension plan. IBM, which had more than 386,000 employees at the end of 2007, has projected savings of $950 million for this year. The redesign is part of Palmisano's plan to boost profit to as much as $11 a share by 2010.

IBM also has pursued billions of dollars in stock buybacks to add to per-share earnings. On Feb. 26, Palmisano announced plans to buy back $12 billion in stock this year. Today the company said the buybacks helped add 13 cents a share to first- quarter profit.

Eight mistakes to avoid while investing

Investing is not just about picking winners, but also about avoiding mistakes. Retail investors can be better off if they avoid making the following mistakes.

Overconfidence - Don't be unrealistically optimistic

A bull market makes retail investors believe that they are geniuses - after all, anything they put money into goes up. This overconfidence in their own abilities leads to a complete disregard of the risks involved. Every new generation that invests in the market ignores past experience. These new investors wrongly believe that stock prices only go up.

Don't be overconfident and don't start believing that you have superior skills compared to the market. Recognise that in a bull market you are benefiting because the whole market is going up. If those around you are getting unrealistically optimistic, start managing your risk accordingly. Remember that sometimes markets do come crashing down.

Over enthusiasm to trade - Not every ball should be hit

Good batsmen realise that some balls outside the off-stump should be left alone. Similarly, professional investors realise that sometimes its better to just stand still than to rush into a stock. Retail investors often make the mistake of "flashing outside the off-stump" because they cannot resist the temptation to trade in every opportunity. And, like an inexperienced batsman, they suffer the same fate.

Too much trading will lead to a lot of churn, extra commissions to your broker and huge tax implications for you. Some of the world's best investors follow a buy and hold strategy - you should too.

Missing the benefits of compounding of capital - Learn from Einstein

Albert Einstein is reputed to have said that compounding of capital is the 8th wonder of the world because it allows for the systematic accumulation of wealth. Even though any one in class 5 could tell you how compounding works, retail investors ignore this basic concept.

Compounding of capital can benefit you only if you leave your money uninterrupted for a long period of time. The sooner you start investing, the bigger the pool of capital you will end up with for your middle-aged and retirement years.

Don't wait to start investing only when you have a large amount of money to put to work. Start early, even if it's with a small amount. Watch this grow to a very large amount with the passage of time.

Worrying about the market - But there is no answer to your favourite question

Smart investors don't worry about the direction of the market - they worry about the business prospects of the companies whose stocks they own. Retail investors are obsessed with the question "Where do you think the market will go?" This is a wrong question to ask. In fact, no one knows the answer.

The right question to ask is whether the company, whose stock you are buying, is going to be a much bigger business 10 years from now or not? Don't take a view on the market, take a view on long-term industry trends and how your chosen companies can create value by exploiting these trends.

Timing the market - Around 99% of investors will fail in this strategy

Its very difficult to time the market, i.e, be smart enough to buy at the absolute bottom and sell at the absolute top. Professionals understand that timing the market is a wasted exercise.

Retail investors always wait for that elusive best opportunity to get in or to get out. But by waiting they let great investment opportunities go by. You should use systematic or regular investment plans to make investments. You'll have to make fewer decisions and yet can accumulate substantial wealth over time. Selling in times of panic - You should be doing the opposite The best opportunity to buy is when the markets are falling and there is fear in the minds of investors. Yet, many retail investors do exactly the opposite. They sell when the markets are falling and buy only when the markets are high. This way they end up losing twice - by selling low and buying high, when they should be doing exactly the opposite. If nothing has changed about the long-term outlook for the company that you own, then you should not sell this company's stock. Use this opportunity to buy more of the same stock in falling markets. Some of the world's biggest fortunes were made by buying when others were selling in panic.

Focusing on past performance - Its like driving forward while looking backwards

It is a very common perception that because a stock has done well in the past one year, it's the best stock to invest in. Retail investors do not realise that often the best performers will underperform the market in the future because their optimistic outlook has already been priced into the stock.

Don't go after hot sectors that are currently producing high returns. Don't let greed drive your investment decisions. Look forward to see whether the gains produced in the past can get repeated or not. Short-term trends of the past might not get repeated in the future.

Diversifying too much will kill you - Investing is all about staying alive

Beyond a point, having too many names in a portfolio can be counterproductive. You might end up duplicating, or end up taking too much exposure to a sector. Over-diversification can upset your portfolio, especially when you have not done enough research on all the companies you have invested in.

If you are an active investor in the stock market, maintain a manageable portfolio of 15-25 names. Instead of adding new names to this portfolio, recognise ideal ones. Then back them with more capital. In the long-run, this will produce better returns for you than adding another 20 names to your portfolio. Investing is all is about patience and discipline. By avoiding mistakes you can improve the long-term performance of your portfolio, whatever the economic conditions prevailing in the market.

Industrial growth jumps 8.6% in Feb

India’s growth story remains robust, if you go by industrial production. The Index of Industrial Production (IIP) rose 8.6% in February 2008, with capital goods growth rebounding to double-digit levels after falling to an inexplicable low of 2.1% in January, and consumer durables climbing out of negative territory. This comes as good news, as the IIP growth rate had dipped to 5.8% in January from 7.7% in December. Industrial growth at 8.6% in February 2008 is still lower than the 11% achieved in February 2007. The data is sure to give policymakers more room for manoeuvre, as they try to balance growth and inflation and come under pressure to tighten monetary policy to control inflation. Ministry of statistics and programme implementation secretary Pranab Sen said, “The February number reaffirms the belief that India’s growth story is very much on track. Although growth is a tad lower compared with previous months due to high base effect, cumulative growth for the April-December period indicates that investment-led growth is very much intact.” The growth figures in some of the vital sectors like capital goods have brought cheer and confidence in the economy. Prime Minister’s economic advisory council member Saumitra Chaudhuri said, “Capital goods growth, which, by falling to 2.1% in January, 2007-08, had policymakers worried, is back in double digit at 10.4% in February 2007-08. However, it is lower than 18% witnessed in February 2006-07.” The story in consumer durable sector, which includes automobile and whitegoods, has also bettered. From a negative 3.1% in January, the growth in consumer durables sector bounced back with 3.3% growth in February 2007-08, and is near double of 1.8% in February 2006-07. The sector has shown negative growth in seven months and positive growth in just four months, with February being the fourth month in 2007-08 fiscal. While the cumulative growth in consumer durables since April still continues to be in the negative at 1.0% compared to 9.7% in February 2006-07, the industry, it seems, is shedding its blues on some pick-up in the demand. Mr Sen said, “The consumer durables sector is bearing the brunt of higher interest, as demand is interest-sensitive. And one can expect a bounceback only if interest rates come down from the prevailing levels. Besides, implementation of the 6th Pay Commission recommendation could also provide some impetus.” The consumer non-durable sector, comprising largely FMCG products, grew by a whopping 11% in February 2007-08 compared with 9.3% in the same month in 2006-07. The sector’s performance is expected to better with customs duty cuts in edible oils and excise duty cuts in the budget start playing on the demand.

Basic goods and intermediate goods grew by 7.3% (10.7%) and 8.2% (13.3%), respectively, in the month under consideration. Manufacturing, which occupies the highest weightage of about 80% in the Index of Industrial Production, grew at 8.6% against 12% in February, 2007, much higher than 5.9% in January. As many as 15 out of the 17 industry groups showed positive growth in February 2007-08. Wood and wood products, including furniture and fixture, showed negative growth of 13.8% besides textile products, including wearing apparel which showed a negative growth of 1.7%. For the first 11 months of last fiscal, industrial growth stood at 8.7% against 11.2% in 2006-07, according to data released by the government. Mining and electricity also did their bit for this turnaround. In February, electricity generation grew by 9.8% from a low of 3.3% a year-ago while mining output managed to maintain the growth rate of 7.5% in February 2007-08. Mining and electricity had dropped to 1.8% and 3.3% in January 2007-08.

Microsoft, HCL launch world's cheapest laptop

MUMBAI: Microsoft Corporation and HCL Infosystems on Friday announced a series of joint initiatives, including launch of world's cheapest ultra portable laptop and setting up of centre of excellence, which will employ over 500 professionals. Priced at Rs 16,990, MiLeap brand of HCL laptops with Microsoft Windows XP Home operating system is the lowest priced among the MS operating system powered laptops, the company officials said. "There is a huge potential in the PC market as India is selling about seven million PCs as compared to 32 million in China. Through this laptop we mean to increase the IT penetration," HCL Infosystems Chairman & CEO Ajai Chowdhary told reporters. Microsoft Chief Operating Officer Kevin Turner said that by altering its operating system for HCL's ultra portable laptop, the company has reinforced its commitment to offer the best and the latest technology to Indian consumers. The companies also announced the setting up of a new Centre of Excellence, which will employ over 500 software professionals to create, design and deploy Microsoft technologies based solution frameworks across various industry verticals.

Inflation hits 41-month high of 7.41 per cent

India's annual rate of inflation rose further to hit a 41-month high of 7.41 per cent for the week ended March 29, from 7 per cent for the week before, on account of higher food and commodities prices. ( Watch: Inflation hits three-year high at 7.41pc ) The inflation rate, based on the official wholesale price index, is the highest since Nov 8, 2004, as per data released Friday by the commerce and industry ministry. Since the data pertained to March 29, it did not reflect the measures taken by the government since March 31 when it cut import duties on a wide range of items including edible oils, while imposing a ban on exports of non-basmati rice. The alarming data comes a day after Prime Minister Manmohan Singh said the steep increase in prices of food and essential items was making inflation management a difficult task that could hurt the country's macroeconomic stability. "Sharply rising food prices can slow down poverty alleviation, impede economic growth and retard employment generation," the prime minister said at a global conference on agro industries Thursday. "A steep rise in food prices will make inflation control more difficult and can hurt the cause of macroeconomic stability. The constituency for economic reform, so necessary to stimulate economic growth, would also diminish," he warned. The Reserve Bank of India (RBI) has already said that it will take monetary and fiscal steps to contain inflation - which it had hoped to contain below the five percent mark for the fiscal year ended March 31. Analysts now expect the central bank to take some immediate steps to check inflationary pressures, like hiking the benchmark interest rate to control the supply of money in the financial system. The International Monetary Fund (IMF) has forecast India's inflation to moderate to 5.2 per cent in the current calendar year and four per cent in 2009, as against 6.4 per cent in 2007.

Indian IT-BPO industry heads for slowdown

NEW DELHI: The Indian IT-BPO industry is headed for a slowdown in growth this year but is on track to achieve its target of exports worth $60-billion by 2010, industry association Nasscom said on Friday. “There will be some slowdown but growth will happen. The $60-billion target will be maintained and achieved,” said Nasscom president Som Mittal. Mr Mittal said that the Indian IT-BPO industry needs to grow at 22-23% in future to achieve the $60-billion export target, a rate which could be achieved and exceeded easily. “There will be 4-6 months of sluggish growth but we don’t think there is any long, deep recession setting in,” said the association’s new chairman Ganesh Natarajan. The Zensar Technologies CEO added that in some cases, slowdown has already led to more outsourcing. Nasscom vice-chairman and Genpact CEO Pramod Bhasin said there was still lack of clarity over the impact of the slowdown in the US. “The impact will be clearer in the next 3-6 months,” he said.

Nasscom estimates published in its Strategic Review 2008 pegged Indian IT-BPO industry’s revenue growth in fiscal 2007-08 at 33%, exports at over $40-billion and domestic revenue at over $23-billion. The association would release the final figures for FY’08 in June. With elections in the US, the issue of job losses due to outsourcing has raised its head again. Mr Natarajan said Nasscom is trying to deal with the issue. “We are getting our point of view across by presenting data to prove our case,” he said. The association laid out its six-point agenda for fiscal 2008-09 on Friday. The agenda includes focus on innovation, building communities for sharing best practices, collaboration, green IT, societal development and education & skill building. Nasscom also announced the appointment of Raju Bhatnagar as vice-president. He will focus on the BPO sector. The association said it will also put in place initiatives to address infrastructure and security issues.

Oil Passes $111, Gasoline Hits Record on Unexpected Drop in U.S. Supplies

Crude oil rose above $111 a barrel in New York and gasoline surged to a record after a government report showed that U.S. supplies unexpectedly dropped.
Crude oil inventories fell 3.15 million barrels to 316 million last week, the Energy Department said. A 2.3-million- barrel gain was forecast, according to a Bloomberg News survey. Metals futures also rose as the dollar fell against the euro, and gasoline pump prices reached a record average $3.343 a gallon.
``It looks like this move will accelerate and prices will move toward $115,'' said Tom Bentz, a broker at BNP Paribas in New York. ``This is all part of the big uptrend, and where it stops nobody knows.''
Crude oil for May delivery rose $2.49, or 2.3 percent, to $110.99 a barrel at 11:54 a.m. on the New York Mercantile Exchange. Futures reached $111.43, the highest since March 17, when prices touched a record $111.80 a barrel.
Gasoline for May delivery climbed 3.86 cents, or 1.4 percent, to $2.789 a gallon. Futures reached $2.8228, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
U.S. pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 1.2 cents to the record, AAA, the nation's largest motorist organization, said today on its Web site.
Refineries operated at 83 percent of capacity last week, the Energy Department report showed. Plants used 88.4 percent during the same week last year. Refiners operated at 82.2 percent in the week ended March 21, the lowest since October 2005, the department said.
`Supportive'
``The report is supportive across the board,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``I'm surprised gasoline isn't up more because of the larger-than-expected drop in inventories.''
Supplies of gasoline and distillate fuel, including heating oil and diesel, also fell. Gasoline inventories dropped 3.44 million barrels to 221.3 million last week, the report showed. A 3-million-barrel decline was expected.
``Domestic demand isn't great but that's not important,'' said Antoine Halff, head of energy research at New York-based Newedge USA LLC. ``Global demand is still growing and that's what matters.''
Total implied U.S. fuel demand averaged 20.5 million barrels a day in the past four weeks, down 0.4 percent from a year earlier, according to the department. Consumption was down 2.2 percent from a year earlier in the four weeks ended March 21.
`Speculation'
``Speculation is the main reason driving up oil prices,'' Qatari Energy Minister Abdullah bin Hamad al-Attiyah said today in Beijing. ``OPEC so far doesn't have anything on the agenda for the informal meeting in Rome.''
The Organization of Petroleum Exporting Countries will hold its next formal policy-setting conference in September. Many OPEC ministers will hold informal discussions during a conference in Rome on April 20-22. The group's 13 members produce more than 40 percent of the world's oil.
``OPEC has lost control of the oil market to institutional investors who are looking for a sanctuary from the weak dollar and slowing economy,'' said Richard Chimblo, manager of global business development at Calgary-based Genoil Inc. ``I believe the bubble will break and prices are going to fall to the $85 area before the winter heating season.''
Oil's 80 percent gain during the past year is the second biggest among 19 commodities on the Reuters/Jefferies CRB Index, trailing only wheat, which doubled. Rising global demand for raw materials and a weakening dollar have led to record prices this year for raw materials including corn, rice, gold and platinum.
Brent crude for May settlement rose $1.89, or 1.8 percent, to $108.23 a barrel on London's ICE Futures Europe exchange. Futures reached a record $108.77 a barrel in intraday trading.