Stories of price manipulation
Venkat Pharma (Rs5)
The company is supposedly into pharmaceuticals, but nobody knows what its business is really. The BSE does not make its annual reports available and the company’s website is not functional. How does the BSE expect small investors to obtain information? Venkat Pharma has been implicated by the BSE in the past for non-compliance of shareholder as well as corporate governance norms, in June 2011 and December 2011, respectively.
The company’s fundamentals are bizarre. It generated no sales at all for the past six quarters ending December 2012 and did not generate a single rupee of profit. In fact, in the past six quarters, it recorded losses in all the quarters. However, you will be shocked to learn about how its share price has moved. Despite such lousy fundamentals, the stock price rose a whopping 178% within three months (5 March 2013 to 13 June 2013), from Rs1.87 to Rs5.20. SEBI, which has spent crores of taxpayers’ rupees over the past decade on its ‘modern’ surveillance systems to catch precisely such cases, has remained shamelessly quiet. Blatant price-rigging continues unabated.
Debashis Basu, editor Moneylife, explained the dangers of insufficient planning and the assumptions to be made while planning for better retirement
Moneylife Foundation conducted another successful seminar on retirement planning where Debashis Basu, editor Moneylife, discussed the various aspects of retirement planning and why you should not neglect it. Using a fictional character called Mr Kumar, Mr Basu detailed the different factors that influence how much one can save and how long one’s corpus is expected to last. Many are unaware how expenses could just balloon by the time of retirement. “Many don’t bother to make the calculation, even though some parts are not difficult at all. One reason is that there is much that is simply not known. Many assumptions are to be made when making a retirement plan,” explained Mr Basu. You don’t know how long you will live for, but you can calculate what your expenses will be, how inflation will affect expenditure, and much else.
While saving for retirement, one needs to be prepared for the six unknowns—under-investment risk, the risk of longevity, failure to account for sudden spikes in monthly expenses, the dominance of a non-income-generating asset like real estate in the portfolios, low growth of assets and post-retirement support.
Mr Basu said, “Under-investment risk is the danger of not having saved or invested enough for retirement, if not both.” Indians do save their money, but often don’t look beyond fixed-income schemes, such as bank FDs or investment-oriented insurance products. Mr Basu said, “You may have under-invested, which means that you have simply not saved enough.” With poor returns from investment and high inflation, by just saving in fixed income investments one would find it difficult to create a sustainable corpus for retirement. If your income grows as inflation rages on, it may be possible to ignore the adverse effects of inflation. But when your income is static, it becomes a major problem. Therefore one needs to choose the right products for investment, those, which can generate wealth over the long term.
“The second risk, longevity, is a big concern. The longer you live, the more likely it is that you will run out of money,” said Mr Basu. Like interest rate and inflation, this is another factor that is out of your control, he highlighted. Therefore, one needs to be prepared for the unforeseeable.
The third factor, failure to account for sudden spikes in monthly expenses pre-retirement and post-retirement, is one that is completely unknown. Unexpected expenses before retirement may need you to pull out from your retirement corpus. Even post-retirement, you cannot, for example, predict when you’ll need surgery in your later years. Mr Basu said, “We have assumed that your retirement expenses will be 80% of current expenses. But what about the month when you need surgery or are under costly medication? At this time, it could be 135% of the current expenses.
One needs to consider their assets at the time of retirement, as well. The problem of over-reliance on property is another concern. “Real estate works just like stocks. In a good economic scenario, real estate appreciates; at other times, it can be static,” Mr Basu said, adding equity exposure is a good way to achieve a sizeable corpus.
When it comes to post-retirement income and support, Mr Basu said that “Indian children do support their parents, so perhaps you won’t need to bother about big healthcare costs.” This can make a huge difference to your retirement requirements.
The session concluded with Mr Basu outlining the steps one could take to calculate how much is needed for retirement. This was followed by an engaging Q&A session where Moneylife Foundation members raised queries related to retirement.
Phone and email ID sharing of around 60 lakh users of Facebook has highlighted the risks we are running over the internet, especially through social networking sites. Time for safeguarding yourself on Facebook, Twitter, LinkedIn and other social media?
Social media networking site Facebook has admitted that due to a software bug, phone numbers and email addresses of its 6 million (60 lakh) users were ‘improperly’ shared. This incident highlights the need to strictly safeguard one’s privacy in the virtual world, as well. Just imagine, what would have happened if the bug had exposed credit card details or money related info instead of just phone numbers and email IDs? But more about it later.
Techcrunch.com has quoted a Facebook spokesperson as saying that the bug had been live since last year and was discovered last week, adding that its security team fixed the bug in less than 24 hours after it was brought to their notice. Shocking, isn't it? The bug was there in Facebook for over a year and it may have explored data of more than 6 million users, that the social networking site is unaware of.
In a blog post, the Facebook security team said, “We've concluded that approximately 6 million Facebook users had email addresses or telephone numbers shared. There were other email addresses or telephone numbers included in the downloads, but they were not connected to any Facebook users or even names of individuals. For almost all of the email addresses or telephone numbers impacted, each individual email address or telephone number was only included in a download once or twice. This means, in almost all cases, an email address or telephone number was only exposed to one person. Additionally, no other types of personal or financial information were included and only people on Facebook—no developers or advertisers—have access to the Download Your Information (DYI) tool.”
Explaining the ‘bug’, the security team said, “When people upload their contact lists or address books to Facebook, we try to match that data with the contact information of other people on Facebook in order to generate friend recommendations. For example, we don’t want to recommend that people invite contacts to join Facebook if those contacts are already on Facebook; instead, we want to recommend that they invite those contacts to be their friends on Facebook.”
“Because of the bug, some of the information used to make friend recommendations and reduce the number of invitations we send, was inadvertently stored in association with people’s contact information as part of their account on Facebook. As a result, if a person went to download an archive of their Facebook account through our DYI tool, they may have been provided with additional email addresses or telephone numbers for their contacts or people with whom they have some connection. This contact information was provided by other people on Facebook and was not necessarily accurate, but was inadvertently included with the contacts of the person using the DYI tool,” it added.
Facebook has sent emails to those whose phone numbers and email ID it shared due to the bug. The email reads...
“Here is your contact Information (inadvertently accessible by at most 2 Facebook users):
We estimate that 2 Facebook users saw this additional contact info displayed next to your name in their downloaded copy of their account information. No other info about you was shown and it’s likely that anyone who saw this is not a stranger to you, even if you’re not friends on Facebook.
We recognize that mistakenly sharing contact info is unacceptable, even if you are acquainted with people who saw these details, and we’ve taken measures to prevent this from happening again. For more information on the bug, please read our blog post.”
Coming back to the question of risk to privacy, there is nothing as 100% “hack-proof” in the world. Almost everything that you feed over the internet can be accessible, including your credit card number and card verification value (CVV) code. At the most, what you can do is take small precautions.
Coming back to exploitation of financial data, just two years ago there was a breach into Sony’s PlayStation video game network leading to a theft of millions of names, addresses and possibly credit card details.
Earlier, this month, people from India witnessed money being withdrawn from their bank accounts in Greece. This was possible because some scamsters using scamming machines on some ATM centres, then collected the data and shared it with like-minded people from Greece. We hope this has nothing to do with the debt crisis Greece is going through, although!
But it is not just the social media sites, where your data, financial details are left to be exposed. Information technology (IT) systems across several banks in India are also not without glitches that affect most of the customers. One of the many issues that Moneylife has taken up with the Reserve Bank of India (RBI) is the need for a technology audit of banks and the systems and processes that they adopt. While RBI’s department of supervision inspects banks, it is not clear if this covers the core banking technology that now drives all big bank operations. Over the years, individual banks have often configured systems in a manner that hurt depositors’ interest. And, since technology changes are complex and outsourced, the process of incorporating even small, but necessary changes, is both cumbersome and expensive.
Online thieves love your social media page
According to an article published by ConsumerAffairs.com, online thieves love your social media page because of the personal info shared on such sites. “There are people who sit around all day, every day, trying to put together the small pieces of information that float around cyberspace. In fact, people use social media so much these days, they sometimes forget how much of their personal info is really out there,” the article says.
In a study conducted by Javelin Strategy & Research, it was found that 68% of people who use social media gave their birthdate and 63% posted where they went to high school. In addition, the survey showed that 18% of users listed their phone number on their social media page and 12% told followers the names of their pets.
“And because of this, all a shady person has to do is connect each dot, and presto, he has enough information to carry out his evil deed,” ConsumerAffairs.com said.
How to protect yourself from online exposures?
1. Keep changing your password often. Make it a combination of special characters, letters in upper and lower case and include digits. Choose a password that doesn’t contain a readable word. Mix upper- and lower–case letters. Use a number or symbol in the middle of the word, not at the end. On a safer side, make the password bigger than 13 letters. (read Crack-proof Passwords )
2. Do not use the available set of questions for guessing a password on any site. Always create your own question and do not share the answer with anyone.
3. Do not share your credit/debit card number, PIN and CVV code with anyone, including somebody from the issuing company, like the telecaller from your bank. A strict NO to share this info on social media sites.
4. Try not to share your location details on social networking sites.
5. Especially for Facebook, allow only selected ‘friends’ that you know personally to see your personal details. Go to Home-Setting-Privacy and change the settings accordingly.
6. Do not post too much information on social media pages.
7. Do not reveal more information through photos like your location and family and friends etc.
8. Disable location sharing in your smartphone. For Android-based devices go to Settings-Location & Security-My Location- then disable it.
9. Try not to use a public computer, especially one which runs a Windows operating system. The memory management feature in Windows OS retains any data that you input in the normal course of operation.