Monday, September 26, 2016

Portrait of a sick world

An article in today's Mint shows how far the world has moved away from sanity (link at the end). The first few paragraphs are reproduced below:

Is the colleague who sits next to you blowing his nose into a handkerchief, complaining about a "mild fever"  that has been lingering for more than a week? Chances are that he has flu. He should be consulting a doctor, and if the doctor so recommends, should take a couple of days off to recuperate.

"It may sound alarmist but the truth is that if your colleague is suffering from an infectious disease like flu or common cold, and it is only getting worse with time (lack of attention to the problem, severity of the disease, or a weak immune system), you are 30-35% more likely to catch their infection owing to proximity, since flu is highly contagious," says Anu Gupta, associate consultant (microbiology) at the Fortis Escorts Heart Institute and Research Centre in New Delhi.

"The modern open workplace only increases this risk," says Monica Mahajan, senior consultant (internal medicine), at the Max Super Speciality Hospital in the Capital. "The centrally air-conditioned halls increase the risk of people going down with air-borne infections. The same air gets circulated for hours on end, making the environment more contaminated with viruses and bacteria," says Dr Mahajan

Sounds Normal doesn't it? There lies the problem.

Time was when people used to roam around in the world where all kinds of 'viruses and bacteria' were floating around, and their immune systems used to take care of them. All organisms in the world evolve their immune systems in response to the environment around them, and over a period of time, they develop the ability to survive in the environments into which they are put. The human organism is no different. It is a masterpiece of design, and it is designed to survive under diverse conditions, in different types of environments, battling all kinds of 'viruses and bacteria' which are actually a part of the environment, not some alien creatures.

For doing that of course, the immune system must be strong. 

Look at what is happening today. "colleague suffering from an infectious disease like cold or common flu... highly contagious... air-conditioned environment which circulates the same air... air is contaminated with viruses and bacteria".... This would be hilarious except that it is a sad commentary on the state of the modern sedentary office worker today.

Since when are viruses and bacteria "contaminants"? They have always existed and will continue to exist. This is like the fish complaining that the water in the fish tank is full of H2O. The fish evolved with the ability to survive in its environment, it developed an immune system for it. The problem is that now that immune system is severely weakened due to the lifestyle we lead, due to the choices we make in our diet ( for lack of a better all-encompassing term, the 'modern urban western' diet), occupations (where the body sleeps and the mind races when it should be the other way round), exercise (or lack of it - the occasional marathon to show that you are part of the corporate wellness initiative only makes things worse), and our lifestyles in general.

We have moved away from the way we are supposed to be, from the optimum way the human animal is supposed to function. And the result is we read things like 'viruses and bacteria are contaminants... dangerous.. highly infectious.. stay away' etc. - for God's sake we are talking of the common flu! 

It is a disturbing portrait of a sick world.

(the link:

Friday, September 9, 2016

Statins are completely worthless... and On the Way to Wellness

An article which talks about how this whole cholesterol lowering drug business is a scam: The link:

"Statins are totally worthless" - this is not surprising, have known this all along - in fact have several earlier posts where I have mentioned this.

What is sad is that it needs another 'scientific' study to disprove all the studies that have shown statins to be good - this whole 'scientific' study business is a waste of time when it comes to health. You can be sure there will be a few more studies that prove these wrong, or tout some other bunch of medicines as the new panacea.

Other things that are worthless: going for a preventive medical checkup, aggressively treating various incipient 'diseases' based on these 'tests', taking antibiotics indiscriminately, or in general pill-popping...

I had a stye in the eye (actually what is termed as a 'chalazion') recently, and two doctors ( I went to one more since I didn't trust the diagnosis of the first) prescribed me antibiotics. A little reading convinced me that chalazions don't require any treatment, and I did not take the medicines. I got ok in two days - with the antibiotics, I would have taken another week to recover from the effect of the medicine! My point is not that antibiotics are never required, but that prescribing medicines indiscriminately has become the norm nowadays.

Modern western medicine proved effective in countering infectious diseases which were rampant at the turn of the last century. The 'germ theory' has its uses, but extending it to our entire lives is a problem. Germs exist everywhere, they are both good and bad. The only way to ensure the bad ones don't get you is to maintain your immunity at a high level through a proper lifestyle. Unfortunately for the pharma companies this does not involve any medicines.

Most illnesses we have nowadays are lifestyle related - diabetes, blood pressure, IBS, ulcers, kidney problems, backaches, mental sluggishness (yes, that is a disease though it is so common that it is accepted as normal), ... the list can go on. The pharma industry convinces us that aggressive intervention is necessary with medicines like 'cholesterol' lowering drugs, statins, sedatives, anti-depressants, pain-killers, aniti-inflammatory drugs, antibiotics, and the like. These things don't really help, and in most cases they cause more harm than good. What they do which is good for the companies is to have enough side effects which manifest as a continuous list of other diseases all the time, which keep the companies perpetually in business.

What we are asked to do as a consequence of the 'germ theory' is fundamentally flawed. Instead of being told to maintain our bodies in an optimum state of immunity, the 'modern' approach is to kill all germs. Take Hand Sanitisers for example. It will just kill all the good germs along with the bad germs, in effect making your hand dead. Environments are completely sanitised, children are kept away from 'unhygienic' environs, etc. - as a result the body loses the ability to adapt to the environment. Children playing in the mud is essential to a healthy growth, but nowadays there is no mud (it is all concrete), and where there is mud, you can be sure there are no children!

The other major flaw with 'modern' medical science is its reductionist approach - treating each condition as if it is a lab experiment in physics, and countering 'what is wrong' with the opposite, in the process ignoring the entire body-mind system and its interconnectedness. The term 'holistic' is much abused nowadays - I have seen ads from major hospitals offering 'holistic diabetes treatments' - today's doctors don't even understand what holistic means.

There are a thousand and one ways in which things can go wrong, and a thousand and one ailments that you can get. Our approach is to develop a thousand and one therapies to counter each of these ailments, with substances which are poisonous to the body, thus entering into a vicious cycle of ailments. We also in the process forget what good health means.

Health is not mere absence of disease. Health is complete and total well-being, a positive vibrancy, a joyous state where you feel light in mind and in body. It is not growing old at all ( in the conventional sense) but having a body (and mind) that acts as an instrument for joyful, fulfilled living.

There is only one way to achieve that health (as opposed to a thousand and one ways in which you can fight ailments), which makes things easy. Focus on this one way, the way of right living, of a proper lifestyle, of maintaining and enhancing your body, mind and spirit (for all three are interconnected). Focus only on rules that will keep you healthy and enhance that well-being of yours. In fact this sloka from the Gita, though Arjuna said it in a different context, fits perfectly here:

  • In the debate about the path of knowledge and the path of action, and which of them is superior, (very similar to the various debates we have on health and disease), Arjuna asks: "With this apparently perplexing speech, thou confusest my understanding; therefore tell me that one way for certain by which I may attain bliss" (chapter 3, verse 2) - the implication being, that the ways of confusion are many, but the one true path is just that - One.

And that One Way of achieving health is to follow the prescriptions of the Gita, Yoga, Ayurveda, Naturopathy, Unani, traditional wisdom of all societies (not just Indian, not by a long shot) - it is to tap into the ancient knowledge that is a collective heritage of mankind, to follow a lifestyle that will not only keep us free from disease (which is a very limited objective), but which will help us achieve our full potential.

Sunday, September 4, 2016

Sovereign Gold Bonds

The fourth tranche of Sovereign Gold Bonds (SGB's) are open for subscription right now, from Sept. 1st to Sept. 9th, 2016. They are bonds:

  • with the sovereign guarantee of the Indian Government,
  • linked to the price of gold,
  • available in 1 gram multiples,
  • carrying an interest rate of 2.75 percent per annum, payable half-yearly,
  • with an eight-year tenor,
  • to be redeemed at the end of eight years, with an option to redeem prematurely at the end of 5th, 6th or 7th years

Each individual can subscribe upto 500 gm. In case of joint holdings, the first holder shall be considered for this limit 


Liquidity (apart from redemption on fixed dates) will be through listing in the secondary market


The tax treatment is as follows:

  • Any gains (or losses) on sale of these bonds shall be treated as Capital Gains, with the normal provisions applicable for most capital assets, i.e.
    • long term means greater than three years,
    • long term gains will be taxed as per the following formula: tax payable will be 20% of the sale price less indexed purchase price.
    • Short term gains (if held for less than three years) will be taxed at the normal rates on your marginal slab rate, meaning the gain will be added to your normal income for all practical purposes for the purpose of tax


  • For the fourth tranche (the current one), the government has notified that any individual "redeeming" the bonds (i.e. not selling in the secondary market), will be exempt from capital gains tax (CGT). What this means is that if you subscribe to the bonds now, and hold till maturity, or redeem them prematurely through the normal window, there will be no CGT.

If you sell the bonds somewhere along the way in the secondary market without waiting for redemption, then the usual capital gains rules explained in the previous bullet-point will apply.

My reading is that it also means that if you buy these same bonds later in the secondary market, and then "redeem" them, no tax should be applicable, though I have not seen any specific clarification anywhere on this.


  • The interest of 2.75 percent per annum will be taxed as any normal income - i.e. at your applicable slab rates


  • There will be no TDS deducted either on the interest or on redemption.





This question is better answered keeping in view broader asset allocation objectives. Your money can broadly be invested in four different asset classes: Debt, Equity, Gold (includes Siver) and Real Estate. Contrary to what some banks who are into "fee-based income" might claim, I don't think commodities, derivatives, or forex trading are asset classes.


Within that broad portfolio it is generally recommended that you hold 10 to 15 percent in Gold. However, I know people who would want zero gold in their portfolio, and some who would want more than fifteen percent.

The characteristics of Gold are:

·      It is a conservative asset. In the long run, it is likely to give returns averaging to a little above inflation

·      It automatically protects you from Indian Rupee depreciation against the dollar, since gold prices which are denominated in dollars, are uniform worldwide

Gold can be bought as:

·      Ornaments: Ornaments are not an "investment", so we shall not discuss that further

·      Physical Gold:

o   Is the best form of investment in gold.

o   Only buy 24 carat gold biscuits, and buy from the wholesale markets (like Zaveri Bazar in Mumbai). Never buy from a bank, that is the stupidest thing you can do, since you will end up paying high margins on what is essentially a commodity purchase.

o   I am assuming that physical gold purchases and sales will be in cash, so taxes, both direct and indirect, don't apply – I am not talking law here.

o   Physical Gold has no 'management fees' like in ETF's, or counterparty risk

o   If you are investing in gold as the 'ultimate fallback asset' in case of any major calamity or war, etc., physical gold kept in your possession is the best

·      Electronic Gold:

o   This includes ETF"s and SGB's.

o   ETF's carry a counterparty risk. They don't necessarily have all that gold kept in their vaults. Some of it may be merely "gold-backed securities" and some of the gold may be lent out in the market. Further, in case of a national emergency, the government can easily lay its hands on that gold.

o   ETF's charge 'management fees' averaging to one percent per annum, which is a continuous drain on your return.

o   Capital gains on ETF's are taxable.

o   SGB's carry a sovereign guarantee – for an Indian citizen this equates to zero risk. Also, they pay interest. Further, with respect to the fourth tranche, Capital Gains Tax is exempt under the conditions already explained above.

o   Therefore, SGBs are definitely superior to ETF's, except for the fact that ETF's have more liquidity. Though the SGB's are listed they may not be as easily tradable, since the market is likely to be shallow


Recommendation: SGB's are a good product (especially fourth tranche) to consider including in your portfolio.