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By:

Kaustubh Kale

10 September 2024 at 11:37:15 pm

Modak and the Art of Investing

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar....

Modak and the Art of Investing

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar. Choose the Right Ingredients A Modak is only as good as the ingredients that go into it. Fresh coconut, good-quality jaggery, properly prepared rice flour and the right flavours all contribute to the final result. Our investments and financial products are the ingredients of our financial plan. Equities, mutual funds, fixed income, gold and other investments each have a specific role to play. The objective is not to pick whatever appears most exciting at the moment, but to select suitable, good-quality investments that match our financial goals, time horizon and ability to take risks. Health and life insurance are equally important ingredients. Adequate coverage helps protect savings, the family, and their financial goals and dreams. Good ingredients provide the foundation. But ingredients alone are not enough. Get the Recipe Right You may have the finest ingredients in the kitchen, but if the proportions are wrong, the Modak may still not turn out well. The same applies to investing. Asset allocation is the recipe of a financial plan. Too much of one ingredient can spoil a Modak. Similarly, excessive concentration in one asset or too much money in low-return products can spoil a portfolio. Balance is key. A thoughtfully constructed portfolio brings different investments together in the right proportions. To keep asset allocation very simple - short-term goals can be planned through bank fixed deposits, recurring deposits and debt mutual funds. For long-term goals, one can consider hybrid mutual funds, equity mutual funds or direct stocks. Trust the Process Once the Modak is shaped and placed for steaming, constantly checking whether it is ready will not make it cook faster. Investors often make the same mistake. We keep checking markets, reacting to every correction, chasing recent performers or changing strategies because of short-term noise. Good investing requires patience and discipline. Invest regularly, review periodically and allow your financial plan enough time to work. Compounding is powerful precisely because it rewards those who remain invested for long periods. Sometimes, the best thing an investor can do is simply avoid unnecessary interference. Enjoy What You Have Created Finally comes the most important part - eating the Modak! The purpose of investing is not merely to accumulate the largest possible number on a statement. Wealth should eventually help us fulfil our goals, support our families, create financial security and enjoy life with greater peace of mind. A good Modak needs the right ingredients, the right recipe and trust in the process. A good investment journey needs exactly the same. This Ganesh Utsav, may Bappa bless us with the wisdom to make good financial choices, the patience to stay disciplined, and the prosperity to enjoy the fruits of our efforts. Ganpati Bappa Morya! (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

A Ceasefire in Name Only

Apr 13
4 min read

A fragile pause between Iran, Israel and America exposes the widening gap between diplomatic signalling and military reality.

By definition, a ceasefire is a temporary suspension of hostilities. In practice, it is often something murkier: a tactical pause, a diplomatic fig leaf or worse, a convenient illusion. The ceasefire announced on April 7 between Iran, Israel and the United States appears to belong firmly in this latter category. Less a bridge to peace than a pause pregnant with contradiction, it has already begun to unravel under the weight of competing claims, regional entanglements and strategic mistrust.


The timing itself was telling. The ceasefire came just before a deadline set by Washington for Tehran to reopen the Strait of Hormuz, the chokepoint through which a fifth of the world’s oil passes. Faced with the prospect of economic shockwaves and military escalation, all sides opted for a temporary de-escalation. Yet even as Washington and Tehran paused their attacks and declared victory, the fine print - or lack of it - quickly surfaced.


Israeli Prime Minister Benjamin Netanyahu asserted that the ceasefire did not apply to its ongoing operations in Lebanon against Hezbollah. Iran insisted that Lebanon was very much within the ambit of the agreement. This divergence struck at the heart of the ceasefire’s credibility. When Israel continued its strikes in Lebanon, Tehran responded by once again closing the Strait of Hormuz, effectively undermining the very premise of de-escalation.


The result is a ‘ceasefire’ in which each party appears to be observing a different set of rules.


The diplomatic effort that followed did little to clarify matters. Talks in Islamabad, brokered improbably by Pakistan, brought together delegations led by America’s vice-president, JD Vance and Iranian officials. If the ceasefire was fragile, the negotiations were stillborn. They collapsed almost as soon as they began, undone by familiar disagreements and a conspicuous lack of trust.


At the centre of the impasse lies a 10-point Iranian proposal, the details of which remain contested. Washington and Tehran have offered differing interpretations of what was agreed, if anything was agreed at all. One sticking point has been whether the ceasefire extends to Israel’s campaign in Lebanon. Another was that Iran demanded the release of its blocked financial assets and a halt to Israeli operations before substantive talks can proceed. Neither demand has been met.


Iranian officials, including parliamentary speaker Mohammad Bagher Ghalibaf, warned early on that continued Israeli strikes in Lebanon could derail negotiations. That warning has proved prescient. By the time the delegations convened in Islamabad on April 11, the ground beneath them had already shifted. The talks ended without agreement, each side blaming the other.


Performative Diplomacy

Vance pointed to Iran’s refusal to accept what he described as reasonable terms, particularly a clear commitment to forgo nuclear weapons. Tehran, for its part, accused Washington of making “excessive demands and unlawful requests.” Israel, meanwhile, continued its military operations unabated, contributing to an atmosphere in which diplomacy seemed almost performative.


The broader picture is one of a conflict that has become both intractable and self-defeating. Strikes across Iran, Lebanon and parts of the Gulf have heightened the risk to critical infrastructure. Shipping through the Strait of Hormuz has been repeatedly disrupted, sending jitters through global energy markets. Gulf states, anxious about their own vulnerability, are demanding stronger guarantees for the security of their oil and gas facilities and shipping routes. Energy-importing countries, from Asia to Europe, are pressing for the restoration of free navigation.


Analysts have rightly described it as a welcome, if limited, step back from the brink. Yet it is also clear that none of the parties is winning. The costs are mounting faster than any plausible gains.


This asymmetry between costs and benefits should, in theory, create incentives for compromise. In practice, it has not. For Israel and the United States, any durable arrangement would require credible assurances that Iran will not pursue nuclear weapons and will restrain its regional proxies. For Iran, it would require guarantees against renewed strikes, relief from crippling sanctions, and recognition of its strategic interests.


Bridging these gaps will demand a degree of pragmatism that has so far been conspicuously absent. Israel and America would need to offer Iran credible security assurances and adhere strictly to agreed terms including those relating to Lebanon. Iran, in turn, would need to accept verifiable limits on its nuclear programme and refrain from using the Strait of Hormuz as a lever of coercion.


Equally important is the tone of engagement. The continued build-up of American forces in the region, coupled with bellicose rhetoric about “bombing Iran into the Stone Age” does little to foster trust. Such language may play well domestically, but it complicates diplomacy and hardens positions in Tehran. Conversely, Iran’s periodic closure of the Strait serves as a reminder of the leverage it wields and the risks it is willing to run.


Regional Dimension

The regional dimension adds another layer of complexity. Gulf states are not passive observers; they are stakeholders with acute vulnerabilities. Any miscalculation could trigger a broader conflagration. The margin for error is perilously thin.


As the American journalist Dorothy Thompson once observed, peace is not the absence of conflict but the presence of creative alternatives to it. For Iran, Israel and the United States, those alternatives remain elusive. Until they are found, ceasefires such as this one will continue to be what they so often are - pauses in a war that has not yet decided its purpose, let alone its end.


(The writer is a retired naval aviation officer and a defence and geopolitical analyst. Views personal.)  


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