The golden children of the Indian diaspora...

The Oscars celebrated not one but two dead Indian actors last week. Sridevi the quintessential Indian beauty died tragically just a few days before the awards.

Suddenly, it wasn’t just my Indian girlfriends sobbing shocked on WhatsApp - the whole world participated in our grief. Note to readers - don’t ingest large amounts of drugs and alcohol and then get in a hot bath!

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Twenty-five years ago, as a teen in California, my peers hadn’t even heard of Bollywood. Indian immigrants have come far in the last few decades.

Indians are the model minority, super successful in a variety of fields. So what do all these successful Indians have in common? They have landed in the UK, the US, and Canada.

Some are from the north, some from the South, some from wealthy families, most are not. Many are in technology but also medicine, law, and the arts. As well as Hollywood and comedy. Some have elite educations, others have brought themselves up from nothing.

Successful Indians are such an eclectic bunch - what is their secret? Duh! They all have Indian mothers.

Indian mothers those formidable creatures who expect their children to do well despite circumstances.

Other than investing in their children (great returns as demonstrated above) Indian mothers have also been huge advocates of investing in gold. For thousands of generations, without access to the markets or education, Indian mothers insisted on building up as much physical gold as possible.

In year's past, they may have been visited the family jewelers on important birthdays and festivals. In the present day they might buy a gold coin off the internet to mark milestones and anniversaries.

Gold doesn’t generate cash flows which means many investors including Warren Buffett think of it as a poor investment. You hold gold for it’s inherent value and scarcity as a hedge against downturns. Gold prices have underperformed compared to other investments, but it retains its value, especially in the face of hard times. A virtual share certificate in Goldman Sachs may not.

Instead of holding physical gold, some investors choose to invest in the proxy of a basket of gold mining companies. Unfortunately, mining companies and the extractive industry as a whole have terrible problems remaining competitive. Daniel Gladiš an investor I only recently met and started to follow has described this situation so well here, I can’t do better.

Physical Gold ETFs have emerged as another way investors try to hold gold, without actually holding the real gold. In a time of financial meltdown though, these ETFs might not be able to cope with people actually demanding the physical gold. An article here describes why -- his arguments seem reasonable, but I don’t know the author.

Entire countries used to be on the gold standard as a way of assuring governments didn’t just print money. There are some people who think it's reasonable for us to return to something like that. A commodities trader in London, John Butler, who I know, has written a book on how this might happen.

So have I convinced you to hold gold? Indian mother’s everywhere will be proud of you. If you do, You should really use a bank’s safety deposit box to store your gold, as policemen in London and New Jersey know, Indian households are targets of gold burglars, especially around Diwali time.

Happy Mother’s Day to all the UK based mothers (Indian and otherwise)!

Thanks,

Mallika