Only Money

Recently we visited Chokhi Dani at Kalyan-Bhiwandi Road near Mumbai. I thought of getting a sketch of mine with a theme on Money. Here is how it looks. I don't think that I would ever like to be a Happy Men with only Money but respecting what the artist drew for me.

Regards, Rohit

Sanjay Bakshi on Piramal Healthcare

Here is an excellent article by Sanjay Bakshi on Ajay Piramal and value bargain he sees in Piramal Health Care Ltd.
 
Regards, Rohit

Disclosure. We may buy Piramal Health Care Stock. 

Opportunities

I am back after a while. Seems like had gone into a writer's block :) Actually I also got very busy with few certifications that I took up at my workplace.

Stock Indexes are going strong from last few sessions. And couple of recent IPOs have done well too. I chose to stay out of them mainly because of small sizes. I also sense lot of price manipulations in some of the IPOs currently doing 'well'. On Directly Equity, I have seen couple of opportunities but let most of them go. I did buy 3i Infotech and HEG but not much. I would have liked to buy Yes Bank, JBF Industires, LIC Housing, Shriram Finance and few more on my radar.

On the other hand, I see some of my investment not making any movement. So logically, I should shift them to Stocks that are likely to grow faster.

However, I am holding back since I plan massive cash outflows starting end of this year or early next year. Investing in Equity for such a short time frame is certainly not advisable.

Paid my taxes for all Capital gains and included an E&OE margin of 10% on a safer side. It would have been a smart move to book losses on some of the trades I am holding in losses. I missed it but never-mind.

I bought below books recently

1. Make More Money - Secrets from the Worlds Greatest Finance Classics
2. The Fresh Brew - Chronicles of Business & Freedom.

Regards, Rohit

Investing Thumb Rules

The Economic Times - Wealth (Feb 14th Edition) has published a good collection of Thumb Rules for Investing.

• Rule of 72 - Double your Money. Dividing 72 by the compounded interest rate tells you how much time your money will take to double. For e.g. if your investment is earning 9%, then money will double in 72/9 = 8 years.
• Rule of 114 - Triple your Money. Dividing 114 by the compounded interest rate tells you how much time your money will take to triple.
• Rule of 144 - Quadruple your Money. Dividing 144 by compounded interest rate tells you how much time your money will take to quadruple.
• Rule of 70. Dividing 70 by the current rate of inflation tells you how fast the value of investment gets reduced to half its present value. As an example, inflation of 7% will reduce value of investment to half in 10 years (70/7). However, the assumption here is that inflation rate remains constant.
• 100 Minus your age Rule. Subtract your age from 100 to find how much percentage should be invested in equities. So if you are 30 years old, invest 70% (100-30) in equity.
• The 10, 5, 3 Rule. You can expect 10% from Equities, 5% from Bond and 3% from liquid / cash like accounts
• Emergency Fund Rule. Always keep aside 3-6 months worth of expenses in a liquid saving account for emergency purpose
• 4% Withdrawal Rule. Financial Planners typically suggest using 4% as a thumb rule to withdraw during retirement.
• Pay yourself First. Experts suggest that 10% of your income should go in for retirement corpus. The rule ensures that as you earn more, you save more for your retirement.
• Are you wealthy? Thomas Stanley & William Danko gave a thumb rule formula in 'The Millionaire Next Door' a book that studies selfmade American Millionaires. You are wealthy if your Net worth as on today equals (Age *Pre-Tax Income)/10. In the Indian context, the financial experts argue changing the denominator value. Instead of keeping at constant 10, it should be a sliding scale linked to age. Article says experts argue applying a denominator of 25 for a 20 year old and denominator of 20 for a 40 year old

Regards, Rohit

Credit & Reference: The entire post above is based on the article published in The Economic Times - Wealth, Feb 14th edition.

Group Buying

This week's Wealth (The Economic Times) has an article on Group Buying.
Below sites seem to be helping good discounts on group buying. I took a quick look and its impressive.

www.mydala.com
www.snapdeal.com
www.taggle.com
www.koovs.com
www.dealsandyou.com
www.buytheprice.com

Regards, Rohit

Reading : Pathbreakers

Read 6 out of 26 Top Achievers profiled in the 1st Series of Pathbreakers by Money Life. I read about RC Sinha, Aditya Puri, Mukesh Ambani, Ram Shriram, Satish Magar, Hafeez Contractor & Jagdish Seth.Each profile is an interesting read of good 6 pages. Lots of fascinating things about these achievers.

In each of the profile, there is something that caught my attention. Either the punch line of the article presented or something that these achievers said. Let me try & give a quick summary for each of them:

Aditya Puri. Has a nice write up about his Citi Career & how he joined Deepak Parekh to setup the HDFC Bank. One interesting comment 'When you are building the business, you cannot let anybody know that you are not so confident. It is a lonely situation'.

RC Sinha. A rare bureaucrate who has shown what a determined Government servant can do. Notably his achievement of building Mumbai Pune Expressway in record time @ half the cost of private  sector companies and how we handled situations are like feminine when he was the collector in Aurangabad.

Ram Shriram is the 2nd Investor who gave the cheque to Google. He is still a Director at Google & very much involved with its growth. One interesting statement " Humility is another trait that I look for. You listen a lot better if you are humble. And if you are a good listner, you absorb ideas from others"

Hafeez Contractor narrates his story as to how he struggled and reached where he is today. When he was in college, he would tell his friends that one day my office will be running in three shifts. Those days Everybody used to laugh. Hafeez Contractor managed to study in Architecture despite his poor performance till 10th. What followed of course is the history.

Prof. Jagdish Seth known internationally for his work on consumer behavior, relationship marketing, competitive strategy & geo political analysis. He makes an interesting statement when asked about not doing CA. "I found out that to be a CA you have to work for a firm for three yeras - without any money ! For a Gujarati bania, working for someone else itself was a shame. Working for no money was a double shame"

Mukesh Ambani talks well about opportunities lying ahead for Reliance. His observations on arbitrage opportunity in Agriculture are remarkable.

Satish Magar stands out with his philosophy on inclusive growth. Wonderful to learn how he went about setting up the Maragpatta Township and ensured that farmers also benefitted along with him.


It will take lot of time to read the rest & also the 2nd book in the series. But certainly looks worth.

However, I am not impressed with Money Life Magazine. I did not get a chance so far to  read these in detail. But layout, topics chosen for the issue did not impress me at first. Let's see.

Economic Times has started a weekly edition of 'Wealth' focusing on personal finance. For a Monday Morning read, I find the contents too much & too serious. I don't get their focus & just seems fat sheet of printed papers to me. I would have liked a thin size edition with a sharp focused articles on Personal Finance and with some lighter mood & brighter colors on every page.

Regards, Rohit

Portfolio Updates

The Direct Equity portfolio at the overall level too now keeps switching back in to Red & Green every other day. The mutual fund investments of course still continue with 40% Gain. There are number of shares available at very tempting valuations though there is a general feeling that 2011 is going to be dull. Given that I have a large investment plan at end of 2011 or early 2012, I am not inclined to add any substantial exposure to direct equity though I will continue with my monthly SIP for Mutual Fund and little bit every month for Direct Equity.

Tata Steel is now down to 595. Not saying that I am happy to have skipped FPO at 610. Would have loved to buy Tata Steel right now but my sense is that valuations would go down still further.

IPO Investments on Punjab & Sindh Bank, Shipping Corp, Power Grid & MOIL are still on. Power Grid and MOIL show a little bit of profit still. P&S Bank & Shipping Corp are in Red. Did not get a chance this time to stick to my principle of selling on listing. I was 'Waiting for the better price' and I keep waiting now :(

Which are the stocks I see at good valuations right now? Well, I don't have access to any good stock filters. Google Finance is my best bet right now. What stocks I have right now, I see below at good levels purely from a valuation perspective. Current PE is given in the bracket.

Aditya Birla Chemicals (4.15)
3I Infotech (3.53)
Micro Tech India Ltd. (2.15)

Some day I would like to build a site that will provide very strong stock filters. It should be able to give lot of freedom to build filters, present various cuts, compare individual & at industry levels. As the Google founders say, a good search engine should be quick able to understand what the user is looking for and provide the same.


Regards, Rohit

Furniture Making Experience

I would like to narrate my experience on making of furniture for my house. We stay at Rustomjee OZone in Goregaon West, Mumbai. You can visit our house at Builder's website here.

Nothing much about the Finance of Furniture. We pretty must paid decent money, at market rates. What helped is the approach we followed. We made a minute design for both the Ward Robes and the Kitchen. While it took really long time, the rule of 'if you spend 90% Time in Planning, it takes only 10% Time to execute', worked well for us.

Furniture was designed & made by Sajid Patel (098212 16900) from Kitchen Palace, Goregaon, Mumbai . We worked along with him and gave inputs, including this excel sheet, in most possible details.

Let me first post few photos of the view from our Bed Room.

Here is the design we followed for this Wardrobe in our Bed Room. Pictures of the Wardrobe are also added below.

And here is the kitchen ! Sorry, the soft copy of the Kitchen Design is not available with us. Sajid designed this in his software.





Regards, Rohit

Financial Independence

This is a very big subject. But here are My quick thoughts:

• To me, Financial Independence is the state when one is consistently able to save 20 to 25% of his income.  
• 'Rich Dad Poor Dad' & 'The Richest Man in the Babylon' point one of the key factor as the ability to first pay yourself (save)
• Being financially independent is just not 'earn more, spend less & save more'
• Idea is to think through what one is earning and spending, forecast for next 2-3 years, decide on financial goals, identify the asset allocation and work on the gaps
• I find the spend control part to be very difficult, in this 'Consumerism' era. One approach that has worked for me is that I have frozen the spend amount on say electronic gadget and we typically plan our spends far in advance.
• One must keep asking 'Whats the best use of my Money'. Remember, once we earn money, the earned money should earn more money for us. 
• I have been tracking my Networth for last 5 years. Being conscious of my Assets & Liabilities has been very helpful, the same way the goal of 'Rs.100 Crores by 2035' keeps me driving.

Received Pathbreakers Series from Money Life. Looks interesting. Lets see when can I catch up with this.


Regards, Rohit

Reading

I have recently subscribed to electronic edition of Outlook Profit while the physical mode subscription is already running. At Rs.300 for a year, e copy is very reasonably priced. I have recently also subscribed to Money Life by Sucheta Dalal. I did not get a chance to read it as yet though.

Moneycontrol has an article on how to pick stocks the warren buffet way.

Over the weekend, bought below books.

1. When the Penny Drops by R Gopalakrishnan
2. Ten Much by A G Krishnamurthy
3. How Starbucks Saved My life by Michael Gill

Regards, Rohit

Judging the IPO Investments

Tata Steel FPO Subscription has left some gain opportunity for those who invested. Looking at small premium and possibility of high over subscription, I decided to skip. However, the Retail category subscription of 1.6 Times and overall subscription of about 6 times means that if we had applied in full, meaning from all our 4 Accounts, we would get about 800 Shares. Looking at about Rs. 30 premium, there should be a Gross Profit of about Rs.24K and Net profit of about Rs.18K after considering cost of funds (7.75% in my case) and income tax. 3 of our accounts have ASBA so funds would earn 3.5% till the actual amount is debited from the bank. ASBA is helping. I am not looking at investing in Omkar Specility. The valuations @ 20 times look bit stretched. At this point in time, I would stay away from small size IPOs. I am not regretting my decision to skip Tata Steel FPO.

For me, IPO Investment is turning out to be judging the current state of market, looking at valuation & gray market premium, size of IPO, Investor enthusiasm and then deciding if the investment would be profitable.

Our Current Account for Loan Against Shares with ICICI Bank is ready with long term shares pledged. @ 13.5% its bit costly, but If we were to be needing more money for IPO investments, this would come handy, especially when two good IPOs come together. However, I don't see this happening for sometime in next few months given the state of stock market.

Regards, Rohit

Financial Planner

I have enrolled for Certified Financial Planner certification, in line with my objective for 2011. Just the first step...long journey ahead !

Regards, Rohit

So what next

Stock Markets continue to crash :)

Tata Steel FPO is starting on Jan 19 @ Rs.594-610. The share last traded @ Rs. 622. Its not clear as yet, if there would be 5% Retail Discount. Even assuming that, the Issue does not look attractive. Street view is that in the Secondary Market, Tata Steel will be available at around 580. I am not excited to apply for FPO but if it does come to 580 or so, I would like to buy. Valuations are less than PE of 8. I however don't understand Steel Business. All commodity businesses follow a cycle.

We bought few Yes Bank, LIC Housing about a week before. I have been sitting quiet so far. Let's see. Intention is not to deploy any additional funds in Stock Market.

My friend Bhuvan Singhi has started a blog with his analytical thoughts on the current state of affairs. You can visit his blog on the below address. Happy Reading.

http://bhuvanoninvestments.blogspot.com/


Regards, Rohit

Understanding a Stock

The Sage of Omaha says that when you buy a stock, you are actually buying the business.

I am wondering how long one takes to understand a Company's business. Fundamentally, Stock Market values a Stock based on its current & future earning power. Yes, there can be other parameters that help valuation but from a very very fundamental & conceptual perspective, I believe, its the earning power.

What impacts the earning ? Well, Its Pricing Powers, Competitive Edge, Product Leadership, Economic Cycle, Regulatory Forces, Quality Of Management & so on.

Understanding a Company Business needs substantial efforts. Tracking the Quarterly Performance, Reading Balance Sheets, Management Interviews, Brokerage Reports & Market Views..

When Central Banks tighten liquidity, this means pressure of a Bank's margin since Banks now need to keep more money with Central Bank with lower yields.Similarly, Rising Crude has a cascading impact in the Economy and impacts the earnings. Decreasing or Increasing import tariffs have again substantial impact. So when one understands the underlying business, its easy to analyze the developments and identify impacts on the stocks.

We are not saying that we need to watch like a hawk quarter on quarter. After all, the Equity investments are for long term. Yes. But the deeper understanding of the business and earning helps one to maintain an outlook & take a position in line with goals. This is one reason, I strongly discourage most of the individuals I meet, from trading directly in equities & instead focus on Regular Investments through Mutual Funds.

Time, as they say in the market is more important than timing the market.

Regards, Rohit

Banking Business

What fascinates me about Banking is the very much nature of the underlying money business which necessitates its forever existence. While the Software Companies did not exist 100 years before, the Pager Companies do not exist anymore. However, Banks existed 300 years before and will be there 300 years after as well.

So investing in Banking Business is a good idea. However, its also one of the most riskiest business. With Capital Adequacy @ 12%, Banks need a Capital of only Rs.12 for say giving loan of Rs.100, to take a very simplified example. This means, if this loan goes bad, the entire Capital & much more is wiped out.

I am watching 2011 for Banks. My interest in Banking Investments started with Yes Bank coming up with IPO @ Rs.45 in 2004. 2010 was supposed to be the Year that RBI was to open up the Banking Industry though its delayed. Now in Q1 or Q2 of 2011, we expect that RBI will release the final guidelines & give few licenses to new banks. This may result in some M&A in the Banking space. On the other hand, I expect Central Bank to continue the liquidity tightening measures, which means pressure on bank margins.

Regards, Rohit

Reading : Investing Stretegies

Oct 2010 Money Today has an interesting article on Joseph Piotroski's style of picking up stocks. It seems he became famous with his method of selecting unpopular stocks that have the potential to become winners.

Here is his methodology:

1. The stock must have a high book value to market value ratio
2. Return on Assets should be positive & increasing
3. Cash flow from operations should be positive & greater than net income
4. Long term debt to asset ratio should be decreasing
5. Current ration should be increasing
6. Number of outstanding shares should not be increasing
7. Gross Margin should be increasing
8. Asset Turnover ratio should be increasing

When this was applied in Indian scenario for last 2-3 years, it seems to have beaten the BSE Smallcap Index. The Money Today article mentions details and name of stocks that passed the above filter.
I just wanted to make a note of the concept.


Regards, Rohit

Making Money

The basic principle says that once we start earning money, our earned money should earn more money for us. We can get 8-9% pa Pre Tax from FD, 10-12% pa from MF for 5 years + investment horizon and 15-20% for Direct Equity again for 5 years + investment horizon. Real Estate is another good avenue and can fetch similar or higher returns.

Does anyone know of any better options to make greater returns without being full time engaged? I understand that more risks one takes, will mean more returns. We can't take risk with all of our money but with some, we can perhaps take.

One of my friend replied to this query with a comment that prices of Onions have gone up by 880% compared to 2 Digit return by all assets in 2010 :)

Regards, Rohit

Starting 2011

Last weekend, we visited a proposed construction site near Panvel. They have just done Bhoomi Pujan and the plans are getting a final sanction. The location is amidst good population but the area is not developed. With Airport coming near by, this is right to invest there. Once we have the final design, we will make a decision. We are likely to invest. One of the friend is also referring a Project in the outskirts of Pune. Let's see.

If I do go ahead, the surplus cash will be absorbed. We are close to opening the Loan Against Securities account with ICICI Bank so fund should not be a problem. However, with IPO Investment returns turning out so low, I am not sure if it would continue making sense.

Today, we exited from MRO Tek & Manugraph & bought more of IFCI, Aditya Birla Chemicals, Shriram Transport & entered in 3I Infotech. 

Happy New Years to All.

Regards, Rohit

Portfolio Review

Is PE & 52 Week L or H is the only measure? Of course not. Few things that I would like to check:

• Nature of business
• Growth in Sales, Profit & EPS in last 5 years
• Level of Long Term Debt
• ROCE
• Visibility in the earnings
• Publicly available Brokerage Reports
• Valuation

I reviewed all 23 Stocks in my portfolio & applied the above parameters. While Aditya Chemicals, HEG, Manappuram, Micro Tech & Yes Bank show a strong sign of growth over a period of years, IFCI, MM Forging, MRO Tek, Pudumjee Industries, Shipping Corp. & Manugraph Industries show negative growth. I have considered where 2 of 3 parameters show negative growth so ignored Reliance, Power Grid or Precision Pipes showing negative EPS growth, for example.

Aditya Birla Chemicals, HEG, JBF Industries & Micro Tech have reasonable or low valuations and also have shown strong growth over a period of years, In case of LIC Housing Finance, I suspect that EPS reported is for a face value of 10. Recently, there has been a split to face value 2, reflected in the CMP.

In case of Manappuram, while the historical growth in Earnings has been good, the stock seems at high valuation right now. Seems like recently they have diluted lot of equity base. The business is simple & management looks strong. We would buy more. MM Forging is a clear case of turnaround as we can see from the performance in last few quarters. While it does not match the criteria, I would hold for now. IFCI is just for speculation that they would eventually get a Banking license & someone would take them over. But would it not be wise to switch these funds to some high growth stock? I am wondering.

MRO Tek originally attracted me as they had cash balance of around Rs.40 per share. I need to check the latest status now. Looks like potentially due for sell off from my portfolio. Pudumjee investment was based on Outlook Profit story on concept stocks. Management looks strong and their household products of tissue paper seems will grow strong. I will hold on. But its very expensive. Also, they have increased debt...making me uncomfortable.

Shipping Corp, Punjab & Singh & Power Grid are IPO investments. Have not been able to get out of these.

Here is how our industry profile looks like. Yes, the Banking & Financial Services have of course got a very highly skewed balance. Its Yes Bank, LIC Housing Finance, Manappuram & Shriram Transport though over 37% is due to Yes Bank. At this stage, I am comfortable with this imbalance and have been increasing my non banking sector investments over a period of time, to get this under control.
My sense is that I need to focus more in reading, rather than buying more stocks. I am hoping that this vacation, I will complete Benjamin Graham's Intelligent Investor. I am on my annual vacation right now and went thru a medical treatment on my ears. So its like a compulsory rest :)

Regards, Rohit

Stocks Screnning

I have been jotting down stock ideas from various News Papers & Magazines. Some are currently available cheap, some are trading to their 52 week low. Some of them are familiar name so I am going to add 3i Infotech for now. It also shows attractive on PEG Ratio & has an "Affordable MRP" :)

File with complete list of 47 stocks is available here. I would like to take a deep look at few more stocks in this list and take an investment call. However, I am already invested full in Stocks right now and don't have a great appetite for investing substantially more. 3i Infotech, I have been eying for sometime.

During 2008 crash, it had gone down to Rs.25, I recollect. One reason I thought to avoid this was IT Software business. Already being long on Infosys & MindTree, I was not sure if I should add more. Over the period of time, I have allocated Infosys for a different purpose and are now out of my investment purview. MindTree I sold off few months before to garner capital for IPO.

Just reversing the logic i.e. Stocks close to their 52 Week high but low PE results in Shree Ganesh Jewellery, Ind Swift Laborataries etc. Will check these out later.

Punjab & Sindh IPO listing was disappointing today. We are hardly breaking even at the current price, including cost of funds. With enhanced limit for Retail subscription & experience like Coal India, my sense is, much money is on from Retail segment and 'making money' will continue to be difficult :)

Regards, Rohit

Book Reading

Read 'Ambani & Sons' by Hamish McDonald. Has a complete story of how Reliance empire has been built from scratch. A must read to understand how bureaucracy worked in the License Raj days & the ways people used to get around that.

Regards, Rohit

Financial Quotes

One of our Kind reader from Ahmedabad, Nikhil Shah, has shared a nice presentation of quotes from Financial Wizards.  Its available here. 

Regards, Rohit

My Investment Style

Over a period of years I have evolved as an Investor. There is a change, there is a learning and experience. So here is how I see it today:

Good Part of my style:

1. I can analyze Stock performance from basic parameters
2. I can do a good job judging IPO investment opportunity
3. I can spot good MF schemes & quality stocks
4. Have been conservative
5. Historically, made decent profits in IPO (But IPO Money is getting difficult now)
   
6. I can analyze my own personal finance well
7. Good reading on the subject. I spend reasonable time to keep myself updated.

Not so Good Part of my style:

1. Not reached a level of analyzing the opportunities for Stock Investments on my own. Still need professional analyst reports. This is a function of time that I can spend so hoping to make better use of my time going forward.
   
2. Have not been opportunistic in terms of getting maximum buck. Thinking is 'If I am going to sell LIC Housing Finance years later at 2000 or so, it does not make a difference if I buy at 980 or 1025. In reality, even this difference, matters
   
3. Have not been able to network much with others & hence not learning the smart way
4. Personal Finance focus is largely on Stocks & MF. Have not yet done a comprehensive insurance for house, as an example.
5. Have not understood Technical methods, chars etc. Have not learned / traded in derivatives. Don't even intend to Trade in derivatives but knowledge would be nice.
   

Regards, Rohit

My Investment Tools

So here is what helps me to manage my personal finance.

While Outlook Money, Profit & Money Today help me to keep updated and get lot of good tips, I have stopped reading Value Research Insights Magazine since last 15 months or so after having started focusing more on Direct Equity. While, I have not added here, the starting point was of course classical books like Rich Dad Poor Dad & One Up on the Wall Street.

Then there is a brokerage chart available here. A handy tool for calculating total price of shares. I use Money Control for updating portfolio. tracking stock news etc. What you see at bottom is IPO calculator, available here. This is very handy to estimate the trading profit potential in a public issue


Regards, Rohit

Saying Yes

Here is a link on Money Control. This has an interview by Subroto Bagchi with Rana Kapoor, who is Founder, Managing Director & CEO of Yes Bank.

Regards, Rohit

Asset Distribution

So here is our family investments distributed across the asset classes. I have excluded Real Estate in this consideration. As I have mentioned earlier, I would like to include Real Estate as an Asset only when we have our second home. Including the current home, we live in Mumbai, will distort the asset pie as 3/4 pie will be in real estate category.

The Debt asset class comes out largest, thanks to my Retierment savings. In the years to come, I need to channelize my savings in the Equity Asset class to improve overall returns. Looking at our Family profile, I would eventually like this distribution to be 35% Equity, 35% Real Estate & 15% each in Gold & Debt.

Gold & Cash are normally once category - Cash & Equivalent. I am tracking separately since home loan linked current account earns me a decent interest. Also, right now I am sitting on cash that I hope to deploy in next 6 months. Let's see.

Regards, Rohit

Yes, I am here

I have been very busy at work so did not get time to blog!

Retail Participation in recent IPOs continues to surprise me. Retail demand in Ravi Kumar is almost same as HNI + Corporate demand. In case of Shipping Corp., Retail demand is highest. One part of the change is due to increased limit for Retail investment & other part is also effect of successful issues like Coal India. Since demand of shares keep increasing, the allotments continue to get poorer :) So making money is becoming increasingly difficult :(

I let A2Z issue go since funds are blocked. Most of the analyst feel that this IPO is over priced a bit but my sense is that this will list at a premium. Let's see. On the other IPO this week, Ravi Kumar Distilleries, I would not invest even if I had funds. I would like to stay away from stocks in the category like Liquor, Cigar etc. I am fully aware that some of my direct equity or mutual fund investment may not be always in what is called 'Ethical Businesses' but I would like to do what I can.

Punjab & Sindh IPO looks interesting. There are management comments that they would like to leave 'something on the table'. I will take a look at the numbers but most likely we will apply.

We bought LIC Housing, Yes Bank, Shriram Transport & IFCI in the recent crashes. To me, it seems that the undertone is still bearish.

Regards, Rohit

Investment Updates

Looked at some options for IPO Financing since couple of issues are over lapping. Learned about ICICI Bank's Loan against Securities scheme. Interest rate is 13.5% p.a. and is charged on a daily basis for actual number of days funds are used. They need you to have minimum Two Lakhs rupees of eligible Shares & with 50% Margin, they fund One Lakh Rupees. The shares are pledged to them & it seems this can be done on-line. The only other expense is Current Account opening - 2k for first year & 1.5k thereafter, plus of course the taxes. This seems pretty good. For a funding of a lakh for two weeks, the interest cost works out to just Rs.563. I am seriously considering to Open the Account so this funding is available on demand. Here is the link on ICICI Bank's website.


I am bit disappointed with the price band announced for Shipping Corporation FPO. But I guess this is more due to current market situations. With large issue size, decent profit should still be possible.

Another disappointing news is development on Lavasa. I am pretty impressed with the first planned city of India. We actually visited Lavasa and stayed there for 2 days to check out Real Estate Investment. We did not go ahead with Real Estate investment for different reasons but I am eagerly looking at their IPO. That said, keeping my profit orientation aside, I sincerely wish that environment concerns be addressed first & all approvals obtained.

We will be applying, but naturally, for Manganese Ore IPO in full retail quota of Two Lakhs in all our accounts.The Indexes continue to go down. So this is a cause of worry.

Regards, Rohit

The IPO Flood & My Investments

I decided not to invest in RPP Infra IPO. I am not impressed for various reasons, as I stated in my earlier post. I earlier thought of taking a punt may be for 1 full application but now that we are close to MOIL & SCI issues, with Claris Life Science in between, I am running out of funds. I will review Claris Life Science RHP and take a call.

It will be a good strategy to apply using Rs. 2 Lakhs limit. If we want to apply full limit, for both MOIL & SCI, for all in Family, we need a huge amount. I hear that Hindustan Copper plans the FPO around Dec 6. Then there is Lavasa & then there is IOC planning issue by end of Jan 11.

What this clearly means is that we need to be ready to utilize the opportunities that are coming in. So I need to review our portfolio and liquidate less profitable investments. I think its also time to sell 199 Shares of Coal India that we are still holding on. I can hold for some more upside but I think its sensible to keep funds available for IPOs, in this scenario. I know all this means a lot more churn in the portfolio and more brokerage payments, but I am OK with that ! Would have also liked to leverage my LIC Jeevan Shree policy and take a bit of loan but my wife won't allow :(

A quick review of MF Portfolio reveals that Magnum Contra & Magnum Tax Gain are not doing very well. I know both are good schemes and have done well in past but this is sort of forced ranking since the objective is to try & get best returns. Table above is a comparative rating of key MF Schemes part of our Portfolio. On the Stocks, the only possible stock I can liquidate for now is NTPC. Though its not unlocking any great liquidity, I am still going ahead !

I also decided to subscribe for Equity Masters Hidden Treasure Service. Seems like some discounted rate of Rs.2,950 for a year's service. Not sure if they would offer to all. Would get one Small cap stock recommended every month. Seems like pretty much researched. Though again, I don't know where will I get funds for investing :)

One of their report talks about MIC Electronics. I originally invested in their IPO and sold off quickly as usual. There was a stock split so its difficult to compare the price but I don't think there is a huge difference in the price. Its about Rs.35 right now & I plan to invest. So why now? I agree with the investment rationale that there is a tremendous opportunity in the LED Market. MIC has a monopoly.

LIC Housing Finance & Shriram Transport are 7 to 9 % down compared to Nov 5, Murhat Trade. So I will bye some more.

Regards, Rohit

Recent IPOs

I took a quick look at the RPP Infrastructure Prospectus. Looking at the Risk Factors, Crisil
Rating, business concentration & valuation, I am not excited to apply for
this IPO. The PE is about 21 & I would watch out for SP Tulsian's analysis
of this IPO. One thing I like about his analysis is reference to
comparative valuation of the company, that's pretty helpful. His prediction
on Bedmutha has come out accurate. The stock has been hitting lower circuit
for several session & no price for guessing that now it will trade below
its issue price.
Since the grey market for RPP indicates a premium of about 3k for a full
application, we may still apply from just one of the account. I would also
like to test out the hiked limit of Rs. Two Lakhs for investment in Retail
category, just to see how it works.
Gravita India listing turned out pretty good. So we did not hit the bulls
eye, but never mind :)
Coal India is holding at around 320 when there is this carnage happening
all around. Am very tempted to buy Coal India at this level & I can see 10%
upside potential easily when markets rebound or say two quarters down the
line. I am aware that this is richly valued currently with a price of 280
or so more appropriate keeping in mind the comparative valuation of Coal's
global peers. However, what I am hopeful is about sustainable growth. What
we sold during IPO averaged 341 so again tempted to reverse the trade &
this will ensure that some profit is booked & we retain this for long term
as well :)
Regards,
Rohit

Book Reading

Purchased few interesting books recently. Leaving very close to a big mall still does not help devoting a quality time that one needs to buy & read good books. So this has become like a bi-annual affair for me to go and buy all I can :)

1. iCon - Steve Jobs, Jeffrey Young & William Simon
2. Enterprising India, IIFL
3. Think India, The rist of the world's next super power, Vinay Rai & William Simon
4. The IITians, Sandipan Deb
5. The creation fo wealth - The Tatas from the 19th to the 21st Century, R M Lala
6. Business Maharajas by Geeta Piramal
7. Ambani & Sons, Hamish McDonald
8. Go Kiss the world, Subrato  Bagchi
9. Business Wizards - Andhra Pradesh
10. The Invincible Investor by Top Global Financial Planners
11. How to read Cash Flow Statement

Regards, Rohit

Murhat Trading & IPO Updates

Purchased Yes Bank, LIC Housing Finance & Shriram Transport Finance during the Murhat Trading, this Diwali. It turned out bit exciting with an hour to trade and we were trying to get best price to sell our Coal India IPO stocks as well as buy these new stocks. It seemed to me that there was unusual rush by many investors and Sharekhan, ICICI Direct & Motilal Oswal sites were very slow.

Its just little few shares of LIC Housing & Shriram Transport right now. I have been watching both of this stock for sometime. In case of Shriram, about 7 years ago, I purchased a good quantity @ Rs. 20 but sold sometime later @ Rs. 30 :(

With Coal India's effect, Powergrid evoked even better response from Retail Category. Now, with 3.85 Times over subscription in Retail Category, each full application is likely to get 287 Shares. So it does not seem that profits can match the Coal India experience :(

I did not invest finally in Gravita India. This is one of the rare instance I recollect that Retail interest was much higher than FIIs :)




Regards, Rohit

Healthy Meals

So I read about this in the Book - Stay Hungry Stay Foolish. Calorie Care delivers Healthy lunch for me at my office. I thought of testing it out but I like it now. Yes, originally the idea was to try & reduce some weight. So calorie counted meals was a good option. Now, I realize this is bigger then the counted calories. These are balanced & tasty meals. If you like, there are also low sugar & low salt options.

Here is the link to their website. 
 
Regards, Rohit

Investments

I have started building positions in IFCI & Yes Bank. For the IPO Liquidity, I had partially sold my holdings. While we are waiting for Power Grid FPO, there is Gravita India IPO starting now. I took a quick look at the DRHP and the information available on the Web.

At 45 Cr. its a small issue. The financials look OK though the Cash Flow has been negative. Its difficult to compare the pricing since no listed players are available in this field. I find the risk statements segment in DRHP very useful. Found an interesting analysis of this IPO on web.

I am not likely to apply for this IPO though I will make a final decision after reading some more analysis and looking at QIB / HNI response. But for sure, we will not apply from all our Accounts. It will one or at the best from two Accounts.

Regards, Rohit

IPO Trading Updates

We have now sold all our IPO Holdings in Career Point, Eros International, Techpro Systems, VA Tech Wabag & Oberoi.

During last one month, I have made some tough calls in order to efficiently utilize the Capital for maximum gains. It was difficult, for example, to choose between Career Point, Eros & Microsec Finance. I decided to go with Career Point & Eros. Came out at Break even on Eros & booked decent profit in Career Point. Similarly, skipping Ashoka Buildcon & going for Tecpro System was difficult

In case of Oberoi, almost every analyst felt that issue was priced bit high at the upper hand. Knowing Oberoi's construction quality, I sensed they deserve a little bit of premium. While the Retail quota was subscribed just about 1 time, the Institutional Investors gave a good response. While it shows a modest 10-12% Gain, the allotment for Retail was 100% & hence we could book substantial profit here. Lucky me :)

Here is the approach I normally follow for IPO Trading:

1. Study the DRHP
2. Look at Analyst's comments - Source : Money Control & The Economic Times
3. Look at Retail Inventors Enthusiasm. Source : Money Control
4. Look at Grey Market Premium. Source : http://www.premiuminvestments.in/ or http://www.smartinvestment.in/
   
5. Look at earning consistency, quality of management, peer comparison etc. Management quality is the factor I find most difficult to assess.
   
6. Look for Margin of Safety. So best to avoid issues showing Rs. 5-10 premium
   
7. Apply maximum quantity from all accounts in the Family
8. Sell at least 2/3 Quantity upon listing.

I have included a quick analysis of IPO Trading in 2010 so far. With markets inching up, this is of course not with myself alone. Every investor who has invested in last few months with a reasonable care, had made money.

I could have of course improved the realization further but as I said before, as a principle, I do not trade during office hours. That leaves me with a limited flexibility & I have no issues with that.

Stock Ideas

I finally started doing little bit of research on the 'Stocks to check' list I made in last couple of weeks. Marathon Nextgen Realty is one such stock that came to my notice with low PE tag. It incidentally also happens to be my current work place where my client is located.

I took a look at the Financials of the Company, checked their website and went through their latest Annual & Quarterly results. Current PE is 4.45. EPS was Rs.116.06 as per last audited Annual Report for period ending March 2010. However, the Quarterly EPS has sharply come down to Rs. 12.31, the lowest in last few quarters. While their property that I see everyday is pretty decent, it does not seem to have high occupancy right now. Also, the Residential Apartment & the Club House in the same premises are a good pluses. Further, development is still happening with more commercial property coming there. Seems to me that they will grow though inconsistency in the performance is making me uncomfortable. Not much information is available from any publish analyst reports or management interviews.

I decided to drop this finally.

IPO Investment Updates

Oberoi Realty IPO is closing today. While the issue looks expensive & grey
market premium isn't great, we are still investing for one strong reason.
Being in Mumbai, I am familiar with the kind of reputation this builder
has. I found their houses to be of good quality. In fact in 2005 when we
bought our Rustomjee Ozone house, we were considering one of the Oberoi
Property nearby. Finally went ahead with Rustomjee for different reasons.

We were allotted Eros & Career Point stocks. Have sold some & will
liquidate the rest soon.

Now waiting for Wabag allotment. There is a controversy regarding numbers Wabag published in the DRHP and Wabag has given the option to retail investors to withdraw their application. I would stay put. Allotment is getting delayed by few days.

It was difficult to make decision across so many IPOs. I was highly tempted to avoid investing in say Wabag which we knew would be highly subscribed and instead invest in say Orient Green, Ramky or Electro Steel, trying to use Capital judiciously and go for small returns but more assured than investing in IPOs good but difficult to get allotment. Somehow, I held on to my core thinking and invested only for strong fundamentals. Eros has bit disappointed but still 8% on Issue price. Wabag should still give a decent return. Lets see.

Regards,
Rohit

Sent on my BlackBerry®

Money Monitor

I came across the Money Monitor Service by Yes Bank. The Service will provide an integrated view of finance by combining various bank accounts, Fixed Deposits, Stocks, Mutual Funds, Credit Card, Reward Points etc. Something that I have been looking for. It briefly says Rs.149 p.a. as Service Charge and first 3 months as free. But its not clear if this is for complete gamut of the service. Sounds bit cheap but definitely impressive.

Regards, Rohit

BlackBerry Tips

I use BlackBerry Bold 9000. Found below to be helpful.

1. Email Shortcuts are very useful. C for Composing an email, F to Forward, R to Reply, L to Reply All, S to Search, B to go to Bottom, T to go to Top, There are many more !
   
2. BlackBerry Messenger is Feature rich application. What I like most is the Voice Notes. If you hate to Type text you will love using Voice Notes.
3. Backup interface through Desktop Manager Software is decent. Auto Backup works well.
   
4. Best thing is of course their email application.
5. Smart Phone has all applications integrated. SMS can be sent as an email & vice versa. A Phone Book Contact can be sent to a Messenger Contact. When you setup say - LinkedIn, the smart phone recognizes and you get options in your Contacts Menu.

Though when it comes to a basic Phone functionality, I miss Nokia E71 for Contacts, Templates, User Friendliness & so on.

I was pleasantly surprised this time while getting my handset serviced that Redington now gives a stand by device. Its very painful to be without your handset for a week or so. This was when the warranty was about to expire. Somehow they could not repair the voice button problem and actually gave me a brand new BlackBerry Bold 9000 :)


Regards, Rohit

My Financial Goals

Here are my Immediate & Long Term Financial Goals

Start on my Own by 2012-13
Needs lot of preparation. I need to spend time, estimate capital requirements & firmly outline my ideas. I also need to develop the skills that will be needed. Its not just financial readiness, after all.

Second Home by 2015
Preferably near to where we stay currently and of course near to a Jain Temple. We have a decent house and would have stayed completely out of any plan to buy a house in Mumbai's expensive real estate. However, the challenge is that we stay a bit far from the Jain Temple. Its easy for us at our age but for my parents its difficult. Let's see how fast I can make this happen.

Retire the Housing Loan by 2020
The loan retires around 2027. Well - I don't think I will prepay this actually. The longer the loan, better it is from a tax saving perspective. Also, my loan came with Home Credit facility which means the surplus amount I have in the Home Loan account, the outstanding loan gets reduced to that extent. An excellent cash flow tool. My goal is to accumulate cash surplus to the extent of outstanding loan.

Net worth of Rs.100 Crores by 2035
Sounds filmy like '100 Days' :) With where I am & What I am today, I will end up in the region of Rs. 5 Crore to Rs. 25 Crores Networth depending upon how well I do in my professional career. So this is a tough one. I have no plan, no calculations of how to do this. But its a dream. This is one factor driving me strongly to move on my own. Why only Rs. 100 Crores? Well - In addition to my retirement corpus there is also a noble cause. Before I retire, my goal is to setup a School & also a Foundation in the Education area. And that's much beyond a financial goal.

Regards, Rohit

Invest in yourself

About 4 years ago, I read an article in a Personal Finance Magazine, either Money Today or Outlook Money. It was about how the biggest investment is in yourself. This gave me a few leads and though not fully there as yet, the path that I have taken has been fruitful. The immediate decision was to take up a professional certification in Project Management (PMP). This allowed me to shift from a Project Management assignments in Process Outsourcing business to IT Outsourcing Business. From the IT Outsourcing Project Management, now I have shifted to IT Outsourcing Service Delivery. I am now investing my time in certification that will add further value. Plan for 2010 is to target Certification for IBM Certified Sr. Project Manager & IBM Certified Delivery Project Executive.

Regards, Rohit

IPOs investment Selection

Need to decide between VA Tech Wabag, Ashoka Buildcon & Tecpro Systems. I am in
a Training from Monday for 3 days & hence Traveling tomorrow. So need to
decide today. VA Tech seems to be a good choice though retail subscription
will ofcourse be heavy so lottery allotment is likely.

I have identified number of stocks that seem like a good choice but due to
ipo investment, I am actually in a tight liquidity. Yes, I did liquidate
some or all of my holdings in Mindtree, Yes Bank & NTPC to get cash for ipo
investment

Regards,
Rohit

Sent on my BlackBerry®

Concept Stocks

Latest issue of Outlook Profit (Oct 1, 2010) has an excellent analysis of 25 Stocks who could be the next rising start. Except for NIIT, most of the names are new to me. Went thru some of them and liked the attempt made by the magazine. Worth reading... Outlook Profit continues to be my favorite Magazine for Stocks & Personal Finance

Regards, Rohit

PS. I continue to receive lot of emails on this post. Unfortunately, I did not keep a copy of this edition. Here are some of the stocks I remember they covered.

MIC Electornics
Tasty Bites
Vadilal Ice cream
Pudumjee Industries
NIIT

Current IPO Issues

I have reviewed the latest status and decided to go for Career Point & Eros International IPO. I would have liked to go for Microsec Finance IPO also however, at least 2 more good IPO Issues are just coming up and I need to judiciously deploy the funds.

Career Point has been already subscribed 26 Times since QIBs portion closed today. Retail is expected to close anything between 15 to 20 Times.

Ashoka Buildcon & VA Tech Wabag Seem like good IPOs too. For the first time, I liquidated few of the under performing stocks to divert funds for IPO. I am hoping that I will shift back to these good stocks once I sell on listing. Not excited with this as moving out and in has tax implications & transaction costs. I am however hoping that Ashoka Buildcon & VA Tech may not go beyond 10 Times the quota and allotment may not be that bad. Let's see.

Regards, Rohit

My thoughts on Time Management

Recently some of my colleagues asked me share tips on time management. Nothing much to talk about. Few tips are:

1. To manage emails, use coloring, message marking, follow ups, archive rules & short cuts.
2. I rigidly stick to office work during office hours
3. Always make a to do list and follow
4. Read good books in your area. You get good ideas.
5. Its about 4 hour drive from my Home to Office & back. I have hired a driver, bought a BlackBerry & a small stand for Laptop in my car. My study room at home allows me to be productive. It always helps investing in yourself.
   
6. I rewrite all important emails 2-3 times before sending.
   
7. Idea is to manage team by objectives, manage by exceptions, constantly prioritize & Enable Team members so that they can deliver
   
8. I normally stay organized

That said, I have a long way to go in balancing work & home :)

This Diwali, I plan to buy myself an eBook Reader. So nice to have 1000s of Books along with you, on the go. Being a coffee addict, I was also planning to buy an Espresso Coffee Pump Machine. But Of course, I am prioritizing eBook Reader.

Regards,
Rohit

Stocks Study

I have compiled a really large list of stocks that I need to study and make a decision if I can invest. These are over 50 stocks that have been recommended in the Media or Financial Magazines or Newspaper and they caught my attention. It would have been nice if I have a time tested model for stock screening in place :)

Regards, Rohit

IPO Season

Many IPOs on-going & of them seems good. I am considering Eros International, Career Point, Microsec Fin & VA Tech. It seems that Companies who have approvals in place, need to ensure that IPO is launched before Sep 30 or else they will need to get the Q3 Results included - so there is this hurry of 9-10 Companies queue up.

Going by the Grey Market Premium, Eros, Career & Microsec seemed like can get about 8% Gross Profit. Does not sound great but this return is for an investment of 15 days or so. Risk of loosing principle is also not very high.

We plan to apply from all the investment accounts we have in the family. Though obviously we can't apply for all the IPO from all the Account so I now need to look at DRHP and get a deeper insights before prioritizing investments.

Regards, Rohit

Investment Updates

SKS Microfinance & Bajaj Corp. turned out to be a decent IPO investment. I am not fully out but mostly done. Gujarat Pipavav seems an interesting IPO though I am bit confused looking at the RHP at NSE Website. Crisil has rated this IPO @ 4/5 and mentioned number of positive factors, I observe from financial section that Company has consistently made losses as it seems that capacity is not yet fully operational.

On the other hand, the Grey Market indicates a premium of about 10 per share. Looking at the size and the face value, there is a good chance of large number of shares being allotted assuming that current trend of retain subscription continues.

I will take a final call after studying bit more in the IPO reviews.

Few more stocks have come in my radar after reading latest Money Today. Need some time to research before I can take a final call.

Regards, Rohit

Reminder Buddy

My cousin Jogesh Jain has thought of an interesting concept.

http://reminderbuddy.blogspot.com/

Essentially idea is to setup a personalized reminder services that helps one to make sure that Birthdays, Anniversary, Exam Results are not missed. He is offering a range of options for reminders and can also deliver gifts. Complimentary Pilot is open right now.

Seems like a good idea.

Regards, Rohit

Recent Investments

Got 119 Shares alloted in Engineers India Ltd. and swiftly got out, in line with my stand to always book Public Issue Profits. In this case, it worked out to about 16.5% before tax & interest cost.

SKS Microfinance is listing tomorrow & we had applied from all our accounts. So we have 36 * 4 i.e. 144 Shares. The gray market premium indicates about Rs. 90 + Rs. 50 was the retail discount. I plan to get out immediately as usual though it will take 2-3 days for logistics reasons. As a matter of principle, I do not trade during office hours, so I get to enter my trades only late in the night or early morning.

Yes, we applied from 3 Accounts for Bajaj Corp. as well. About 23 shares have been allotted against each application.

Regards, Rohit

Investing in MM Forging

With a view to cleanup the Portfolio and also book some profit, I was contemplating to sell off my small holding in MM Forgings. As I mentioned in my previous post, 'When to Sell' is still a mystery. I was looking at the financials @ Indiaearnings website and in the process ended up looking at the board comments. My past observation is that most of these comments are a Punters view, more of speculative in nature. Someone argued that Automobile Industry is picking up & with a low PE, MM Forging is a good bet. I looked at the numbers more closely and changed my mind. Having decided not to sell, I went ahead and increased my position a bit more. This was few weeks before.

What has followed is the strong quarterly results and the price is now up 25%. With the original investment made year ago, my overall gain is 37 % before tax. EPS (TTM) is Rs. 11.87 p.a. & PE is 8.9. The Q2-2010 EPS is Rs. 4.05 and assuming this reflects annual growth, this translates into an EPS of Rs. 16.20 p.a. Industry PE multiple seems high but even at PE of 10, the valuation works out to Rs. 162. Current Market Price is Rs. 105. My average cost is Rs. 77.

No - I may not add any more but will just hold on & see if the growth is consistent in Q3-2010. How did I originally get into this script? think it was one of the Outlook Profit issue that carried a detailed analysis by one of the leading fund manager. Seems like a worthy pick.

So my investment style has changed with reduced time at hand. Its difficult for me to get into a full fledged research on my own and I have started relying on professional research though very selectively.


Regards, Rohit

Disclosure:
As stated above, I have a holding in MM Forgings

IPO Season?

It seems the IPO market is getting hot again with couple of successful issues like Engineers India, SKS Microfinance & Bajaj Corp. Grey Market premiums indicate that all these issues will list at premium. Amidst my busy schedule, I did manage to apply for each of these IPOs investing aggressively.

Coal India and some more interesting IPOs are coming soon. I plan to invest aggressivley.

Regards, Rohit

Portfolio Update

Last week, I redeemed holdings in MF schemes of DSP BR Opportunities, DSP BR Tiger & HDFC Prudence. I am shifting the proceeds to stocks like Reliance, Mind Tree, IFCI, Reliance Communication & MM Forgings.

I also purchased couple of Yes Bank stocks but only for a momentum trading perspective. Bought at about 272 & will liquidate in the 300-315 Range.

Need to liquidate Fortis Flexi Debt Fund and again shift to Direct Equity. This will take few days as the holding is in physical mode.

Regards, Rohit

Income Distribution Analysis

This is based on the current status + a forecast for next one year. I have included Retiarals investments by my Employer as well. The biggest expense is in the housing category towards servicing housing loan and flat maintenance, though the loan is @ 7.75% and this house in Mumbai was purchased in 2005. The flat maintenance is on a higher side @ 6.5 / Sq., being recently built, has all amenities and hence the high maintenance.

Investments @ 28% is at a satisfactory level. Forecast suggests that I will end up with 14% cash. So either I increase my monthly investments or look for another avenues for upfront investment. We may end up spending much more on vacation budget as I hope to take a vacation abroad in next one year along with parents. On the Donations category, I would progressively like to increase the spend to 10%. In the Car Category, Petrol is hardly 1.5% right now as I get some allowance from my Employer. Rest is Drivers Salary & Car Loan. The expenses are for all four of us viz. My Parents, My Wife & myself.

Regards, Rohit

Banker to the Poor

This is an interesting book of how someone builds an inspiring institution from scratch & makes a difference in the lives of millions of poor people. Muhammad Yunus (Winner of Nobel Prize for Peace in 2006) has written this book " Banker to the Poor" along with Alan Jolis.

Dr. Yunus, while going to the university kept observing that inside the university there is all the knowledge of the world in the books but just outside the Campus, lot of poor people are struggling. He tried helping them by persuading the local bank to lend them . The traditional way of banking did not allow this to happen, as the poor do not have collateral nor ability to manage the documentation.

What follows then is a long journey of Dr. Yunus walking a different path. He finally took up on his own to show everyone that this was needed & was feasible. Dr. Yunus argues and proves with his own experiences that Poor people are more honest in repaying the loans and they are more punctual in paying on time. I am planning to read C K Prahalad's Fortune 500 at the Bottom of Pyramid and I think the Author has similar observatoins.

More difficult was to lend money to poor women. There is an interesting experience. Dr. Yunus receives a letter from the Central Bank of Bangladesh - Pls. explain us the reason why majority of your borrowers are women. Dr. Yunus replied - 'While I will be happy to answer you question, I would like know if the Central Bank has ever questioned any bank as to why majority of their borrowers are Men?'

The manner is which Dr. Yunus persuaded decision makers, built his team, designed the model, worked thru the bureaucracy, worked with poor is remarkably outstanding.

For anyone interested in Micro Finance subject, this book is strongly recommended.

Regards, Rohit

Stock Analysis

I came across an interesting post at Rohit Chauhan's blog. Good One !
http://valueinvestorindia.blogspot.com/2008/08/how-i-analyse-stocks.html
Regards, Rohit

Portfolio Review

A quick look at my equity portfolio shows that out of core holdings, Yes Bank, MM Forgings & Infosys have done well. In absolute terms the gain is 120%, 94% & 64% respectively. Reliance is 4th @ 50%. The investments are of course made at different points in time so there is no direct comparison. I recently entered back in MindTree and thinking to take a position in NTPC.

In Mutual Funds, HDFC Equity, Birla Sun Life Midcap & Fidelity Equity are the top 3 performers. In absolute terms the gain is 105%, 92% & 80%

Just like 13 scripts in Direct Equity, over a period of time, I have invested in 19 different Schemes of MF. I plan to reduce these to best 10. Will divert the amount so liquidated to chosen direct equity scripts.

Regards, Rohit

The Richest Man in Babylon

This is one such book you can read it at one go. The lessons for financial prosperity are incorporated in such a nice way throughout the book, in form of interesting tales. There is lot of wisdom in this book and goes on to show that principles for financial success still remain the same, after thousands of years. As an example, keep 1/10th of your earning for yourself, make it a good use so that it multiplies & invest wisely. Given the time period to which the book relates to, the language is bit difficult to get accustomed to, for someone like me. The author, George Clason, has used the theory of learning reinforcement very effectively. You observe the key message getting reinforced time and again throughout the book thru different tales. Strongly recommended !

Happy Reading

Regards, Rohit

Being On My Own

Nop - no sudden thoughts after reading Rashmi Bansal's books though of course they are eye openers. I basically belong to a business family and most of my cousins are in Business. It's very common to have a feeling that 'I want to be my own boss' but when it comes to reality of taking the first step, its lot easier said than done.

What's the unique idea? Business model? Target Market? Capital? There are questions and of course there are answers but one does not know if they are right.

As far me, before I can make that decision, few hurdles that I need to cross. I do have my ideas on huge opportunity related to Financial Literacy though I need to do to detailed planning level to conclude. Another area of interest is Micro Financing. But I need to get much deeper on this subject before I can firm up.

The most important thing from my perspective is to first save enough cash to have capital for business and also to have emergency funds to run the family affairs. So it will take some time before I can reach that level.

Hum honge kamiyab, ek din !

Regards, Rohit

Investments Update

Few weeks before I decided to cut down on my monthly SIP in MF and direct that to Direct Equity instead. I still continue 1 SIP in HDFC Equity though. I picked up Aditya Birla Chemicals, JBF Industries, MRO Tek, Manugrah Industries, Micro Tech, Mind Tree, Precison Pipes & Reliance Communications. Big Shopping, huh !

Review of my portfolio performance shows that Direct Investments are earning a far higher rate of return than the one in MF. Now, this is not a new discovery though the Direct Investment ideally requires a quality time to research & understand what you are getting into.

In the time to come, I would focus on reducing the number of scripts I have in my Direct Equity Portfolio - currently at 13. Somehow, I am psychologically attracted to scripts which have low MRP :) I am consciously looking at scripts in the sub 100 Region so its mentally easier to build position. That's how most of the scripts mentioned above have found a place in my portfolio.

Review of our family's Asset Class, net of all liability shows that I continue to have an overall asset imbalance, primarily due to inflated real estate in Mumbai. Here is how it looks:
78% Real Estate
8% Equity
14% Cash or Equivalent
There is nothing much I can do in the short term. I hope to avoid additional real estate investment, keep diverting my savings to Equity & Debt and get a proper balance, eventually. But why is it not possible to correct this imbalance? Well, the real estate pie (net of loan value) comprises of the only property we have so we can't liquidate. It has grown significantly in last 4 years though its more like a paper profit as one always needs at least one house to live.

Why am I sitting on cash? Hum.... As I mentioned, I do not have time required to make a quality investment. I am pondering over some of the real estate investment options if I should increase the imbalance and go ahead. On the other hand, there is always 'I want to be on my own' thoughts though I am miles away. Let me post separately on this.

Regards, Rohit

Vacation

After a long time, managed to get a break. Had a good time visiting Pondicherry & unwind for 5 days. Read two interesting books. Connect the dots by Rashmi Bansal is in line with her earlier book of Stay Hungry & Stay Foolish. This time she has covered 20 business achievers who do not have an MBA background. Each of the Entrepreneurs narrate their experience as to how they went about it. Very silently, you observe Rashmi's adding her inspiring comments here and there. Yes - this is a book must buy for any one considering getting into his or her own business. While I was on the Airport, picked up another book. My Big Idea by Rachel Bridge. An experience sharing by 30 Entrepreneurs in UK. Both books have similar objective of motivating would be entrepreneurs though Rashmi's book naturally has all Indian touch that we are more familiar with.


Regards, Rohit

Useful Excel Spredsheets

http://www.exinfm.com/free_spreadsheets.html
Regards, Rohit

What's Up

It's been a long time that I have posted. I have shifted to a new profile within IBM and that's keeping me very busy. All the financial magazines remain un-opened. We have shifted to Economic Times Gujarati Edition so at least my father can read it :)

While I continue with my regular MF Investments, I have not been at all active on Direct Equity part. Now it's time to review the MF Portfolio as well. There are also few stocks that I would like to regularly buy.

Naturally, there is a significant appreciation in the portfolio as the Indices have gained substantially over last 6 months. The IPO Market is looking up. But finding time is going to be challenging. I am thinking to sell some quantity of Yes Bank & add some more of other stocks in the portfolio. Let's see.

Regards, Rohit

Autotext

Found this to be useful.
http://www.autotext-software.com/
Regards, Rohit

Book Reading

Recently read couple of books. 'Stay Hungry Stay Foolish' by Rashmi Bansal, 'It happened in India' Co-authored by Kishore Biyani & 'High Performance Entrepreneur' by Subrato Bagchi.

Stay Hungry Stay Foolish is a story about 25 IIM Ahmedabad Graduates who have at some point of time in their career left their high paying jobs & taken a different path. To quote Robert Frost, they took the road less travelled by & that has made all the difference. This book is an outstanding collection of the real life experience of such entrepreneurs. How & why they did it, What problems they faced, What would they advise to others... Truly motivating and inspiring. If you have aspirations of doing something of your own, at some point of time in your life, like I do, this book is must for you !

Subrato Bagchi's book 'High Performance Entrepreneur' is another outstanding piece of Advise to potential entrepreneurs. Yes, the book has lots of instances about how MindTree was setup. But I think it delivers value on a much larger landscape. Subrato has dealt with every possible aspect & minutely. Well, he makes a point with provoking our thinking that it's not only setting up a business but setting up a truly Creative, Professional, Global & Energizing workplace, that really needs a lots of careful thinking & creating planning.

My interest in Kishore Biyani's Book, It Happened in India, started with interest in Retail. It's amazing to read his experience over years. Kishore narrates his experience right from his college days. It's interesting to see his perspective and his calculated bets. Again, he took the road less travelled and the rest, as we all know, is history. The way Kishore has done, in particularly, his speed of execution & style of doing business are very different. As an example, so many times he has gone against the common thinking and invested in say advertising. The way he makes deal with his business partner, seems remarkable to me. Book goes on to state Kishore's reputation in the real estate market. If Kishore likes a property and thinks that rates are reasonable, he says yes. If not, he says no & walks out. Period. Kishore does not bargain. Another interesting aspect the book has been written. In every Chapter, at every few pages, Book carries para or two written by Kishore's relatives, business associates, employees etc.

Regards, Rohit

GiveIndia - donate securely online to accountable NGOs in India. 150+ charities to choose from.

GiveIndia - donate securely online to accountable NGOs in India. 150+ charities to choose from.

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Giveindia

It's been a long time that I have been wanting to donate some part of my income for charity purpose, in the education field. The big problem is how do I ensure that my hard earned money is actually used towards the intended cause? Given my work profile, I have limited flexibility of doing any field research myself. Finally, I came across Giveindia website. Started by Venkat Krishnan who is IIM Ahmedabad Graduate. I learned about Venkat and this website in the book 'Stay Hungry Stay Foolish' by Rashmi Bansal.

They basically provide a donation platform & you can choose from around 200 NGOs that Giveindia has scrutinized for transparency & credibility. They ensure that at least 90% of the contribution reaches to the organization, against 60% average for NGO Sector.

I found this to be extremely helpful.

Regards,
RS

Comparing Rates

I am planning a small amount of Fixed Deposit. I was wondering if I would get a website that can throw comparative of rates offered by various banks. A simple search in Google gave lots of good results & I am positively surprised. Here are the links of such websites.

RateKhoj.com
Rupeetimes
itrust.in
ecompare.co.in

All of them show difference results in terms of highest available FD Rate. Some of them have included Company FDs as well, which are unsecured. Normally FDs with Bank are secured upto Rs. 1 Lakhs. Some sites may have outdated rates.

Found these sites to be useful, anyways.

Cheers,
RS