Thursday, 13 April 2017

The Warren Buffett Way

Appearing on the PBS show Money World in 1993, Buffett was asked what investment advice he would give a money manager just starting out.  “I’d tell him to do exactly what I did 40- odd year ago, which is to learn about every company in the United State that has publicly traded security. “
Moderator Adam Smith protested,  “But there’s 27,000 public companies”
“Well”, said Buffett, “start with the A’s “

Para above is from the book The Warren Buffett Way. One of the great book of Investment one can have on   his/her Library.  Though book talk about Mr Buffett Investment philosophy which might not suite to many Investors today still I believe the core idea display in book will help individual investor to look the business from eye of Mr Buffett.
We here try to highlight essence of book in few words:
Author has classified Mr Buffett all investment in four core principles:
  1. Business
  2. Management
  3. Financial
  4. Value
With above four principle you would find how Mr Buffett has discovered his greatest investments like Coco-Cola, Washington Post  , Gillette, Wells Fargo  etc. The idea of finding successful business is still applicable but after Mr. Buffett no such a great investor came who have applied it with such a ease.
Later part of book displays how to manage portfolio and psychology of money. Robert Hagstrom,the author , did true justice to the idea of Warren Buffett in the book. Writing book on such a topic is not easy. He had kept the thing simple that reader can connect with it. Get your copy today if you have not yet read it from here:   The Warren Buffett Way
“We don’t need to be smarter than rest, we have to be more disciplined than the rest” ~WAAREN BUFFETT

Be Smart. Invest Smartly

Thursday, 9 March 2017

Man behind D-Mart: Radhakishan Damani.

D-mart is very well known in India.  Retail market chain which is changing the future of Indian retail market with its sound business model.  Since 2000 when D-mart is started, it has not shut a single store of it. This only justifies strategy and sound business model of it.  And the brain behind this successful business model is Indian Stock Wizard RK Damani.
Rakesh Jhunjhunwala consider Mr Damani as his Guru in his success journey of stock market. Mr RK Damani himself is on of value investor. He has made big fortune in Indian stock market by investing in great Indian corporations in late 80’s. At last known equity portfolio value of Mr RK Damani is around INR 2665cr.
Mr Damani started from almost nothing. At age of 32 with absolute no knowledge of Stocks , he enter the family  business of stock broking. He began as a speculator at the stock market. within no time, he understood that watching was not the best way to make or grow capital, and hence, taking inspiration from the legendary value investor Chandrakant Sampat, he started playing for the long term. His philosophy was long term, say 5 to 10 years. He would see if the product has the potential that far in the future. Gradually, his judgement began getting right, and within the next couple of years he was standing at par with the ranks of the biggies on Dalal Street.
As his nature Mr Damani in 2001 , entered in new unknown space which he has no knowledge about, Retail Business. In a market where more recognized and larger counterparts such as Spencer’s (RP-Sanjiv Goenka Group), More Store (Aditya Birla Retail), Star Bazaar (Tata Group-owned chain of hypermarkets) and Hypercity (Shoppers Stop-owned). In such a competitive market   D mart has successfully managed to crack the code in just about a decade.
Now there is an unsaid rule in the market that – “one must not open any store within a 1km radius of Dmart, simply because, no one can beat them on prices.”
As now   D- Mart is coming with IPO on 8th March , Mr Damani stake of  90 percent will be valued around INR 1600 Cr.  All broker house has given high rating to Dmart IPO so as we also consider it good buy even if one not get hand on IPO,  Investor can buy it after listing long term.
Be Smart. Invest Smartly.

Friday, 3 March 2017

Portfolio2- High-Beta of Tomorrow

Hello Investors,
It’s past 5 months when we have published our first model portfolio undervalue-gems and since then it has delivered stellar 32 % upside so far against Sensex’s 3.69% return.
Now today we bring you our second model folio. This folio we count for investor who has above the average risk profile. So without waiting lets go to our list of high-beta stocks.
Portfolio2
High-Beta
Suzlon EnergyMarksan                Pharma   South India BankManali Petrochemical
SectorRenewable        EnergyPharmacyBankPetrochemical
Current Price (23thFeb )18.0549.720.5534.85
M cap(cr)906920343704599
P/E42121.229.5112.36
Industries P/E2727.6824.0330.29
Divined Yield00.242.431.43
EPS0.430.412.162.82
Book Value1.2310.0230.5716.43
Our Folio allocation (%)30302020

As you notice here we have listed 4 stocks where two are priced high in valuation with PE above industries PE  where other two are at low PE.
Now Suzlon and Marksan Pharmacy are two stock we picked which are currently coming from negative to positive trends. We strongly believe that this two stocks are turnaround story. You can read our last article on Suzlon ‘Suzlon- Wind is Started Flowing’. On other had Marksan Pharm recently got UK regulatory approval from its GOA plant. Year ago due to non-compliance issue stock halved and hit 40 from 100.
For rest two stock South India Bank and Manali Petrochemical, we find that market has valued this stock very low and any positive even can bring them to eye of market. Also both stocks are consistent dividend player which added in its value.
So if you are ready with fund and want some phenomenal return on long side with ability to withstand higher risk then you can pick this folio in one go.
Here we are keeping investment horizon more than 2 year because diamonds took time to get in shape and then shine.
Be Smart. Invest Smartly

Monday, 13 February 2017

Panic of 1901: First stock market crash of New York Stock Exchange

The Panic of 1901 was started because E.H.Harriman and James Hills, titans of rail road industry, wanted to control of Northern Pacific Railroad.
In those days they started buying share of Northern Pacific Railroad from open market quietly and as there was no regulation on such buying no one have any idea of it. In April 1901, E.H. Harriman started buying Northern Pacific Railroad stock quietly and stock rose 25% in a month time.
Since overall market is raising no one predict that takeover is happening in Northern Pacific Railroad. Some trader thought that Northern Pacific Railroad stock rising to fast and they started shorting it.
When someone short stock, he in fact borrowing security from someone else and selling it.  When price of security goes down person who shorted it, goes to market and buy at lower price.
But in this case as there are secretly buying was happening , stock continue it run and when on May 7, stock reach $143 and news floated what was happening behind the scene. When news came that Harriman is in race of buying, Hill and J.P Morgan try to stop him by putting in bids to buy stock as much as they could. Now it was open to all that it was race between Harriman and Hill, and sometime there are many people out there holding short position.
No one was selling and big buyers were forcing the price through the ceiling. Now shorter was caught in trap , they has to deliver the stock to whom they sold else the buyer can go to market and buy at market price and come back with bill to shorter. By the May 8 stock was trading $180 a share.
Next day fear and panic started in shorter and by noon shorter has bid the stock at $1000. When you have to have it, you have to have it.
Now at same time interesting thing was started in market, as shorts caught in very dangerous situation, they started selling other holding to raise money to cover their short position. Most of the other stock was down 10 to 20 points.  Panic continues on next day and most of the other stocks were down 40 to 60 points.
This was the classical example that single stock created rest all stock on down journey.  Same time there were few intelligent investor who has complete understanding of situation and got the opportunity to buy the stock that all are dumping because of their stupidity.
Article Inspired from book “Buffettology 
Be Smart. Invest Smartly.

Sunday, 12 February 2017

Life Lesson from RICH DAD

Lesson of RICH DAD from the book RICH DAD POOR DAD by Robert Kiyosaki
  • There is difference between being poor and being broke. Broke is temporary. Poor is eternal.
  • The poor and the middle class work for money. The rich have money work for them.
  • People’s lives are forever controlled by tow conditions: Fear and Greed.
  • It’s not how much money you make. It’s how much money you keep.
  • Rick people acquired assets. The poor and the middle class acquire liabilities that they think are assets.
  • Cash flow tells the story of how a person handles money.
  • Financial struggle is often the result of people working all their lives for someone else.
  • If you work for money, you give the power to your employee. If money work for you , you keep power and control it.
  • Often in real world, it’s not the smart who get ahead, but the bold.
  • It is not gambling if you know what you’re doing. It’s gambling if you’re just throwing money into the deal and praying.
  • Job is an acronym for “Just Over Broke”.
  • Worker work hard enough to not be fired, and owners pay just enough so that worker won’t quit.
  • You can’t teach old dog new tricks.
  • Give and you shall receive.
  • The primary difference between a rich person and a poor person is how they manage fear.
  • Failure inspires winners. Failure defeats losers.
  • There is gold everywhere. Most people are not trained to see it.
Get your copy of  “RICH DAD POOR DAD” and add money in our and author assets column.
Be Smart. Invest Smartly

Saturday, 11 February 2017

Suzlon: The Wind is started Flowing…

Suzlon, Pune base Wind energy Turbine manufacture  and operate in 19 countries across the globe with around 22 years of presence in the renewable energy sector
Due to high debt and less demand in global market company lost its way after 2008 crisis but now it seems it is coming back to get it title back in Renewable energy sector.
In last couple of months there is many things happen in Suzlon.  Here we have mentioned few event which happened which made noise in Suzlon:
  • On 17 January 2017 – Suzlon Energy achieved 10,000 megawatts installed wind energy milestone in India. Suzlon’s 10,000 MW of wind installation is capable of powering over 5 million households per annum.
  • On day of Vibrant Gujarat Summit Mr Tulsi Tanti, MD of Suzlon Said that Suzlon Energy plans to add 1,500 megawatt of power capacity. Out of this 1,500 megawatt, 500 megawatt will be wind and solar, the hybrid solution in next 3 years. The current debt of the company is around 7,000-8,000 crore and the payment of debt is going, according to the schedule. Tanti added that company is in the final stages of discussion with the banks from exiting the corporate debt restructuring (CDR) and hoped to exit from CDR this financial.
  • Company Secured 8 MW wind power project in AP.
  • Company Secured 105 MW from Axis Energy Group.
  • Company Secured maiden order  of 50 MW from Oil India.
  • Suzlon bags 63-MW wind power order from THDCI.
  • Rating Agency CARE assigned A rating to Suzlon. The rating has been assigned for its proposed long term and short term bank facilities. CARE ‘A’ ratings are considered to have adequate degree of safety regarding timely servicing of financial obligations, carrying low credit risk,”
  • Outstanding Q3 results of 274 cr.
Suzlon is big beneficially of interest rate cut which help the company in lowing interest on its debt.  In last year company has delivered better result and significantly reduces it debt. Few thing that don’t work for company is that we find is that company has promoter holding is very low to around 20 percent only. But we have  to look out for this result as many thing get clear and future path of company will be decide.
Currently Suzlon is trading at 17.10 INR on 10th Feb 17 on BSE with market cap of 8k Cr. With long term view one can enter in Suzlon.
Be Smart. Invest Smartly

Tuesday, 18 October 2016

Top 5 Dividend Stocks of last 10 year

When Investor was looking for good stock , dividend would be the very important factor to be consider. Stock go up down but consistence dividend make your investment worth. For conservative investor with low risk profile good dividend paying stock would be the best to invest.
Here we have try to bring few very good stock with great dividend payout over the last 10 year.
Infosys
 IT giant Infosys is always giving handsome dividend to its investor since inception.Even for last 2 year Infosys is facing growth issue because of the slow down in spending of BFSI client but for conservative investor Infosys is paradise. Study stocks growth with good return that what all they need. Let have look into infosys 10 year stock and dividend data.
Jan 2006 Infosys was trading at around 360 INR and now it is around 1027 INR.  Stock has given 185 % return with CAGR of 10.19%. Now let’s have look at dividend data. In last 10 year Infosys has declared 438.5 INR as dividend. This make total dividend of 121 % if stock brought at 360 in 2006. So 10 year average dividend yield is 12% around. If you have PPF or any other such investment time to think again.
Manappuram Finance: 
Manappuram finance is India’s Largest Listed and Highest Credit Rated Gold Loan Company.It Currently trading at 94.4 INR as on 14th Oct 2016. It is very hard to believe but this stock was traded at just 0.63 INR back in 2006. In 10 year stock price surge 149 times.
  If investor has invested in Manappuram Finance in Jan 2006 then he would had received  11.06 INR dividend till date.Now with investment price 0.63 INR , 10 year dividend payout would be stand 1755% with average of 175%. If you still not believe please read our last post: Stock with 150% average yearly dividend yield since 10 Year

 Clariant Chemicals India Ltd

Clariant Chemicals India Ltd is largest producer of Pigments, Textile Chemicals & Leather Chemicals in India. Also it is one of the highest dividends paying company we found.  Stock Price on 2006 was 333.75 INR which raise staidly to 805 INR today.  CAGR of stock for last 10 year is 8.5% but stock has paid 491.5 INR as Dividend in last 10 year and its average Yearly Dividend Yield is 14.72 % for 10 years.
NMDC
NMDC is state-controlled mineral producer of the Government of India. NMDC is one of the consistence dividend players in Indian stock market. NMDC was traded at 45 INR around in 2006 while it is now 117 INR.  So stock has given 160% ROI with 10% CAGR. Sometime in last 10 year NMDC has given 56.17 INR as Dividend which make it 124% yield and 10 year average Dividend yield is 12.4% .
Hindustan Zinc Limited
Hindustan Zinc Limited (HZL) is an integrated mining and resources producer of zinc, lead, silver and cadmium. It is a subsidiary of Vedanta Resources PLC.  HZL is consistence growth stock with healthy dividend. Stock raised from 25 in Jan 2006 to 245 INR today. With ROI 880% and CAGR of23% Hindustan Zinc makes valuable investment. Stock has paid total 46.7 INR as dividend in same period which make total 10year yield 186 % and annual average of 10 year yield 18.6%. No doubt it make in our list.
Remember Good stock come with great dividend. Don’t forget to look at dividend while you are investing next time. Also please do share  this and comment your view.
“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”
–John D. Rockefeller
Be Smart. Invest Smartly