I am currently going across various websites to collect the PE/VC investment deals, When analyzing these deals it is quite surprising to see that IT boom is not over as yet. It is still in disguise of Advertising boom. May be I am reacting too much and have no doubt that Google is excellent innovation based company but it is primarily a Advertising company.
So when the deals were analyzed, one might say that all these social networking websites are getting another round of funding. I was just wondering is there a real need to invest this hard earned capital in "Social Networking" / dating websites which earns majority of revenues from Advertisements?
So I am just trying to understand the difference between 2 social networking dating websites including their competitive advantages except the ad-spaces, inventories and other so-called efficiencies. There has to be some limit in senseless investments. This shows people have now become too greedy to explore various avenues and going in for some short term quick gains.
There are several social economic businesses lying around where there is still paucity of funds. I am not saying to invest in businesses with bad economics but essentially investments are required in healthcare and other tangible businesses which add significant value to the society.
Friday, December 11, 2009
Wednesday, December 2, 2009
interdepartmental transfer 2
I really thought that I can do great stuff in another department, but I really don't know why I backed out. Was it because I got more accustomed to the current job? Was I afraid of doing something new? Didn't like the processes that I had to do for the early days, despite the assurance from the new boss that this will be taken care of within next few days. But what I really feel that I am at peace now. Does this determine that I am being diffident? To me yes!
Of course taking a decision is quite the pain, but anyways we all have to decide, and whatever the decisions would be we all have to bear the consequence of either good or bad.
Of course taking a decision is quite the pain, but anyways we all have to decide, and whatever the decisions would be we all have to bear the consequence of either good or bad.
Wednesday, November 11, 2009
Interdepartment transfer
it is so difficult from moving out of comfort zone, and especially undertaking new assignment in operations and marketing. Earlier I was just an associate doing some basic research for our clients. But I had taken a initiative to do some marketing and operations for another BU and had applied for interdepartmental transfer. so as and when day of migration is coming nearby, I am now having second thoughts, not knowing whether I am doing the right thing.
But I probably would still go ahead as I think it is better if one adapts to changes constantly,one has open view for doing something new, probably helping his own career. It even means leaving ones own friends and safe targets, and doing some dud work (like uploads)in the new profile. But there is also some great excitement in new work...Hope it is good
But I probably would still go ahead as I think it is better if one adapts to changes constantly,one has open view for doing something new, probably helping his own career. It even means leaving ones own friends and safe targets, and doing some dud work (like uploads)in the new profile. But there is also some great excitement in new work...Hope it is good
Wednesday, October 7, 2009
the whims and fancies of a sell side analyst
who is the sell side analyst
what motivates them to publish reports
why is there a target price, and how is the period determined
why do they want to tell about the stock to the general public, if they have really good pics then they should be just telling their clients and not the whole world
do i want to become a sell side analyst who has freedom to pick up the stocks that he likes or is he just working for another broker who wants a report (with beautiful graphs and just some information so that the clients would fall in love of the stock, and buy the stocks, and then he will earn the brokerage (brokerages are hardly money management businesses, and if they have PMS. it is just restricted to HNI' and have different analysts (often a buy side) or a private client group analysts but then didn't graham worked for a brokerage firm, but i feel he was given a leeway for selecting his own stocks and bonds, and then suggesting the clients to take the decision,
does he need to write so many reports (if the client really wanted to read those he would be doing his own investing and making his own calls, then why does he needs the analyst to help him out. best thing for him to give funds to Mutual funds and PMS's then...i still cant figure out why are so many reports of economics, GDP, Industry report that stretch to so many pages (mostly greater than 40-200 pages). As a retail investor do i time to look at these reports. For the brokerages research is always a cost center, mostly an advertising gimmick.
So my question is do we really need so lengthy reports (which the individual investor seldom reads) for making a right investment decisions? and going one step further do we really need a sell side analyst who prepares the reports and increases the brokerage cost for the individual investor. We really need Discount Brokers in India to escape these high costs then!!
what motivates them to publish reports
why is there a target price, and how is the period determined
why do they want to tell about the stock to the general public, if they have really good pics then they should be just telling their clients and not the whole world
do i want to become a sell side analyst who has freedom to pick up the stocks that he likes or is he just working for another broker who wants a report (with beautiful graphs and just some information so that the clients would fall in love of the stock, and buy the stocks, and then he will earn the brokerage (brokerages are hardly money management businesses, and if they have PMS. it is just restricted to HNI' and have different analysts (often a buy side) or a private client group analysts but then didn't graham worked for a brokerage firm, but i feel he was given a leeway for selecting his own stocks and bonds, and then suggesting the clients to take the decision,
does he need to write so many reports (if the client really wanted to read those he would be doing his own investing and making his own calls, then why does he needs the analyst to help him out. best thing for him to give funds to Mutual funds and PMS's then...i still cant figure out why are so many reports of economics, GDP, Industry report that stretch to so many pages (mostly greater than 40-200 pages). As a retail investor do i time to look at these reports. For the brokerages research is always a cost center, mostly an advertising gimmick.
So my question is do we really need so lengthy reports (which the individual investor seldom reads) for making a right investment decisions? and going one step further do we really need a sell side analyst who prepares the reports and increases the brokerage cost for the individual investor. We really need Discount Brokers in India to escape these high costs then!!
Friday, June 19, 2009
why do people sing hymns
Why do people visit religious places / they sing hymns?
I was actually pondering over this thought since last 2 days. I got some answers but they may be wrong. Whenever you visit a temple,you try to concentrate on something (some idol or even you are not concentrating on idol, in your mind you paint the Gods picture and pray). Isn't this another form of meditation. The fundamental of meditation as far as I believe is to concentrate and keep your mind blank. And this is what temples and other religious places are made for.
Even when you sing hymns and praise for the Lord, you are single minded concentrating on God. The highest meditation form is that you have reached the absolute thoughtless state. A visit to a temple or singling bhajans is one of the ways to reach towards the ultimate stage. Even in Gita, Krishna has mentioned three ways for making yourself enlightened namely Karma Yog (throgh actions without expectation of results),Bhakti Yog (through devotion), Jyana yog (through knowledge), and Raja Yog (through meditation).
So this is a Bhakti Yog and helps in reaching towards path of enlightenment and vairagya (dis-attachment).
Now for the next post, I am thinking about - who is GOD?
(PS.-I am still in Senses :))
I was actually pondering over this thought since last 2 days. I got some answers but they may be wrong. Whenever you visit a temple,you try to concentrate on something (some idol or even you are not concentrating on idol, in your mind you paint the Gods picture and pray). Isn't this another form of meditation. The fundamental of meditation as far as I believe is to concentrate and keep your mind blank. And this is what temples and other religious places are made for.
Even when you sing hymns and praise for the Lord, you are single minded concentrating on God. The highest meditation form is that you have reached the absolute thoughtless state. A visit to a temple or singling bhajans is one of the ways to reach towards the ultimate stage. Even in Gita, Krishna has mentioned three ways for making yourself enlightened namely Karma Yog (throgh actions without expectation of results),Bhakti Yog (through devotion), Jyana yog (through knowledge), and Raja Yog (through meditation).
So this is a Bhakti Yog and helps in reaching towards path of enlightenment and vairagya (dis-attachment).
Now for the next post, I am thinking about - who is GOD?
(PS.-I am still in Senses :))
Tuesday, June 9, 2009
learnings from sam walton
-What did I gain by reading this book?
-Be passionate in business you take than anybody else
-Always change even when it is not essential to do that. Don't become to predictable
-Learn from your competitors, Associates, support staff always does the ground research. Computers will just say how much and not how
-Prepare to bring in staff more qualified than you are
-Invest in systems that are going to benefit your customers. They will appreciate that and become your repeat customers
-Set goals and strive to achieve those
-Laugh at your failures
-Hold Saturday meetings to know more about the specific stores, and the successful store can disseminate information to the stores that are not working
-Make the associates as partners in the business. Aim for servant-leader (you are the both) relationship
-Try new promotions and new things rather than not doing anything, and be open to fail in that
-Be a family man too (also coming from Dhirubhai Ambani)
-Be frugal, but at the same time if something is needed for gaining competitive advantage, spend the amount in a judicious manner, and especially do that if it is helping customers
-Like your customer and never lose him. Do everything that he wants. Always over deliver.
.....and many more
-Have now picked up, the biography of JRD TATA-Over the last blue Mountain-By R M LALA, will post my learning after finishing it.
-Be passionate in business you take than anybody else
-Always change even when it is not essential to do that. Don't become to predictable
-Learn from your competitors, Associates, support staff always does the ground research. Computers will just say how much and not how
-Prepare to bring in staff more qualified than you are
-Invest in systems that are going to benefit your customers. They will appreciate that and become your repeat customers
-Set goals and strive to achieve those
-Laugh at your failures
-Hold Saturday meetings to know more about the specific stores, and the successful store can disseminate information to the stores that are not working
-Make the associates as partners in the business. Aim for servant-leader (you are the both) relationship
-Try new promotions and new things rather than not doing anything, and be open to fail in that
-Be a family man too (also coming from Dhirubhai Ambani)
-Be frugal, but at the same time if something is needed for gaining competitive advantage, spend the amount in a judicious manner, and especially do that if it is helping customers
-Like your customer and never lose him. Do everything that he wants. Always over deliver.
.....and many more
-Have now picked up, the biography of JRD TATA-Over the last blue Mountain-By R M LALA, will post my learning after finishing it.
Tuesday, May 12, 2009
Lynch guide to Indian Stocks-2
Coming back from my Earlier post regarding "Lynch's guide to Indian Stocks", I have missed something that Mr. Lynch always told that just because stock has gained in price does not mean that the stock is expensive and is not a reason of not investing, and vice-versa. He advised to look into Walmart stock (WMT), where the stock has generated promising returns for its shareholders y/y consistently.
I had assumed that after PE fund invest in the company, they reap major benefits than the shareholders who have participated in an IPO. I have been proven wrong by this scenario.
Take an example of Bharti Airtel Ltd.
-Warburg Pincus had invested $292M in 1999 for ~19% stake, and exiting from the investment in 2005 at $1616M, making cool profit of 5.5 times in the span of 5-6 years, which is damn good
-Now enter the retail long-term shareholders at Rs.45 via IPO at P/BV of ~2 (the company was not making profit during that time). If the investor had tremendous faith in the fundamentals and had stick around with the company for another 6 years (same as the PE fellow), then the CMP of ~534 as on Oct08, when the markets crashed to the new lows, the stock would have generated staggering return of 12 times-more than Warburg Pincus returns.
Of course this is a hind sight bias, but I have to admit my original these is incorrect and Mr. Lynch is 100% right for this part.
Monday, May 4, 2009
Emperor's New Clothes...
Emperor's New Clothes...
Come a rally, all the analysts in the market are saying that its a bear rally, some have even gone ahead to say that the worst is over. So I am just pondering over the analysts calls. Most of the analyst have specialized knowledge in particular domain, lets say, a Pharma analyst. He has to do the most important thing of keeping tabs of the pharma companies he is covering, and from this he gazes into a crystal ball to predict the earnings. I can understand if the prediction levels are generalized but basically all the analyst will try to predict each line-item in the financial statements and then come up with the target price using some of the most sophisticated valuation tool-THE DCF. If you aspire to become an analyst some time in the future, you have to learn the DCF modeling, only then you may treat yourself as an analyst. Coming back to my story of predicting earnings, isnt it futile to predict earnings as its a pretty difficult exercise to do.
Graham insisted to choose "precaution" than "prediction". But then who wants to follow simple techniques, rather analyst try to challenge their intellect by predicting the earnings. To make the matter worst, they try to predict changes in the earnings quarter by quarter, and the statistics tells us that analyst forecast is nothing more than throwing darts blindly. Good analysts try to forsee the company in the ways that even the layman will understand. They see the companies growth by building the decision trees; what is the probability that the company will grow earnings at x% or y%. If the odds provide favorable margin of safety, they will recommend the stock despite the growth rates being below the analysts estimates. And to be frank majority of the analysts know that their forecasting abilities are nothing more than throwing some intelligent numbers, but who will say that the emperor is wearing nothing!!!
Come a rally, all the analysts in the market are saying that its a bear rally, some have even gone ahead to say that the worst is over. So I am just pondering over the analysts calls. Most of the analyst have specialized knowledge in particular domain, lets say, a Pharma analyst. He has to do the most important thing of keeping tabs of the pharma companies he is covering, and from this he gazes into a crystal ball to predict the earnings. I can understand if the prediction levels are generalized but basically all the analyst will try to predict each line-item in the financial statements and then come up with the target price using some of the most sophisticated valuation tool-THE DCF. If you aspire to become an analyst some time in the future, you have to learn the DCF modeling, only then you may treat yourself as an analyst. Coming back to my story of predicting earnings, isnt it futile to predict earnings as its a pretty difficult exercise to do.
Graham insisted to choose "precaution" than "prediction". But then who wants to follow simple techniques, rather analyst try to challenge their intellect by predicting the earnings. To make the matter worst, they try to predict changes in the earnings quarter by quarter, and the statistics tells us that analyst forecast is nothing more than throwing darts blindly. Good analysts try to forsee the company in the ways that even the layman will understand. They see the companies growth by building the decision trees; what is the probability that the company will grow earnings at x% or y%. If the odds provide favorable margin of safety, they will recommend the stock despite the growth rates being below the analysts estimates. And to be frank majority of the analysts know that their forecasting abilities are nothing more than throwing some intelligent numbers, but who will say that the emperor is wearing nothing!!!
Wednesday, April 1, 2009
Lynch's guide to Indian Stocks
Can we have Peter Lynch's sort of growth companies in India?
Peter lynch the legendary investor is often renowned for picking up stocks which had great scalable model, most preferably retailers like WMT, NKE, Service Corporation and etc. This was in the time when there were dearth of VC and PE's; the companies directly approached the stock markets and expanded. Those who grew conservatively taking into conderation the managerial depth, proper cost control, strengthening margins and cautious growth wihout taking debt load did give multibaggers to him. Not all of them were multibaggers; some collapsed and some gave superlative returns.
As a lay investor, I was searching for some good stock pics in simple to understand industries. We have very few companies in retail like Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons. For me theie debt levels are really too high, and in the midst of the economic slowdown they are not managed to post positive same-store growth. In that case, where the organized retail is expected to grow double-digits for the next few years, this is giving negative signals.
Another advantage Mr. Lynch had was absence of financial instruments and so-called "structured deals" which hid the true accounts of the companies. I am not taking anything away from him. He is one of the best stock pickers history has ever known.
Next post...I will continue on this giving the facts of the returns made by the investor the company directly entering the primary markets vs. company funded initially by PE/VC and then going for primary markets.
Peter lynch the legendary investor is often renowned for picking up stocks which had great scalable model, most preferably retailers like WMT, NKE, Service Corporation and etc. This was in the time when there were dearth of VC and PE's; the companies directly approached the stock markets and expanded. Those who grew conservatively taking into conderation the managerial depth, proper cost control, strengthening margins and cautious growth wihout taking debt load did give multibaggers to him. Not all of them were multibaggers; some collapsed and some gave superlative returns.
As a lay investor, I was searching for some good stock pics in simple to understand industries. We have very few companies in retail like Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons. For me theie debt levels are really too high, and in the midst of the economic slowdown they are not managed to post positive same-store growth. In that case, where the organized retail is expected to grow double-digits for the next few years, this is giving negative signals.
Another advantage Mr. Lynch had was absence of financial instruments and so-called "structured deals" which hid the true accounts of the companies. I am not taking anything away from him. He is one of the best stock pickers history has ever known.
Next post...I will continue on this giving the facts of the returns made by the investor the company directly entering the primary markets vs. company funded initially by PE/VC and then going for primary markets.
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