Investors club? Do we need it?

Of late in my office, we have started investors club. Investors club is a group of people who meet every fortnight and speak about a stock picks i.e. why would you invest in this company. This is really great as it helps us in knowing best stocks which will yield better returns for the long term.

However, when there were expectations setting, one of the common trends which were observed; that most attendees were clueless about investing in stocks and directly wanted to invest in the stock markets. Consequently, first session was kept on the basics of various market instruments where individuals can invest. However, just because it was investment club, members still wanted to invest directly in the markets. Some wanted tips without putting in efforts.

I can understand that there is definitely a thrill of directly investing in markets, but there has to be learning process involved.

During the session, I suggested two books: The Warren Buffet Way and One up on the Wall Street as a starting point of understanding stocks and companies. After this session, one and half months have passed and in the next session when asked who has read the book – no one replied yes. None of them has even bought the books, let alone reading them. If this is the case, then how in the hell are they going to read the annual reports which is a most-read document for investing in stocks? Ideally one has to spend 5-6 hours in a week to analyze the stock.

In a nutshell, they want to earn high returns without dedicating themselves for the grinding work. Well, one can still generate benchmark returns, but one has to accept that he can’t devote time on this and there are other experts who can do that for him. Here comes the mutual fund advantage, where the person who doesn’t want to devote much time on research. So he has to be truthful with himself and assess his priorities before diving directly in the stock markets. Yes, this will be unexciting but it frees him to do other stuff which interests him. Also, it provides him the discipline to invest regularly in all market cycles which will ultimately result in creation of wealth over the long term.

Also, one thing which was missed in expectation setting session was that how much one saves of his total income. If the person is not able to save even 10% of this total income, then it is meaningless to speak about investing in front of him. What is he going to invest if he is spending every penny? Is there even a point to explaining him about investing and wasting one’s time…

These are solely authors’ views.

Good Dialogue in Ghajini

Description:
Confidence - "I can do it"
Arrogance - "Only, I can do it"

RIO movie

Trailer can be watched here - http://www.youtube.com/watch?v=p_8Pf8klXDU

I watched RIO this weekend. It is a wonderful movie. Watching with 3-D effects is a must. RIO city, especially Christ – The Redeemer was too good to be missed. The story line was simple; something similar to our Hindi love stories with Happy ending. Same was the case here.

Rating – 3 /5

My favorite movies

Below is the list of movies - Must watch according to me! Will add to this list if I recollect other good ones...

Hindi

1. Lamhe
2. Sahib Biwi Ghulam
3. Kabhi Haan Kabhi Na
4. Dil Hai ke manta nahi
5. Jab We Met
6. Namaste London
7. Golmal
8. Chupke chupke
9. Choti si baat
10. Swades
11. Jane Do Bhi Yaaro
12. Sparsh
13. Masoom
14. Parichay
15. Jo Jeeta Wohi Sikandar
16. Dil Chatha Hai
17. Anand
18. Jewel Thief
19. Khushboo
20. Swami
21. Angoor
22. Ek Doctor Ki Maut
23. Abhiman

English

1. My Girl
2. The pursuit of Happyness
3. Pretty Woman
4. 12 Angry Men
5. As good as it gets
6. Shrek 1
7. Finding Nemo
8. Lion King
9. A Few Good Men
10. LOTR
11. Scent of a woman
12. UP
13. Cast Away
14. Forrest Gump
15. Serendipity

Marathi

1. Ashi Hi Banva Banvi
2. Uttarayan

Namaste London

Yesterday saw Namaste London - Decent movie, KK was superb, Akshay was his usual best
One dialogue which struck me the most

"ishq de meree mitra pehchaan kee
mit javay jadoon zid apnan dee"

English Version:
Being In True Love Means-You Do Not Need To Posses It (explanation taken from http://wogma.com/movie/namastey-london-review/)

What is the identification of love ?
When you are no longer obsessed with the feeling to possess it.

This is quite old dialogue but I just loved it.

Volatility Woes

It was the best of the times, and it was the worst of the time! Volatility in the current choppy markets signifies both worst and best of times. With all the proponents of MPT (Modern portfolio theory with the Betas and Alphas) who really abhor the term citing it as "Risk" will advocate us to stay away from the markets. However, like all value investors, believe volatility helps people who help themselves. Long term investors who have done their homework well will find some discounts, albeit not with higher margin of safety, but high enough to start building their starter positions.

There are very few stocks which are available at good discounts. One of this is Balmer Lawrie &Co. which has one of the best balance sheets among the Indian corporates, offering a 4% dividend yield, and has EBITDA of Rs.110 cr at Mcap of Rs. 900 cr without any debt and cash of Rs. 250 cr. You will find this kind of value buys in market turmoil, but getting these at the current market levels will help to build a strong portfolio of companies.

Disclaimer: Guinea Pigs should try to do their own analysis to make an informed decision. I have a postion in this stock

Inflation woes

Since I am inspired by all contrarian thinkers, I wanted to check out if there is any contrary thing moving inside my head (well only then I can be called as contrarian investor :).

Well, most of us believe that inflation is which makes your rock investment look like a pinch of salt. Yes of course, we have to look at the real returns. 2 months before I purchased a flat TV from LG for Rs.6000/-. 10 years before, the same TV with all the funny technologies like Fuzzy logic, QFT (qudra point focus) etc made strong waves in Indian electronic sector. The cost was somewhere around Rs. 21,000. So its not inflation but deflation in this market. But over the years new technologies are invented. At present we have HDTV /flat paneled TV in which cost atleast Rs. 30,000/-.

What I mean to say, its not inflation which are causing problems but our increased desire for luxury and comfort. What's in the TV. It is the same idiot box which was 10 years ago, and it is going to show same stupid sops. Will Tulsi / Parvati cry more on HDTV's? No...But yes then we want to see tears more clearly.