How to value company with negative cash flows:

First of all why would you like to select the company having negative cash flows consistently (here I am assuming consistently means for duration of 3-5 years). It’s better to ignore them.

However, we can segregate them in 2 categories:

The newly established companies like Linked in, which does not have positive cash flows

The perennial loss making company like MTNL which has negative cash flows due to high fixed cost and are unable to recover them

Valuation will differ depending on the above types:

For the first type of company, ideally DCF should be used, but it is difficult to look in the future. Another thing which can be done is you estimate eps for next few years and multiply it by PE (general estimate), and then you discount the price by the discounting rate (a hurdle rate).

Other option is just valuing the company on tangible assets

2nd type of company:

No point of valuing it :) I wouldn’t. However if you want, you can value it on basis of liquidation value

It requires tremendous patience to get the correct appraisal from the market for these companies

Running away

I want to run away from myself....Why??? To find myself!

Good morning mumbai dialogue. Lage Raho Munnabhai (Vidya Balan)

Shaher ki is daud me daud ke karna kya hai?
Jab yehi jeena hai dosto to phir marna kya hai?
Paheli barish me train late hone ki fikr hai
Bhul gaye bhigte hue tahelna kya hai?
Serials ke kirdaaro ka saara haal hai malum
par maa ka haal puchhne ki fursat kaha hai?
Ab ret pe nange pao tahelte kyu nahi?
108 hai chanel phir dil bahelte kyu nahi?
Internet se duniya ke to touch me hai,
lekin pados me kon raheta hai jaante tak nahi.
Mobile, Landline sab ki bharmaar hai,
Lekin jigri dost tak pahuche aise taar kaha hai?
Kab dubte hue suraj ko dekha tha, yaad hai?
Kab jaana tha shaam ka guzarna kya hai?
To Dosto Shaher ki is daud me daud ke karna kya hai
Jab yahi jeena hai to phir Marna kya hai?

Har Ek "Facebook" Friend Zaroori Hota Hai?

Bharti Airtel has come up with an advt. with tag line “Hare ek Friend Zaroori Hota Hai”. It’s a really good ad. And has a nice jingle around it. However this ad. made me think of what is friendship. It has described various kinds of friends. Out of which, one type could be Facebook friends. I have seen many of my friends having 500-700 facebook friends. (Mine is just ~150 :().

This can tell you one thing:
1.The person having large number of facebook friends is highly social, and could be mostly very outgoing. Here one really has to know what is the definition of facebook friend from him.

2.It could be other way round as well –
the one with limited friends is very choosy, doesn’t have time to be on facebook often, has opened the account due to peer pressure, or he is least bothered with new things happening in other person’s life.

I wonder where do I fit in (yeah in the second point – first point is out of scope for me)

In the Bazaars of Raviwar Peth…

“Where do you stay?” I reply “Pune City Area – Raviwar Peth”….Never heard of this place before…most of my colleagues reply. “Tu Gavat Rahato” I feel offended :).

Is city a village? Majority of my colleagues stay at outskirts of the main city – most of them are plush locations of Aundh, Baner, Kalyani Nagar, Kondhwa, and Koregaon Park which are predominantly residential areas. However, my (sorry my ancestors!) 5-storeyed house stands tall in the wholesale hub of Pune. Now, this wholesale market sells everything from safety pins to software, but yeah it is still a village! Let’s compare the property rates here – 30000 per sq feet at Raviwar Peth vs. 8000 per sq. feet at Aundh / Baner, little high for other areas mentioned above, but not at par at Raviwar Peth; but yes it is still a village…

However, a person who has spent its childhood in Raviwar Peth would be able to live in the bazaars of Raviwar Peth – bazaars where there is constant honking (by 2 wheelers, 4 wheelers would make traffic jam, and everyone would curse them for bringing them in this locality). So that’s the reason of not owning a car (:), though I still don’t know how to ride a bike too).

So what do I like about Raviwar Peth – area with narrow lanes and only commercial space that I am writing a blog about. I can spend countless hours looking at people. Families of four come on 2 wheelers and buy groceries, toys, birthday gifts, cosmetics, and clothes. Seasonality bring true colors to this place – Buying lights for Diwali, Small thermocol temple and thrones for Ganesh Chaturthi, Rakhi for Rakshabandhan, and of course colours for Holi. I enjoy looking at them, their purchase habits, their haggling nature, and poor husbands and boyfriends who totally seem out of place. But yes, they get the goods cheaper than “Big Bazaars”, and they seem happy about it.

All this viewed from balcony; where there is really cool breeze blowing on your face. Two – three hours are nothing when you enjoy this stuff. Though there are some disturbances from my mom who thinks I am wasting time. So after my office hours I usually stand in my balcony to catch the glimpses of the market – (also helps to know which festival is around and how one can plan out leaves!!!). “Why are you lazing around” mom remarked breaking my reverie.
“Lazing around” who said so?
“No one said, I can see”
“I am learning psychology in practical way” I say giving intelligent looks
“Which psychology?”
“Consumer psychology” She doesn’t say anything then. Sometimes I do win in the arguments…

Smartfone for Dumb!

Well, after five years I bought a new cell phone. I was still content using my old phone but much to my dismay, I couldn’t disconnect my phone as the button was not working. So unless the person at the opposite end didn’t disconnect, the phone was still on.

Also, my family and friends (who already knew I was a great miser) coerced me to hunt down some good color phone with lots of features and so called apps (read as android and bb’s). What they didn’t know that I am technologically challenged and will probably never use any of the above features except listening to the music. This is one thing which I thought that my current phone lacked.

So on Saturday afternoon, I was on my way to buy a phone. Unfortunately, my sister got up early from her afternoon siesta and joined me in my phone hunt. What I was very clear about that I would be purchasing a Samsung phone. She also liked Samsung so I was saved by the torture of arguing which phone is the best one.

We reached the store and I made a point of just taking 15 mins. to finalize the phone, but I forgot I was with my sister who is a hardcore android devotee. I selected one simple Samsung cdma phone having FM radio+Music player and it was costing Rs.4650/-. It was a little higher priced as compared to GSM but I didn’t want to change my service provider so had to accept the price. I still can’t figure out why is there a need to CDMA and GSM. GSM is sufficient and it has more varieties of phone at cheaper rates than the CDMA versions, but our telecom ministry wants to make things complicated for the consumer.

“Why are you buying this one?” Ruchi spoke with pursed lips. She was aghast with what I was buying. She informed that I was not going along with the trend. “I am not a trend setter” I replied with annoyance. But she insisted me to buy the android version (Galaxy Pop) costing Rs.8500/-. I was quite defiant. Its simple, I am not smart enough to buy a smartfone :). Why should I freak out additional 3000/- bucks for the phone features which I am hardly going to use? “So if you are not buying I am gonna buy it”. I gawked at her! But who can win against women. She didn’t have her debit card and ultimately I had to pay Rs.13500/- (This was a lesson of being Smart! :()

Delhi Belly **** should be negative starred

Can film reviews be compared to the hyped growth stock? Undoubtedly, I would like to compare Delhi Belly as a tech stock of 2000’s. Absolutely no value and all hype!

It was the first movie in my life where I wanted to just leave in the interval (there was no interval, so after 45 mins. I felt I had to just move out of the movie hall). What is Aamir Khan trying to show in this movie, I still can’t figure out...

Yes, he has become a master salesman who can sell any lame movie with all the Peppery words to the public. All Ivy league B-school grads should call him as a guest lecturer. After all we do need to train these chaps in becoming big shots in insidious firms like Lehman and Bear Stearns. Well, he will be a best prof to guide that, especially when he can get 4 Stars in all the major newspapers for this crappy movie.

All major newspapers said it’s the best youth movie which is gonna be a cult movie. Now I can understand Dil Chahta Hai and even Rang De Basanti being a cult movie, but Delhi Belly – not even in my wildest dreams!

There is hardly any story line. It is just one of the stereotype movies where the smuggled diamonds are misplaced by the protagonists, and there is complete chaos for getting the diamonds back by goons and them. I would have been okay with stuff too but this is just one part of it. The movie begins with an abuse (all words BC, MC, G, C, etc. etc….) and ends with an abuse and there is nothing except this. Yes, there is farting too in this one (bad Belly you see :)).

Now come to the worst part, people were laughing whenever these words were spoken! or some farting scene was shown. This was supposed to be a funny movie….but we have stooped so low in making such movies or we fell so low in our standards, that we are calling this funny stuff. Farting will be enjoyed once….not in every other scene. Even kiddos will laugh for 5-6 times max. but we adults weren’t tired of laughing….

Does youthfulness means using abusive language as fad and showing off? Well I am still a youth (I assume :P) and I sparingly use any of the above words but I have friends who use them, but occasionally, definitely not in every sentence….and I presume that this would be applicable to most of us!

So was just wondering, how does this movie get 4 stars. Hats off to Aamir! You are truly a RocketSingh...