Macro Picture - Should We spend time on it?

What is coming off in investment these days?
•Europe crisis looming ahead - Greeks on verge of default.
•Interest rates still high due to inflation

Where are we heading towards? What will happen to our investments? Why are we worrying about the macro factors?

I wouldn’t have but it is necessary to take the holistic view to check if everything is alright in the global markets especially after reading Jim Rogers. But one must not completely look at the macro picture. If the economy is not doing well, then majority of the companies will not do well. This is the time where the good companies are available cheap and you can start investing in them. Yes, everything won’t be hunky-dory and it will require tremendous amount of patience to get adequate returns. But as Warren Buffet said, time is a good friend of good businesses while it is a foe for bad businesses.

Happy investing!

what am I reading and watching

What am I reading since last week (diwali)

Hot commodities - completed
Adventure capitalist - currently reading
Revolution 2020 - Completed
Norwegian Woods - Currently reading
The Great Gatsby - Have to start

Which movies I saw
Shaitan
Mere Brother Ki Dulhan

It seems that I am relaxing too much. Not working at all and indulging in books and movies...

Cheshire Cat quotes which I like

Cheshire Cat "`Cheshire Puss,' [Alice] began, rather timidly, as she did not at all know whether it would like the name: however, it only grinned a little wider. `Come, it's pleased so far,' thought Alice, and she went on. `Would you tell me, please, which way I ought to go from here?'
`That depends a good deal on where you want to get to,' said the Cat.
`I don't much care where--' said Alice.
`Then it doesn't matter which way you go,' said the Cat.
`--so long as I get SOMEWHERE,' Alice added as an explanation.
`Oh, you're sure to do that,' said the Cat, `if you only walk long enough.'"

"`But I don't want to go among mad people,' Alice remarked.
`Oh, you can't help that,' said the Cat: `we're all mad here. I'm mad. You're mad.'
`How do you know I'm mad?' said Alice.
`You must be,' said the Cat, `or you wouldn't have come here.'
Alice didn't think that proved it at all; however, she went on `And how do you know that you're mad?'
`To begin with,' said the Cat, `a dog's not mad. You grant that?'
`I suppose so,' said Alice.
`Well, then,' the Cat went on, `you see, a dog growls when it's angry, and wags its tail when it's pleased. Now I growl when I'm pleased, and wag my tail when I'm angry. Therefore I'm mad.'"

Source: http://www.alice-in-wonderland.net/school/cheshire-cat.html

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)