How to fail at almost everything and still win big

How to fail at almost everything and still win big “I find it helpful to see the world as a slot machine that doesn’t ask you to put money in. All it asks is your time, focus, and energy to pull the handle over and over.” – Scott Adams Most autobiographical self-help books on success recommend a “work hard”, “stay focused”, “never give up” doggedness. This book is one of the few that makes a direct reference to the role of luck in living a successful life. The typical tone of self-help books “I have it all figured out so

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The curious case of HUL and how the markets play favourites

Hindustan Unilever just posted its results for the quarter ending March 2018. A healthy 14% year-on-year increase in net profit mostly attributable to a poor base quarter. HUL stock price promptly went up from around 1504 to 1574, a 4% increase in a couple of days. It is now valued at 65 times Earnings This means, If HUL’s profits stay the same and it paid out all of it’s profits to shareholders, it would take 65 years for a shareholder to recover her current buy price. For context, the NIFTY is at 27 times earnings. Chart shows HUL Earnings and

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How to evaluate an investor

Supreme Industries, Cera Sanitaryware, Page Industries, HEG India, Thirumalai Chemicals, APL Apollo Tubes… We see/hear about them all the time. On Twitter, in blog posts and in conversations. Investors or Investment Managers talk of a stock they identified, a few months or years ago that has since several ‘X’d its initial price. When they explain their rationale for why they felt it was massively undervalued, it seems obvious, in hindsight. Let’s temporarily suspend cynicism and appreciate the investors’ skill in identifying multibagger stocks. Now how do you decide whether you should give them your money to manage or take their advice

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Debt in Indian Companies

How much debt have Indian companies taken on over the last few years? Chart shows the aggregate debt on the balance sheets of listed Indian companies from 2008 to 2017. Note this is from a sample of ~ 1,000 largest companies by market cap. Since 2008, total debt has grown by 3.7X from 7.6 Lakh Crores (USD 116.8 Billion) to 28.3 Lakh Crores (USD 434.9 Billion) in constant currency terms. For context, the lines on the chart show total debt as a percentage of market cap and of country GDP (unadjusted for inflation). Which brings us to the natural question: Which

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Fundamental Analysis Tools for Investors in India

In the course of finding the most time-efficient way of analyzing companies shortlisted for investment, I’ve come across various tools available to Indian investors. This post compiles a list of some of the tools that I’ve tried either briefly or extensively along with some of their key strengths and weaknesses. Note that this list is far from comprehensive and also that digested analysis from any source is typically only a starting point and not a substitute for diving into past annual reports to gain context of the fundamentals. Overall note of caution on using any tool that aggregates data is to assume

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The most profitable industries in India

If you were to guess which are the most profitable industries in India on a PBITDA basis, what would your top 3 guesses be? How about the least profitable industries? Chances are you didn’t guess Marine Port & Services, Roads & Highways and Mining for the former and Commercial vehicles, Storage Media & Peripherals for the latter. Chart shows the top 10 most PBITDA profitable industries in India as of the last financial year. It also shows the PBITDA for the period 2012 to 2016 for comparison as well as the most profitable industry in each sector. Note that sectors with aggregate

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Beating the Street

I learnt a while ago, when reading non-fiction books, it’s important to mentally separate the content into what’s interesting because it’s entertaining and what’s interesting because it has underlying principles that help me understand the world better. Great books tend to combine entertainment and providing tools/frameworks but most books lean one way or the other. For books on investing and business in particular, I learnt to become wary of eloquent stories replete with hindsight bias that end with convenient and short takeaways as a guide to successful anything (outthinking competition / managing world-class teams / investing…). For investing books, unless the content is

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India Sector Sales Growth

India Sector Sales Growth Chart shows aggregate Sales Growth by sector from 2008 to 2017, ordered by top 40 sectors by Sales in FY17. The growth columns show compounded growth rates broken into two periods, 2008 to 2014 and from 2014 to 2017. The red shaded cells in the ’14 – ’17 column show sectors that have seen negative sales growth in the last three years. The green shaded cells highlight the sectors that have grown faster in the last three years than in the six years before that. Banks continue to be the largest sector by revenue over the

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