Calm Investor on Paisa Vaisa

Had the opportunity to sit down with Anupam Gupta (@b50 on twitter) to talk about investing on the paisa vaisa podcast. Paisa Vaisa incidentally won the ‘Best Business Podcast’ award for Asia. Blurb from the ivmpodcasts.com page: How people get their forecast wrong about the stock market? What is Warren Buffett investing strategy? Why is it difficult to emulate Warren Buffett investing style? In the episode, Anoop answers all your queries and shares his blogging journey. He also talks about what we must look at before choosing a financial advisor, and more about the stock market.

Read more

The complete list of 2020 stock recommendations

This has become an interesting annual exercise where I track stocks recommended at the end of the year by the various research houses from big investment banks to brokerages. After all, there are the folks with high-powered research teams equipped with bloomberg terminals. You would expect them to outperform the simplest way you could invest, i.e. buying the index. Recap of how the professionals did in 2019 Here’s how the professionals did. The 13 research teams I tracked recommended a total of 98 stocks (with overlaps). If you had invested equal amounts of money in their stock picks, you would

Read more

Does Momentum Investing work in India

This post was first published on capitalmind.in In Short Contrary to how it might seem in financial media, momentum as an investment strategy has been around for the better part of a century. Empirical studies going as far back as 1801 have shown momentum works, not just in equities, but across asset classes. Momentum outperforms broader markets. Momentum outperforms benchmarks in India. We extensively backtest a momentum strategy against portfolios of randomly selected stocks, and against the benchmark indices. But the outperformance comes at the cost of higher volatility and higher point-in-time drawdowns in the short-term. Stick with it though,

Read more

Does Buying Expensive Quality Stocks Work?

This post first appeared on capitalmind.in It’s the 1960s. New investors join the markets in droves. The number of shareholders crosses a landmark number for the first time in history.  Most of these new investors flock to mutual funds.  Assets under Management, having grown 7x in the last decade, are on track to grow more than 3x. A star fund manager breaks away from the firm that he helped make the face of the mutual fund industry to start his own. His NFO seeks to raise $25M, an ambitious amount for the time. He plans to charge as much as

Read more

The Best Health Advice that’s worked for me

No Net Worth number compensates for needing a neck, back, knee brace to get through the day. The good thing, unlike time, being in the best physical / mental state you can be is not a perishable commodity. It takes more work depending on how much you’ve let it slide, and yes, the raw material, your genes. Anyone, irrespective of age or gender, can improve, whatever their current state. This post summarizes the best health advice I have received and implemented to see benefits. I have been moderately physically active in some shape or form since my late teens. It

Read more

Making sense of sector valuation multiples

This post was also published on capitalmind.in In Short Valuation multiples (EV/EBIT: Enterprise Value / Earnings before Interest & Taxes) are indicators of investor willingness-to-pay for future earnings growth Some sectors currently see a narrow range of multiples while others see broad ranges Analysis of what drives multiples suggests three key metrics: Sales growth, Return on Capital Employed (ROCE), and Cash-Flow from Operations as % of Net Profit are the key factors driving valuation multiples Current multiples might be overly optimistic for some sectors and overly pessimistic for others A chart first to set context. Range of enterprise value (EV/EBIT)

Read more

The smelting of Indian stocks

This post was first published on capitalmind.in Markets have been getting smashed over the last 12-18 months, dramatic corporate tax reform notwithstanding. But because our benchmark index views are market-cap weighted, they don’t do justice to the phenomenal destruction in value across the board. Overall, the 1,900 companies we analysed, went from a market cap of Rs 1,46,19,230 Crores ($ 2.1 Trillion) in the middle of 2018, to currently about Rs 1,37,95,850 Crores ($ 1.97 Trillion).  Wait. That’s a 6% decline in a little over 12 months. What’s all the hand-wringing pessimism about then? Maybe we’ve just been spoilt by

Read more

The most profitable industries in India in 2019

“Why so glum? It’s friday afternoon for crying out loud” (A senior executive to his subordinate) Subordinate: “See this pile of resumes? All applicants for that open role on our team. I’ll spend the best part of the weekend shortlisting this lot.” Senior Exec: (picks up pile, splits into two. Tosses one half into the trash can) Shocked Subordinate: “What about finding the best person for the role?!” Senior Exec: “Who needs unlucky people on the team. Enjoy your weekend.” Think of the pile as companies you could invest in. Sure you could comb through each one to find the

Read more