2014 – The year that was….
As we say good bye to 2014, we can say that it was one of the better years for the market in general. NIFTY has gone from 6300 to 8200, a 27% increase. If one were investing in NIFTY on a monthly basis, one would have realized a return of 14%. This has been a […]
Wealth creation is value creation
Wealth creation has always been about value creation through innovation and invention. The richest people in the world today, Bill Gates, Warren Buffett, Carlos Slim, Larry Ellison, Koch family etc., have created value by building businesses. Wealth creation happens by deploying capital to create value. Capital could be any asset like cash, land, an idea […]
It’s all relative
Sensex is at 28,500 is it too high? Gold is at 2,700 can I buy at this price? These questions are looking at just one number and trying to determine if it is reasonable. This is almost like looking at a cab fare and not considering the distance you want to travel. Sensex is a measure of […]
Three P’s of investing
Philosophy: Investing philosophy is the set of underlying beliefs that will drive the investment approach. For instance – Value investors will invest only when the valuations are reasonable, contrarian investors will do the opposite of the crowd, technical investors will invest based on the charts, Black swan investors will take bets on extreme events and […]
Your investments in the east will go north
A case for NRI’s to invest in India: If NRI’s were looking for 2 reasons to invest in Indian markets those would be: Growth story – US market (S&P 500) had an historical return of about 10%. Indian markets have returned over 15% for the last 35 years. With significant opportunity for deployment of capital and […]
Interest in Retirement
Many would like to evaluate their retirement options, plans for retirement are usually based on building a corpus that when invested in a bank deposit can reasonably sustain their life style and take care of inflation. This is a good plan but for a key challenge – the amount needed is significant as the interest rates […]
Counting small things and making small things count
Making good financial decisions is not all about big decisions, it is also about the small decisions that have a significant impact. I had a term life policy which I had bought about 9 years ago. The prices of term life insurance have fallen drastically since that time and now I could buy the same […]
Predictably irrational….
Our bias: We believe that more people die in cyclones or earthquakes as opposed to malaria. We remember extraordinary events, hence we feel that they have a greater impact. Economic impact of our bias: Markets crashes, losses, and frauds get a lot more air time – hence there is a prevalent misconception about business. We […]
Getting time on your side…
Let’s say you believe that team A is an excellent team. If you are betting that your team will win in a game then you have to be right on that day, which is not certain as even the best teams can have an off day. But, if you are betting on good win record […]
The only certainties in life are death and taxes
Tax avoidance is the legal usage of the tax regime to one’s own advantage, to reduce the amount of tax that is payable by means that are within the law. (Tax avoidance is legal, tax evasion is not) Managing taxes well will help us keep more of our money. We should realize that the people […]
How to pay the piper….
If you have a financial advisor or a portfolio manager or if you have assets in a mutual fund you are entrusting your funds to a professional for management. You are expecting the advisor to make “good” returns and the advisor is expecting a fee for the services provided. At the outset, let’s get one […]
The average shall generate the wealth…..
Let’s say you have good friend Ashish, who is an “excellent and ethical” businessman. Ashish wants you to invest some money in his business. He will have to offer you a better rate of return than the bank rate to get you interested in investing in his business. If the bank paid you more, you may […]