Investment Decisions

This is meant to be an ongoing record of interesting books that I come across and would love to read. It's for my own reference but if anyone comes across it and wants to buy me a new book, you are welcome :) 1. Handwriting Analysis: Putting it to work for you - by Andrea McNichol 2. Common Stocks and Uncommon Profits - Philip Fisher 3. River of Life, River of death - The Ganges and India's Future 4. Investment Valuation by Aswath Damodaran 5. 100 to 1 in stock market by Thomas W Phelps 6. The Warren buffet way - Robert Hagstrom 7. The education of a value investor - Guy Spier 8. The Dhandho Investor - Mohnish Pabrai 9. How to stop worrying and start living - Dale Carnegie 10. The most important thing - Howard Marks 11. Poor Charlie's Almanack - The wit and wisdom of Charles T. Munger - Peter D. Kaufman 12. Thinking fast and slow - Daniell Kahneman 13. The art of learning - Josh Waitzkin 14. Bogleheads - Guide to Investing by John C. Bogle 15. Fooled b...

Feb 2018 has been a really bad month for stocks. Worryingly, the phenomenon is now also spilling into Mar 2018. Newspaper reports are as usual blabbering forecast after forecast only to be proved worthless. It is a proven fact that most newspaper reports are absolute junk and a waste of time in predicting market direction. You can also find experts on both sides of the table, some clamoring for more blood, others more hopeful but still fearful. Amidst all the noise, I am getting first hand experience of how difficult can it be to be hopeful when your portfolio is deep in red. At the same time, I realize though that it is a convenient opportunity to list down the stocks that have good fundamentals because those are the ones that see the least fall in this broad market weakness. Some such stocks that I see as of Mar 7 that have not fallen much are listed below: 1. Arvind Mills - Jeans manufacturer, ready for a demerger - stays around 380 with a brief fall 2. Asian paints - price...

1982: Acquisition, paid with stock In this letter, Warren Buffett talks about acquisitions and how a company pays for it. Whenever you buy something, the best value you can get is when you pay as close as possible to the intrinsic value of what you are buying. There are several reasons for a company to make an acquisition which usually depend on the kind of management that intends to make an acquisition. A company may want to expand its empire and may be ready to pay much over the intrinsic value of a company which is being bought just for the sake of mindless expansion. Such expansion is in no way good for the investors of the company. Another kind of management may just be acting reckless in a euphoric business environment and want to extend into businesses where it has no business to be in. Such companies irrespective of the value it may pay for a company being bought have a high tendency of resulting in heartbreak. Indian corporate throw up examples like Videocon to substantiat...

Fundoo Professor Sanjay Bakshi is one of the foremost authority in India on value investing. Below are some notes from his podcast with Planet MicroCap podcast. SB's investment style has evolved over a period of time as does everyone's into buying value via good managements and businesses. He likes to invest in businesses where the management has 3 qualities: 1) Operational efficiency-how efficient is a management in conducting its business. This is something that is driven by comparing the performance of a company versus its peers. 2) Capital allocation-this differs from point 1 in that a management may know how to operate efficiently but may not be the best group to know about what to do with the money they make. Should they grow organically/inorganically? Should they buy back or give dividends, etc? 3) Integrity-This is the most important trait since if the management doesn't have this then the business you are buying may be just a value trap where the management ...

So you decided it's time to start investing in stocks. You may have already decided how much you of your money you are going to invest in stocks. Let's find out if you have done your homework right. A lot of financial planners tell you this. What's your age? Subtract it from 100 and whatever you get should be the percentage you invest in stocks and your age is the percentage of your money to invest in safer instruments like debt funds, bonds, bank fixed deposits, etc. I believe this argument makes little sense. Let us consider a few scenarios: 1. An 80 year old woman who has Rs 2 crore as her bank balance. She has no financial liabilities and is self dependent and her children are independent, in no need of support. 2. A 35 years old doctor who has Rs 1 crore bank balance and has a very predictable amount flowing in as monthly income. 3. A 20 years old student who gets Rs 3000 a month as pocket money and saves Rs 1500 each month. The age formula loving financial ad...

Great businesses are everywhere and it makes great sense to buy a portion of such businesses through the stock market. If you can find great businesses through research, enter at a fair value and stay invested for considerable time, there is a fair possibility of getting wonderful returns on your investment. I highlight the 'enter at fair value' because buying something great at an exorbitant is not really going to be fruitful for an investment. If a commercial property pays high rental income then it may be a great investment but you need to make sure you don't overpay for it else it will cease to be a great investment. There are 3 qualities that I have noticed some great businesses possess: 1) Debt free - firms that don't carry any debt on their balance sheet. 2) Cash rich - firms that are flush with cash on their balance sheet. 3) Negative working capital - Firms that can charge the customers an advance for their products and as a result maintain negative wor...