Archives for 2012

3 Big Risks in Value Investing – Part 1

“Who would join a Facebook chat around investing on a bright Saturday morning?” I asked myself while preparing for the latest session of Safal Niveshak’s Facebook Jam on June 9.

I opened the session for questions at 9 AM, but the first question came only at 9.16 AM. So my fears were coming true. But then, the speed at which people came in and the intensity at which the discussions progressed, it was an amazing feeling by the time the jam ended at 11 AM.

Click here to read the transcript of the jam. The next session will be held on coming Saturday, 16th June, between 9-11 AM.

Anyways, the reason I’m talking about the Facebook Jam is that this is one platform where I’ve encountered the best questions around investing over the past four weeks since it all started.

Like in the last session, one of the avid readers of The Safal Niveshak Post asked, “What are the risks involved in value investing?”

Opto Circuits, and Power of Story in Investing

Power of Story If you clicked on the headline expecting to read my view on Opto Circuits, I’m sorry to disappoint you because this post isn’t about that.

The reason I mention Opto Circuits here is because I have received several emails over the past few days requesting for my view on the stock.

Given the number of requests for this specific company, I would definitely work on the same and try to release a report soon via StockTalk. But what intrigues me is – Why are so many people suddenly talking about a small-size company called Opto Circuits?

What’s the story?

Well, that’s what I’m going to discuss today – investing and power of “the story”.

Satyameva Jayate in Financial Services: When Victim is also a Criminal

I am a big fan of Aamir Khan and his ideas, so I make it a point to watch Satyamev Jayate every Sunday morning.

Over the past five weeks of watching the show, I’ve realized that there are three types of people who relate to Satyamev Jayate…

People who suffer from the crime – the victims
People who create the crime – the criminals
People (like you and me) who aren’t criminals but love/hate to hear about the crime between 11 am and 12.30 pm on Sundays

I feel sorry (and pathetic) for the first type – the victims. They really deserve huge moral support from their families and friends.

Is this a Good Time to Be a Value Investor?

A reader of The Safal Niveshak Post sent me this email yesterday…

For the last few days, one question is worrying me. As a value investor, even if I choose value stocks after thorough analysis of the business, how do I factor in general macro-economic environment, global slowdown, etc.? How do I know these macro-economic factors will not keep markets subdued for years to come? How do we identify if it’s not great depression again?

Just to add, is there a wrong time for value picking, or is it always the right time as long as there’s thorough analysis and sufficient margin of safety

Very important questions, I must say.

Traditionally, value investors have tended to ignore macro-economic issues and have focused on bottom-up investing.

Safal Niveshak StockTalk #7: Clariant Chemicals

Welcome to the seventh issue of Safal Niveshak StockTalk.

After covering Balmer Lawrie & Co. Ltd. last time, this time I delve deeper into another small-cap company, Clariant Chemicals India Ltd. (CCIL). Before we dive deeper into CCIL, here is a brief overview of the sections of this report.

About CCIL
Safal Niveshak’s 20-Point Checklist
Intrinsic Value Assumptions
Financial & Market Snapshot
“Should I Buy CCIL?” Checklist

An Open Letter to My Daughter

My dearest Kavya,

These past seven-and-a-half years seem to have gone by like the blink of an eye.

You’ve gone from a newborn princess cradled in my arms to a small princess experiencing the joy and independence that life can bring.

I can still recall the moment I got the news of your birth. I was not by your side then, but I felt like the happiest father on earth. Your mother and I marveled at your red cheeks, wrinkled fingers, and your intense eyes.

Your birth gave me the experience of my lifetime…an experience that holds the most precious place in my heart.

How to Invest When the Stock Market is Sinking?

Let me create some fear if you aren’t fearful as yet.

India’s economy is going downhill, fueled by a rising deficits, and falling rupee, governance, and hopes.

Foreigners are taking note, and pulling money from their Indian investments.

Led by this, the stock market is tumbling. The Sensex is down almost 22% or 4,600 points from its last peak in November 2010 (18 months).

Some so called ‘safe stocks’ are down even more – like BHEL is down 59%, L&T is down 46%, Tata Steel is down 36%, and Infosys is down 23% (since Nov. 2010).

How can such a scenario not trouble even the most sensible of long term investors?

Is it sane to invest during such bad times?
Should you sit on the sidelines?
If not, how should you invest in these volatile times?

I tried to provide answers to all these questions in Safal Niveshak’s Friday Night Facebook Jam…

…which finished just an hour back.

Click here to read the transcript of today’s session if you couldn’t participate.

Click here to read the transcript of last Friday’s session.

The next session of the Friday Night Facebook Jam will be held on 1st June 2012 between 7 PM and 9 PM on Safal Niveshak’s Facebook page.

Block your calender!

70 Reasons to Stop Complaining about Rising Inflation (Plus 1 More)

Emergency Post I know…I know how much you cursed the government last night for raising petrol prices by Rs 7.5 per litre!

I know how much you’ve started loving all those ‘revolutionaries’ who are calling for a nationwide protest against these hikes!

It’s funny to see all those queues outside petrol pumps with people waiting to get their vehicles pumped up with as much fuel as possible…as if that is the only fuel they will need for the next several years. (They must’ve burnt more fuel waiting to get their tanks filled up!)

3 Investing Lessons from Facebook IPO No One is Talking About

Let me start by repeating what has already been repeated somewhere else. Facebook just raised US$ 16 billion in its historic IPO.

It sold 421 million shares for US$ 38 each, a price that valued the company at a mammoth US$ 104 billion, or 107 times its profits in the last year (P/E of 107 times!).

Now how much is US$ 104 billion in market cap? Well that’s 25% more than the combined market cap of India two biggest companies (by market cap) – TCS and Reliance Industries.

I’m a Facebook fan, only and only because of the connections it has helped me create with my friends and readers (that it can become a pastime or is dangerous for kids is another point of discussion). I’m on it for business reasons mostly, but I’m on it.

Like just last Friday, I conducted the first session of Safal Niveshak’s Friday Night Facebook Jam…where we had some great discussion around investing (Check out a part of the discussion here).

You can join the jam this coming Friday evening (25th May), between 7 PM to 9 PM.

Anyways, no matter what everyone is saying about Facebook and its IPO, I don’t believe the company is a fad, at least not technically — it’s been around too long.

Safal Niveshak Radio: How to Invest When Fear Runs High

Here is an email I received from a reader of The Safal Niveshak Post last week…

Dear Vishal,

I have been an investor in Indian stock markets for the past 10 years, but no other time in the past have I felt the fear of investing as I’m fearing now. With so much global uncertainty, problems in India, and the way markets are behaving these days, I am not sure how to conduct myself with respect to my investments.

Can you help me in this regard?

I thought of writing a post as a reply to this email, but then worked on this short radio show (podcast).

Just click on the ‘play’ button below to listen to the podcast (and let me know your view on this medium of communication in the Comments section below).
[audio:https://www.safalniveshak.com/wp-content/uploads/2012/05/fear.mp3]

If you can’t see the button above, click here to listen to the podcast.