Archives for September 2017

StockScan: Accelya Kale Solutions Ltd.

Here’s my StockScan report on Accelya Kale Solutions Ltd., leading software solutions provider to the airline and travel industry.

Please note that this is NOT an investment advice to buy or sell shares. This is just my analysis of the company’s business and not a stock advice. It’s important that you make your own decision.

StockScan is just my effort to compress my thoughts on a business in a single page, that forces me to focus on the most important things, and exclude the noise that too much information and analysis may bring.

Click here, if you cannot read or download the report above.

Statutory Warning: This is NOT an investment advice to buy or sell shares. Make your own decision. I do not own the stock, but my analysis may be biased, and wrong. I, Vishal Khandelwal, am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

The Art of Reading Balance Sheet (Video)

For all my warnings against watching business TV over the years (I don’t want to get started on the reasons again), I was on at ET Now yesterday to speak about long-term investing (yes, long-term investing…on business TV!). I also talked about one of my favourite subjects i.e., reading annual reports and specifically the Balance Sheet.

Here is the video of the chat (click here if you are not able to watch the video below) –

Combine this with my earlier posts on how to master analyzing the Balance Sheet – Part 1 and Part 2.

In the above chat, I talked about the annual reports of Avenue Supermarts, Symphony, and Info Edge – all of which I have analyzed and written about recently (Disclosure – I don’t own any of these stocks).

On being asked in the interview about my all-time favourite ‘annual reports,’ I mentioned Asian Paints and Titan (Disclosure – I own both these stocks, so big bias here).

Hope you find value in what I spoke, but also understand that my views were always on the annual reports and underlying businesses and never on the respective stocks.

Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. My analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

Latticework of Mental Models: Fundamental Attribution Error

The first impression is the last impression. I am sure you’ve heard this advice numerous times especially from the communication skill experts. But the more I studied psychology, stronger became my belief that there’s quite a bit of truth in this saying. However, if you’re into the business of working with people, it’s the first impression you shouldn’t trust.

Had I gone with my first impressions about some of the strangers I met in my life, I wouldn’t have found my best friends. If you look back in your life and trace the history of your relationships with your best buddies, you would tend to agree with me on this. In fact, go ahead and ask your old friends about how they thought of you (in the first meeting) as a prospective candidate for a long-term friendship.

Whenever we meet someone for the first time, we have a natural tendency to attribute his behaviour to his personality. If that stranger’s behaviour is cold and unresponsive, we jump to the conclusion that he is either shy or introvert or perhaps arrogant. Whereas an individual who seems warm and lively makes you believe that the guy is an extrovert.

Sometimes you may be right, but often you are falling for what is known as the Fundamental Attribution Error. This error is the result of people’s tendency to place an overemphasis on internal characteristics (personality) to explain someone else’s behaviour in a given situation rather than considering the external factors guiding that situation.

Imagine It’s September 2007

Imagine it’s September 2007. The world seems safer, for we have not seen much of Donald Trump or Kim Jong Un. We have an opportunity to trademark brands like Uber, WhatsApp, Quora and Instagram as they do not even exist. Twitter and iPhone are less than a year old. Steve Jobs, Robin Williams, and Michael Jackson still walk the planet.

Imagine it’s September 2007. Bear Stearns and Lehman Brothers are still in business. Ramalinga Raju, along with his accountants, is still creating fictitious cash at Satyam. The market caps of Eicher Motors and Page Industries are less than 2% of what they would be ten years later. And those of DLF and Suzlon are 6x and 24x respectively of what they will be when you are ten years older. The BSE-Sensex is just four months away from peaking before crashing by 50%, though it is still 50% of what it will be after ten years.

When I imagine it’s September 2007, I am ten years younger, and stupider. I am busy writing stock recommendation reports for my employer, whom I am going to leave in another three years. The idea of Safal Niveshak does not exist in my, or anyone else’s, mind. Nobody knows me or trolls me (wow!).

Annual Report Review: Info Edge

Here is my review of the FY17 annual report of India’s leading online classifieds company, Info Edge.

Click here to download the PDF review (7 MB file), or click the image below.

Info Edge Annual Report FY17 Analysis (SafalNiveshak.com)

Let me know your thoughts and questions on this review in the Comments section of this post, plus any additional thoughts from your own review of Info Edge’s FY17 annual report.

Click here to read past annual report reviews

Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. I do not own the stock, but my analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

The J-Curve Model of Thinking, Living, and Investing

My friend Ravi came home for lunch last weekend. He looked dejected.

“It’s a bull market, Ravi!” I said trying to cheer him up, but he was in no mood to give away his dejection.

“I’m nearing forty, Vishal, and that makes me depressed.”

“Why Ravi? You should be happy that you’ve already left your dumb forty years behind!” I said jokingly.

“Be serious, Vishal! I mean, forty years have passed and it seems I have not achieved much in life. My salary is good but not great, I am travelling long hours every day for my job, my investment portfolio size is still a far cry from what I want to retire with, my stocks are doing well but not as well like what my other friends’ stocks are doing, and my dream of writing a bestseller novel is still a dream.”

“Wow! And you are nearing forty!” I said with a smile.

“You don’t have to remind me that!” Ravi replied with a smirk.

“Ravi, how much would you rate your life so far on a scale of one to ten?”

Annual Report Review: Symphony

Here is my review of the FY17 annual report of India’s leading air cooler company, Symphony Ltd.

Click here to download the PDF review (5 MB file), or read it in the panel below.

Let me know your thoughts and questions on this review in the Comments section of this post, plus any additional thoughts from your own review of Symphony’s FY17 annual report.

Click here to read past annual report reviews

Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. I do not own the stock, but my analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

The Dhandho Investor’s Guide to Calculating Intrinsic Value

One of the best books I’ve ever read on investing, and one written in a simple language, is Mohnish Pabrai’s The Dhandho Investor.

Mohnish explains in the introduction –

Dhandho (pronounced dhun-doe) is a Gujarati word. Dhan comes from the Sanskrit root word Dhana meaning wealth. Dhan-dho, literally translated, means “endeavors that create wealth.” The street translation of Dhandho is simply “business.” What is business if not an endeavor to create wealth?

The premise of Dhandho investing is, as is repeated time and time again in the book is simple – Heads, I win; tails, I don’t lose much.

One of my favourite chapters from the book is “Dhandho 102: Invest in Simple Businesses.” Here, Mohnish explains the concept of intrinsic value and also why, for most investors, it pays to identify simple businesses and then buy them at prices that provide sufficient margin of safety.

I would recommend you read this book in its entirety, and especially this chapter for it explains one of the most critical aspects of the investment process i.e., intrinsic value calculation, in its simplest sense. Though I am sure a lot of readers would not like such a simplistic approach to calculating values, for our minds generally don’t accept things that are simple and rather search for things that are complex (which make us look and feel smart). Else, Confucius wouldn’t have said that life is really simple, but we insist on making it complicated.