Blog on Value Investing | Safal Niveshak

Why Real Estate Will Remain Expensive in India

Here is an email I received from a reader of The Safal Niveshak Post some time back.

I am an NRI living in the Gulf, with no plans to return to India in the near future. Now the problem is that, my wife and all her relatives are insisting that I invest in real estate in Chennai. They feel that it is the real “solid” investment, all the rest is in paper. They keep giving me examples of other people, especially relatives, who have seen terrific returns by investing in real estate.

But, when I see the current prices when compared to the rental yield and the risk and hassle which we take upon ourselves when we invest in real estate, it makes me hesitate. Also when I went to the OMR (Old Mahabalipuram Road) I saw at least 15,000 to 20,000 new units coming up…including Hiranandani, Purvankara and the others. Most of the purchasers there are investors who are planning to rent them out.

Will it not create a glut of housing in the near future and bring down the rents even more?

I already have an own house in Chennai, so, even when I come to India, I have a place to stay.

Because I’m an NRI, all my money is white and I feel that the high prices in Chennai or anywhere in India, are due to a large extent due to the black money involved.

Infosys: Good to Buy?

Infosys On 22nd February 2012, I’d sent you a comprehensive research report on Infosys, as part of the StockTalk initiative.

The stock was then trading at Rs 2,940, and this is what my analysis told me to write to you…

…the fair value range for Infosys’s stock is Rs 2,740 to Rs 3,050. Assuming a margin of safety of around 20%, I would be comfortable buying Infosys’s stock at any price less than Rs 2,450…but not more than that.

Given that the stock’s current price of around Rs 2,940, I would wait for it to fall by around 15% before buying into the same.

That’s a good case of a great company, but not a great investment (at the current price).

So it is clear from the above words that while I was comfortable about Infosys as a business, I was not comfortable about Infosys as a stock as I believed its price was expensive (as I wrote – “…a great company, but not a great investment…”).

7 Reasons to NOT Buy Gold this Akshaya Tritiya

It’s everywhere!

Whether you read a newspaper, or listen to a radio station, or watch the television, or even just go out in a crowded place…everyone is talking about gold.

Mutual funds are launching gold funds. Brokers are launching e-gold services. Banks are offering loans against gold. Jewellers are offering gold at discount.

The liking for the yellow metal has reached such high levels that I’ve seen people offering me 10 reasons why I must buy gold (and loads of it) before it’s too late!

However, I have my 7 reasons why I am not, and why even you must not buy gold this Akshaya Tritiya… [Read more…] about 7 Reasons to NOT Buy Gold this Akshaya Tritiya

Investor, Do You Know Where You Are Going?

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to,” said the Cheshire Cat.

“I don’t much care where…” said Alice.

“Then it doesn’t matter which way you go,” said the Cat.

“…just so long as I get SOMEWHERE,” Alice added as an explanation.

“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”

~ Lewis Carroll, Alice in Wonderland

This discussion from Alice in Wonderland says a lot about how we keep trying (keep walking) when we are aiming to get somewhere, or achieve something, in life (like financial freedom).

But then, let me ask, when it comes to your financial and investing life – “Do you know where you are going?”

Safal Niveshak StockTalk #6: Balmer Lawrie & Co. Ltd.

Welcome to the sixth issue of the Safal Niveshak StockTalk.

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

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

Art of Investing Workshop: Thank You Bangalore, Chennai!

Safal Niveshak conducted its first ever Art of Investing Workshop in Bangalore on 14th April 2012, and then the second one in Chennai on 15th April 2012.

14th April, 2012 | Bangalore
As I laid down the reference material before the Workshop started in Bangalore, I was worried if people would really come to listen to money and investing related ideas on a Saturday morning. So, I was nervous…and the emptiness of the room added to my anxiety.

But just as the clock struck 9.30, in came Mr. Dipak Chakraborty. Since I had never seen him earlier, I was happy to see a 70+ year old gentleman, travelling all the way for 2 hours, to come an attend the Workshop.

A Stock Broker Goes to Heaven

A priest dies and is waiting in line at the gates of Heaven.

Just ahead of him is a man dressed in sunglasses, a loud shirt, leather jacket, and jeans.

Saint Peter asks this man, “Who are you, so that I may know whether or not to admit you to the Kingdom of Heaven?”

He replies, “I’m Jim Cash, 30, stock broker from Noo Yawk City.”

Saint Peter looks through his list. He smiles and says to the stock broker, “Take this golden robe and silver wand and enter the Kingdom of Heaven.”

Now it’s the priest’s turn.

I Don’t Want a Bull Market for the Next 10 Years

“What kind of a wish is this?” you might wonder. “As an investor, why doesn’t he want a bull market, and that too for the next 10 years? Has he lost his senses?”

Well, before you exercise your brain more and think that I am out of my mind, let me make one thing clear.

I, like you, love seeing stock prices rise.

I love it everytime a stock I own surges, and makes me richer on paper.

But even then, I hate the sight of a bull market – when stocks rise 30-40% on an average annually – and don’t want to see one for the next 10 years!

Not Stocks, Your House is Your Best Investment

House Purely due to luck, and a gentle nudge from my wife, I bought my house in 2006.

Why luck? Because since the time I’ve bought this property (and I thought it was expensive then), the capital appreciation has been almost 250%!

In short, my house has been my best investment till date. And this must be true for you as well.

In fact, I’ve rarely met anyone who has not made a profitable investment in a house. In other words, a house (at least, the first house) is the one good investment that almost everyone manages to make.

I’m sure there are exceptions, such as people who bought disputed properties or houses at super-inflated prices. But in more than 90% of the cases, a house will be a money-maker.

Best & Worst Stocks of 2011-12

As we enter a new financial year (2012-13 or FY13), here’s a look back at the best and worst performing stocks from across sectors in FY12, including the ones from my personal portfolio.

As you will see below, FMCG stocks closed FY12 as the best performers, while Metal stocks were the worst performers.
[Read more…] about Best & Worst Stocks of 2011-12