Safal Niveshak

Wit. Wisdom. Value Investing.

Beware the Excel Spreadsheet

Safal Niveshak is now on Telegram, where I plan to share byte-sized ideas, insights, and stuff I am reading and thinking about on the subjects of investing, personal finance, human behaviour, and the pursuit of a happy life. Basically, stuff that may be too short for a blog post and too long for a tweet. Click here or here to join my channel.

Here is your weekly Saturday newsletter, where I share the latest updates from the site, a new idea worth thinking about, few stories you shouldn’t miss, and a question for you. Let’s get started.

On SN This Week

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Safal Niveshak is 9 Years Old

Safal Niveshak completes nine years today. 🙂

I started with a simple idea in 2011, that of helping people become better at their stock market investment decisions. The idea was just that, and I had no clue how I would do it (I still have no clue about the future!)

However, a lot has happened in these nine quick years – and the tribe is nearing 85,000 members – but as with any kid of this age, we’re just getting started.

Most of all, I want to thank you for “raising” this initiative to this point — it truly could not have happened without you, dear tribe member.

I know I’ve said it before, but it bears repeating – Thank you so much for reading, for commenting, for your interest and support, for helping this entire movement of creating smarter and independent stock market investors become greater and spread wider.

You are magnificent, and I am supremely grateful for your time and attention.

Just in case Safal Niveshak has touched your life, I would be happy and honored to read your thoughts in the Comments section of this post.

Thanks again for being here!

With respect,
Vishal

As Long As You Don’t Lose Money

If your portfolio earns 50% in one year and then loses 50% the next year, you are back to the same level, right?

Wrong!

Your two year return is still a negative 25%.

Here’s the calculation. Rs 100 becomes Rs 150 in year one, and then halves to Rs 75 in year two. So, net-net, you are down from Rs 100 to Rs 75 over two years, which is a -25% decline.

This seems elementary, but a lot of us miss this simple math.

Anyways, the point I am trying to make today is not about our innumeracy, but that to achieve a high return over a long period of time, we must focus on minimizing our mistakes.

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Bitter Truths of Stock Valuation…and How You May Avoid Them


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One of the key topics that I cover during my value investing workshops and courses is valuations i.e., importance of valuations and the process of valuing stocks. But before I start this specific section, I warn members about two bitter truths of valuations and how they can avoid them.

I first learned these truths during my reading of Aswath Damodaran, Professor of Finance at the Stern School of Business at New York University, where he teaches corporate finance and equity valuation. He is widely quoted on the subject of valuation, with “a great reputation as a teacher and authority”. In other words, Damodaran is to business valuations what Peter Drucker was to business strategy.

Couple of years back, I read his The Little Book of Valuation, wherein the first chapter reiterates an important fact about “value” – that it’s more than a number, and that understanding it well is a way to stay ahead of the pack.

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A Simple Formula for Survival in Life and Investing

This real-life story dates back to 2014, and it’s about my father.

During summer holidays, we were at our hometown in West Bengal where my father ran his business.

He was generally a healthy person, but for the previous few months he was having slight pain around his left shoulder. The pain was occasional and thus he did not bother to get it checked up. Ours was a very small town, and we were living at its outskirts. The nearest orthopedic doctor was around 20-km away, and so my father did not bother to visit him for a check up once.

One early morning, he woke up with an intense pain in that very shoulder. He took a pain killer, thinking the pain was due to him sleeping on his left side, with his arm pressed under his upper body. The pain reduced a bit, but stayed for a couple of more hours.

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Why I Write What I Write?

I received this email from a reader recently-

Boss, I’d prefer to read actionable articles on what stocks you like, and what trends you are seeing in the markets, etc. and not these crappy “how to think and invest better” articles. ~ AJ

And then this slightly more respectable one –

Your posts are like sermons. Please write about your stock picks, your predictions, and how sectors and markets are likely to perform in the future. ~ MK

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