Why rich are successful in spite of repeated failures

Few good ideas are all you need.  So don't fret over the opportunities lost while learning.

Red Flags in Reliance Industries Q2 FY 2018 Result

While analysts are cheering trying to justify why Reliance Industries stock price should get re-rated, I found the balance sheet which was with the result release to be quite scary. I have encircled the items which seems to be looking not good for the shareholders:

Current Asset to Current Liabilities, which measure the liquidity position of a company stood at 0.58 in Sep 2017 vs 0.62 in March 2017. Any figure which is less than 1 is not very healthy. It is approaching half which in my view is a cause of worry.

Very Low Interest Payout: Non current and current financial liabilities (including trade payable) put together is roughly 3.99 lakh crores while the interest outgo in the second quarter of FY-18 was only 2272 crores which is just 0.57% for 3 months. No body gets loan at less than 2.3% per annum. So the interest outgo is bound to go up very significantly in coming years when the interest capitalization is stopped and the trade payable(> 84000 crores) are paid / reduced.

The Short Sellers

The Short Sellers in Stock Markets these days.. 

How to choose between Fixed Deposits and Equity for investments?

Stocks Vs Fixed Deposits - Which one is better for you?

If your Investment horizon is  less than 3 years, fixed deposits are better investments than equities as cyclicality might create huge volatility in stock prices in short term while if you have surplus that you can set aside for more than 5 years, diversified equity portfolio or Index ETF such as Nifty BeeS are much better choice as per the performance of different asset classes over the last century.

How Good and Bad Credit Affects the Credit Score?

Credit is an integral part of life today in the form of rolling credit when we swipe our credit cards or in the form on various loans that we may take from time to time. Gone are the days when credit was supposed to be a bad thing. Earlier generations shied away from taking loans and borrowing was frowned upon. This is changed in the past few decades, now loans are no longer a dirty word; getting loans is simpler, and there are multiple avenues available for people who are seeking credit. Credit per se is not bad and any stigma that may have been attached to it has been removed in the last few years but the way the borrower treats credit makes it good or bad. 

Is Credit Good or Bad?

As stated above the way credit is treated makes it good or bad and there is no good credit or bad credit per se. So how does the borrower’s treatment make credit good or bad?

All loans are extended with an understanding that the borrower will repay then in a timely fashion as per the agreed terms and conditions. This essentially means that the borrower needs to pay the EMIs on time every month and in case of credit cards pay the amount due on or before the due date. Not doing so means that the borrower has defaulted on the payment thus apart from attracting a penalty charges and interest there is a negative impact on the credit score too. Repayment history is the biggest contributor to the score calculation and all delays in paying EMIs and credit card dues are reported to the rating agency thereby affecting the credit score negatively for a considerable time.

Is Canada a Better Investment Haven in Troubled Times?

The Canadian dollar is enjoying an imperious run of form of late. Between 1 May 2017 and 7 August 2017, theCAD/USD has appreciated by 7.8923% – a remarkable achievement. The loonie (CAD) has rebounded sharply in recent months, owing to the improved performance of the Canadian economy. The S&P/TSX compositeindex is currently down 0.59% for the year to date, with a 52-week trading range of 14,319.11 on the low end, and 15,943.09 on the high-end.

However, over the past 1 month the index has moved from 15,105.29 (July 10, 2017) to its current level of 15,197.84 (August 10, 2017). The slight appreciation is reflective of current trends in the Canadian economy. Consider that the 1-year return of the S&P/TSX composite index is 5.93%, spurred in large part by the uptick in commodityprices like crude oil, gold, natural gas, coal, and the like.

Canada is a commodity-rich country, with some of the largest crude oil deposits in the world. Currently, Brent crude oil is trading at $53.24 per barrel, and WTI crude oil is inching closer to the $50 per barrel level at $49.85. As oil prices rise, the Canadian economy strengthens. As Canada’s chief export, crude oil has a large part to play in the performance of the CAD. Rising prices boost the value of oil companies on the S&P/TSX composite index. This in turn raises confidence in the Canadian economy.

Portfolio Update - Aug 2017

Model Equity Portfolio update after almost 4 months. Fully utilized cash to buy some good quality blue chip names for the portfolio. Please check the updated portfolio for details:

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

Know About Tax Saving Options This Year (FY 2017 - 18)

Taxes form a good part of your total expenses, and anyway who likes to pay lot of taxes. But the truth is, our government allows tax saving on certain investments to bring about the saving habit. Especially for a longer horizon of three to five years or more.

Thus, there are taxsaving investments which you will be using to save tax this financial year. Similarly, some of these investments also remain tax exempt even at maturity. Thus, all investments are divided in the following three categories:

• ETT: Investment reduces tax but any accrued interest is taxed in future years including the gain at maturity.
• EET: These will offer tax reduction in the year you invest, any interest accrued in future is exempt but the maturity value is taxed.
• EEE: These are completely exempt investments, that is, your invested amount is exempt, interest accrued is exempt and maturity value is also exempt.

Since EEE investments are most tax efficient let’s cover these first.

Can a Personal Loan be Used to Pay Off Student Loan Debt?

One can argue that student loans are the worst, and they could be right. Unlike home loans or auto loans which are usually availed by well-settled and financially strong individuals, student loans are to be repaid by young professionals who have just started their carrier. Needless to say, they are often live on a shoe-string budget and have to put a cap on all kinds of expenses to pay off the student loan debt. So, the question is- can a personal loan be used for paying it off?

It makes sense, right? Since a personal loan can be used for any “personal” reason, why not repaying student loan debt? In most cases, you are right in believing the same. However, it’s important look at the idea from all perspectives.

The Bird’s-Eye View

The most important reason why you would want to take a personal loan to pay off student loan debt is to enjoy a better interest rate. If that’s not the case, you don’t have much to earn from the deal.

You want to reduce your EMIs and hence the financial pressure. Replacing a high-interest loan with a low-interest one is one way to go. However, if you are not able to get a personal loan with a lower interest rate then there is no point in applying for it even. You also need to see if the interest rate difference is enough, to say the least.

Valuation in Nutshell - By Aswath Damodaran

Yes Bank: The Growth Machine

Having acquired the banking license by RBI in 2004, Yes bank exited FY-17 with over 1000 branches and a balance sheet size of over 2 trillion rupees. Its net worth has gone up over 2650% in past decade from INR 800 crores in 2007 to 22000 crores in FY-17. The bank has created tremendous amount of wealth for its investors since its listing, as the stock has appreciated more than 3500% since its IPO price. Yes Bank issued its maiden shares to public in 2005 at 45 rupees.

So what’s the secret behind such success? Probably, right branding and technology focus has played a key role in the kind of growth the bank has achieved. From the beginning itself, the bank has invested heavily in brand building. In 2013, it signed a 5-year sponsorship deal with IPL and the association seems to have paid off handsomely as it has given significant visibility to the brand and acceptance among Indian people. For IPL 2017, the bank was an associate sponsor. 

The bank is investing heavily in technology backbone and demand of the newer generation customers who prefer net banking over branch banking. Yes bank has specifically focused on making its web and app based customer interfaces simple and powerful. The bank also launched the star banking facility recently where the customer can reach the bank by just dialing **2265 (Star Bank) which is a generic number and very easy to remember. This kind of dialing facility is already popular in western countries and is expected to catch up in India as well. 

Yes bank has increased its focus on retail banking recently and has exited FY 2017 with over 1000 branches & 1785 ATMs and a target to achieve 2500 branches by 2020. With larger footprint the bank is poised to get increasingly higher share of low cost deposits and also diversified credit portfolio of home loans, personal loan, credit cards and other retail credits which are relatively far safer than lumpy corporate loans. Considering the capital position, technology backing and ambitious plans, the bank has significant room to grow further and create wealth for all stakeholders in coming years.

Be the climbing Wolf

Get charged up with this very energetic video. I found it really motivational.

Portfolio Update - April 2017

After 4 months of sitting on 100% cash, good opportunities seems to be emerging in some stocks. Sold all the liquid investments and bought few stocks that seems attractive for medium term investments. Please check the update portfolio for further details:

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

How to use UPI for a hassle free money transfer instantly

Unified Payment Interface or UPI is a joint initiative by National Payments Corporation of India’s (NPCI), Reserve Bank of India (RBI) and Indian Banks Association (IBA) to enable secure and extremely easy way to transfer money between bank accounts. It’s a payment mechanism which allows instant money transfer without the bank details. Instead of bank account number and IFSC code, a virtual payment address (VPA) is used here. To use this payment Mechanism one needs to download the bank specific app, such as Axis Pay, on their mobile phone and create a VPA which will be linked to their bank accounts.

A virtual payment address is an identifier that can be uniquely mapped to an individual account. It can be thought of like an email ID for your money that your bank uses to transfer money and make payments.

Important candlestick patterns at a glance

Japanese Candlestick charting has almost become a defacto standard for studying price history of stocks / bonds / gold etc as each candle packs in a lot of useful information regarding the action on a particular day. However a series of candles together gives clearer picture in terms of the direction of the asset class. Following are some of the most important patterns that expert traders use to position themselves. 

George Soros on Volatility

Portfolio Update Dec 2016

BIG changes done to the portfolio considering the recent events and macro headwinds lined up. Please check the updated portfolio for details.

I am sure many of you will have questions after this portfolio change and I will be happy to answer them. You can post your query in the comment section of this post.

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

The Great Humiliator

My Favorite page from the book " Beat the Crowd" by Ken Fisher.

Important Motor Insurance terminologies worth knowing

If you are looking to buy / renew a car or bike insurance then you have either already encountered some jargon, or will encounter as you read the policy documents, which is difficult to understand. Following is the list of common terms that you must understand in order to fully benefit from the insurance policy:

1. NCB or No Claim Bonus: This is probably the easy term and quite straight forward. While purchasing a four wheeler or two wheeler insurance, this is the discount offered by the insurer for prudent use of your vehicle. This discount is available on policy renewals and can be as high as 50% depending upon the number of years your vehicle didn’t claim for damage.

Portfolio Update - Nov 2016

Utilized sharp correction in stocks to add quality stocks at very good valuation which are expected to generate reasonable return in 6 months time. Please check the updated portfolio for further details.

The Seven Deadly Sins Novice Online Traders Commit

There are two important facts about online trading; there are those in it to make money and those who walk back home with discouraging losses. This doesn’t mean there are spread betters who are destined to lose, the problem lies in the strategies they employ. Which in many times are misguided decisions because they fail to see the following blind spots:

1) No Tangible Trading Plan

Because the name of the game is spread betting, many traders go at it without a solid plan to follow. It’s like comparing the trade to playing online slots where you just pull a lever and the wheels of fortune automatically turn for you. Without a real trading plan, you cannot clearly define the losses from the profitable ventures. You are also bound to over trade or under capitalized in the hope that one of your moves will pay off. In the event of so many losses incurred, you end up liquidating the good trades then go home with the bad ones.

Portfolio Update - Oct 2016

Significant changes made in the portfolio. Exited 1 stock while added 3 new names. Cash @ around 25% of the portfolio. 

10 Little Books For Investors

Collection of Little books series in my library. I am a huge fan of Little Books as they are quick to finish & refer and delivers great value for its price. Personal favorite is the "The Little Book that still beats the Market" by Joel Greenblatt. 

Value Investing from Sanjoy Bhattacharya

Key Principles of value Investing by Sanjoy Bhattacharya of Fortuna Capital.

Portfolio Update Sep 2016

Sharp fall in Telecom stocks presented the opportunity to allocate some cash of the portfolio. Please check the updated portfolio for details

Portfolio Update - 31st Aug 2016

Quick Portfolio adjustment. Increased cash level again for the lack of investing opportunity. Please check the updated portfolio for details.

New Age Banking to Make Branches Redundant

Gone are the days when having a branch presence was a great competitive advantage for an established bank over a new bank. Technology is transforming the way people bank. With increasing adoption of internet and our country moving gradually towards cashless economy, each desktop or a mobile with internet connection becomes a mini branch wherein you can do virtually any internet banking transaction anytime, anywhere and from any device.

Model Equity Portfolio Update - August 2016

Portfolio update and a quick commentary on the performance so far. Also a brief about the market outlook and strategy going forward.

Passion, Interest and Hobbies of World Billionaires

With combined wealth of over $7500 billion ($7.5 trillion) world billionaires (approx 2500) are all passionate about Entrepreneurship and almost half of them have interest in Philanthropy. Here is the list of hobbies billionaires mostly have:

File Your ITR Online To Claim Tax Refunds

You can file your return of income for claiming refund of taxes even if your income does not exceed the exemption limit due to TDS. Your employer, Banks & financial institutions deduct TDS sometimes more than your tax liability which you can easily claim by filing your Income tax return. This return for claiming the refund of excess taxes paid can be filed within a period of two years from the end of the financial year for which the claim of refund is related.

Filing of tax return these days have become very easy and in many cases even free through several e-filing portals such as H&R Block which also provides assistance in case you are stuck somewhere. All you need to do is to check your tax liability using an Income tax calculator and if you have paid more than what you are liable to pay then file your return online to claim the refund of excess tax paid. 

Retire early with Immediate Annuities

We all get tired working in this hectic professional world today and dream of retiring early with steady cash flow to take care of our daily expenses for life. While this may not seem possible but is also not entirely impossible. If you have saved reasonable amount of corpus and has passed all the major expense points of your life like children’s education, marriage etc then by creating annuities on your corpus can help you in retiring early.

Annuities, mentioned above, are nothing but a pension plan with steady cash flow during your retirement years so that you don’t have to depend upon others for your expenses. Immediate annuities are basically opposite of a typical life insurance policy. Instead of paying regular premiums to an insurer that makes a lump-sum payment upon your death, with an annuity you give the insurer a lump sum of cash in return for regular income payments until you die. Immediate annuities start paying out right away.

Current Tax Structure in India

Post GST most indirect taxes would be replaced by Central Goods and Services Tax and State Goods and Services Tax.

Dangers of watching every tick

One of the biggest mistake you can ever do as a trader or investor. Watching every tick make you right or wrong every other moment and is highly fatal for your eyes, health and financial well being. 

Why Life insurance and which is the best term insurance plan in India?

Being responsible also means ensuring that your loved ones or financial dependents are safeguarded in case an unfortunate event of death or disability occurs to you. That protection to your family can be provided through life insurance.

Most youngsters won't buy life insurance because they procrastinate this decision of buying insurance. They would spend on gadgets, outings, fashion, etc. which may be a good choice or may be appealing but financial planning for the future is also important. When realization strikes most of them would already be 45 or older and hence may have to pay more because life insurance is directly linked to age or may have  a hard time getting his/her policy issued due to medical issues.

Look beyond interest rates before switching your home loan

With so many comparison sites around, it is no longer difficult to find out who is offering the cheapest mortgage rates. If you are already servicing a home loan from a Bank or an NBFC, you might find that you are not getting the lowest home loan interest rates offered in the market and it becomes quite tempting to switch the loan and take advantage of low rates offered by others and thereby reduce your EMI or tenure. 

But switching your home loan just because somebody else is offering lower interest rate is not a wise decision and can lead to lot of harassment and can even turn costly. Following are the 3 things you must consider before deciding to switch you mortgage provider.

Portfolio Update - July 2016

Utilizing the magnificent rally in our markets, some stocks were sold to increase cash levels. Please check the updated portfolio for further details.

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

Performance of Real Estate vs Stocks vs Gold in India - 2011 to 2016

When it comes to asset allocation, majority of Indians prefer Gold and Real estate over Stocks as they provide tangibility and sense of security. But sense of security is not sufficient as far as investments are concerned as savings in any form need to beat inflation for creating wealth.

So lets check how each of these asset classes have performed over last 5 years and whether Indians are right in their judgment of allocating majority of their investment capital in Real estate and gold:

CPI INFLATION IN INDIA

CPI Inflation has averaged around 8% in past 5 years

7 Mistakes You Shouldn’t Make When Purchasing Term Insurance in India

Buying a term insurance and buying the right term insurance plan, both are different things. In the scramble to get a low-cost policy, people often forget to read the fine print and end up making mistakes that give inconvenience to their loved ones in the future. Given that, how useful a term insurance policy is, you can’t afford to make a mistake. It is important to exercise caution and wisdom while buying a policy. How? By avoiding the following mistakes:

Image credit: cnbc.com

1. Not disclosing important information on the policy application form: The insurer has rights to reject a claim if it finds that the policyholder did not mention vital points in the insurance proposal form. If your close relative has suffered from any chronic ailment, mention it in the form at the time of buying the policy. Similarly, if you are a heavy smoker, don’t categorize yourself as a casual smoker. It is a suppression of a fact. It is important to disclose your facts otherwise your dependents may face a tough time in getting the claim amount. So even if it means paying a few bucks extra in premium or having to undergo some medical tests, it will be worth it because the purpose for which you are buying a term plan — to secure your family’s future— is met. It is important to be honest when it comes to filling up the form, so that the claim is not rejected and your family is completely secured.

Now get loans through ATMs

The Automated Teller Machine (ATM) got introduced in India about 3 decades back. Initially, the machine that were launched as cash dispensers have over the period taken over host of other banking transactions. Today, the ATMS that are available on all corners of our cities have become an integral part of day to day banking transactions.

With the technological advancement, you can now even look at getting an instant personal loan from these ATMs. What does this mean to you?

• Cutting out on process delays and getting easy personal loans
• As lenders will be vying for migrating the borrowers to ATMs for operational ease and cost effective process, one can expect low interest personal loans
• Given the wide availability of ATMS, funding can be received from any corner of the country without any hassle.   

Investment Advise from Martin Sosnoff

An insight into the life of a lesser known but great investor "Martin Sosnoff"and bunch of advise to take home. Enjoy