Investing – Page 8 – The Tortoise Speaks…

The art of Bad-vising

On September 30, 2013

“We’ve done a lot of stupid things but we’ve avoided a small subset of stupidity and that subset is important. It’s about avoiding the dumb things” – Warren Buffet

There have been a considerable number of arguments and an equal number of blogs and posts written about the plight of a retail investor. One of the prime subjects have been the many grounds where a typical investor conks out to make returns in the market. “Market makes returns, but the investor doesn’t” has become the slogan of the Aam Investor (on the lines of aam aadmi). And there have been umpteen reasons attached to the same. Some of them being getting carried away by greed and fear, investing after the bull run, redeeming during the bears, chasing fancies, investing without understanding, etc. While it is easy to blame the investor on the lines of an aam aadmi who pay taxes but abstains from voting, there is a compelling need to question the role of your advisor and his ability to avoid deviating from the fundamentals.

Why Nifty and Sensex may not be the right barometers to look at!

By Raj Mehta

On September 10, 2013

In Equity, Investing

By Raj Mehta, [email protected]

Last week, I met one of my friends who asked me an interesting question, “Why is it that Nifty and Sensex were up 25% in the year 2012 but I have lost money in my portfolio?”. Many times I hear people say Nifty is up 13% year to date or Sensex is up 12% but what does it mean to your portfolio?

CNX Nifty or Nifty 50 is an index of 50 stocks whereas S&P BSE Sensex is an index of only 30 stocks. The criteria for the constitution of this index is set in such a way that only companies with a large market capitalisation can enter these indices. Other factors which are more important like business sustainability, profitability, growth, management have not been considered. So this would include a possibility that “Hot sector companies” might find the place in the index whereas a well managed, dividend paying company might not be included. The criteria of selecting the index constituents shifts the bias towards large market capitalisation companies and the index is not well represented. For eg. ITC has a weightage of 10.68% in BSE Sensex currently but you might not have it in your portfolio considering the valuations that it is trading at. If today ITC moves up by 5%, then the index would move up just by its weightage in ITC but your portfolio return could actually be negative.

Can we really use FMCG techniques to market MF products?

By Jayant Pai

On September 3, 2013

In Equity, Investing, Mutual Funds

Jayant Pai , [email protected]

At a recent mutual fund seminar, there was the usual lament about how funds are failing to gain traction among ‘small investors’. While several causes were cited, they mostly boiled down to mutual funds failing to resonate or ‘connect’ with investors.

It was then posited that mutual funds should take a leaf out of FMCG product marketing strategies. The underlying belief behind this was that small investors are no different from small consumers. As long as you attractively package the idea to them and educate them about the utility of the product, they will bite.

While we are sleeping

By PPFAS Mutual Fund

On July 31, 2013

In Investing

By Ankur Mahajan, [email protected]

“Thoda market ko stable hone do, phir invest karenge” , exclaims a potential investor being chased by every salesperson of a financial intermediary in these dampened markets. In hindsight, the salesperson is offering the sanest advice to invest especially when the markets are battered and bruised. However, the person who was thinking to invest has never run out of reasons for his preference towards real estate and gold over equities. His primary reason of abstaining from equities is waiting for the Indian markets to resuscitate. While equity Investor continue to sleep and invested heavily in gold and real estate, the markets are offering them umpteen hints to resume investing.

Investing for Beginners & Finding our own Investing Style

By Raunak Onkar

On June 21, 2013

In Investing, Value Investing, Warren Buffet

By Raunak Onkar, [email protected]

When a lot of people first start to read & learn about investing they invariably end up reading about Warren Buffett in their first few weeks of reading. From there onwards begins this fairy tale dream ride into the idea that someday they can also invest like Warren Buffett. The next automatic step that people tend to take is to read what any other fund manager worth their salt has to say about Warren Buffett. To remind you, at this point there is not a single rupee invested by this person, ever in his life (apart from may be the automated Fixed Deposit certificates & PPF investments).

After having read & being enamoured with Warren B’s performance & his dazzlingly simple explanations of how he analyses businesses, people start with the notion that investing is an easy affair. By this time, the activity of really sitting through an entire market cycle not being able to find great investment opportunities or even spending huge amounts of time & effort in researching industries & their managers has never happened to them.

A blog which periodically revisits evergreen investment principles!

Category: Investing Page 8 of 9

The art of Bad-vising

Why Nifty and Sensex may not be the right barometers to look at!

Can we really use FMCG techniques to market MF products?

While we are sleeping

Investing for Beginners & Finding our own Investing Style