Various Investment Opportunities – My Explicit No List

456261_which_wayIn general, I have observed that it is easy for us to say, “I can do this”, “I will do this”. We tend to always say “yes” or “may be” for almost anything. Whether directly or indirectly, we hesitate to say “explicit no” for various reasons. Some of the reasons are; we want to keep doors open for us in future, we are not sure of certain things, many times somebody said so it could possibly have some bearing, on many occasions its just does not effect me so haan bolne mai kya jata hai, etc, etc. Same way we apply similar philosophy for investments (or trading).

Almost all of us have some strategy, some technique, and some approach, that we believe works. I am in the same boat. We jump on to something at a drop of a hat hoping it will work. Here also, the opinion or reason is so strong, we find it hard to say “no”. Reading few lines we tend to believe it will work.

I receive emails requesting my thoughts or opinions about a particular stock. Many times its just a one liner asking about the particular company, many times with certain news events, and many with little blurb about the company. If I do not respond in less than a week, then you should consider it has been ignored. Lately, I have bunch of emails regarding real estate companies. Is there an reason why suddenly so much interest in real estate companies? Continue reading rest of this article…

Feasibility of Portfolio Dividend Cash Flow Goal in Year 2020

I have mentioned that one of my objective from my portfolio is to have dividend-based cash flow of Rs 500,000 by year end 2020. To show this feasibility, I could present a sophisticated excel based model with multiple different set of variables (i.e. make it complex). At a minimum, I know most of them would at least respect the effort. That’s how we are; we tend to appreciate complexity rather than simplicity. I like things to be simple. They are easy to understand and easy to implement. In this post, I am discussing a simple empirical exercise to demonstrate the feasibility of achieving my goal.

Before I demonstrate feasibility, following are few nuggets from Indian dividend landscape.

  • There are more than 1400 Indian companies that pay dividends
  • 2007-2008: Rs 52,150 crore is the estimated total dividends paid by Indian companies. This represents approximately 18.1% of estimated total net profits
  • 2008-2009:  Rs 51,500 crore is the estimated total dividends paid by Indian companies. This represents approximately 18.7% of estimated total net profits Continue reading rest of this article…

ABCIL – Is it a Turnaround Story?

Aditya Birla Chemicals (I) Limited, ABCIL, is a provider of chemical products like caustic soda, chlorine and its derivatives, and compressed hydrogen gas. Aditya Birla Group has a majority stake in this venture. Being purely in commodity business, it’s business model is to make money by operational excellence and economy of scale.

If an investor wants to buy shares in this company, it should be driven by quality of management. There is nothing unique about its business model, products, and/or market share.

Trend Analysis

The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is from 2000 to 2009. Continue reading rest of this article…

Index Investing – Can We Use Dividend Yield ?

I have discussed why I use index-based investing for my portfolio and what index investing strategy I have adopted. In a nutshell, there are two reasons, viz., (1) It gives me a benchmark and floor to which I should compare my whole portfolio; and (2) I believe it tracks Indian economy. I presented my investing approach, which is different than SIP. The only reason I do not prefer SIP is because I do not want to mechanically buy at historically high prices. After posting those articles, I had a very good email conversation with Sachin, one of the readers of this blog. This conversation centered on investing approach. If I presented the conversation “as is”, then it would have very long and perhaps little confusing. Therefore, I am summarizing the gist of the conversation in two questions.

  • Can we use dividend yield of the NIFTY index (instead of PE or PB)? e.g. DY > 2.1% invest 100%, DY >1.7 invest 80% and >1.2 invest 40%.
  • My thoughts on split the monthly amount equally, one part to be invested as per relative PE, and second part as per absolute DY.

Continue reading rest of this article…

Three Potential Companies for Long Term Buy

I am still here. I have not left my blog (yet!). Readers have not bugged me enough that I need to run! I can give few excuses for not writing, but the fact is almost one month has passed without a post. Excuses cannot correct that. So let us say, I became lazy for a while.

During this period of laziness, I kept getting questions about my opinion on various companies. I continued my reading browsing, and among the long list, I came across three companies that caught my attention. Following are my thoughts. Before you go through them, please understand that these observations are for my objective (which does not include pump and dump).

AllCargo Global Logistics Limited (ALLCARGO): It is a logistics service provider dealing with multi-modal transport operations, which include less than container load and full container load cargos for exporters and importers. It owns container freight stations near major ports in India. It also has presence in Europe and is expanding in to airfreight business. Continue reading rest of this article…