Tata Investment Corporation: Can it be Treated like Mutual Fund?

Today, I am responding to generic questions about treating a holding companies like a mutual fund scheme. The point here is, not to say, my approach is the only right way. Right or wrong depends upon the context. It depends upon your objective. So without much ado, here I go….

……holding company having ‘Strategic stake Vs Financial Stake’ and treating(valuing) each of them differently simply because strategic stake may never get sold/realized. Do you factor in this difference in to your fair value calculation ? If yes, how ? The how part of the question is because as per my knowledge there is no such breakup provided in the AR Continue reading rest of this article…

Free Giveaway: MPROFIT Portfolio Management Solution

Few months back I wrote, post about MPROFIT, a product for personalized portfolio management which is desktop based. In simple terms, this is solution for retail investors to manage/track their transactions across many different types of asset class. It simplifies many of the mundane tasks of portfolio tracking. Some of the highlights are:

  • Manage an unlimited number of individual and group portfolios:  This is good for all do-it-yourself investors. Almost all of us tend to manage different types of assets/buckets/type of portfolio.
  • Manage assets like Stocks, MFs, ETFs, ULIPs, Insurance Policies, Private Equity, FDs, Bonds, PPF, Gold, Silver, Property, Art and many more…
  • Online update of BSE stock prices, Mutual Fund NAVs and ETFs – I like this one
  • Track income received from investments – I love this one
  • Annualised Returns (XIRR) report – My favorite feature because I believe this has much more relevance in personal investing. CAGRs are nothing but mathematical jugglery.
  • Online update for newly listed stocks, mutual funds, ETFs and company name changes
  • All your financial data is saved locally on your computer – My preferred choice, I like my personal financial stuff in my own computer, especially in Indian context.

In addition, I like that team at MPROFIT listens to its customers. It keeps adding features that customers are looking for and makes more sense to individuals like us. The most recent update (v5.0) has added capability with different methods of “data importing”. Different ways to import data are: Continue reading rest of this article…

Holding companies Can Be Good Long Term Investments

In writing this post, I am assuming that readers understand what holding companies mean. If not, then you may read a simple primer on holding companies (link to another blog). I do not have any particular bias against or for holding companies. As I have said on many in past, investing should be based on your objectives. These objectives should take into consideration your risk profile and time horizon. This blog is about long term sustainable wealth creation. Does holding companies fit into it? How?

I try to keep things simple and focused. Style and panacea does not give you sustainable returns. Your sustainable returns comes from substance behind those stocks. All holding companies are not created equal, and hence all cannot be  grouped together as good or bad. As an individual investor, you need to separate holding companies that have substance and fits your portfolio objectives. Continue reading rest of this article…

Narrowing Search Space – Looking for Needle in a Haystack

What is common between “searching for needle in a haystack” and “going fishing”? The common thing is you are trying to get one small thing (needle or fish) in a sea of unknowns. That’s where the commonality ends. The approach one takes is different in both cases. In case of fishing, you place your hook in the water and wait for fish to get trapped. Yeah, you may try to fish in location known to be breeding ground. But in the end, fundamentally, you have to wait for the fish to get trapped. In case of searching for needle, you are making a proactive effort to clean the haystack knowing there is at least one needle somewhere in there. A dumb person will try to dive in, but a smart person, will carefully remove small blocks of haystack to reduce search space. You cannot do that with water. Can you reduce water to increase your probability of catching your fish? Probably not.

It is in this context, I believe searching for a good company is like searching for a needle in a Haystack. If you make your search space smaller and smaller, you are likely to find that needle. The only question that remains is how you make your search space smaller? There are many different approaches to narrow down your search space. Continue reading rest of this article…

Investment Buckets – An Update

Contrary to general belief, the process of studying and learning does not end when you graduate out of college. It is a continuous process. If you stop learning, you will fail to adapt to the changing environment. You know what happens to stagnant pool of water? Same way, in true sense, long term portfolio or building a long term process, you need to adapt. As you learn more, you need to make changes. During the early phase of TIPBlog, I presented different investment buckets that I use or planned to use.

To refresh, these buckets are not asset allocation. How can that be? A true asset allocation should not have co-relation or may have very low co-relation. The ones that I show on this post, are all co-related and hence, not asset allocation. All are equities! When we talk about asset allocation, what it means is savings, FDs, bonds, equities, gold, etc. They are investment vehicles that are likely to provide true asset allocation benefits. Out of all these, I only focus on writing about equities on TIPBlog. Continue reading rest of this article…

Beginners Dilemma About Monetizing a Gardening Blog

Over a year ago, I wrote a guest article about Beginners Guide Before Starting a Blog. In that article, I presented three elements for any blog to get any traction. These three elements were (1) Blog to add value for your readers; (2) Shared Learning is a two way street; and (3) Don’t fool yourself. One of TIPBlog readers, Raja, left a very inquisitive comment. This comment consists of his observations, his dilemma, and few related questions. The size of the comment is long enough to be considered a post in itself. I respect the thought process and effort that went behind writing that comment. So let me jump in.

I will present my discussion in two parts, viz. (1) respond to Raja’s questions in this post, and  (2) As a beginner how would I set out in trying to monetize my gardening blog. This will be in next post.  Continue reading rest of this article…