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Aegis Logistics: Reviewing Issue of Bonus Shares

TIP Guy 30 July 2010 opinion, review 8 Comments

Recently, Aegis Logistics announced the issue of bonus shares to existing shareholders. It will issue two additional shares for every three existing shares. These so called bonus shares will be paid from reserves it has accumulated over a period of time. Before you read this post, I suggest you read my earlier post about what really is a Bonus Shares.


Aegis has accumulated a reserves of Rs 167 crore in last few years against equity capital of only Rs 18.77 crore. These reserves are nothing but accumulated profits. The company will issue additional 12.5 million shares and increase capitalization by additional Rs. 12.54 crore. The new capital base for Aegis is likely to be Rs 31.31 crore [18.77 + 12.54]. In this announcement, there is no indication or even a hint on why the company decided to issue bonus shares. It is up to financial media and investors to figure out. Continue reading rest of this article…

Value Investing Landscape

TIP Guy 23 July 2010 review, strategy 20 Comments

Do you know how to differentiate between value investing and growth investing, or for that matter value investing with any other form of investing? I will leave this for readers of TIPBlog to ponder over it. However, I would like to say one thing; I do not know how to differentiate. I invest with an objective to grow my capital. It does not matter where it comes from. Hold on, don’t pass a judgment yet.


Let us take an example. Late last year, Buffett bought a whole rail company, Burlington Northern Santa Fe. On per share basis, the price paid by Buffett was (1) 31.5% premium to prevailing market price at the time of announcement; and (2) Approximately, 15 PE ratio at the time of announcement.


At first glance, these two matrices will tell you, “that was not cheap!”. That’s because in today’s world of instant gratification, we have come to believe PE ratio and/or current premiums are only ratios that determines value. We have dropped the meaning of value to few parameters. Small time investors like you and me would jump to take 31% premium and declare victory. But 20 years down the road, Buffett is likely to be basking in glory. Continue reading rest of this article…

ABB Buyout Offer – What Should I Do?

TIP Guy 19 May 2010 opinion, review 25 Comments
ABB group, the parent company of ABB India, made a public offer to increase its stake in ABB India. The company wants to increase its stake from approximately 52% to 75%. The buy price being offered is Rs 900 per share (34% premium to May 14 closing price). As per the annoucement, the reason for increasing the stake is “facilitate the long-term development of ABB’s business in India”.

Investors like me, who are investing for long term and practice buy-and-hold philosophy, need to put these types of corporate events under the lens. Buy-and-hold in real life is not blindly holding any stock forever. What it means is; one should continue to hold the stocks as long as it is meeting portfolio objectives. And the investor has an expectation that it will continue down the path.

I have owned ABB shares since 2005. I believe this buyout offer is significant event. I should evaluate if it makes sense for me to continue holding shares in this company. Continue reading rest of this article…

Putting 2009 YTD returns of 115% in Proper Perspective

TIP Guy 22 January 2010 review 18 Comments

1133804_sign_success_and_failureBy now, I am sure most of us would have finished taking stock of Year 2009. I am also sure that many of us would be happy with our portfolio performance with 25%+ returns in single year. Many of us don’t lose an opportunity to say I made such-n-such in 2009. On a personal note, I also discussed the results of my own portfolio and showed 115% increase in market value. It would be very easy for me to brag that I did much better than market, which was 72%. However, that’s not what this is about. I do not know about others, but when I put my 2009 portfolio performance in the context of my long term vision, in the context of overall objectives, in context of my journey to build wealth, then I know getting 100%+ returns is nothing special. Let me discuss what I mean.

One of my objectives is to continue to have yearly returns in the range of 12% to 18%. And I have said on many occasions, for me, consistency and sustainability is very important. For ease of calculation, let us say, I am looking for 15% of consistent return year after year. Continue reading rest of this article…

Simple Blog Analytics to Measure TIPBlog’s Progress

TIP Guy 19 December 2009 blogging, life, review 13 Comments

ist1_8982997-blog-orangeIt has been almost 10 months now since I have started this blog. It started as means to share my journey and also to keep track of investment data that I generate for my personal investments. May 2009 was the last time I had discussed about traffic for TIPBlog. At that time, the blog was new and hence I presented the most cliché metrics such as number of visits and page views. In today’s post I am reviewing it again, but this time it is in the context of the metrics for social media. I am using frame work presented at Occam Razor by Avinash Kaushik (AK). AK’s reputation is; he is considered as one of the experts in Web Analytics. The essence of AK’s frame work is using trends in six key performances matrices. There is no absolute value which demonstrates success. AK suggests focusing on trends; they should be going in right direction. The six key performance indicators for measuring success of a blog are as follows: Continue reading rest of this article…

Telecom Companies Following Path Airlines Did – Digging Their Own Graves

TIP Guy 28 November 2009 business, review 15 Comments

riskLately, we are seeing telecom companies cutting voice and SMS rates in an attempt to keep up with one another. The main focus in these rate cuts is to ensure that they maintain (or increase?) their market share. The rates are now being calculated in paisa per second for voice and one paisa for one SMS message. Coming from the consumer side these are best times to be using cellular phone for communication. To me, pricing these services in terms of paisa and seconds means this is practically free, relative to what a rupee can buy in today’s market. More so, when you start thinking about the capital expenditure in developing these communication networks and licensing fees involved.

As an investor, I believe these telecom companies are digging their own grave. These do not seem to make any economic sense. You will not find Rs 5 cutting tea on the roadside, but you can use a high tech wireless communication network for 30 minutes for less than Rs 5. Something is missing here. The rates for making calls were already among the lowest in the world. Now, this mad race will bring it down further, and will perhaps make them the lowest in the world. I am passing few of the publicly traded companies through my stock screen to see if it generates interest in me.

Continue reading rest of this article…

Alternative Income Streams

TIP Guy 31 July 2009 commentary, review 10 Comments

ist1_7925369-flock-of-dollar-fly-awayAlmost all of us have full-time salaried jobs where we work hard. We offer our knowledge and/or time to work for any given company. In return, we get compensation and recognition, and many of us eke out an excellent career from it. This is an active form of generating income. When we look at any company, how many times have we asked what are different types of products or market segments it sells into? It is good to have a company that has multiple products for continued profitability. Similarly, wouldn’t it be nice to have multiple streams of income? A multiple streams of income will provide us a safety net against our jobs!

There is a very popular notion of “passive income” that floats around the blog-o-sphere. The essence of passive income is; it is the money earned with or without our involvement. Once it is setup, the recurring income will flow in continuously. In my vocabulary, there is no such thing as passive income. Just because we do not see the effort does not mean it is passive. Instead, I like the term “alternative stream of income”. I am always curious to understand how individuals can create alternative streams of income and how they execute it. Following are few alternatives that I have thought about and tinkered with in recent past.

Continue reading rest of this article…

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