seshnath
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Posts posted by seshnath
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How wealth is concentrated in a few hands most of which is inherited from their parents or grand parents.
so what? Think Rockefeller, Hilton, Vanderbilt, Ford etc etc. How long did that last? One gen? Two gen? Three?
Remember Warren's article on why not to leave money to children - it is true for India as well.
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https://tin.tin.nsdl.com/pan/Instructions49A.html
Looks like you can apply for PAN with a foreign address now.
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Someone wanted to know where to find data on Indian companies. Consider this an early holiday present.
See the Attached PDF. Here is a Scribd link as well: http://www.scribd.com/doc/75608280/Indian-Net-Nets-13-Dec-2011
Matt,
First, thanks for the link.
Second, there's got to be a lot of phony baloney stuff on that list because the first five companies have net working capital that's ten times more than their market caps. Unlike the Chinese companies that took over NA shell companies that are virtually all frauds, some of these Indian companies have to be legitimate because of local scrutiny and regulation. How do you ferret these out?
Matt - Thanks for the list.
I have a major part of my investment portfolio in two companies listed in the first page. I won't name them - but one is a case of bad corporate governance with related issues of delayed recovery of A/R and such; the other is a pure case of market discounting recent results heavily. It is a pure case of supply-demand mismatch in the market for the first and just over-reaction for the second. In the first case, my thesis is to be able to accumulate enough to force a change in operating style. In the second, I am waiting for market to correct.
I see some other names that are on my wishlist (the ones I would buy at a deeper discount).
twacowfca - i am immitating what i read about Walter Schloss with this portfolio. I started just recently down that path since quality was over-priced by foreign investors rushing in to buy in the last few years. I don't have enough of a history to share with you as a result.
I am primarily a fundamental investor. My sources are the 52 wk lows page in economictimes (you can get a copy of it online) and a database from capital-market.com, a local publication that offers industry-wide filters. From there i pick up the financials - soft copy from business-beacon.com or recent ones from bseindia or sometimes from other paid sites that offer free soft copy annual reports and take my research from there.
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You do need an expert, but that won't stop me from jumping in :-\
In the case as you describe it, the losses have no value. The rules are complicated but basically to use the tax losses, there are change of control issues--discontinuing operations probable disqualifies right there. And the companies have to be in the same sort of business. (at least those were the rules when we looked four years ago!) This is for a standard US based C corp.
I happen to come across my notes from those days - relevant section are 381-384. 382 specifically deals with the issue of change of control.
Here is an article on the issue:-
Hope it will be of help with your research
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I am currently looking at a company that is going to discontinue its operations and give its assets back to shareholders. Other than the cash and inventory, i notice it also has around 18 million in tax loss carry forward that will expire from 5 to 20 years. I was wonder what will be worth and what happens to it in a situation where the company discontinuing its operation and repatriation of assets to shareholders ?
Thanks
GK
GK - The last time we looked at it some 5 years ago for a US based C-corp, there were issues if the same business that generated the loss was not continued. Like UCCMal said you really need a tax expert to evaluate this.
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I agree that Warren is great at simplifying complex topics, especially on investing. Check out L J Rittenhouse's Do Business With People You Can Trust. There's a great comparison in it of a before and after explanation of a financial strategy in a prospectus. The "before" version that was in the prospectus was almost incomprehensible. Warren's "after" version sparkles with clarity. :)
One prerequisite for writing clearly is knowing the subject very well.
Another necessity is to revise, cut and rewrite until it can't be improved anymore. Even Shakespeare did this. Warren does this too, and he also has Carol edit his more important communications such as his annual shareholders letter before publication.
:)
Sanjeev - We need a "Like" button for posts like the one I am quoting.
Additionally, Buffett himself has said that whenever he writes the letter he thinks of it as writing to his sisters.
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Amazon has launched a new ebook lending library service. You need to have kindle device, it won't work on ipad or PC. You can borrow a new book as frequently as once a month with no due dates. The selection is limited, but here are some books in the business/ investing section:
Moneyball
The big short
We are all weird
7 habits of highly effective people
Liar's Poker
The millionaire next door
You need to pay $79 a year for the prime membership to be eligible.
you can get most books from your local library in the US through overdrive as well. Usually it has kindle and epub options for the same book. Why pay for something that is free? (I haven't checked the specific titles - it may be that Amazon is planning to roll out prime book lending before letting libraries do it. Also, wonder, if that is the case, wouldn't libraries be incentivised to go for epub format first)
I have both kindle and nook (first was a gift and the second bought - within a gap of a week)
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I would love to see everyone answer this question again after adjusting for portfolio size. Some of the returns posted here are no doubt of very small portfolios.
The following link will give you my return. I have a handful of holdings outside of this portfolio.
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[amazonsearch]Superfreakonomics[/amazonsearch]
Just finished reading this book. The freakonomics saga continues through street prostitutes, suicide bombers, stories of apathy, global cooling/warming, monkeys with silver discs, drunk walkers, Axyxxi etc etc.
I cracked up when I read that Capuchin monkeys in an experiment about money used it to pay for sex.
http://www.diggersrealm.com/mt/archives/001105.html
http://www.q-group.org/archives_folder/pdf/spring2008/ChenBehavioralBiases.pdf
It made me wonder - if the experiment had progressed, would monkeys have formed an ETF of silver and traded it to the sky or would have eventually replaced leaf (paper equivalent) money for silver?
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[amazonsearch]Freakonomics[/amazonsearch]
This book combined my two interests - human psychology and economics. (it was always the same - somewhere homo sapiens and homo economicus got separated). Highly recommend if you want to understand the power of incentives.
I took up three other good books following the threads of this - Art of Choosing by Sheena Iyengar; Gangleader for a Day by Sudhir Venkatesh and Predictably Irrational by Dan Ariely.
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I find the guy fairly interesting. Sorry if cross linking is found to be annoying by anyone.
His list is interesting because it includes many books which have not yet been mentioned before. I plan to slowly (key word being slowly) get around to reading these and will add reviews to the book section.
http://adventuresincapitalism.com/page/Kuppys-Book-List.aspx
Just curious, how do you pronounce Kuppy - with a kuh (as in Cub) or kyoo or koo?
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Hi seshnath, my wife is Indian citizen, but I have no other connections to India. She's on my IB account in Canada, so I'm thinking of trying to see if that would be enough to trade in India via IB from Canada. From the requirements, she will need to get a "PAN" card, and then open 2(!) bank accounts in India.
Does Kotak securities have a simpler process? What are recommended Indian brokers in general, with online trading?
PAN card is easy to get:-
https://tin.tin.nsdl.com/pan/index.html
They can send the PAN card to Canada.
Once you have the PAN, it should be easy to open an account with Kotak - especially since she is an Indian citizen. Kotak also has a 3-in-1 account.
In addition to Kotak, I have used Sharekhan (pure broker - you will need a separate bank account.) and ICICI Direct. I haven't had any issues with any of them. I recommend Kotak first though due to their tech platform and research.
I don't know why you need two bank accounts - are you talking about bank and Demat accounts - demat is for holding shares in electornic form. This is separate from the broker (unlike US) - most brokers though have their own depository participants to handle this. The idea is even if the broker goes bust; your holdings are safe.
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Does anyone know of a broker that allows Canadian retail investors to trade on Indian exchanges?
I always thought IB did, until I wasn't able to even purchase Rupees via IB. Talking to customer service, it turns out IB only allows Indian residents to trade on NSE.
If you are an NRI try:-
http://www.kotaksecurities.com/nriaccount/fpgnriwhyindia.html
Can you tell me if you are a PIO (at least one grand parent born in India)? Or no connection with India at all?
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Hi guys,
Thought just share this since everyone has been generous with ideas/advice over the years. There is a software that allows one to reflow pdfs and make it more kindle friendly (in terms of making font size fit to Kindle screen). This is extremely useful for reading pdf copies of Annual reports/SEC filings. I have included the link below.
http://www.willus.com/k2pdfopt/
Cheers,
Mike
Mike - Thanks. I was wondering about this after struggling with a few pdf research reports in Kindle and Nook. It is a life saver - I hate to print it out and hate reading long pdfs on pc.
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Sorry, this doesn't conform to the usual form of posts in this section but I thought it fitted best here anyway.
I'm looking for a book that takes on companies in different sectors, the obstacles in valuing them vs other companies, accounting peculiarites etc. Some real depth would be preferrable and not only "look at DSO" or "software companies have high R&D". Is there something like that out there?
If not, members on this board should get together and write one :)
I have a book, brought to my attention some time ago by a friend, that is a bit dated
http://www.amazon.com/Financial-Analysts-Handbook-II-Analysis/dp/087094083X
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there always has to be a gimmick. we just can't ever let things restore to their natural balance. gov Always interfering with the markets.
Would you have preferred Bernanke, Paulson and Geithner just minded their own business and let BAC, JPM, GS, GE, eventually WFC, BRK and most other leveraged financial institutions fail in 2008?
Government can work, as long as they don't cater to special interests and actually have the country's best interest at heart. Cheers!
The problems are income inequality and declining morality of the elites. The former seems to cause the latter. Think of the robber baron age around 1910. It brought out the worst problems: income tax, the federal reserve, two world wars, the change of the US from a republic to an empire, and the great depression.
Hold on.... are you saying that world war was caused by the robber baron age? post hoc ergo procter hoc, eh? If I remember my history lessons correctly, US jumped in at the last moment into the first war after the sinking of merchant ships.
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Shane - It is a fallacy to consider just dividends is the point.
I believe Buffett once said that you could create your own dividend stream by selling shares. Assuming you find the next Berkshire (when it was trading at say 19 or so) and put it 100 shares into your Roth, you could take over 9% every year just selling shares at book value and still be left with one A share after 46 years.
Well of course, I didn't think that point needed to be expressed. Nobody said anything about ignoring fundamentals and business dynamics for the sake of dividends.
Well, if you are saying that business dynamics and fundamentals are good, it will reflect in ROIC and hence, it is better if you let it reinvest in the business. There are a lot of situations where it is tax efficient to do so - like advertising cost for GEICO or some employee costs for a software company - these can be charged to PL for tax, but keep on giving.
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Who on this thread said dividends limit downside?
Hester - I think there is a lot of value in that post, thanks. What I am talking about here is starting young to pick some winning stocks that could grow distributions over time. I would argue there is some value in knowing a steady stream of cash was coming as it would allow you to invest a little more heavily. I am thinking from an individuals perspective not a portfolio manager though. We are agreeing but talking from two different perspectives.
I am thinking of things as someone without a job (student). The income would be of value in the future, investment returns are lumpy unless you are a PM or have a salary.
Shane - It is a fallacy to consider just dividends is the point.
I believe Buffett once said that you could create your own dividend stream by selling shares. Assuming you find the next Berkshire (when it was trading at say 19 or so) and put it 100 shares into your Roth, you could take over 9% every year just selling shares at book value and still be left with one A share after 46 years.
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Rranjan, I guess I don't focus on yield on cost as much as forward looking returns for all my investments. I review every one every quarter and recently focus much more on position sizing than I ever did in the past.
My tendacy is to focus on firms that pay stable if not increasing dividends. Much of the historical returns in the S&P 500 are driven by dividend returns not stock appreciation. It reduces the risk of poor managment capital allocation strategies as companies do not build ridiculous cash hoards and it provides returns that can be either reinvested in the existing company through a DRIP or employed into new opportunities. To me, it is another form of check and balance.
I don't always trust management to make the right capital decisions and appreciate a cash return on my investment. The key is that the dividend should reflect a comfortable extra cash flow and not a strain on capital. Rebalancing and review need to happen regularly. There are some I invest in that don't pay a dividend, but very few.
Even though I don't do it personally, I do understand the argument for investing in companies with dividend. My main point was that I don't see any logic in looking at current yield on original cost basis. It is good to use as an example to convince people to hold stock for long term( not the crowd here rather an average Joe) but I don't see any reason why original cost basis should come into the picture when thinking about investment merit.
At times, I have seen people quoting dividend yield based on original cost basis earlier also but never understood the reason. I thought, I might be missing something so raised the quetion. I perfectly understand all points you wrote about investing in divident paying stocks.
Especially considering the low rate environment we are in, this dividend focused strategy doesn't make sense. It may have worked in the past when rates were trending down. If and when rates go up, capital losses will more than offset the dividends at any point of time. Key, still is, buying with a MOS.
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Craig Kielburger, who founded "Save The Children" when he was eleven and "We Day", wrote a very good article on the "Occupy Movement", and how their welcome sentiment may be channeled in the wrong way. He also provides some very good alternatives that would have a much greater impact and do more for pushing forward social initiatives. Cheers!
I don't think the comparison in the article of an MBA oath to Hippocratic oath is fair. My standard question to MBAs who boast about it is whether their MBA can be taken away by their awarding university for ethical violations committed after earning the MBA - answer always is no. (I would love to hear about an MBA that is different)
I would take a CA/CFA Charterholder any given time for that reason - oath is annually renewed and enforced through peer reviews and such. This annual process also has behavioral implications, I would think. (Parallel to reading ten commandments before taking an exam with options for cheating in Dan Ariely's book.)
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The worst thing that could happen is for the USD to lose its reserve status. Especially to an RMB that is backed by gold..
Considering that there is about 5 Trillion Yuan issued, that will be an interesting move - to have about a trillion USD worth of gold in China (at today's exchange rate, that is) backing the currency. Isn't that about a seventh of the world gold stock? The world wouldn't bat an eyelid - all PBC has to do is to confiscate all gold from individuals like the US did back in the 30s.
Then what? RMB becomes as strong as CHF - China loses the advantage it has as an exporting nation. What did they accomplish?
I would rather be in BYD than in gold - under that scenario.
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btw, for those who didn't know, you can get real time google finance info in your google docs spreadsheets:
https://docs.google.com/support/bin/answer.py?answer=155178
Pretty useful to build watchlists and portfolio trackers and such.
Been doing that for sometime. I find the metrics a little restricted for someone who looks at fundamentals.
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I believe that the only logical way to "enter" the market is to be or near fully invested at this time. There should be enough bargains out there to fill one's portfolio quite easily. Then if the market drops further, you need to sell your cheap stocks for cheaper ones. It is tough to do, but the only way that makes sense IMO.
Hedging with cash, puts, short sells, etc. is speculation. You never know when to pull the plug. There is no signal telling you that it is time to unload unlike a stock that approaches your estimate of fair value on the way up. What is capitulation? When are the sovereigns issues going to be resolved and what does it look like?
If you are short now, what do you do? Take all, some or no profit?
I guess if your definition of a cheap stock is 3 times earnings or half of net cash, then you will enter the market after me, but you should still sell these stocks for the ones at 2 times earnings and 1/4 of net cash as the market moves against you.
Cardboard
Again, well said. I do feel that cash is a great hedge as well, but when you see companies you like dropping 50-70% as we have seen over the past 2 months that is what you had your cash for in my view.
I remember a berkshire annual meeting, I think it was 2009, where Buffett or Munger said that any Manager who was all cash in 2008 was not someone they would even waste their time on.
It was 09 meeting. That was the last one I attended and ever will during Buffett's time.
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My personal view is that Buffet retired from Buffet Partners because as he said "you shouldn't be doing the same thing you were doing at 30 at 60" (paraphrasing). Something changed with Buffett, he obviously got bored of being retired and missed the game.
I believe, he has said something along the same lines that he didn't think retirement and travel wasn't for him. I think, he also said something about wanting to stay out of the horse-race of outperforming in his last partnership letter. (I read these some time ago - these are recollections.)
Which is why I don't understand why he is out there so often adamantly saying there will be no double-dip and betting that the unemployment rate will be below 7% by next year. ??? What is he doing if not forecasting?
I remember hearing him say in a talk to students that he doesn't concentrate on the when only the what of an event. I am sure his think is along the lines of when unemployment rate is below 7% rather than unemployment rate below 7% next year.
India oligarchs?
in General Discussion
Posted
Indian markets are not open? check your source - we do a lot of FDIs a year, you know.
What is wrong with family run companies? Our hero buys a lot of family run companies - WaPo, borsheim's, Madam B's etc etc.
Can you give me instances of these allegations in India? In a way, I am glad that you have these perceptions about India - leaves the market and its potential to informed investors like me :-).