chennaivaasi

[chennaivaasi]

The Psychology of Money by Morgan Housel

Nice book! Everyone who is starting to venture into the world of investing should give this book a read.

The book is divided into little chapters. Each chapter is like an article. Very concise. And the book itself is a fast read. Probably one can read it over one or two weekends.

The book is full of quotes and insight. The basic premise of Housel is to keep investing simple. Invest in index funds. Buy a house to live in, and not as an investment. Don't try to beat the market. Have a simple life. Save, save, save. Save for that unexpected event, and not with some goal in mind. Don't be flashy, don't overspend. Know the difference between investing for the long term and short-term trading. Very good advice all this, according to me.

And lots of nice quotable quotes throughout the book.

Charlie Munger, “I did not intend to get rich. I just wanted to get independent.”

The historical odds of making money in U.S. markets are 50/50 over one-day periods, 68% in one-year periods, 88% in 10-year periods, and (so far) 100% in 20-year periods.

In a world where intelligence is hyper-competitive and many previous technical skills have become automated, competitive advantages tilt toward nuanced and soft skills—like communication, empathy, and, perhaps most of all, flexibility.

Controlling your time is the highest dividend money pays.

Capitalism is hard. ... getting money and keeping money are two different skills.

“Having an ‘edge’ and surviving are two different things: the first requires the second. You need to avoid ruin. At all costs.” - Nassim Taleb.

Bubbles form when the momentum of short-term returns attracts enough money that the makeup of investors shifts from mostly long term to mostly short term. .. Bubbles aren’t so much about valuations rising. That’s just a symptom of something else: time horizons shrinking as more short-term traders enter the playing field.

[chennaivaasi]

Diamonds in the Dust - Part 2

I finished reading the book. Lots of in-depth examples of companies which have done well. Which follow the 3 pillars of Marcelus's investment formula - Clean Accounting, Capital Allocation, and Competitive Advantage.

Names like HDFC Bank, Asian Paints, Divis Lab, Abbott India, Nestle India, Pidilite, TCS. All neatly explained with lots of tabulations. Other than these companies, some more which fall under Robert Kirby's investment approach - Caplin Point, Dr Lal Path Labs, Bajaj Fin, Neogen Chem, and V-Mart Retail.

[chennaivaasi]

100 To 1 In the Stock Market

Came across this book by Thomas Phelps. Published in 1971! A good quote from it:

UPDATE: I'll try to add more quotes as I progress reading the book.

Far more money can be made by good stock selection than by good stock timing.

[chennaivaasi]

Diamonds In The Dust

Reading this book now. By Saurabh Mukherjea, Rakshit Ranjan, and Salil Desai. Saurabh and Salil are from Marcellus Investment Managers. The authors are known for their previous books Coffee Can Investing (an investing idea put forward by Robert Kirby), and The Unusual Billionaires. Haven't read those books yet and they are in my to-read list.

The book starts with a cricket analogy, of Rahul Dravid. How technically superior batsman he was, and his approach in Test cricket.

It then goes on to break the 4 biggest myths in the Indian investors' minds. Gold, Real Estate, FDs/debt funds don't help in building wealth. They don't beat inflation. The 4th myth is that GDP growth drives stock market growth. The authors give evidence that there is no such correlation, and in fact there is some correlation that stock market growth predicts economic (GDP) growth.

Another point they stress is that markets worldwide are different. What is true for the US market may not be true for the Indian market. They rubbish the claims that CAPM (Capital Asset Allocation Model) works for India (with the example of SBI). They quote Warren Buffet too who had taken down CAPM. The concept of beta which is part of CAPM is taken down as well.

So, what works in india? Crushing risk. They identify 4 risks. Accounting, Capital, Profit, and Liquidity.

The book recommend investing in carefully chosen equities through what it calls the Consistent Compounding Formula.

In this book, we elaborate on the key elements necessary for crushing risk to generate steady and healthy returns from equities in India. Our approach is to buy clean, well-managed Indian companies selling essential products behind very high barriers to entry. We call this approach to investing Consistent Compounding, and have seen, both in theory and in practice, that it works. This approach has three key elements—Credible Accounting, Competitive Advantage and Capital Allocation.

That's the framework the book elaborates further. It identifies 3 kinds of stocks in the Indian stock market - Type A, B, and C.

Type A: 90% of companies in the Indian market. Struggle to grow earnings (profit %). ROCE < CoC. No sustainable free cash flow. Airlines, Telecom providers.

Type B: 5-10% of the Indian market. ROCE > CoC in most years. Example: Maruti.

Type C: < 1% of the Indian market. ROCE significantly higher than CoC consistently for decades together. Vast free cash flows. Have high PE. 2-3% dividend yields. Examples: Asian Paints, HDFC Bank.

Type C stocks is what the book prefers to invest in, in the Indian stock market.

On scrutinizing Accounting Quality, the book gives various examples ranging from Satyam, Ricoh India, Cox & Kings, Amtex Auto, Manpasand Beverages, Deccan Chronicle, DHFL, and Yes Bank.

That's till Chapter 3.

[chennaivaasi]

100 Baggers: Stocks That Return 100-to-1 and How To Find Them

Reading this book. Lots of valuable info on investing. A quote from the book on auditors and auditing:

... audits are not “clean bills of health” and do not detect fraud. In fact, in the Sino-Forest case, Ernst & Young (the auditor) was Sino-Forest’s best friend. ... E&Y wrote: “The majority of the accounts receivable arising from sales of standing timber are realized through instructing the debtors to settle the amounts payable on standing timber and other liabilities denominated in Renminbi.” Can you make heads or tails of that? ... it means the company never collected the cash. Put another way, “95%+ of the company’s reported gross profit in 16 years of being public never went into the company’s bank accounts!!!” Messy, indecipherable disclosures are clues to stay away.

[chennaivaasi]

The Art of Data: Analytics in Everyday Life

Took this course today. It is for Beginners. The teacher of the course, Tyler Pernes, has done a very good job in explaining what data is, and how to analyze it. He explains the whole process in a very easy way.

First comes the overarching question that you want to answer. Then comes the. ‘science’ part of ETL - Extract, Transform, Load -, and Store. then comes the ‘Art’ part of Explore, Visualize, Analyze, Story-Tell, and finally, Answer. 

He then puts these as icons, so that it is easier to follow the course.

Extract: Data can come from various sources, and in different forms or formats.

Transform: Most times, data needs to be transformed to a simpler form so that it becomes easy to analyze.

Load: The transformed data can then be added to an existing table, or to a new table. The table usually is part of a spreadsheet or a database.

Store: The data gets stored in a spreadsheet or database.

That ends the ‘science’ part. And now comes the ‘art’ part. Usually, a BI tool is used to explore, visualize and analyze the stored data. Tableau is a popular BI tool.

Explore: Drag and drop the various columns from the table and create as many charts as possible.

With the charts created, try to answer the questions. Feel free to omit/delete the charts that you don’t need. This forms the exploration phase.

In the visualization phase, a dashboard gets created, combining all the charts.

And in the Analysis phase, insight or findings from the dashboard are listed.

You then put the charts and the findings together in a slide deck or on paper and present it to the intended audience.

This is just the first part of the course. I’ll try to add the second part of the course in a separate post.

[chennaivaasi]

Skillshare

I have decided to ‘invest’ in myself. Bought 9-10 books on investing, marketing and self-help categories. Most importantly, have finished reading a few of them already.

I have also enrolled in Skillshare. Skillshare is different in the sense that it is a take-all-you-like for one single price. I also have enrolled in a few classes in Udemy. 

I plan to update this blog everyday with what I learned each day. It can be from the books I read, or the courses that I have enrolled in.

[chennaivaasi]

Nexa7.com - Beware of this site

Searched for a vacuum cleaner and this site got listed by Google under the shopping result. The amount displayed was too low, like Rs 1,999. Went into the website and saw that even Samsung tablets were priced at Rs 999!

Definitely fishy website.

In their footer, they have a gmail address, and a cellphone number for customer support. And best of all, was their physical address: Powai, Bangalore, Maharashtra :))

[chennaivaasi]

TV Shows

Amazon Prime has spoiled me. On a binge-watching spree over the last few months. Started with ‘Luther’. Have seen all seasons and all episodes of the below.

Luther Bosch Jack Ryan Sneaky Pete The Mentalist Person of Interest The First Dexter Rizzoli & Isles The Good Wife

In Season 3 of ‘Casual’ now.

Too much of TV suddenly. Only that I’m seeing it on the laptop.

[chennaivaasi]

OLX: Not optimized for real estate

OLX works well till the city level. They don't get it right with the localities within the city. The localities are not alphabetically arranged. What is "2nd Main Road" in Chennai? And there are lots of localities that are missing. This makes it difficult not only when searching a property, but when listing one too. For example, if you want to list a property in Perungalathur, Vandaloor or Maramalai Nagar, your closest choice is Tambaram.

The listing themselves suffer from many oversights. There are houses available for 'Free' (they have to make the price mandatory), some houses have per sqft price (instead of total price), and the area is specified in square meters (where as square feet is the most commonly used)

Some of the prices are in millions (instead of lakhs and crores that Indians follow). Thankfully, not in American dollars.

On the whole, you end up having a very buggy experience.

[chennaivaasi]

IndiaProperty: Stupid use of JavaScript

Whenever you go beyond the site's window area, the whole page switches to a bright green page with a phone number. Becomes so irritating when the page keeps switching.

[chennaivaasi]

Magicbricks doesn't want home searchers

It's surprising how each of the Indian real estate sites are designed. Will be posting my observations of these sites. Coming up first - magicbricks.com. The site's registration form has only Owner, Agent, Builder. Apparently, they don't want individuals like me who are in search of a house (the largest subscriber base, more than the Owners, Agents and Builders combined). How am I to use the site if they have this restriction?

There is a Facebook login option. And they want access to my friends list. So that they can spam them! Very cool, right?

[chennaivaasi]

Hmm, ordering the same thing 3 in number and they charge the delivery charge of Rs 40 three times. Come on Flipkart, there has to be a better way.

[chennaivaasi]

One of CNBC's 'Chart of the Day', no less! Found out what's wrong?

1. The y axis scale goes 8, 10, 11, 13, 15 2. Nov and Dec U-6 rate is 13.1% but the bars are less than 13% 3. Bar charts should start from 0

Not sure why news sites continue to tamper with charts. In this case, having the chart as is would have conveyed the same thing.

[chennaivaasi]

Invest Rs 8,300.00 per month for years together and finally get Rs 1.35 only on maturity? PolicyBazaar ad gone wrong. Or may be right. The private insurance companies' ULIPs probably will return only such meagre amounts at maturity.

[chennaivaasi]

NDTV.com still has Google Buzz buttons. Hmm.

[chennaivaasi]

Comparison: redBus.in Vs TNSTC.in

Comparing a website of a private company vs a governmental one is always fun. Shows how much difference can exist between these two worlds. If the websites are so different, wonder how the actual service the government provides will be.

redBus.in sports a clean and simple interface. Auto filling/suggestions kick in. Once you fill the 'To' field, a calendar for the next two months rolls in automatically. Nice touch.

TNSTC has the mandatory Chief Minister's picture. And lots of other informative links, including 'Browser Settings'.

And one has to search for the ticket booking link/button. It's not as bad as Chennai BSNL's website though, which takes the prize for being the most chaotic, with all kinds of animated gifs, blinking/rolling text etc. I have visited it every month for the last 7 years, yet find it difficult every time I go there to pay my landline/broadband bill.

Sorry for the digression. Coming back to TNSTC, signing up proved to be somewhat difficult. And they seem to have a penchant for mobiles. Many times, they defaulted to the m.tnstc.in mobile interface, even when I was browsing from my 17" laptop. Not sure why.

And they have a weird drop down option called 'Journey Time Between'.

What does 'BEFORE 12 PM' mean? It makes sense only when the other two choices are read. They could have very well said 12AM - 12PM. And why split a day into unequal intervals of 12 hrs - 8 hrs - 4 hrs? They can very well get rid of this option too. How difficult would it be to just show all the available buses on a particular day? Like redBus does.

redBus has neat sorting options on each of the columns too. I can search by fare, by rating, by travels, by Dep/Arr times etc. TNSTC's case would be much easier as they have lesser options to deal with.

There were more quirks (as expected) with the TNSTC website. I put in the date, the weird 'journey time between' option, the From/To places, and hit 'Search Services'. Only to be greeted with this error message.

The mistake I did - not to choose the 'Class of Service'. If I'm not choosing the class of service, why not show all the bus options? More over, clicking the error message's OK button meant that the From and To fields became empty and I'd to fill them up again!

The seat choosing screen was kind of ok.

But it is still ages behind the light, AJAXy feel of a page like redBus.in's.

The TNSTC site is 'powered by' (sic) Radiant Info Systems. A look at their website shows why it is no wonder TNSTC's site is so poorly designed.

Here's hoping Radiant and TNSTC get to see how some of the world's leading eCom websites are designed, and they get to improve their present design/UI, seeing/learning from others.