You long to live long, then you need to go long.

HI

 

IMG-20171129-WA0007

The above message is self explanatory. People now live longer than they did 25 years ago. If you were born between 1980 and 1990 remember that

1. You may not be getting pension, even If You are in a govt job.

2. You continuing job beyond age 50 is a challenge.

3. Your life get a extended by 10 more years. So plan well for retirement living. Failing to plan is planning to fail. Use the matrix as a guide below.IMG-20171129-WA0008

It would be ideal, that you include your family in the planning process.

While Planning you must also do an asset allocation, meaning, you must have investments in Equity, Debt and some % in gold not exceeding 10 to 15%.

Equity is an asset class, which can give a good returns, over a long period and the risk, over this period, may not be there and if there, it would be minimal. Invest in equity and keep your age, profile and goal in mind.

Going long in equity means, staying invested, buying the equity and not selling or redeeming it

I am here to help you. Have a nice day.

 

varadharajan vs

ckar.vsv@gmail.com

Advertisements

Understanding Aplha, it makes a difference

Gdmg. Alpha is the First alphabet in Greek. The Greek alphabets are in use to measure various parameters in mathematics and other fields.
We learnt about downside capture in Mutual funds through the small quiz you participated. Let us learnt about Alpha today.

Alpha is the incremental or additional returns generated by a mutual fund. You may be aware that MF bench mark their performance against an Index. Let us assume that a large cap fund has bench marked with nifty. If in a period Nifty has given 10% returns and the fund has given 12%, then the alpha is 2%. Similarly in Nifty is down 8% and the fund is down 5%, then the alpha is 3%.

To understand alpha better look at the goal scored by Ronaldo, last year, in Euro semi final. 6’1″ tall Ronaldo, jumps to 8’7″ by creating an alpha of 2’6″ over his opponent player and hence directs the ball towards goal.

This is yet another parameter one can consider selecting a fund before investing. Don’t look at alpha for 1 year. See at least for 5 years see how the fund is performing

Ignorance is bliss generally. But in a court of law, ignorance is no excuse.
Beware, MF are subject to market risks.
Be aware MF can create huge wealth if invested over a considerable period

As an advisor, I do try to create alpha for your investments. Do get in touch

varadharajan vs

ckar.vsv@gmail.comIMG-20171128-WA0009

Are you a Shepherd?

Gdmg. Have you seen a shepherd managing a flock of sheep. 1. He is behind the flock and not at the front.2. He ensures that the sheep falling back are brought into the main stream.3. He normally carries a stick. 4. He assumes that there is no risk from the front and the path is clear.5. If ever, a wild animal comes in front of the flock, he cannot prevent the flock running scattered. 6. He himself is unprotected.

That is what is happening to the equity markets today and the shepherd are in the name of DII like, mutual funds, insurance companies. These shepherd in a bull market go after the lagging sector and buying them. You can see this as sector after sector hogs the lime light. SBI life says they will invest in Midcaps, Aviva in PSU banks etc.

Ask yourself, how these are protected by neglected threats or unforeseen threats.

Now most of the investors are focused on returns and therefore you focus on risk. When the market falls everyone focus on risk and hence pause investing, that is the time you focus on returns.

Managing a portfolio of stocks, is not like shepherd managing a flock. Sometimes, you may have to let a sheep or two in the overall interest of the portfolio.

I can coach you to be a better shepherd

 

varadharajan vs

ckar.vsv@gmail.com

02

Powermech Projects

Gdmg. Today let us learn about a stock in the infra and capital goods sector. The stock is power mech projects. This came out with an IPO in August 2015 around 630 and has been in the down side for long reaching a low 380 in Feb this year. Now this is trading around 790 and has doubled in the last 8 months.
The company under takes projects in power plant, mechanical and construction space. This has a turn over of 1300 as of March 2017 with a operating margin of 13%
For a capital intensive project management company debt equity ratio under 1 is very favourable. Also see the PE ratio in comparison with its peers and bar 18.8 makes a case for buying.

This is a largely under owned stock where mutual fund holdings are very low. Some funds which have around 25 crore are IDFC and SBI with DSP and HDFC around 15 crore.

One who is willing to wait at least for 3 years and believes in infra growth can consider this stock. This is not for short term trading and not a trader’s stock. I enclose with This post three images on who owns what?, peer comparison

stock graph since IPO. Take a decision based on your risk appetite. Have a nice day

 

varadharajan vs

ckar.vsv@gmail.com

Inflating the Football

You have seen foot ball or volley ball. When you inflate the ball, when it is flat, it is easy to pump in air and with little effort, you can the see the ball size growing. After some time, the ball, gets spherical shape and you would require more effort to pump in air. And you don’t see the ball growing in size and you can pump in air at a higher pressure than what is present in the ball. You cannot pump beyond a point, as the ball will burst due to high pressure, the leather or resin cannot take. How do you pump in more air?. One increase the withstanding capacity of the leather or two increase the size of the ball. Since the ball is a sphere, 10cm increase in radius will increase the volume by app 4 litres and that much additional air can be pumped.

Similarly, with approximately 5000 crore sip coming into the market every month, there is too much pressure to buy the top 500 stocks. Large cap 100, mid cap 150 small cap 250. Like the ball, the market is high on valuation, which is reflected in PE, which equivalent to the pressure in the ball.
Now to pump in additional air, volume has to increase. This happens by
1.IPO. more money flows to buy more shares offered.
2. If the earning improves, it increases the volume as we call it expansion due it PE. this around the corner.
3. Expansion can also happen by increasing geography which is not under our purview.

So under pressure, the market is waiting to expand.
As murphy’s law says work expands to time. Market when it is time, expands in no time.

Dont time the market. Diminish the waiting time to invest and increase the time money is invested

Have a nice day

Watch this Ad. You have lessons to learn.

Hi

If you look around, you will always get opportunities. I am sure you must  have seen this MRF tyre ad,starring Sachin Tendular.
If you have not seen that, do watch it now, before you read the mail, any further.
He says ” Dedication, Determination and Discipline can take you higher and closer to your ambition. But it is the precise little adjustments, which can take you higher.
How do little things matter.
I will enclose a nice article written by an IIT alumini, Nemi Jain on High speed rail. The document is enclosed for your reference and reading.
He talks about, how a distance of 1450 Km between Kolkatta  and Delhi has 200 places where the tracks curve, station halts etc, reduce the speed and hence it takes time to accelerate to top speed. This amounts to once every 7 kms on the route. This is a hurdle in reducing the travelling time. One of the options to reduce the travelling time is increase the power of the locomotive which will take more years to make.and cost is also high.
Instead, by introducing additional  loco, the cost would be much lower at 85 cr than the previous method of 180 cr.
Apart from saving cost, it can be implemented in 4 to 5 months
It can reduce travelling time by 2 hours.
This was implemented on a trial basis between Mumbai and Delhi and it did save 2 hours.
Now go back to the ad.
Let us assume, that having listened to various people, reading lot of information related to investment, you have the following qualities for making a great investor
Dedication,
Determination and and
Discipline.
When you have these qualities,your investment journey, can have the 200 curves like the High speed rail, journey. The ups and downs of the market for example. These can reduce the speed of growth of your investments.
More importantly, it may irritate you and test your patience.
What are the simple adjustments you can make.
1. When you are in  long haul of a long term goal, review your time horizon. If it is taking longer than you anticipated, you can start additional SIP, which can reduce the target time.
2. An improvised version of SIP, called TIP is available, This means, you can increase or reduce the SIP amount depending upon the market conditions, for a fixed Goal. Both time and amount.
3. You can also have multiple goals, instead of one, which can primarily take care of your short term needs. An investment goal for a holiday  is different from an investment goal of child’s education or retirement.
4. It is important to note that doing the same thing, same way, can get you same results. To get different, improved results, think of doing things differently in a positive manner.
5. Continuous improvement of your processes and hence results needs to be monitored. What is not not measured cannot be monitored .
What is not monitored cannot be improved.
Not only having sound technique is important, doing precise adjustments can take you a long way.
That is why Sachin, says, he trusts the experts.
Do you?
Do get in touch.
Enjoy reading the article. on high speed rail.
Attachments area
Preview YouTube video MRF Tyres and Service – #TrustTheExpert ft. Sachin Tendulkar

MRF Tyres and Service – #TrustTheExpert ft. Sachin Tendulkar
Thanks
varadharajan VS
ckar.vsv@gmail.com

Have Faith: Be it in religion or investing

Hi

Most of the religious beliefs are because of the immense faith the person following the religion has. He or she may not be practising the rituals, but the faith generally is very strong. It is very much needs to be strong too.

Let us understand this with a small story.

A Dip in Ganges rids you of Sins and spiritual impurities

There is general belief that if you have a Dip in the river Ganges, which is supposed to be a holy river, flowing from North to East of India, your sins and spiritual impression be cleaned and you will be pure human being and that you will reach heaven, after you die.

One day, in their abode, Goddess Parvathi asked Lord Shiva. ” if everyone were to dip in Ganges and have themselves purified, they all will reach heaven. I doubt, if we have enough space to accommodate all of them. It will be mad rush and a stampede here”.

Lord Shiva smiled and said ” Don’t you worry. It will not happen. I will explain you, why it will not happen. Tomorrow, both of is will go and have dip in the Ganges and I will pretend that I am drowning and you need call out for help. But you must put a condition, to the person who wants to help me from drowning”

As planned, they dipped in Ganges and the old man slipped  the lady shouted for help. Many turned their attention to them and were to jump to save the old man. But the lady said, only a person, who is pure and rid of all sins can save my husband. One hearing this ever one stepped back and there was no one to help her and the old man. Everyone thought they were  not pure with lot of impurities.

At this point, a young saw the old man drowning, jumped into the rivers and saved the old man. When he came back to the banks, others asked him, if he was pure and how he could do this.

The young man said,” I am definitely not pure but I believe that river Ganges purifies  sins when we dip.. The moment I jumped in Ganges, I was purified and hence qualified to rescue the Old man”.

Lord Shiva told Goddess Parvathi, “though every one knew that they get purified, very few have faith, and believe in that. And those are the ones who succeed. Therefore don’t worry. We will not have too much crowd at the heaven.”

There you see, it was simple but was difficult for many to follow.

Similarly every one can get rich. Making money is simple. You need to have faith in the advisor, the economy and the leadership of the country. But then, as in the previous example, many just don’t get to make it rich and wealthy.

Give money the time to compound and work for you

It is the time in the market that matters and not the timing.

You invest 500 a month and you could be a millionaire in 20 years.

But do you believe this?

Do you trust your advisor when he gives you options

Do you have faith that you can also be rich and wealthy.

It is lack of faith, bystander approach, prevents one from acquiring wealth.

With Faith you can also reach heaven. Jump in the Ganges. Start investing today

I can teach you how to jump but not drown.

 

VS Varadharajan

ckar.vsv@gmail.com