Diwali, in India, is a very good occasion to spend some quality time with friends and family and take a break from work. I spent a part of that time with some very old friends of mine.
Friends, whom I haven’t met for a long time.
Yes, I had been feeling guilty of not reading books for a long time.
Hence, picking up a few books and going through them during the Diwali break of 2019 was a refreshing way to get back among old friends!!.
Intelligent Fanatics of India, co-authored by Rohith Potti and Puja Bhulla, was one such book. Read More
I started working sometime in the year 2005.
When friends or colleagues used to meet, our topics of discussions would invariably include the following:
Investing groups were small and not very popular. They remained within themselves doing the hard work. They never liked marketing about themselves.
In our quest to spread awareness on research and investments in the stock market, we keep sharing some of our research works on this blog. The idea is not to give any recommendation or stock calls, but just to let you, our readers, have a look into our world of research.
Ask any successful long term investor about what he/she looks in a business. A majority would list at least half a dozen key characteristics like:
I have not come up with something new or unique here.
Instead, in this post, I will just pick one of the above characteristics and go deep.
And I pick Debt for this post.
In 2018, over eight lakh people died of cancer in India. Disturbing but not shocking. What’s shocking is that if you visit the Tata Memorial cancer hospital, you will find the longest queue in the lung cancer department. Numbers attest to this observation. According to figures published on Cancerindia.org.in, close to 40 % of all cancer deaths were accounted for by tobacco use (smoked and smokeless).
The reason I call this statistic shocking is that 90 % of lung cancer cases are preventable. The biggest impact solution in cancer research isn’t about finding a cure for the disease but discovering a method that can convince people to quit smoking.
Return on Equity (ROE) is often hailed as the most important metric in judging the efficiency of a business. It is indeed an important metric. Legendary investors around the world have repeatedly highlighted ROE and its importance in investment decisions. One of the world’s most famous investors, Warren Buffett, has time and again expounded on the importance of ROE.
But the matter of fact is that very few new investors have a thorough understanding of ROE and its composition. So, the purpose of this piece of writing is to provide clarity on the concept of ROE and to lay down a practical framework as to how one should use the same to gain insights into the working of a business or an industry.
Simply put, ROE is a measure of profitability that calculates how many rupees of profit a company generates with each rupee of shareholders’ equity.
In one of our previous posts, we had written about this project of dividing all the letters of Warren Buffett into six parts representing six decades of Buffett’s investment journey. We also wrote about our learnings from the letters of Warren Buffett in the first decade (1957-1966).
This post is on our learnings from his letters in the second decade (1967-1976). For our readers’ convenience, just like the last time, we’ve put together an illustrated version of the letters. Please click here to download it.
Here are the eight big learnings from the second decade of Warren Buffett’s investment journey.
The cement industry is one of the strategic and vital importance for every growing economy. The humble commodity of cement is used everywhere from construction or renovation of a standalone home to building giant skyscrapers and sea bridges which serve as testaments to human ingenuity and progress. Cement is the most widely used material in existence and is the 2nd most-consumed resource on Earth after water.
So we’ve created this report to simplify how cement industry work. This will definitely help the new investors wrap their head around the cement industry. We also cover the history of the cement industry in India and how the landscape has evolved over the years.
Banks remain an enigma for new and inexperienced investors who are often clueless as to how to go about assessing them for a potential investment in the stock market.
It’s fair to say that banking is one of the toughest industries to understand for new investors.
So we’ve created this report to simplify how banks work. This will definitely help the new investors wrap their head around banking industry. We also cover the history of banking in India and how the landscape has evolved over the years.
There is one activity that an investor can never over do — reading.
But it’s important that you read things that build your knowledge and help you make better investing decisions. Avoiding the noise is as crucial as reading the timeless stuff.
In this post, we’re sharing few good pieces that we came across this week …
Successful Investing Requires Both Humility And Arrogance
I would argue that an investor should have roughly equal doses of arrogance and humility to be able to perform well. The arrogance would allow him to stay apart from the crowd and believe in his own logic and objective reasoning, while humility would keep him grounded and not be seduced by hubris which would lower the quality of his investment decisions.