Why The Rules For Buying Vs. Holding A Stock Are Not The Same

April 3, 2015

Fundoo Professor

A few weeks ago, Vishal Khandelwal of Safal Niveshak and I had an email exchange on this subject. Vishal published that conversation in his excellent Value Investing Almanack (subscription required).

That email conversation is now public. You can read it from here.

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What is the Piotroski score of your stock ?

March 24, 2015

Tyro Investor

In fundamental analysis, no single tool or ratio will give the complete picture of the stock. Let it be P/E, EPS, D/E etc, all these ratios must be considered together to get the overall financial health of the company. In today’s post let’s know about something called “Piotroski score” which gives a number using fundamental analysis. What is this number and how it must be used? Let’s see below:

Joseph Piotroski, an American professor of Accounting at Stanford University. He rose to fame by his most influential 2000 paper he wrote at University of Chicago titled “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers” (Click here link for the full report)

Image 1

His idea behind this was “Because value stocks are by definition often troubled companies, many will not possess the financial resources to recover. Consequently, if it was possible to improve…

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100 to 1 in the stock market

February 20, 2015

Seeking Wisdom

One of the best ways to learn any domain deeply is to look at the actions of the experts in that domain and clone it. Cloning is not blind copying but instead it is rediscovering the reasons behind those actions and learning from it. This way we increase our odds of becoming an expert one day. I have seen this working in (1) Investments in the form of 13Fs (2) Programming; reading the code written by engineers better than us (3) Reading books which are read by people better than us.  I follow few experts when it comes to reading books. I purchased the book 100 to 1 in the stock market by Thomas W. Phelps as soon as I saw the recommendation given below. In this post I will be summarizing some of the key ideas from it.

100To1-ProfSanjayBakshi100To1Book

Meet Mr. Paul Garrett

Paul Garret was an accomplished man facing retirement in 1956…

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The worst paid jobs on Wall Street and in the City of London

February 19, 2015

Alpha Banker

The financial industry is only the stereotypical dream of free money for a few people at the top of the heap. There are actually many types of jobs that are far from the six figure salary that most people think that you earn from the gate on Wall Street or in London’s financial district.

As a matter of fact, there is an entire industry of support personnel who are paid a near pittance. Here are a few of the worst paid jobs on Wall Street and in London.- Reconciliations

Most people never see the people behind the settlement of trades. However, there is an entire position that is completely dedicated to resolving differences of opinion in the rather common occurrence of a trade discrepancy between a buyer and a seller.

– Compliance monitoring

Although keeping in compliance is a hot button topic these days, only the compliance officers who work…

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A New Kind of Investment Outlook

February 19, 2015

Above the Market

Outlook212015 Outlook2014-2015

Forecasting Follies

Nobody’s perfect.

That universal truth is easy to prove, of course, and no sane person would deny it. Indeed, even the smartest of us are far from immune even in our areas of expertise when we’re actively trying to do our best. A famous study by the U.S. Institute of Medicine concluded that up to 100,000 people die each year due to readily preventable medical errors. Since physicians are among the smartest and most highly trained professionals imaginable, being stupid is obviously not a prerequisite for making mistakes, even horrible mistakes.

It’s also easy to prove how error-prone we are in the investment world. Every year I take a look at various predictions for the year that’s ending and they are uniformly lousy in the aggregate. Moreover, when somebody does get one right or almost right, that performance quality is not repeated in subsequent years.

2014…

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January Barometer

February 19, 2015

A rose by any other name would smell as sweet

I am currently reading the much acclaimed “Stock Trader’s Almanac 2015” and the first major seasonal indicator that comes up for discussion is the January Barometer. Designed by Yale Hirsch in 1972, the January Barometer states that as S&P 500 goes in January so goes the year. The Indicator has been successful 89.1% of the time since 1950.

In India, we are not fortunate to have such large data sets and hence I have had to make do with the Sensex data that I have. Starting from 1982 till 2014, the Sensex has had a record that is pretty close to a coin toss.

In those 33 instances, markets have followed January only 17 times while going against what was seen in January 16 times. In that sense, there is nothing much to take from it. But with January 2015 being +ve, let us see what it can bring in the year…

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Career Point- An Education PE Fund ?

February 3, 2015

Big Investor Blog

Unknown

Ajay Relan refers to Career Point as a “fallen angel” and he expects this angle to fly again in the near future. He loves it as it is service based, has a brand name, is a B2C business, operates in a recession free industry, generates massive cash flows, can scale without significant capital investments and expects it to give 3x returns in the next 3 years.

http://www.outlookbusiness.com/printarticle.aspx?292921

Excited ? Well lets delve a little deeper into this company.

Business Model

Career Point operates in three 4 ( 5 & 6 are new ) models with more than one over lapping the other.

  1. Tutorial Services – The are pure tuitions, bundled into schools as an additional service or also a fully residential campus for pure IIT coaching.
  2. Schools – IGCSE, CBSE schools for day and boarding
  3. Higher Education – Universities in Kota &  Rajsamand in Rajasthan and  Hamipur UP
  4. E learning…

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A Dozen Things I’ve Learned from Joel Greenblatt about Value Investing

January 29, 2015

25iq

Joel Greenblatt is a very successful value investor and the founder of Gotham Capital, which offers four diversified long/short equity mutual funds. He has written several books on value investing identified in the notes below.

1. “One of the greatest stock market writers and thinkers, Benjamin Graham, put it this way.  Imagine that you are partners in the ownership of a business with a crazy guy named Mr. Market. Mr. Market is subject to wild mood swings. Each day he offers to buy your share of the business or sell you his share of the business at a particular price. Mr. Market always leaves the decision completely to you, and every day you have three choices. You can sell your shares to Mr. Market at his stated price, you can buy Mr. Market’s shares at that same price, or you can do nothing.

Sometimes Mr. Market is in such a…

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Wisely Speaking- 5

January 27, 2015

Wise Wealth Advisors

I get atleast few responses in the form of mails from you for every piece I write. That gives me a hope that some of you really read what I write:-) People who happen to read it through the blog also write to me. Some put it in the form of comment as well. I want to share a part of what someone wrote to me after reading the last piece. 

“A well worded article. It touched me because I have gone through the phases which you had described – especially the pain and endurance and acceptance part. I am a cancer survivor and not long ago I was on my death bed supposedly. Up to that moment I was fighting cancer and was fighting for my life, thinking that I would win over cancer with my drugs, doctors and positive thinking. But one day when my heart nearly gave…

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Technical and Fundamental.. Which is the best?

December 23, 2014

bilal thaibsyah

Fundamental_Analysis                     technical

Ini tema pertama saya dalam menulis sebuah blog investasi, jadi kalau terjadi kesalahan mohon dimengerti ya maklum pengalaman mengelola saham aja ga nyampe setengah tahun.. hehe. Dalam dunia pasar modal ada dua jenis menganalisa saham yang paling tidak asing didengar oleh para investor maupun trader, apalagi kalau bukan Technical Analysis dan Fundamental Analysis. Nah dua pendekatan tersebut sangat diperbincangkan di koran maupun televisi oleh para analis, namun mana yang paling jitu untuk digunakan sebagai alat untuk menganalisa?

Mungkin para blogger sudah pada tahu ya dua pendekatan tersebut tetapi tak ada salahnya saya mengulas lagi pendekatan tersebut yahh mungkin ada newbie yang membaca seperti saya hehe. Technical Analysis adalah pendekatan oleh para trader,analis, maupun investor untuk membaca pergerakan harga saham melalui grafik sedangkan Fundamental Analysis pendekatan yang digunakan para trader,analis, maupun investor melalui sisi fundamental perusahaan seperti ikhtisar keuangannya,compatitive advantage(baca:daya…

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