PANDIT & THE POWER OF COMPOUNDING !!!

Hello friends, after a very long time coming up with an interesting short story on market, till now we have heard stories narrated or heard as in foreign context, today I have this Indian story – the story is quite interesting and very simple in understanding – It goes like this

Once upon a time in a very small Indian village there lived a poor Brahmin poet. His financial condition worsen to such a level that he was not able to feed his wife and a new born baby. Tired with his misery and poverty he decided to seek help from the king. He went to the king’s palace where, King was playing chess with one of his minister. King told him to visit his darbar (court) the next day and recite some of his poems. Next day the Brahmin went to his court and on the permission of the king started reading his poems and songs, King was pleased and happy with his creations & granted Brahmin to wish something as a reward. Brahmin thinking for a second pointed his finger towards the chess board & requested King to place one grain of rice in one box of the chess and double that in the next box till the enitre chess board is filled. King laughingly said “Just rice grains ! - King was astonished by this and said, "You don’t want gold coins or land or big house !”. Brahmin said “No, just one rice grain in one box an double that grain in next till the entire chess boxes get filled, doing so I will feel that I received my reward.”     

King and the court started laughing on the simple thinking of Brahmin and king ordered his courtier's to bring rice grains. King's men started putting one grain in one chess box and two grains in second and four grains in third and eight grains in fourth and so on, when they reached tenth box, they needed to put in 512 grains. Till the twentieth box, this number increased to 5,24,288 rice grains, and when they reached half on 32th box this number increased to 214,74,83,648 rice grains and within hours this number went into billions. Ultimately, the King had to surrender to the intelligence of the Brahmin and gave away all of his riches to him because Kings promise is a promise to full fill his wish and this all started with just One grain of rice.

Moral of the story – Never under estimate the Power of Compounding (Read one such real story on compounding - Here ), and investing minimum amount every month in SIP,  can create great wealth for your retirement . -  READ SUCH STORIES HERE

                                           !! HAPPY INVESTING !!


MORE SUCH SHORT STORIES - here

Reader Friends, if you enjoyed this article then please do share it with your friends & colleagues through Facebook and Twitter, also do drop in your valubale thoughts in comment box...

So, grab a fresh hot cup of coffee, turn on your net & browse on to www.bhavikkshah.blogspot.in & take out few minutes to get to know the most interesting world of investment... Till then HAPPY INVESTING, don't forget to Share !! 

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Disclaimer: 

This is a personal blog and presents entirely personal views on stock market. Any statement made in this blog is merely an expression of my personal opinion. These informations are sourced from publicly available data. 

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READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

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RETURN ON CAPITAL  

It's my Birthday Today :)

Hello Friends!! 

 It’s my Birthday today .. J J …and am too, little bit of happy & excited like everyone else on Birthday’sJ, no matter how old are you, you too have that pleasant feeling about the year coming ahead, we are happy that we have passed off one year, and optimistic for the coming one. Last year of mine was a mix but  the year gone by left many joys and memories. I always write something for all you my dear reader friends on this day, as this is a day when I speak my mind and heart out.

The year gone by was beautiful; off course on market front, it cannot be said so, but would also say it was not bad either, at least for me and my stocks, yeah we were not in green but did well by benchmark’s performance and this does not discourages me to be invested. I always advocate stock market investing. I truly believe that India has huge potential and is definitely a long term story driven on consumption demand and is better positioned to enjoy demographic dividends. Indian economy is of Rs. 105 lakh crores ($ 1.59 trillion) with our stock market capitalisation of Rs. 94.71 lakh crores (as on 1 April 2016), with registered investors of 3.07 Cr (2.45 % of our total population). Whereas, US has market capitalizing is of $ 19.8 trillion which is also the biggest representing 52 % of the world’s market cap. US has population of roughly about 31.90 Cr and investing population in stock markets are whopping 14.35 Cr or I should say 45 %, and we at mere 2.5 %. India has savings rate of 36 % and still only 7 % of it comes to the equity market. Indian Retail investors hold around $ 16 billion of Indian equity. These figues says a lot and we should understand the potential of our strength, encourage investing in equities and should not shy away from stock markets, terming it as “Gamble”. 

Indian corporates have tremendous positive earning potential, & there are vast numbers of businesses of various kinds available at better price. What we misunderstand is that we buy at wrong price and most often we buy on tips, and there’s where we fall off. I truly believe that “Valuations are the slave of Earnings”, if you trap the earnings right you get the valuation right, off course with sentiments the stocks do falls back, but at the end the valuations do prevails. Look at the stocks with net profit margins above the fixed maturity instruments, with minimum debt and high ROE & ROCE’s. Now, there are many who would say we don’t understand these terms or we dont have much time to spare to, for them I would say go for mutual funds- let the expert fund managers do the job for you, but do invest, be the part of new vibrant India. Built up your retirement fund, start investing in mutual funds in Systematic manner via SIP (systematic investment plan). Take a minimum investment goal for five years at least, start investing little bit every month and you shall surely win, and those who are enterprising enough should look out for stocks with high net profit margins, low debt, high ROE & ROCE’s and off course strong Cash Flows. In all do invest and study well before investing. There’s lots of opportunity out there and participate in the growing economy of ours.

I am optimistic about markets and beileve that more positives are yet to come. Be positive and Be invested. Lastly I would like to thank all you wonderful people, who have become impairable part of my life now, who have constantly encouraged me and inspired me in all aspects of my life.

Again, I take this opportunity to give Thanks to all my reader friends for being there for me, and encouraging me...

                                           God Bless You All !!!

Thanks to my parents who made me what I am here today And Thanks God for all of it !!!

Warm Regards,

Bhavikk Shah.  

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

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DON'T BUY BCOZ SOMEONE IS BUYING !!

Hii Friends,
Once again I am back with very funny but meaningful story I recently heard at my work place. It's always fortunate to be surrounded with so much of wisdom. This story was narrated by one of our elderly client who read this story in his early days and narrated this story to us on hearing someone saying that so and so stock is being bought by some influential big investor, so we should buy that..... contradicting to that he narrated this story, thus giving us the unforgettable lesson on how we should learn to apply our own mind and not to be fettered by the saying of others, develop your own thought process -  

It was Autumn!

And the Red Indians asked their newly elected chief if the winter was going to be cold or mild. Since the new Red Indian chief was from the modern school of thoughts, he was never been taught the old secrets and so he couldn't tell what the weather was going to be. Nevertheless, to be on the safer side, he replied to his tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared. But also being a practical leader, he went to the phone booth, called the National Weather Service and asked ''Is the coming winter going to be cold? ''

'It looks like this winter is going to be quite cold indeed,' the meteorologist at weather service responded. So the Chief went back to his people and told his tribe mens to collect even more wood. 

A week later, he called the National Weather Service again. 'Is it going to be a very cold winter?'

'Yes,' the man at National Weather Service again replied, 'It's definitely going to be a very cold winter.' The Chief again went back to his people and ordered them to collect every scrap of wood they could find.

Two weeks later, he called the National Weather Service again. 'Are you absolutely sure that the winter is going to be very cold?'

'Absolutely,' The man replied. 'It's going to be one of the coldest winters ever.' 

'How can you be so sure?' the Chief asked. The weatherman replied, 'The Red Indians are collecting woods like crazy.'

This is how stock markets works. Those who trust on rumours or stock call tips and see evidence of their correctness in the stock prices moving up or down may be caught in the same game. Many a times while the choice of stocks may be right, but the timing of purchase goes wrong. Thus, investors end up buying stocks after the prices have moved up sharply and they get tired or depressed as the stock refuses to climb in the short term or declines. And they end up exiting the counter just as the valuation starts moving up again. And left regeretted, so friends just don't buy because someone is buying - Hear them out why they bought that particular stock - understand their rational behind it - Apply your mind - can u understand the business - Do your set of homework - ask questions if u dont understand any aspects - then go for it - DON'T JUST INTIMATE PEOPLE, Develope your own thought process !!! -  READ SUCH STORIES HERE

                                                      !! HAPPY INVESTING !!

Reader Friends, grab a fresh hot cup of coffee, turn on your net & browse on to www.bhavikkshah.blogspot.com & take out few minutes to get to know the most interesting world of investment... Till then HAPPY INVESTING, don't forget to Share !!

*Dear Reader friend, if you enjoyed this article, please do share it with your Friends and Colleagues through Facebook and Twitter, and drop in your valuable thoughts in comment box..

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Disclaimer: 

This is a personal blog and presents entirely personal views on stock market. Any statement made in this blog is merely an expression of my personal opinion. These informations are sourced from publicly available data. By using/reading this blog you agree to (i) not to take any investment decision or any other important decisions based on any information, opinion, suggestion, expressions or experience mentioned or presented in this blog (ii) Any investment decisions taken if any would be his/hers sole responsibility. (iii) the author of this blog is not responsible.  

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READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

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MY QUOTES : 3 DAY QUOTES CHALLANGE - DAY 3 !!!

Hii Friends , 

My  Third Quote and Last day for 3 days Quotes challange ... 

Non Other than the Guru of Value Investing Mr. Warren Buffett -  better known as "Oracle of Omaha", "Sage of Omaha" or "Wizard of Omaha" is obviously the most successful investor of all times. He is not only known for his investment philosophy but also for his great quotes on investing. 
But as promised to myself ( & to my dearest friend) that I will try to write beyond markets, so here I am trying to quote Warren Buffetts Quotes which are life inspring, here are some -  

"How you come out of the womb has really nothing to do with what kind of person you are. You decide what kind of person you're going to be."

"You're neither Right nor Wrong because other people agree with you. You're right because your facts are right and your reasoning are right - that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else"  

" It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently"

" If you're in the luckiest 1 % of humanity, you owe it to the rest of humanity to think about the other 99 %"

" Money to some extent sometimes let you be in more interesting environments. But it can't change how many people Love you or how healthy you are"

And the best one - 

Here is my Day 2 of my 3 day Quote challange

Please do keep on ur support for me & pl do visit again and share the posts :)

 Regards

Bhavikk shah

mumbai  

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I have been tagged by my blogger friend Dipanwita, to take part in Three Days Quote Challenge which is - 1) Post a favorite quote of yours for 3 consecutive days, each day new quote. Quote could be from any Book, any Author of your choice, or your own quote. 2) Nominate 3 bloggers with each post to Challenge them. 3) Thanks the person who nominated you.

Thanks Dipanwita for tagging me :) I am tagging my blogger friend Datta Ghose Das, Deepa Prabhu& Sneh Asnani
All the best Friends... I hope u all enjoyed these series :)

MY QUOTES : 3 DAY QUOTES CHALLANGE - DAY 2 !!!

Hii Friends , 

My Second Quotes for 3 days Quotes challange ... 

Steve Jobs, 

Here is my Day 2 of my 3 day Quote challange

Please do keep on ur support for me & pl do visit again and share the posts :)

 Regards

Bhavikk shah

mumbai  

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I have been tagged by my blogger friend Dipanwita, to take part in Three Days Quote Challenge which is - 1) Post a favorite quote of yours for 3 consecutive days, each day new quote. Quote could be from any Book, any Author of your choice, or your own quote. 2) Nominate 3 bloggers with each post to Challenge them. 3) Thanks the person who nominated you.

Thanks Dipanwita for tagging me :) I am tagging my blogger friend Jyotsna Bhatia, Preethi Venugopala& Archana Chaurasia Kapoor
All the best Friends... I hope u all enjoyed these series :)

MY QUOTES : 3 DAY QUOTES CHALLANGE - DAY 1 !!!

Hii Friends , 

One of my blogger friend Tagged me with 3 days Quotes challange ... 

So, here's my first quote by Mr. Chandrakant Sampat - World knows about Warren Buffett and Benjamin Graham, but Mr. Sampat was the first Value Investor of India. He made his wealth by identifying investment opportunities in 1950's when he bought Hindustan Unilever (then Hindustan Lever) and Gillette India (then Indian Shaving Products) at Rs. 16 a share. He had many such great picks in his kitty. He had one piece of Advice for every investor : Look for Companies with minimum Capital Expenditure - where Return on Capital Employed should not be less than 25 %, company should have Free Cash Flow. Invest in business you understand, company should have ZERO debt or very little debt & should be available at P/E ratio of 13 to 14 times the current year's earnings and lastly it should be available between 3.5 % to 4 % of Dividend yeild. I have tried to complie his quotes in one, Hope u all will learn as I did !!! 
Here is my Day 1 of my 3 day Quote challange

Please do keep on ur support for me & pl do visit again and share the posts :)

 Regards

Bhavikk shah

mumbai  

******************************************************************************************************************************

I have been tagged by my blogger friend Dipanwita, to take part in Three Days Quote Challenge which is - 1) Post a favorite quote of yours for 3 consecutive days, each day new quote. Quote could be from any Book, any Author of your choice, or your own quote. 2) Nominate 3 bloggers with each post to Challenge them. 3) Thanks the person who nominated you.

Thanks Dipanwita for tagging me :) I am tagging my blogger friend Namrata Kumari, Kiran Acharya & Garima Shrivastava Nag
All the best Friends... I hope u all enjoyed these series :)

GOD & INVESTOR STORY !!! (FPFS – Day 5)

Hii Friends , 

This is my Fifth and the last day for Five Pics Five Stories challange and my all posts relating to this challenge is here (FPFS- day 4). 

I am into a proffession whereby we deal with money, mostly other people's money, so it takes great responsibility to manage that, off course when you win you are praised but when you loose you are criticized. People always asks us what will the markets be, what will so and so stocks prices will be, and I say I don't know, I only know that this company is doing its best and is well managed and I see its future cash flows being intact and so I feel that this business should grow. But do I know what would be its prices be, NO I Don't know, M not GOD we are humans as you are and so we also cant predict future... 

Remember no one can buy at the bottom prices & Sell at top, So we try to find out stocks which are available at discounts and looking at margin of safety, we are humans too and so can do mistakes and that's why we have Strict Stop Loss (why stoploss of 8% - read Here) on our stock picks. Talking on Prices reminds me a short story told by my Uncle about an Investor who met God - 

Commuter reading Daily in Firstclass compartment in
mumbai local in rush hours 

A man dealing with stocks met God - God asked him to make one wish - he said "GOD please give me the copy of news paper dated excatly after 2 years from now"!. God was suprised but still granted his wish and Gave him the NEWSPAPER which was dated 2 years from now...... 

The first thing that man did was opened up the business page & Saw the stocks prices and invested in those stocks immediately which could fetch him multi-millions after 2 years.... After few days of buying spree and as tended by the Human psychology, he felt let me see what would be the news around the world after two years from now and turning on the pages he landed on Obituary section - On Which his Name was the First !!  - So, what this tells us, that do live in present and dont worry what will be there in future, Just live your life at the fullest .. 

This is my last day for the challenge series and I hope you all must have enjoyed reading some of the offbeat post, it was bit difficult for me to going into the creative zone after a long long time, I dont know how it has turnout.. but will say I enjoyed this very much.. after a very long time I was thinking beyond markets ..hehehe :)
Anyways thanks friends for your amazing supports !!

Please do keep on ur support for me & pl do visit again and share the posts :)
 Regards
Bhavikk shah
mumbai  

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I have been tagged by my dear friend Shweta, to take part in Five Photos Five Stories Challenge (FPFS) which is - Post a picture for 5 consecutive days and attach a post to it, fiction,poem or short wrtie-up. It can be anything to suit your taste. Thanks Shweta for tagging me :) I am tagging my blogger friend Priyanka Artiste, She is a brilliant, passionate & talented photographer.. All the best Priyanka... I hope u all enjoyed the 5 day series :)

Koshish karne walon ki kabhi haar nahi hoti (FPFS – Day 4)

Hii Friends , 

This is my Third day for Five Pics Five Stories challenge and my first post relating to this challenge is here (FPFS- day 3). 
One more from the treasure of Harivansh Rai Bachhan.... An inspring poem fits all.

लहरों से डर कर नौका पार नहीं होती,

कोशिश करने वालों की कभी हार नहीं होती।

नन्हीं चींटी जब दाना लेकर चलती है,

चढ़ती दीवारों पर, सौ बार फिसलती है।

मन का विश्वास रगों में साहस भरता है,

चढ़कर गिरना, गिरकर चढ़ना न अखरता है।

आख़िर उसकी मेहनत बेकार नहीं होती,

कोशिश करने वालों की कभी हार नहीं होती।

डुबकियां सिंधु में गोताखोर लगाता है,

जा जा कर खाली हाथ लौटकर आता है।

मिलते नहीं सहज ही मोती गहरे पानी में,

बढ़ता दुगना उत्साह इसी हैरानी में।

मुट्ठी उसकी खाली हर बार नहीं होती,

कोशिश करने वालों की कभी हार नहीं होती।

असफलता एक चुनौती है, इसे स्वीकार करो,

क्या कमी रह गई, देखो और सुधार करो।

जब तक न सफल हो, नींद चैन को त्यागो तुम,

संघर्ष का मैदान छोड़ कर मत भागो तुम।

कुछ किये बिना ही जय जय कार नहीं होती,

कोशिश करने वालों की कभी हार नहीं होती।

-- ।। हरिवंशराय बच्चन ।।

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I have been tagged by my dear friend Shweta, to take part in Five Photos Five Stories Challenge (FPFS) which is - Post a picture for 5 consecutive days and attach a post to it, fiction,poem or short wrtie-up. It can be anything to suit your taste. Thanks Shweta for tagging me :) I am tagging my blogger friend Sindhu Devi , She is a brilliant & a passionate Fashion Designer by Proffession, but a talented photographer.. All the best Sindhu... I will tag a new person on Day Four :) 

BAZAAR !!! (FPFS – Day 3)

Hii Friends, 

This is my Third day for Five Pics Five Stories challenge and my first post relating to this challenge is here (FPFS- day 2). 
This is a beautiful poem by Harivansh Rai Bachhan which I feel fits perfectly on Markets.

Mumbai's famous Chor Bazaar 

यहाँ सब कुछ बिकता है , दोस्तों रहना जरा संभाल के !!!

बेचने वाले हवा भी बेच देते है , गुब्बारों में डाल के !!!

सच बिकता है , झूट बिकता है, बिकती है हर कहानी !!!

तीन लोक में फेला है , फिर भी बिकता है बोतल में पानी !!!

कभी फूलों की तरह मत जीना,

जिस दिन खिलोगे... टूट कर बिखर्र जाओगे ।

जीना है तो पत्थर की तरह जियो;

जिस दिन तराशे गए... "खुदा" बन जाओगे ।।

-- ।। हरिवंशराय बच्चन ।।

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I have been tagged by my dear friend Shweta, to take part in Five Photos Five Stories Challenge (FPFS) which is - Post a picture for 5 consecutive days and attach a post to it, fiction,poem or short wrtie-up. It can be anything to suit your taste. Thanks Shweta for tagging me :) I am tagging my blogger friend Deepa Prabhu, She started photography as a hobby which has now become her passion. A very brilliant photographer will surely amase us with her talent. I will tag a new person on Day Four :) 

THE FISHERMAN & INVESTMENT BANKER (FPFS – Day 2) !!!

Hii Friends , 

This is my second day for Five Pics Five Stories challenge and my first post relating to this challenge is here (FPFS- day 1). 
A few weeks ago, I came across this fantastic story about a fisherman and an Investment Banker. 

This is the story that states the "Be More with Less" principle of life. We are so inclined with the materialistic world today, that we forget the importance of what we have. We work harder and harder to make more & more, so that we can buy more, to have more, like being in a rat race just to have more. I too was no exception to that, atleast before knowing this story. This story makes you realise how important is to live the real life                                   ...... (my Investment banker friends, do read this ) .......

So, the story is - An American Investment Banker was at the pier of small coastal Mexican village when a small boat with just one fisherman docked in. Inside the small boat there were several large yellow fin tuna fishes. Impressed by the catch of the fisherman, the American Investment banker complimented the Mexican fisherman on the quality of his fish and asked how long it took to catch them.

The Mexican replied," Only a little while". The American then asked why didn't he stay out longer in the sea and catch more fish? The Mexican said he had enough to support his family's immediate needs. The American then asked, " but what do you do with the rest of your time?"

The Mexican fisherman replied, " I sleep late, fish a little, play with my children, take a nap in afternoon, stroll into the village each evening where I sip Wine, and play guitar with my amigos. I have a full and busy Life." 

On hearing this the American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boats, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to middlemen you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then to LA and eventually to New York, where you will run your expanding enterprise"

The Mexican fisherman asked, " But, how long will this all take?"

To which the American replied,"15 - 20 years".

"But what then?" Asked the mexican. 

The American laughed and said,"That's the best part. When the time is right you would announce an IPO and sell your company stock to the public and became very rich, you would make millions !!" 

Fisherman said," Millions - then What?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take an afternoon nap, stroll to the village in the evening where you could sip wine and play your guitar with your amigos." 

This story is smiply superb, it brings clarity to what the money game is all about & definitely not about. This story brillantly breaks the illusions of ours for pursuing wealth and financial freedom. We have so forgotten to all the goodness we're surrounded by today just in race to chase the money.

The truth is it doesn't take lot of money to have a truly wealthy life, but it does take freedom. Believe it or not values do determine your path in life, regardless of your financial goals. Having clarity around issues like these develops you as an better financially sound person - at both times, while building wealth and after wealth is achieved.

I hope you like this story which I read somewhere, but the story do teaches US a lots ENJOY!!! 

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I have been tagged by my dear friend, Shweta to take part in Five photos Five stories Challenge (FPFS) which is- Post a picture for 5 consecutive days and attach a post to it , fiction, poem or short write-up. It can be anything to suit your taste. Thank you Shweta for tagging me :)

This is different for me as I have never tried such as U all know I am finance guy but as we say "There's always the First Time" so here it is...I am tagging my dear friend Renu Sethi on my Day Two and as a part of the challenge, I will tag a new person on Day Three.