And worst of all, patient

tag:blogger.com,1999:blog-201702382024-09-10T19:54:25.516-07:00And worst of all, patientTrials and tribulations of an Indian investorAditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-20170238.post-1139136818216000262006-02-05T02:20:00.000-08:002006-02-06T08:16:15.553-08:00Shooting For Average : Index funds in your portfolio

Index funds are well-known for their advantages: low expenses, passive management, and, in most cases, zero loads. Index funds shoot for average performance at low cost. While most index funds in the US track broad indices, such as the S&P500 or the Wilshire 5000, Indian index funds track either the 30-stock Sensex or the 50-stock Nifty. These narrow indices represent the bluest of the Indian

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com3tag:blogger.com,1999:blog-20170238.post-1138962789977380522006-02-03T01:37:00.000-08:002006-02-03T07:11:13.246-08:00Reading The Signs: What does a good mutual fund look like?

This post came about because of my doubts about the performance of index funds in India. Index funds in the US routinely outperform the majority of actively-managed funds. The theory is that long-term returns of most funds will be the average market return minus incurred costs of investment. So, passive index funds outperform active funds over the long-term by the sizeable difference in expenses.

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com0tag:blogger.com,1999:blog-20170238.post-1138522364299336592006-01-29T17:30:00.000-08:002006-01-31T04:29:25.586-08:00Cause and Effect: Stock Market Physics (Part III)

Changes in interest rates by the RBI, as seen in Part II, have an effect on stock valuations and the economy. It affects valuations directly (by increasing the risk-free rate of return) and indirectly (by changing the investor's expectations of future earnings growth). What creates the need to hike interest rates? curbing inflation is the dominant reason.Cheap moneyInflation is, simply, too much

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com0tag:blogger.com,1999:blog-20170238.post-1138446717291620422006-01-28T03:10:00.000-08:002006-01-30T03:54:58.696-08:00Cause and Effect: Stock Market Physics (Part II)

From Part I, we see that the expected return on stocks is above that of the risk-free return rate by a margin called the equity risk premium (ERP). The equation is:Return on stocks = risk-free return + equity risk premiumTechnically, the ERP ought to be multiplied by a risk factor, beta, which we will assume to be 1 for now. An ERP of 7% on top of a risk-free return rate of 7% results in an

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com1tag:blogger.com,1999:blog-20170238.post-1138025828063235832006-01-23T05:50:00.000-08:002006-01-30T03:54:38.083-08:00Cause and Effect: Stock Market Physics (Part I)

Why should you,as an investor, worry if inflation is rampant? Why does CNBC have one-hour specials on whether the Finance Minister might have said that he might raise interest rates? Why does an expected 8% increase in GDP get mentioned everywhere (especially in blogs with weird titles)? Because they affect your choice of investment, the price you'd pay for that investment and the potential

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com1tag:blogger.com,1999:blog-20170238.post-1137561073438532692006-01-17T21:01:00.000-08:002006-01-30T03:54:14.046-08:00The safest way to double your money (is to fold it over)

====================================STEP-BY-STEP GUIDE TO IPOs ====================================Step 1: Don't====================================It's raining IPOs here in India. A string of IPOs and the associated media blitz can hardly fail to affect the retail investor. Companies, once listed, immediately jump up in price showing an almost instantaneous profit. To most, it would seem that

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com4tag:blogger.com,1999:blog-20170238.post-1136103090547726432005-12-31T23:50:00.000-08:002006-01-30T03:53:51.170-08:00The Fine Print: Indian Card Clothing

The Company: THE INDIAN CARD CLOTHING CO. LTD (ICC)The Business: The company pioneers in the manufacture of card clothing for the over the last three decades. It manufactures flexible and metallic card clothing and raising fillets and sheets and saw tooth wire. (Source: MyIris )Market Capitalization: ~ Rs. 127 CroresLatest Quote: Rs. 277.70Trailing P/E : 9.07Price/(three-year average earnings) :

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com3tag:blogger.com,1999:blog-20170238.post-1135747429173505142005-12-27T21:03:00.000-08:002006-01-29T23:51:04.806-08:00Saving Tax II

Questions, reasonable questions, arise with respect to my Saving Tax post. I thank 'Value Investor' for bringing them up, you can read his/her comments here. My analysis was perhaps too simplistic and his/her views on the subject are very much worth examining. I shall call him/her VI for the remainder of this post for convenience.What? No Insurance?With respect to my flat insurance no-no, VI

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com2tag:blogger.com,1999:blog-20170238.post-1135584848803087902005-12-26T00:13:00.000-08:002006-01-30T03:53:27.223-08:00Don't just do something, stand there

The speculative public is incorrigible. It will buy anything, at any price, if there seems to be some "action" in progress. It will fall for any company identified with "franchising," computers, electronics, science, technology, or what have you when the particular fashion is raging. Our readers, sensible investors all, are of course above such foolishness.—Benjamin Graham, The Intelligent

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com1tag:blogger.com,1999:blog-20170238.post-1135513356052118952005-12-25T03:10:00.000-08:002006-01-30T03:52:52.206-08:00Saving Tax (and ICICI's best-kept secret?)

It's that time of the year again when tax starts to weigh on one's mind (atleast, it should be). A lot of changes in the I-T act this year say most websites that i bother to read.In case you dont already know, one can exempt upto 1L off the salary and get the tax benefit of your bracket. So, instead of a not-so-attractive %15 rebate like last year, your investment of 1 Lakh is not taxed. In

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com2tag:blogger.com,1999:blog-20170238.post-1135501666206761562005-12-25T00:51:00.000-08:002006-01-30T03:52:07.436-08:00Worst of all, patient

This blog is about investing from an Indian perspective and my take on it. The title is derived from one of my all-time favorites, 'Seven'. An investor should be, as Morgan Freeman describes John Doe, "methodical, exacting, and worst of all, patient".This blog is a record of my investing actions and plans, This blog is not advice on investing in India. Basically, PLEASE do your own homework and

Aditya Ramachandranhttp://www.blogger.com/profile/15224455374927273194noreply@blogger.com0