2017 – A Recap

1. I became a father to a baby girl on 23 November 2017 just 2 months after my brother became a father to a baby boy for the first time. Double celebration at home. That just about sums up the whole year.

2. All certifications and education came to a complete halt this whole year. Nothing moved on that front.

recap

3. Just read one book in the whole year. Though read tons of super-texts, research documents, company annual reports and investment documents.

4. Watched more than 100 movies. Across multiple languages. Not to mention a lot many TV series too. Hardly went to the theaters.

5. Traveling was also just about absent. Just one trip to Bangalore to see my nephew.

6. Exercising and going for walks/jogs didn’t happen. Instead i got a fitness band to at least clock 10000 steps per day. Except a few times, even that was a downer. But i consistently managed to clock more than 8000 steps on most days. Best thing was that my weight stayed constant throughout the year. The only positive.

7. For the 6th year running, the annualized returns of my equity portfolio beat the annualized returns of the BSE Sensex. I had my first ever 10 bagger in the form of Dabur. Its the oldest surviving stock in my portfolio. Took more than 10 years to hit the 10 bagger target.  The other best performers have been Bharat Forge, Mayur Uniquoters, Skipper, Titan, Wipro, M&M, Deepak Nitrite and L&T.

8. For the first time ever kept a small budget to dabble in stocks that were running up frequently. Or as they are more commonly known as “momentum stocks”. Didn’t have any great returns, so i will reconsider this effort going forward.

9. Instead of waiting for that elusive stock market crash to happen, i stuck to my SIPs religiously. Moved to direct investing in Mutual Funds without going through ICICIDirect through whom i used to invest earlier.

Wishing and hoping that the new year brings in much happiness and success to everyone

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Which Stocks Do Mutual Funds Own The Most?

This is a list of the top 10 stocks invested in the best performing large cap mutual funds over the past 5 years.  A glance at it shows how a majority of the funds have similar portfolio of stocks in it.  E.g HDFC bank is a part of the portfolio of all the 5 top funds.  Other companies like ITC, L&T, Maruti Suzuki , Indusind Bank, Grasim and SBI are repeated in 3 of the funds.  This is not to say that these stocks dont form a part of the rest of the funds too.  Maybe they are a fractional portion of the portfolio of the other funds. Since its difficult to go through all the stocks that is a part of a mutual fund portfolio, i have only looked at the top 10 stocks that make up a fund portfolio.

mutual funds
Also the percentages in the brackets beside the mutual fund names are the returns the funds have given over the past 5 years.  It ranges from 20.90% to 23.05% which is not much of a variation over 5 years. Looking at the variation of growth and the stocks that form a part of the portfolio which are more or less similar, does it make any sense to spend hours and weeks trying to zoom into the mutual fund you want to invest in?  I dont think so. Also, if you are planning to replicate the portfolio of the mutual funds into your own stock portfolio, i think you can follow them. Looking at the stocks in the mutual funds, its a good indication that the mutual funds are confident of the performance of companies like HDFC Bank, ITC, Grasim, Indisind Bank, L&T, Maruti etc.

Also, if all the mutual funds are more or less buying the same stocks, does it justfiy the mutual fund companies taking a significant chunk of money as fees? More or less the funds are choosing the same stocks. As an investor, i prefer to go the direct way.  I buy the mutual funds directly from the mutual fund companies.

E.g if i want to buy the Franklin India Flexi Cap fund, i go directly to the Franklin Templeton India website, create an account with them, give my bank details and buy the units.

Why go direct then?  Lets take the same fund Franklin India Flexi Cap.  When you buy the fund in the traditional way, the expense ratio is 2.30% and when you buy direct, its just 1.48%.  The 0.82% might not look big initially.  But if you are buying the units over a long period of time using the Systematic Investment Plan (SIP) method, the expenses add up to a significant total.  Hence, if you can manage to do the work diligently and afford to spend around 10-15 minutes of your time, you can automate the process and relax.

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NCFM Exams – Advanced Modules

The Advanced modules consists of 13 certifications

1. Algorithmic Trading Module

For understanding the importance and approach towards algorithmic trading. It focusses on equity, index futures, options and commodities. Click here for the course outline

Exam Details
Duration 60 minutes
Questions 100
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 3 years
Fees Rs 6900

 

2. Financial Markets (Advanced) Module

To understand and gain comprehensive and indepth knowledge about the financial markets. Click here for the course outline

Exam Details
Duration 120 minutes
Questions 60
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

3. Securities Market (Advanced) Module

To understand the role in mobilizing savings for investment in productive assets. To understand and transform the economy into an efficient, innovative and competitive marketplace. Click here for the course outline

Exam Details
Duration 120 minutes
Questions 60
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

4. Derivatives (Advanced) Module

To understand the role and presence of derivatives in the overall financial sector strategy. Click here for the course outline

Exam Details
Duration 120 minutes
Questions 55
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

5. Mutual Funds (Advanced) Module

To understand and gain an indepth knowldged into the working of the Indian Mutual Fund industry. Click here for the course outline

Exam Details
Duration 120 minutes
Questions 60
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

6. Options Trading (Advanced) Module

To gain knowledge and understand the workings of the options market. Click here for the course outline

Exam Details
Duration 120 minutes
Questions 35
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

7. Modules of FPSB (Certified Financial Planner – CFP)

The Financial Planning Standards Board (FPSBIndia) conducts exams for the following 5 modules which leads to the CFP certification.

  • Risk Analysis & Insurance Planning
  • Retirement Planning & Employee Benefits
  • Investment Planning
  • Tax & Estate Planning
  • Advance Financial Planning

For a detailed information about the course, a new CFP page is being created which will contain all the details.

 

8. Equity Research Mode

Finitiatives Learning India Pvt Ltd offers a range of e-learning and certification programs for the Banking and Financial Services (BFS) sector for both freshers and working professionals.  Follow the below mentioned steps to register, study and get ceritfied

  • Register with FLIP
  • Purchase the Equity Research E-Learning Module
  • Complete training, pay the NCFM examination fees and book the exam date
  • Fees is Rs 4950 + service tax for the interactive e-learning course and Rs 1726 for the NCFM certification exam

 

9. Issue Management Module

This course is also offered by Finitiatives Learning India Pvt Ltd for both freshers and working professionals. They offer e-learning and certification programs for the Banking and Financial Services (BFS) professionals.  This module covers the issues faced by Indian corporates who want to raise funds directly from the market locally or overseas.

Follow the below mentioned steps to register, study and get ceritfied

  • Register with FLIP
  • Purchase the Equity Research E-Learning Module
  • Complete training, pay the NCFM examination fees and book the exam date
  • Fees is Rs 4950 + service tax for the interactive e-learning course and Rs 1726 for the NCFM certification exam

 

10. Market Risk Module

This course is also offered by Finitiatives Learning India Pvt Ltd for both freshers and working professionals. They offer e-learning and certification programs for the Banking and Financial Services (BFS) professionals. Market Risk measurement is highly quantitative in nature, and requires a strong foundation in mathematics and statistics.

Follow the below mentioned steps to register, study and get ceritfied

  • Register with FLIP
  • Purchase the Equity Research E-Learning Module
  • Complete training, pay the NCFM examination fees and book the exam date
  • Fees is Rs 4950 + service tax for the interactive e-learning course and Rs 1726 for the NCFM certification exam

 

11. Financial Modeling Course

This course prepared by IMS Proschool prepares graduates, CA, MBAs for roles in

 

  • Equity Research Analyst
  • Project Finance Report Preparation
  • Credit Rating Analysis
  • Financial Analyst
  • Business Analyst
  • Financial Research

You need to be a Commerce Graduate, CA inter passed, ICWA, Graduates, Post Graduates with first class, MBAs with excellent accounting skills.

Apply for the IMS Program here and download the brochure for more information here.

 

12. Business Analytics Module

This course offered by IMS Proschool covers areas like Business Intelligence, Big Data, Data Mining, etc and prepares Graduates, Post Graduates, MBAs to become

  • Analytics Manager
  • Analytics Consultant
  • Business Analyst
  • Business Intelligence Manager
  • Data Scientist

Apply here to enroll for the course and click here to access the brochure of the course.

 

13. Investment Banking Operations – International

This program is developed by Finitiatives Learning Pvt Ltd

for both freshers and working professionals. They offer e-learning and certification programs for the IT Professionals engaged in the Banking and Financial Services (BFS). This course equips you with the necessary domain knowledge to interact with customers confidently and better understand their requirements. This course is relevant for professionals in the field of KPO, BPO & IT companies.

Follow the below mentioned steps to register, study and get ceritfied

  • Register with FLIP
  • Purchase the Equity Research E-Learning Module
  • Complete training, pay the NCFM examination fees and book the exam date
  • Fees is Rs 9500 + service tax for the interactive e-learning course and Rs 1726 for the NCFM certification exam

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NCFM Exams – Foundation Modules

The foundation module of NCFM Exams comprises of 11 certifications

 

Financial Markets – Beginner’s Module
This course is to get a basic understanding of capital & financial markets. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

Mutual Funds – Beginners Module
Gives you a insight into the concept of mutual funds and awareness of how the industry works. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

Currency Derivatives – Beginners Module

To improve awareness about currency derivatives which was introduced into the Indian securities markets since 2009.  Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

Equity Derivatives – Beginners Module

To gain more knowledge about the equity derivatives market. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

Interest Rates Derivatives – Beginners Module

To gain more knowledge about the interest rate derivatives market. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

Commercial Banking in India – Beginners Module

To learn more about the fundamentals of banking and provide insight into the Indian banking system. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 50
Negative Marking No
Certificate Validity 5 years
Fees Rs 1726

 

FIMMDA-NSE Debt Market (Basic) Module

To learn more about the different types of debt instruments. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

Securities Market (Basic) Module

To learn more about the securities market. Click here for the course outline.

Exam Details
Duration 2 hours
Questions 60
Maximum Marks 100
Passing Marks 60
Negative Marking Yes
Certificate Validity 5 years
Fees Rs 1726

 

Clearing Settlement and Risk Management Module

To learn about operational guidelines and procedures of a clearing corporation. Click here for the course outline.

Exam Details
Duration 1 hour
Questions 75
Maximum Marks 100
Passing Marks 60
Negative Marking No
Certificate Validity 3 years
Fees Rs 1726

 

Banking Fundamentals – International

This certification is provided by Finitiatives Learning India Pvt Ltd (www.learnwithflip.com).  The certifications provided here are for Information Technology (IT) professionals who work on BFS projects.  Its relevant for people wanting to work in the BFS verticals of a KPO, BPO or IT company.  Click here for the course outline and course demo.

To get certified, follow this process

  • Register with FLIP here
  • If you are already registered, go here
  • Purchase the Banking Fundamentals E-Learning module (Rs 4500 + service tax) and complete the training.
  • Pay the NCFM certification fees (Rs 1726) and book the test date.
  • The certification is valid for 2 years.

 

Capital Markets Fundamentals – International

This certification is also provided by FLIP.  Its intended for the same audience.  Follow the enrolment procedure as mentioned above.  The fees for the course is also Rs 4500 + service tax (to be paid on the FLIP website) and exam fees of Rs 1726 (to be paid on NCFM website)

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9 questions to ask before investing

You would think that managing an investment portfolio for returns and risk should be sufficient to protect your interests as an investor. But costs and taxes are an integral part of financial products, and they can bleed the returns your money can earn. Not only does it take a bite out of your returns, but you miss out on compounding benefits too as this portion is no longer available to be invested and earn returns.

The impact of expenses on the returns can be significant. For example, an increase of just 1% in the annual expenses charged to an investment translates into a difference of close to 16% in the final value of your investment over a 20 year investment period. This difference goes up to over 20% if the holding period is 25 years. Similarly, taxes are dues that you have to pay on the returns that you earn which diminishes the amount you have to invest further and earn.

Read rest of the article here

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Blood on the floor

What a change a few weeks can do in the life of a stock market.  At the begining of the year, there were predictions of the BSE Sensex reaching 24,000.  Post the battering that the markets have received in the past 2 odd weeks, it would be great if the markets can come back to 21,000 levels.

Of course nothing can be predicted about the future.  The market conditions might become better, the Egypt political crisis might be solved, the companies could come out with better results in the next few quarters, the government might get tough on graft and a few politicians & their crony businessmen might end up in jail.

BSE Sensex performance in the past 1 month (courtesy: Yahoo finance)

Meanwhile, some of the best blue chip stocks and companies with strong fundamentals have been beaten down 20-40%.  This is another of the great time for a fence sitter to invest.  I have done too.

Bought a few stocks of Sintex Industries, Punjab & Sind Bank, Kanoria Chemicals, Noida Toll Bridge and averaged out the badly battered stocks of  MIC Electronics & 3I Infotech.

At the end of last year sold off Suzlon Energy, Reliance Communications (my worst investment ever. I would never buy any Anil Ambani companies again) and Punj Lloyd (another laggard not only on the stock market, but also in business).   I had sold them off for a loss.  It would have been a bigger loss if i had held them on as all 3 of them have been beaten down very badly.

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Just Read – Common Stocks & Uncommon Profits – Philip A Fisher

Happened to lay my hands on the audio file of this book and managed to finish the audio / book in 2 days flat. Its obviously an advantage getting the audio of books so that i can just transfer the files to my mp3 player and listen to them on my travels to work. Holding a book in hand; trying to read them during rush hour is a chore and these audio books are indeed coming handy for me.

Philip Arthur Fisher was an American stock investor who wrote this book Common Stocks and Uncommon Profits way back in 1958.  Just like Benjamin Graham’s bible of investing, The Intelligent Investor, this book is also considered to be a must read for anyone planning to invest in the stock markets.

Philip Fisher is considered a pioneer in the field of growth investing. Morningstar has called him “one of the great investors of all time”. In Common Stocks and Uncommon Profits, Fisher said that the best time to sell a stock was “almost never”. His most famous investment was his purchase of Motorola, a company he bought in 1955 when it was a radio manufacturer and held until his death in 2004.

Perhaps the best-known of Fisher’s followers is Warren Buffett who has said on some occasions that “he is 85% Graham and 15% Fisher”.  (source: Wikipedia)

Fisher goes on to give a lot of Do’s and Don’ts for investors.  A few of the Do’nts include

  • Dont buy into promotional companies
  • Dont ignore a good stock just because its traded over the counter
  • Dont buy a stock just because you like the tone of its annual report
  • Dont overstress diversification
  • Dont be afraid to buying on a war scare
  • Dont fail to consider time as well as price in buying a true growth stock
  • Dont follow the crowd

Fisher also goes about sharing his ideas of how he goes about finding a growth stock.  Fisher talks about using the Scuttlebutt method to investing.  This means that the relative points of strength and weakness of each company in an industry can be obtained from a representative cross-section of the opinions of those who in one way or another are concerned with any particular company.  Also he talks about talking to the vendors, customers etc to find the correct information needed for your investment in that particular company.

Common Stocks and Uncommon Profits
Author – Philip Arthur Fisher
Pages – 271
Publisher – John Wiley & Sons

Above picture courtesy: Nickgogerty

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Equity Updates – Asahi Songwon Colours

Sold off Asahi Songwon for a very good profit.  The below shown chart should give you an idea of how much the stock grew in the past 1 year.

Also bought more stocks of MIC Electronics & Graphite India

This year the dividend payout has been pretty good. Add to that bonus shares from both Dabur (1:1) and & TVS Motors (1:1)

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Indian mutual funds dominate world's top 100 list in 2007

Reliance Power’s IPO, SBI’s right’s issue (approx USD 4 billion), BSNL to sell 10% of its stake for USD 10 billion. For the equity market, 2008 is going to be another bumper year. How many will make money or how many will miss out on the bull run is something that time will tell.

But, as of now, i have no interest in applying for the Reliance Power’s IPO. Am staying away. Iam more interested in a proven performer like BSNL or SBI than the hot air spewed by Anil Ambani.

Indian equity funds stormed into the Lipper list of the world’s 100 top-performing stock funds of 2007, with 40 funds making a mark compared with none a year ago, as Indian shares turned in their best performance in four years. A power sector fund from the country’s largest asset manager Reliance Capital led the Indian top performers in 2007.

The top-100 list, carved out from a set of 24,887 funds tracked by global fund intelligence firm Lipper also includes five India-dedicated offshore funds. Over the 10-year period ended December 2007, local funds are clear winners with seven of the world’s top 10 funds from India.

“Indian funds had a revelling year, with the broader markets faring well and the mid- and small-cap segments outperforming their bluechip peers by a significant margin in 2007,” Dhruva Raj Chatterji, research analyst with Lipper in India, said.

Full article here.

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