Vipin Khandelwal

Understanding Accrual – Have you accrued your interest?

October 24, 2016 by Vipin Khandelwal

You have just invested in a Bank FD which carries an interest rate of 10% per year, paid every quarter.

So, if you invested Rs. 10,000 in this FD, at 10% a year, you get Rs. 1,000 for a year. Since the interest is paid out every quarter or 3 months, you get Rs. 250 every quarter.

Now, what is the value of your investment at the end of Month 1, Month 2 and Month 3?

OK.

What if I say that at the end of Month 1, the value of your investment is Rs. 10,083.33, at the end of Month 2, it is 10,166.67 and at the end of month 3, it is Rs. 10,250.

You shake your head in disagreement.

“What nonsense is this? I am getting the interest only at the end of month 3, so why are you doing this trick?”

Well, it does look like a trick but a perfectly legal one.

How to pick investment worthy stocks

October 20, 2016 by Vipin Khandelwal

equity investor insights - how to pick stocks

This is Part 2 of the note by Balaji Sridharan, an equity investor, who shares his approach and thought process on investing.

In Part 1 he suggests that every equity investor asks two questions:

Am I an above average investor objectively?
Is investing worth my time?

He then goes to explain how possibly can an individual investor seek those answers.

Subsequently, he questions whether one is ready to be an equity investor by taking up three 3 hurdles that one has to face.

You can read the Part 1 here.

Part 2 continues.

Once you are past all these hurdles, the question “how does one think about companies” arises?

There is enough literature out there from Ben Graham, Seth Klarman to Phil Fisher taking from deep value to high quality, growth companies. We will not rehash about any of these. Instead we will talk about a few of the filters that I use to pick stocks.

At the top of the list is whether the business is predictable.

What this essentially means is that can you envision what the company will look like five years from now?

The Truth about investing in PMS

October 19, 2016 by Vipin Khandelwal

The truth about Portfolio Management Services - PMS

Deepak was meeting me after a long time. Even though we were working and living in the same city for many years, we couldn’t meet. As a senior sales guy, he has a traveling job and that made it all the more difficult.

Finally, we did meet up.

The conversation was all around from college days to family and finally to investments. Yeah, you must have guessed it.

“Hey, it’s nice to know you are doing your own practice as an Investment Adviser.”

“Yes, it is very fulfilling.” I tried to reflect on the purpose.

“How have you been investing?” I asked.

“Nothing much, my bank RM keeps coming back to me with options and I put some of my money there. I also make direct stock investments based on ideas that I get from the market and advice from friends. I also get some insights from experts I follow on social media.”

“Hmm. Hmm.” I could sense where this was going.

He continued, “You know I have just spoken to this company and they have offered me to invest through their best PMS.

“PMS? Why?”

Investing – Insights from an equity investor

October 23, 2016October 17, 2016 by Vipin Khandelwal

To be an equity investor is difficult. For some, it can be downright scary. The fact remains that more people lose money in equity investing than make in it. Why is that so?

You see equity investing is a science. There is a whole lot of financial analysis and valuation methodologies that enable an investor to make decisions. Interestingly, it is an art too as it is subject to ‘views’ of individuals. The simplest example of it being an art is that one company can be valued very differently by two individuals.

The real magic of investing happens at the ‘horizon’ where the ‘art’ and ‘science’ meet.

I have been on the search to find real world investors who practice this amalgamation of ‘art’ and ‘science’.

By pure chance, I came across Balaji Sridharan, an equity investor who also has a full time job as a CXO of an organisation. Balaji has generously shared his approach and thought process on equity investing.

You might be investing in direct equity or via equity mutual funds or just be getting prepared to start your journey as an equity investor, I am sure you will benefit from his ideas. I have benefited for sure.

This is Part 1 of the note. You can read Part 2 here.

So, let’s read what Balaji has to share.

Announcing “Money and You” Workshop Bangalore

November 7, 2016October 15, 2016 by Vipin Khandelwal

Investing Workshop - Money and You - Vipin Khandelwal

More than an year ago, I started this blog with a simple objective –

to share simple actionable ideas on money and help you become a smarter investor.

Thank you for being a reader of this blog. The truth is you are the one who has made it worthwhile.

It has been an exhilarating journey over the past 1 year. I believe now it’s time to take it to its next level – to come and meet you – face to face.

There is different power in personal interactions – it propels our thoughts into actions. It provides room for discussion and discovery.

With that perspective in mind, I am happy to announce my new initiative – investing workshop – “Money and You”.

Slay your Ravanas – Greed and Fear

October 11, 2016 by Vipin Khandelwal

“Can you please suggest me some mutual funds which will give high returns over the time period of 5 years?”

“Please tell me mutual funds that can give me 30% to 35% returns on an average.”

Two queries that I received in the past few days.

What’s this?

Unrealistic expectations!

Greed!

—

“I don’t want to see even a single rupee negative on my investment.”

“…don’t want to invest in equity.”

“My portfolio has 37 schemes.”

What’s this?

Unrealistic expectations!

Fear!

Fear of missing out (FOMO)!

Greed and fear are two of the many faces of Ravana in your life.

Now that the Dusshera of 2016 is here, I call upon you to slay them.