Very good article on past and future of nifty
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A couple of articles with explaining legal implications for companies shareholding and effect for companies going under restructuring (merger, demerger etc…)
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SOYA - Sit On Your Ass by Investment Master Class
https://us13.campaign-archive.com/?e=79840b504f&u=891ba322a62ca9570ec20af4e&id=e26982443e
Good read. Most of the stuff is reinforcement. I liked ‘Position Sizes / Volatility’ section. Happy reading!
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- Many biggies scammed…setting seems similar to Theranos way…I feel they took good advantage of social proof leading to lack of due diligence
Lesson for us: Never invest because some biggie has bought it. It’s CAVEAT EMPTOR always!
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Chinese per capita G.D.P. is still about one-third or one-fourth the size of neighboring countries like South Korea and Japan. And yet its birthrate has converged with the rich world much more quickly and completely — which has two interrelated implications, both of them grim.
First, China will have to pay for the care of a vast elderly population without the resources available to richer societies facing the same challenge. Second, China’s future growth prospects will dim with every year of below-replacement birthrates, because low fertility creates a self-reinforcing cycle — in which a less youthful society loses dynamism and growth, which reduces economic support for would-be parents, which reduces birthrates, which reduces growth
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The stamp of an apparently reputable accounting company, such as Deloitte, BDO International, EY or PwC, all of which are among the world’s top 10 auditors, on financial reports does not guarantee the investing public reliable guidance on a company’s performance
source: https://www.thejakartapost.com/academia/2020/01/21/spate-of-accounting-fraud-may-cost-public-faith-in-stock-market.html
Fieldwork in an audit is conducted by junior trainee accountants
The premise under which its done is based on trust. An auditor doesnt go to a company assuming there is fraud.
They check one year’s work within a week and sometimes with fewer resources than the company they are auditing. A company might have 10 accountants working round the clock for a year. An audit firm will have 5 auditors given a week or 2 weeks to check one years work of 10 accountants.
The price paid to the auditors doesnt allow them to hire or spend more than that. Its a competitive world. I am not an auditor but I know this is how things work.
Add to this the auditor will check a system. He will assume that if the system is in place the likelyhood of fruad is less. A typical system might be purchases. He will ask what the company’s system is when purchasing. The company might say, purchases are these 8 steps … 1)department send requistion for materials, 2)purchase department takes quotes, 3) check cheapest if they match requirement in entierity, 4) negotiate on cheapest, 5)get approval from purchasing manager, 6)issue purchase order, 7)record receipt of goods, 8)issue goods to the department that ordered
An auditor will pick up 5 random samples and check if the procedure was followed.
This is pretty much what an auditor does. They check large differences as well as major balance sheet items somewhat indepth but generally its not possible for the auditor to uncover fraud specially if you have a cfo who is really good at hiding, has been with the company for a long time, there is no change in auditor so he understands how his auditor works. A good cfo can easily hide anything.
We as investors need to be better than the auditors unfortunately. Not easy but the payoff is more than what an auditor will get.
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Multi-baggers of the past from the mid, small & microcap universe that have corrected significantly from their 10 Year – High and are now bouncing back with strong fundamentals intact. - A Report by Prabhudas Lilladher
https://www.plindia.com/SampleReports/QuantifiAttractiveExMultibaggers.pdf
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Latest Tony Sheba presentation.
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Not sure if this fits here, but the Economic Survey every year offers a lot of business / investing insights and this time is no different.
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“We cover ourselves with extra inventory,” said Arjun Juneja, director, Mankind Pharma. “So, there is no fear till mid-February. However, if it goes beyond that, 70% of industry will get impacted,” he said. Some other firms said they had buffer stock for next few months.
Roughly 80% of active ingredients used by commercial sources to produce finished medicines come from China, Christopher Priest, deputy assistant director at the U.S. Defense Health Agency, said in testimony given last July to the U.S.-China Economic and Security Review Commission.
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A speech from 2012 by late Professor Clayton Christensen on innovation and disruption from linkedin speaker series. This is with a case study on how disruption worked in steel industry in 70’s onwards in US. He wass also the author of the best-selling book “The Innovator’s Dilemma”, which outlines his disruptive innovation frameworks used by leading Fortune 100 companies like Intel and he was on the board of TCS for many years.
Came across this great video from an article of CTO of TCS which in turn is a good article as well.
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Interesting read, because really shows how Human behaviour influences the market!
Apart from lower oil prices, the markets seemed to be factoring in resolution of coronavirus situation given the recent recoveries of around 500 people discharged. But we will need to monitor the situation closely as some supply chains may get disrupted by then.
“China’s health minister, Ma Xiaowei, recently told reporters there is evidence it’s already mutated into a stronger variation that is able to spread more easily among humans.”
Quote:
The prices of certain APIs have already jumped 25-30 per cent in the domestic market, according to industry sources. Plants manufacturing these APIs in China are shut in view of lockdown there. Indian formulation units (medicine manufacturers) typically have a buffer stock of around two months, and some medicines from the stock are already in circulation.
“My supplier in Hebei province in China which does not even share a border with Hubei province, where Wuhan is in a lockdown, informed that people are confined to their homes and factories are shut until further notice. I am not receiving regular supplies of chemicals and intermediates from China,” said an API manufacturer in India. He apprehended a shortage of antibiotics, vitamins and diabetes drugs if the supply disruption continued.
The government, too, appeared concerned about the emerging situation. A senior official admitted that the government had already checked if there were alternative sources to procure these APIs. “For fermentation APIs, there is no other option. We have to wait and see how the situation pans out. We are considering the industry proposal to relax pollution norms to step up supplies here if needed,” he said.
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Coronavirus situation is providing a testbed for China to evaluate it’s social credit scoring system.
" China’s censorship and surveillance are seen by many as a potential threat to democracy itself. Mass surveillance in China is closely related to its highly controversial Social Credit System, and has significantly expanded under the China Internet Security Law which enforces censorship for over 1 billion people. Drones rebuking people who don’t wash their hands may be efficient in the short run, but they might damage a person’s credit score tomorrow. The potential future usages for this are, at the very least, questionable.
It’s remarkable that Chinese internet companies have developed a platform that lets users check if they have recently traveled with someone who contracted the new coronavirus. But it’s also concerning that this data is so readily available."
Q3FY20 EARNING CONFERENCE CALL SUMMARY FOR 137 COMPANIES
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Wonderful documentary on Amazon and Jeff Bezos. Great work done by PBS Frontline.
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A very interesting and thought provoking Article
Some Lessons From 92 Years of Market Return Data
The author BEN CARLSON (CFA) has compared annualized returns of US Stocks (S&P 500), US Bond (10-year treasuries) and US Cash (3-month t-bills) for 92 years from from 1928-2019 and the returns were as under :
• Stocks +9.7%
• Bonds +4.9%
• Cash +3.4%
The returns after inflation (real rate of return) is:
Stocks +6.7%
Bonds +1.9%
Cash +0.4%
$100 invested in 1928, at current value would look like this:
• Stocks $502,417.21
• Bonds $8,012.89
• Cash $2,079.94
Read the Article.