Archives for August 2017

Annual Report Review: Avenue Supermarts (D-Mart)

August 31, 2017 | Reading Time: 2 minutes | 40 Comments |

Here is my review of the FY17 annual report of India’s leading value retailer, Avenue Supermarts, which owns and operates the D-Mart brand of stores.

Click here to download the PDF review (4 MB file), or read it in the panel below.

Let me know your thoughts and questions on this review in the Comments section of this post, plus any additional thoughts from your own review of Avenue Supermarts’ FY17 annual report.

Click here to read past annual report reviews

Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. I do not own the stock, but my analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

Reading isn’t a Race

August 30, 2017 | Reading Time: 13 minutes | Leave a Comment |

Recently I started reading a book called The Moral Saying of Publius Syrus. There were two reasons I picked it up. First, it came as a recommendation from multiple places. When a book name starts popping up numerous times, I move its rank up in my to-read list. Second, it was a small book. The thought of finishing a book in 1-2 hours is very enticing. But it’s deceiving too and I’ll circle back to this thought later in the post.

As I patiently worked my way through the first few pages of Publius Syrus’ book, it was clear that I wasn’t enjoying it. But the more boring it became the more I took it on my ego. I didn’t want to give up on a supposedly great classic. I just wanted to finish the book and heave a sigh of relief.

[Read more…] about Reading isn’t a Race

Financial Shenanigans 101

August 29, 2017 | Reading Time: 4 minutes | 3 Comments |

Definition
“Financial shenanigans are acts or actions designed to mask or misrepresent the true financial performance or actual financial position of a company or entity.

Financial shenanigans can range from relatively minor infractions involving creative interpretation of accounting rules to outright fraud over many years. In almost every instance, the revelation that a company’s stellar financial performance has been due to financial shenanigans rather than management prowess will have a calamitous effect on its stock price and future prospects.

Depending on the scale and scope of the shenanigans, the repercussions can range from a steep sell-off in the stock to the company’s bankruptcy and dissolution.” (Source – Investopedia)

Best Books on the Subject
Howard Schilit’s Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, Charles Mulford’s Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance and The Financial Numbers Game: Detecting Creative Accounting Practices.

StockTalk (August 2017)

August 25, 2017 | Reading Time: 24 minutes | Leave a Comment |

3 Reasons IPOs Are Almost Always Bad Investments

August 24, 2017 | Reading Time: 14 minutes | 5 Comments |

People indulging in the stock market are often people with a lot of emotions. They get excited by something new, especially if it holds the promise of making them a whole lot richer and provides bragging rights at their next social gathering.

Maybe that’s why amateur and professionals alike tend to lose their minds in bull markets, particularly when a hot initial public offering, or IPO, is offered to them by their broker.

On one hand, had you bought into the IPOs of Infosys (yes, remember?), HDFC Bank, Sun Pharma, or TCS, you would have had some volatile price fluctuations along the way, but there is no question that you have made enough money to substantially change the quality of your life. Clearly, a well chosen IPO can be a life changing experience if you simply make the right choice and stick with the stock for years.

On the other hand, there is a large majority of IPOs such as those of Reliance Power, Suzlon and DLF, which have destroyed investors’ capital. With such businesses, even the “long-term” cannot save you from permanent capital destruction.