Archives for August 2017

Annual Report Review: Avenue Supermarts (D-Mart)

August 31, 2017 | 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 | 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 | 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 | Leave a Comment

InvestorInsights: Jeff Gramm

August 20, 2017 | Leave a Comment

Jeff Gramm manages Bandera Partners, a value-oriented hedge fund based in New York City. He has served on several public company boards and is the author of Dear Chairman, a history of shareholder activism that has been described as “a grand story” and an “illuminating read” by the Wall Street Journal, “a revelation” by the Financial Times, and “an excellent read” by Andrew Ross Sorkin at the New York Times. Jeff has taught Applied Value Investing with Terry Kontos since 2011. He received his MBA from Columbia Business School in 2003 and graduated from the University of Chicago in 1996.

A hedge fund manager and an adjunct professor at Columbia Business School, Gramm has spent as much time evaluating CEOs and directors as he has trying to understand and value businesses. He has seen public companies that are poorly run, and some that willfully disenfranchise their shareholders. While he pays tribute to the ingenuity of public company investors, Gramm also exposes examples of shareholder activism at its very worst, when hedge funds engineer stealthy land-grabs at the expense of a company’s long term prospects. Ultimately, he provides a thorough, much-needed understanding of the public company/shareholder relationship for investors, managers, and everyone concerned with the future of capitalism.

StockScan: Bajaj Corp Ltd.

August 18, 2017 | 2 Comments

Here’s my StockScan report on Bajaj Corp, India’s leading player in the hair care industry. Click here to read the first report on V-Mart Retail.

To repeat my disclaimer, this is NOT an investment advice to buy or sell shares. This is just my analysis of the company’s business and not a stock advice. It’s important that you make your own decision.

StockScan is just my effort to compress my thoughts on a business in a single page, that forces me to focus on the most important things, and exclude the noise that too much information and analysis may bring.

Click here, if you cannot read or download the report above.

Statutory Warning: This is NOT an investment advice to buy or sell shares. Make your own decision. I do not own the stock, but my analysis may be biased, and wrong. I, Vishal Khandelwal, am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

Two Wise Men: 40 Stories for Children Inspired from the Wit and Wisdom of Warren Buffett and Charlie Munger

August 15, 2017 | 17 Comments

In July 2016, Bill Gates wrote a memoir on his 25 years of friendship with Warren Buffett. Here is how Gates started his memoir –

I don’t remember the exact day I first met most of my friends, but with Warren Buffett I do. It was 25 years ago today: July 5, 1991.

I think the date stands out in my mind so clearly because it marked the beginning of a new and unexpected friendship for Melinda and me—one that has changed our lives for the better in every imaginable way.

Warren has helped us do two things that are impossible to overdo in one lifetime: learn more and laugh more.

That last note caught my attention. Including the two lessons that Gates learned from Warren, there are four most important lessons I have learned from studying the latter and his partner Charlie Munger over the past 15+ years.

BookWorm: Steal Like An Artist

August 10, 2017 | Leave a Comment

When you give yourself permission to steal from the great artists, it takes away the huge burden of the need to be original. And that relief itself, ironically, makes space for original ideas.

Investing, they say, is more of an art than science. And, art by definition, stands on the shoulders of creativity. Where there’s art, there’s creativity. So, any insights that can inject some creativity into one’s life and work, including investing, are worth paying attention.

Austin Kleon’s book – Steal Like An Artist– is an illustrated guide that gently touches the various aspects of how creativity takes shape. It’s a manifesto for writers, artists, entrepreneurs, designers, photographers, musicians, and anyone attempting to make things, especially in the digital age.

StockScan: V-Mart Retail Ltd.

August 10, 2017 | 12 Comments

“Writing is 1 percent inspiration, and 99 percent elimination.” ~ Louise Brooks

This is an idea about brevity, so let me be brief.

StockScan is Safal Niveshak’s latest initiative where I will write and share to-the-point, one-page reports on listed Indian companies on a regular basis.

If you have been a reader of Safal Niveshak for long, you must remember how my idea of writing stock analyses has bombed quite a few times. So, I launched StockTalk 1.0, then 2.0, and then 3.0…but none could make it beyond a few weeks or days. If you think that’s due to my incompetence in analyzing stocks, you are right, and I am fine with that thought because you won’t expect much from this new initiative too. 😉

One big reason I never carried on far with my earlier such initiatives was that my business analyses were often construed as stock recommendations, and I found a lot of people acting on the same (and, of course, losing money). In fact, some curse me even now for a few old reports, despite my several warnings that what I wrote was purely entertaining business analysis and not serious stock recommendations.

Anyways, as I have also realized in hindsight, another reason I could not continue with these initiatives for long was that I often found the idea of writing long reports as cumbersome, after having done that for a few years in my job.

Inverting the Money Problem

August 7, 2017 | 13 Comments

In the controversial movie, The Social Network, which supposedly portrayed Mark Zuckerberg’s Facebook journey, Sean Parker’s character famously quipped –

“A million dollars isn’t cool. You know what’s cool? A billion dollars.”

It’s probably the most favourite problem that majority of the individuals in the world are trying to figure out i.e., how to get rich?

So let’s investigate this problem by using Charlie Munger’s most cherished mental model i.e., inverting the problems to solve them.

One of the ways to invert the question of “How to Get Rich?” is to ask, “Is getting rich worth it?”

Before you decide to skip this article thinking that it’s another one of those “money can’t buy happiness” rant, just stick with me for few more minutes and I promise that you won’t regret it.

In fact, this is a good opportunity to wear our curiosity hats and look at the hardships that tag along with large sums of money. Now given the fact that the author, yours truly, isn’t super rich (money wise at least) and likely never will be, is it justified for him to comment on the problems of the rich?

In my defence, all I have to say is that I never let my lack of first-hand experience with a topic stop me from speculating on it. 🙂

Maybe, like the proverbial fox and his sour grapes, I am deluding myself with a story that I never wanted what I will never be able to get. Or maybe I belong to the camp of those cash-poor intellectual types who want to prove to the world that rich people secretly live a miserable life.

I am not ruling out any of these possibilities where my subconscious is playing a game.