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).

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.

3 Reasons IPOs Are Almost Always Bad Investments

August 24, 2017 | 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.

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.