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Ask Me a Question

I completed (well, almost) the 2013 edition of my Art of Investing Workshops last week.

The Workshops spanned 4 months and covered 7 cities, 11 sessions, 90 hours of discussions, and around 350 tribesmen (and a lot of tribeswomen).

There were intense debates on specific topics around investing, lot of questions answered, and yes, a lot of questions unanswered for the lack of time.

So, now, I have a proposal for you, whether you attended my Workshop or not.

If you and I sat down to have a coffee (or tea/water) and you could only ask me ONE question around money and investing, what would it be?

Ask that question in the Comments section below (and please keep it short).

While I’m happy to answer almost any question (those within my circle of competence), keep in mind that I can’t recommend anything for anyone individually, but I can share my general thoughts, beliefs, opinions and ideas on questions around money and investing.

So, no stock-specific questions please! 🙂

Having said that, questions that can be answered briefly, and might be relevant and/or of interest to other tribesmen, will be high on my list.

I’m not sure how many I’ll get through but I’ll do my best – either by way of a series of posts, videos, or podcasts.

Most importantly, I’ll be totally honest with my answers.

So just ask away!

Note: There won’t be any posts till next Friday. Safal Niveshak is travelling for its first “out of India” Workshop. And this is not an April Fool prank 🙂

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Vishal,

    Here is my question . . .

    Do you foresee ‘money’ getting replaced by anything else in future ?

  2. Do you think the time for which one holds a stock generally depends on the market cap of the stock? i.e. Large caps can be held longer and small caps need to be sold sooner?

  3. Shamil Abdul Kader says:

    Hi Vishal,

    What do you think about MNCs increasing royalty payments form Indian companies? I find HUL, Colgate etc to have good moat, but recent increase in royalty payments is not a good sign.


  4. R.C. Darbary says:

    Dear Sir,

    One Question I would ask would be; “Is Investing only an ‘ART’, or could it be a process (or a set of rules) which one does not understand fully, or stock prices are totally/(partially) RANDOM, or is it something else?

    R.C. Darbary

  5. From a average investor’s point of view Is the buy and hold concept relevant or would you rather churn, given there are a handful of skilled cum lucky people who have done justice to this maxim.

  6. On one hand we have Ben Graham who talked of net-nets working capital. On other we have Sanjay Bakshi who looks at certain current liabilities (in certain companies) as surplus float (resulting in negative working capital year after year). How do you look at the different (seemingly contradictory) opinions of both the masters?

  7. Reluctant Investor says:

    What lessons did you learn when you stepped out of your “circle of competence” while analysing Opto Circuits? Even though you did not expressly recommend a BUY, clearly, you missed a number of important red flags, which should have made your assessment much less positive than what it was.

  8. What is the difference between a holding company and equity diversified mutual fund? Why can we able to buy mutual fund at NAV and can’t able to buy holding company at book value

    • Maries,
      you can buy a holding company as long as it is listed in a stock exchange. But mostly, holding companies are not listed and are generally privately held like Tata sons limited. But there are holding companies that are listed…for example “”Tata investment corporation limited” and “”united breweries holding limited”” that i know of….so go ahead and find a holding company that you are interested.& become a shareholder..:)

  9. Chirag Ghate says:

    Hii Vishal,

    I am 30. Almost Broke. No Savings/Investments.How can we meet ? 🙂

    • Read the book ‘The richest man in Babylon’, it should help. It will tell you through stories, thousands of years old, how slaves ended up being rich landlords and how human behavior has not changed a bit all these years.

  10. Vinay Kala says:

    Dear sir,

    While graham wants a max cap of 22.5 on the multiple of pe and pb and is conservative, fischer justifies high pe ratios for companties which have got good goodwill . in our case he would justify say itc.

    My query is – How do we reconcile the margin of safety principle of graham and buffet with the above view fischer.

    Would they not be contradictory?

    • kalidasa says:

      Fisher was a proponent of “growth” style…Fisher style, I would say aligns with high-tech stocks(more like NASDAQ). Although, i find it confusing when Buffett invokes Fisher’s name once in a while

      This is my take after reading a few chapters of “common stocks and uncommon profits”.

  11. Akshay Jain says:

    In Buffett’s letters to shareholders (1960 issue #4), he mentions that he expects to outperform in declining markets while expecting an index to below average index performance in rising markets

    My question is that isn’t this behavior only possible in defensive’s like FMCG, pharma and IT? As much as I want to find Buffett type companies currently, I just do not find value there. Beaten down sectors (Capital goods, Auto’s, Other cyclicals etc) seem interesting to me but looking at Buffett’s style I do not think he has anything but stocks that have capabilities to do well across all business cycles. It seems my portfolio will only do well when the sentiment and investment climate changes, i.e. in a rising market, contradicting his performance graph.

    So how does his statement hold true, or is it that my investment style needs to be changed?

  12. What would you buy 1) A good company available at high valuation or 2) A mediocre company available at extremely low valuation ?

  13. P.Thangaraju says:

    Dear Mr.Vishal,
    I am outside India and NRI. I have started investing in stock and mutual fund since 2003 little more seriously than before. Since the market was on bull run, everything worked. As you can imagine after 2008 bear run, though I was realizing I was loosing heavily but did not come out or book the loss. (I did not have book loss mechanism in place). Most of the stocks are in negative and I am waiting for the market to move up to get positive return. I have over 70 stocks in my portfolio consisting of large, mid and small caps on many sectors (I did not focus on sector or market cap to select a company for investment.) Overall even today my stock portfolio is about 30% down.

    What you advise me to do?

    Many thanks in advance.

    A suggestion:
    As you know each of the Tribesman will work hard to identify a good company for investment based on various analysis. ,Can it be shared with other Tribesmen, by whoever is willing to do it. The advantage is other Tribesman’s opinion could be his counter check, as most of the Tribesman positive comment/vote for a company could be considered as safe investment.
    Thank you

  14. As previously asked regarding index funds (maybe not the ones in India), only dilemma which I face is:

    If you can’t beat the market, be with the market.

    (Off course this is only for people who don’t have time to research and invest)

  15. Mark Erratt says:

    Hi Vishal,

    In Buffets letters he makes it clear that return on net tangible assets is his favoured measure of growth. Can you explain why this is better than a simple return on tangible assets or more broad measures such as growth in long term eps?

    When I calculate return on net tangible assets for a company I often get a negative figure (intangibles are greater than tangibles as I prefer asset light companies). Under what circumstances is that good or bad? Whilst I calculate this figure I never give it much weight in my decision making as I don’t fully understand the meaning of the numbers that I generate.

    Thanks a lot,


  16. The single biggest value destroyer for common shareholders in India is unethical behavior by promoters. How do we unite as common shareholders and put a check on this behavior and force more transparency and ethics?

  17. Situation: You hear of a value stock from a friend/colleague/tribesmen that its worth testing.

    What would u do next?
    Whats your initial/foremost criteria to dig deeper in the stock story or abandon the idea?

  18. Nishanth says:


    Here goes — How do we develop the patience to wait for our desired stocks ( Asian Paints,Colgate etc.) to come to more normal valuations so we can invest at more rational prices?


  19. Gunjan Chhaya says:

    Hi Vishal, congrats for your first international workshop.

    If I was allowed only one question to ask to you, it would be,
    Based on your understanding, on a long term (15-20 year) basis, what is the additional compounding rate a successful full-time equity investor should expect with respect general stock index (say Nifty50).


  20. Hi Vishal

    I am Vipul,26 and I recently attended your workshop in Delhi. I seek advise from you as below:
    I have 2 choices wih me as of now and would like to know your advise on same.
    I had invested in two properties in jan 11( 6.4 lac) and in july 11( 29 lac) and now they are worth 16.8 and 40 lac resp.

    1. I sell it and buy a nice 3bhk for me and family in noida which will cost me 65-70 lacs. Remaining amount will be funded by bank.
    2. I continue to invest it in property/stocks etc to accumulate wealth for me say over next 3-4 years and then buy a flat in Ncr which will definitely cost me more..

    Other considearations:

    I plan to settle in ncr
    I dont want to work my entire life.
    Look forward to hearing from you.

    Best Regards

    • In the book One up on the Wall Street, Mr Lynch categorically says first build/ own a house and then only put that much money in stocks which you can afford to lose. I would think that should give you the answer.

  21. My question:
    Back from school days, thick books and small letters scared and intimidated me. Annual reports are exactly those.

    I can go to google finance or moneycontrol to check the 3 statements and Valueline for 10 year data and key-metrics. I understand the annual report offers more insight into how the business conducts and where the money comes from(although I am not aware if the specifics are mentioned).

    So, my question is – other than financial statements, what are the things in the annual report that I mandatorily need to pay attention. I have seen some annual reports repeat the same data in multiple sections. What is the intent when you go back to previous years annual reports – What was warren buffett looking, mere numbers OR verifying what the management said it would do and what they achieved.

    • If I were to rephrase my last question, I just finished reading Pat Dorsey’s “The little book that builds wealth”. Also, finished prof Bakshi’s floats and moats presentation (a rare treat!). The common theme is, moats which is directly proportional to increasing RoE or RoIC regardless of the markets cyclic turns. Very interestingly Mary Buffett/David Clark in their book “New Buffettology” talk about the same idea – increasing RoE regardless of market downturns signifies a moat.

      If I were to pour through Valueline and go through the 10 year history of every company and look for these 2 indicators( other factors considered ofcourse, share buybacks/high insider buying/gurus buying/low 0r 0 long term debt and increasing retained earnings) – shouldnt this be enough information to make a purchase? If I were to go and buy, would i be a speculator vs an investor? What other information does the annual report give to me which these cold hard statistics do not?

  22. shivam bose says:

    Just 1 question :-
    Which brokerage service do you use ?? And which brokerage service should I use ??

    • Marshal Mi Suit says:

      Hi Vishal,

      larger fees aside, do public sector bank brokerages risk lesser demat account fraud than private brokerages? Or is this just wishful thinking. I dislike demat account fraud more than larger fees.

      What is your opinion? Any personal preferences that you have? Your views however specific, are welcome.

  23. Hi, How to stay profitable during both bull and bear markets in stock investment.
    We all mostly know how to stay profitable during bull markets (by buying low and riding profits).
    How to stay profitable during bear markets also

  24. Anything to share on FII’s? (myths, are they better investors ?, how much attention to be given to FII flows),

  25. reverend buffett learned about common stock valuation from Benjamin graham … but where does he got acumen for insurance underwriting and what we can learn from that experience

    or more specifically how can i learn insurance underwriting and you those tools in sharpening my thing, which can be utilized for common stock piking etc .

    Do reply please
    Dheeraj .

  26. I would love an article on the potential bull run story of the Indian middle class and whether valuations might be stretched in some of the related stocks.

  27. J Sanghvi says:

    Hi Vishal,

    Do you feel long term investing is still a valid theme?

    I see traders making more money than long term investors.

    Appreciate your views.


    J Sanghvi

  28. P Mankotia says:

    While analysing a company one should look at Standalone result or consolidated result. For example Dabur standalone P/E is 41 and consolidated P/E is 32. Which we should consider, because both has vast gap.

  29. Marshal Mi Suit says:

    After figuring out a fair value range, do we apply margin of safety to
    upper end of fair value range
    lower end of fair value range
    average of fair value range (in between)
    is it stock specific?
    eg, for EIL, margin of safety is applied to average of fair value range while for BHEL, the margin of safety is applied to upper end of fair value range

    could you please elaborate more on this?

  30. SHIRISH joshi says:

    Simple question. Can u prove that analysis helps in the indian market ? Or is it more like Russian Roulette?

  31. I found Ganesh’s question very interesting ? Do we forsee money getting replaced by anything else? Do you think we will turn back the clock to a barter system just like the old days?
    Also will you sharing the replies over here?

  32. can you recommend best books accounting & statements analysis of equity valuation in “indian stocks market”

  33. CA AMIT G says:

    why should one buy stock when no 100% certainity of dividend i.e. frozen corporation and in india no liquidation happen. its just an piece of paper.

  34. Vikas Bargale says:

    I have only one ‘difficult’ question.
    As Warren Buffett says- “Its far better to buy a wonderful company at fair price than a fair company at wonderful price”
    So what should be the PE ratio which will be appropriate for fair price?


  35. Hi Vishal,
    What do you think about NIFTY and NIFTY Junior ETFs (Goldman, IIFL, etc) and a strategy based on investing in such ETFs based on the PE of the NIFTY (invest regularly when low, and stop/sell when much higher than the 10-15 yr avg). This is mainly to eliminate fund manager risk, and the low cost of these ETFs.
    Had asked this question in a previous post of yours, hoping for a reply this time 🙂

  36. hi vishal,

    i appreciate your cash out flow (curtailing expenses) explained nicely in previous posts.
    but how did u plan ur cash inflow(your present income)
    only from stock market gains / dividends / any rental income/other?.

    if possible pls explain in detail, so that it will be useful to plan my future

  37. Jana Vembunarayanan says:

    Hi Vishal,

    For a retail investor like me do you think SIP investing in market indexes like Nifty makes sense?


  38. Hello Vishal,

    firstly, Thanks to you and safalniveshak tribesmen/women to for help people who are very new to value investing.

    I need an answer for Very basic question : How to understand business of a company behind a stock thoroughly? (Where to look for information, please mention possible resources which I need to look into)

    Keep in mind that : I’m newbie in value investing arena.

    Hoping for the useful answer for me and like.

    Thanks a lot again.


  39. Arti Rungta says:

    Hi Vishal
    Congratulations for your first international workshop and all the best for spreading the wings of knowledge and growing the circle.
    In the market volatility what should be the approach towards asset allocation and investment, given a person has resources/option to invest only online(like for NRI’s), continue investing in equity through SIP or wait and invest in lump sum/ invest surplus in liquid schemes/ sip in mutual funds/or..?
    Best Regards,

  40. Dear Vishalbhai,
    Thank you for all your invaluable posts that all the tribesmen like me have been receiving. All are great pieces of advises and most will agree to what you have been saying through all of them.

    The question that I would like to ask is;
    According to you what are the top 5 safe heavens for retirees to invest money and get regular returns ?

  41. ankur bhatia says:

    Recently I had a experience of buying an AC for my home. I wanted to buy any a/c which fulfilled 2 criteria- most energy efficient and uses environment friendly gas (R410). It turned out to be the most expensive and almost 30-35% beyond my budget.
    Based on this I have 2 questions:

    1.If we apply the same to buying a stock assuming I buy it below the intrinsic value only. Still given the nature of balue investing there is bound to be that psychological doubt and in most of the cases reaction would be to go and search for cues to validate the decision.
    My question is how do we deal with this situation on behavioural front- what’s your perspective on it.
    2.As I have been targeting in reducing my expenses to increase margin of my savings and expenses bbut still I don’t want to compromise certain things like environment. For eg I may buy star rated appliances, I may buy battery car or water efficient systems or organic fresh produce but currently some of the decisions you have to pay premium in current world.
    My question is that where do we operate in terms of our expenses- should I compromise certain things like environment or health to keep my expenses low or try and evaluate total cost of ownership (monetary and non-monetary)

    One learning which I would like to share is that when we spend in cash it hits you more rather than non-physical payment ie card or online transfer. Interestingly current monetary system is discouraging usage of cash. So, if we spend in hard cash (as much as practically possible) the expenses wd be controlled psychologically. Not sure if everyone will agree with this but my experience is this majority of people wd esp middle class salary earners.

  42. Hi Vishal,

    Congrats on first workshop outside India. You are doing wonderful.

    I have a very simple question.

    As Retail investor with no time and authority to meet management of the company, How can I judge company management reading annual report and financial statement ?

    I found many companies with very poor management who does not take care of small share holders.


  43. Could you please recommend a must read book on investing in gold?

  44. How a new investor can use the Core-Satellite approach to build his mutual fund portfolio?

  45. Vishal, Congrats on the great work and your totally unique selfless style / approach !! Im sure you have done much good for many and the snowball effect will only compound in future. How would you describe your experience and learning / gains in all this time ( guess its a question on an ‘ investment ‘ of a slightly different nature ! )
    Best Regards,

  46. Kumar Abhishek says:

    Sir , please analyse the “cash-flow statement” and “Income statement” of a company as you analysed the balance sheet of opto circuits.

  47. Hello Sir,
    I am a 22 years old engineering student,started investing from 18..I only invest in midcaps and small caps with huge growth potential..My question is out of around 7000+ listed companies how do you sort out/find quality companies? If I find a stock what the primary criteria I should look upon to decide whether that stock is worth to research throughly or not?

  48. Abhishek Manjrekar says:

    Hi Vishal,

    What is your take on low liquidity stocks that have features of a good value investment? Should one invest in them? From your experience, how much time does it take for such Indian stocks to reflect its intrinsic value?

    Abhishek Manjrekar

  49. Vishal, There is a PPT by Prof. Bakshi where an example of NESTLE is given and shown that it is always profitable to buy such businesses starting from PE of 30 to 65 . Does that mean that for strong businesses like Nestle we should not worry above paying too much for them ? I mean the whole idea of buying cheap cannot be applied here as these companies are never cheap.
    Could you put in your views pls. ?


  50. Hi Vishal,
    ETFs are considered as one of the options to invest for passive investors and its one advantage is low expense ratio(near 0.5%) in comparison to mutual funds. However when one buys a unit of ETF a one time expense of 0.67%(including brokerage and other taxes) occurs and the same would be at the time of selling. Wouldn’t the whole expense of buying and then selling a unit of ETF come to 1.84% (.5+0.67 +0.67)?. This is similar to one of the best managed mutual funds.

  51. Hi Arsh,
    The expense ratio of a fund (including ETFs) is a YEARLY cost.
    To understand the low cost advantage of an Index ETF, you need to consider a long term.
    Assume a holding period of 10 years. Comparing a mutual fund with a 2% expense ratio and an Index ETF with a 0.5% expense ratio, we get the total expense for the MF is 2% X 10 yrs = 20%. For the ETF, it is 0.7% (buying brokerage) + 0.5% X 10 yrs + 0.7% (selling brokerage) = 6.4%. Hence, the ETF has a much lower expense. This is assuming their underlying portfolios grow at the same rate.

    However, if you are going to be trading ETFs frequently, then brokerage costs will significantly eat into profits.


  52. Read your posts they are amazing….
    I started studying investing in 2008 by reading all letters by warren buffet for six months. I was mentally prepared theoretically for wild swings.. Around may 2008 I started investing regularly. i would invest in stocks with had “strong moats”. they would be invariably FMCG stocks. I would invest a fixed amount every month to buy 10-15 stocks like SIP. so far my annualized return from investments is around 14-15%. My investment horizon in 20 years. I would like to know what would annualized returns for a top notch investor? Are my returns reasonable and ok?

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