Vishal Khandelwal

Safal Niveshak StockTalk #5: Graphite India

Welcome to the fifth issue of the Safal Niveshak StockTalk.

This time I delve deeper into a small-cap company, Graphite India Ltd. (GIL). GIL, despite being a small company, is India’s largest manufacturer of “graphite electrodes”, one of the most important components used while manufacturing steel using the electric arc furnace (EAF) route.

Before we dive deeper into GIL, here is a brief overview of the sections of this report…

About GIL
GIL’s Shareholder Value Creation Model
Safal Niveshak’s 20-Point Checklist
Intrinsic Value Assumptions
Financial & Market Snapshot
“Should I Buy GIL?” Checklist

What Investing Topics Do You Want Me to Write About?

Whatever I write at Safal Niveshak is for you. And I want it to be useful to you.

So a while back, I did a feature called “Ask Vishal,” where I answered investment-related questions asked by readers. And the response was good.

Going forward, I want to do something a little different.

Here’s what I’m asking.

Post topics of interest to you in the Comments section below – topics related to investing, stock market, and financial education, which you want me to write on Safal Niveshak.

Sorry Veritas, But I Love DLF!

Whatever Veritas may say, I love DLF and for the reasons mentioned below. Here’s my ode to the company and its founder Mr. K.P. Singh for whatever good they’ve done for me as a financial analyst and an investor…

My Ode to DLF
KP-KP, where have you been?
“I’ve been working day and night, to make my balance sheet clean.”

KP-KP, so what did Veritas found there?
“It’s ‘mischievous’ of them, I don’t know what wrong they saw here!”

KP-KP, but aren’t your assets really inflated?
“I don’t know why you say so, for I’ve always kept them deflated!”

By the way, I love your company for what it is,
It’s taught me what’s nice and what I must miss.

Education and Investing

Some people are educated. Some are smart. Some are both.

Some educated people are blockheads. Some uneducated people are geniuses.

Put the sophisticated, smart fund manager in the role of a chief financial officer of a company, and see who the intelligent one is – him or the relatively ‘less educated’ CFO who has been managing the ‘real’ business challenges for years.

Some people understand the theory of everything but can’t deal with the reality of anything.

Like an arm-chair financial analyst would continuously blame an automobile company for not managing its cost well, but does not understand a bit what problems that company faces in dealing with its vendors.

So you have some people who are academically capable but practically incompetent!

How to Invest after Sensex Rises 20%

“Bull markets go to people’s heads. If you’re a duck on a pond, and it’s rising due to a downpour, you start going up in the world. But you think it’s you, not the pond.” ~ Charlie Munger

“I’m loving it!” said my friend as he entered my home for a family dinner.

“Why, did you just eat a McDonald’s burger or what?” I asked.

“What a poor joke, man!” he said while switching the channel from Star Cricket to CNBC. “Haven’t you seen how the Sensex is rising these days?”

“I don’t keep a track of the Sensex, you see!”

“It’s sad! Then you’ve missed a great rise in stock prices,” he said as if he was mocking me for not watching CNBC.

I Don’t Want Money. What about You?

I Don't Want Money “Who is rich? He that is content. Who is that? Nobody.” ~ Benjamin Franklin

I was reading The Money Game by Adam Smith last night, so thought about sharing some random thoughts on a too-close-for-my-comfort subject of ‘money’.

“It’s simply outrageous!” you might think on reading today’s headline. “Who doesn’t want money?”

Well, this is indeed a very normal way of thinking (Who doesn’t want money?). But you see, what’s normal isn’t always rational.

How to Know if Your Company is the Next Kingfisher Airlines?

Image Source: Economictimes.com

Succeeding in our professional and personal lives requires tremendous confidence.

Our natural desire to be highly confident, however, leaves us at risk of becoming overconfident, which may be the biggest error of judgment that we make.

It is when false confidence drives overconfidence that we become susceptible to hubris.

Such hubris is commonly seen across people in power – like corporate CEOs or Chairmen.

In fact, according to researchers, the most reliable indicator of financial fraud is not good corporate governance practices, but rather, the ego of the chief executive.

Lance Armstrong Guide to Losing in Stock Market

Image Source: Lancearmstrong.com

I really like to stay positive with whatever I write here on Safal Niveshak.

As you must have noticed from my posts in the past, I write more on ‘how to make money from stocks’ than on ‘how to avoid losses’.

But whatever I think and write, I can’t deny that losses are an integral part of the stock market investing game. And chance is you might have come across them yourself.

After you suffer a loss on your stocks, while it is understandable (and healthy) do go into the grief and anger phase initially, staying there for a prolonged period of time won’t do any good.

5 Steps to Create Your ‘Personal’ Investment Strategy

We had an interesting discussion here at Safal Niveshak yesterday. It was around my post on why I do not invest in index funds.

Some readers gave very valid reasons why index funds are a great way to invest for small investors given that these take away the big risk of a short-term focused fund manager and his inadequate stock picking skills.

Another valid reason readers gave was that a small investor does not have the time to put in the effort of selecting good stocks and mutual funds…and thus index investing is a good way to go.

Why I Don’t Invest in Index Funds

“I made the smartest investment decision of my life yesterday,” a friend told me over phone.

“Did you finally stop trading in share market?” I asked him jokingly.

“Shut up! What I did was to invest in a good index fund,” he said.

“And why did you do that?” I asked.

“You see, the index fund will keep my money safe as the returns won’t depend on the whims and fancies of the fund manager while my money will grow in line with the stock market,” he replied. “I believe every investor must have an index fund in his portfolio.”

Well, this wasn’t the first time I heard someone ‘sell’ me the idea of an index fund and why it’s a must-have in a small investor’s portfolio.

But I have never invested in index funds in the past, and don’t plan to do that in the future as well.