Blog on Value Investing | Safal Niveshak

A Stock Broker Goes to Heaven

A priest dies and is waiting in line at the gates of Heaven.

Just ahead of him is a man dressed in sunglasses, a loud shirt, leather jacket, and jeans.

Saint Peter asks this man, “Who are you, so that I may know whether or not to admit you to the Kingdom of Heaven?”

He replies, “I’m Jim Cash, 30, stock broker from Noo Yawk City.”

Saint Peter looks through his list. He smiles and says to the stock broker, “Take this golden robe and silver wand and enter the Kingdom of Heaven.”

Now it’s the priest’s turn.

I Don’t Want a Bull Market for the Next 10 Years

“What kind of a wish is this?” you might wonder. “As an investor, why doesn’t he want a bull market, and that too for the next 10 years? Has he lost his senses?”

Well, before you exercise your brain more and think that I am out of my mind, let me make one thing clear.

I, like you, love seeing stock prices rise.

I love it everytime a stock I own surges, and makes me richer on paper.

But even then, I hate the sight of a bull market – when stocks rise 30-40% on an average annually – and don’t want to see one for the next 10 years!

Not Stocks, Your House is Your Best Investment

House Purely due to luck, and a gentle nudge from my wife, I bought my house in 2006.

Why luck? Because since the time I’ve bought this property (and I thought it was expensive then), the capital appreciation has been almost 250%!

In short, my house has been my best investment till date. And this must be true for you as well.

In fact, I’ve rarely met anyone who has not made a profitable investment in a house. In other words, a house (at least, the first house) is the one good investment that almost everyone manages to make.

I’m sure there are exceptions, such as people who bought disputed properties or houses at super-inflated prices. But in more than 90% of the cases, a house will be a money-maker.

Best & Worst Stocks of 2011-12

As we enter a new financial year (2012-13 or FY13), here’s a look back at the best and worst performing stocks from across sectors in FY12, including the ones from my personal portfolio.

As you will see below, FMCG stocks closed FY12 as the best performers, while Metal stocks were the worst performers.
[Read more…] about Best & Worst Stocks of 2011-12

The Secret of Peter Lynch’s Investing Success

If there is one legendary investor who not just beat the market but destroyed it, it is Peter Lynch.

Lynch ran Fidelity’s Magellan Fund in the US for 13 years, from 1977 to 1990. During this period, he beat the US stock market index S&P 500 in 11 years. His average annual return during this period stood at a mind-boggling 29%.

It means that every US$ 1 invested in his fund in 1977 grew to more than US$ 27 by 1990.

Fortunately for us, Lynch has laid down his secrets in two great books that every investor must own and read several times – One Up on Wall Street, and Beating the Street.

7 Steps to Becoming Your Own Financial Planner

I am a strong believer of managing one’s own money and finances.

The simple reason is that it’s your money at stake, and your financial future that’s being planned.

Nobody cares more about your money than you do. So if you are not motivated to improve your financial situation, nobody else is going to do so either…not even the best financial planner around.

I manage my own finances and see no reason why anyone else can’t do that on his or her own.

‘Einstein Way’ to Get Over the Stock Market Insanity

Albert Einstein defined insanity as ‘doing the same thing over and over again and expecting different results’.

In the stock market, these are some things that most people do, over and over again…

Worry where the Sensex is moving next
Worry where interest rates are moving next
Worry what FIIs will do next
Worry about the GDP growth next quarter and next year
Worry about the government’s fiscal deficit targets
Worry what the next quarter might bring for companies
Worry what will happen in the US, Europe, and China
Worry why most people are worried about these worries

The truth is that these worries either keep people away from investing, or these lead them to make serious errors of judgment with their investments.

How Much Term Insurance I Have, and Why

This seems like a season of disclosures!

After disclosing to you the stocks and mutual funds I own in my portfolio, today I discuss the amount of term insurance I’ve bought and my reasons for the same.

Buying a term insurance is one of the most important steps in your overall financial planning.

You may avoid buying any ULIP, Endowment, Money-Back, or Child Plan…but just don’t avoid term insurance.

This is especially true when you have dependents but don’t have enough assets (investments, trusts, etc.) to provide for them after your death.

However in case you have dependents and also have enough assets to provide for them after your death – a fully-paid-for home, a large and well-performing investment portfolio, frugal lifestyle – then you “do not” need term insurance.

Why This Paid-Versus-Free Financial Planning Di

This is what happens when you are enjoying your holiday and get a cold-call from a financial planner who first offers you a fee-based service, and then goes down to do anything for you for free.

This is with due regards to Dhanush and his team for their wonderful composition that I’ve twisted to suit what I want to tell you with respect to my view on this entire debate of “free versus paid” financial planning, and which one is better for you – the investor.

So here I go…

10-Point Checklist I Use to Sell My Stocks

“I wish there was a quarterly review possible in a marriage,” rued my wife after a small fight. “I also wish there was an exit clause,” she added, this time raising my interest levels.

Long term investing is a lot like a marriage.

For a peaceful relationship, you must be willing to…

Commit for the long term
Keep your ego and emotions aside
Keep your expectations realistic
Learn to say ‘no’
Learn to take the blame
Know that things could change and accept when they do change
Have immense patience

However, there’s one big difference between marriage and investing.