Sunday, December 29, 2013

My investments in 2013 and the predictions for 2014

My best wishes to all my readers for a very successful 2014 - I hope you can help at least one person every day for 365 days in whatever way you can.

2013 was a reasonably good year from investing stand point even though my predictions of Dec 2012 went wrong.  I did not expect slowing down of the Indian economy and the resultant devaluation of the Indian Rupee. I had also expected the interest rates to come down and stock markets to do well. However, as I invest on specific stocks for the long term, my investments in 2013 have not been effected by my wrong forecast.  Here are my 2013 stock investments:

  • Wipro (Dec end  2012 –at Rs 386 – now it is Rs 555 –a 60% increase –that was pretty good)
  • Jubilant food (Feb 2013 –at Rs 1179 – now it is Rs 1259 –a 7% increase –that was not good)
  • Gruh Finance (March 2013 –at Rs 218 – now it is Rs 251 –a 15% increase –that was good)
  • Nesco (April 2013 –at Rs 790 – now it is Rs 790 –a 0% increase –that was not at all good)
  • Repco Home (April  2013 –at Rs 172 – now it is Rs 354 –a 106% increase –that was very good)
  • ICICI Pru FMCG Fund Marico (May  2013 –at Rs 56.89 – now it is Rs 57.87 –a 2% increase –that was not at all good)
  • Reliance Pharma Fund Marico (May  2013 –at Rs 72.3 – now it is Rs 84.15 –a  16% increase –that was good)
  • Marico (July end 2013 –at Rs 217 – now it is Rs 221 –a 2% increase –that was not good)
  • Asian paints (Aug 2013 –at Rs 424 – now it is Rs 485 –a 15% increase –that was good)
  • HDFC bank (Sept end 2013 –at Rs 600 – now it is Rs 669 –a 11% increase –that was good)

Beyond these stock market investments -  I also sold one flat in Bannerghata road in Bangalore and invested in a row house in Kengeri in Bangalore -  I expect this investment to grow well in asset value over the next 5-10 years.

My 2014 predictions are based on the following scenario –

May 2014 elections – a stable government is what everyone is hoping for. But with BJP, Cong and AAP in the reckoning – I am not sure if we can get a stable government. A split mandate could mean bad news for the industry and for the stock markets. 

I do not expect too great an year from that stand point. I expect the RBI to be under pressure to manage the economy as government policy would be weak. Interest rates would be kept high to control inflation. Fiscal deficit would be a concern and a rating downgrade would keep the RBI on the toes. Rupee devaluation would be a concern – we have seen a 11% devaluation in 2013 – I expect a similar devaluation and high inflation in 2014 if we have a fractured mandate.

I expect the US, Europe and Japan economies to improve further. This has good implications for our exports and the exporters in India would do well (IT and Pharma sector).  This also would keep global Gold Prices in USD under pressure as global investors would continue to flock to stocks rather than commodities like Gold.

In such a situation where would I invest?

  • For short term for 0-6 months– I recommend Liquid funds –that would give about 7-8% surely. 
  • For 6-24 months – I would recommend FMP’s – they also should give 9-10% returns.
  • For 24 months and above – stock market is surely a good option still. There will be companies that will do well and one needs to cherry pick the stocks - in case you want, please write to me – I have a Private Equity mailing list where I share my stock activities and you can also get that information.
  • For 60 months plus  – Urban real estate is still a good option. There is a bit of overheating in the real estate market   -so one needs to be careful. However, there are many ideas for investing in this space in every urban area in the country. My knowledge is limited to Bangalore and in case you want to invest in Bangalore and need some help  - please do write to me
  • Gold –I do not expect a great return this year. The global price of Gold in USD would be under pressure -it is currently holding at $1200 per ounce – I do not expect it to go below this.  The Rupee/US Dollar rate is currently around 62 – I expect it to be around Rs. 67-68 by 2014 end - an 8-10% devaluation (based on Indian inflation of 10% and US inflation of 2%) – that means Gold in Indian Rupee will give around 8-10% returns – that is the same as inflation in India. So investing in Gold in 2014 may not be a good idea – if you already have gold – then you would get around 10% returns (which means you have survived the inflation)

The key message is that in 2014, we can get a decent 15% plus ROI per annum on long term investments and appx 8-10% post tax per annum on short term investments. That is enough to “GET RICH AND RETIRE EARLY”.


Tuesday, December 17, 2013

Here is a typical High Net worth investment idea that you can participate in:-

Hennur Road in North Bangalore has seen a lot of real estate activity in the past 3-4 years. The new Bangalore Airport and the promise of many tech parks and other industries in the vicinity has triggered the demand for residential spaces in and around Hennur road. This road also serves as an alternate route to Bangalore airport for people travelling from the outer ring road area. It is a four lane road and is already chocked with traffic on any normal day. All well known builders in Bangalore, including Mantri, Shobha, Prestige, Brigade have launched projects in this locality. Apartment prices are around Rs. 4000 to 6000 per sq ft.  Land rates depend on the exact location – but typical land rates are around Rs. 4000 psft to 7000 psft.

A group of High Net-worth Individual investors are looking at investing in a 7 acres piece of land off Hennur road - this land is owned for about 4 decades by an erstwhile royal family and the price negotiated is just below 2000 psft.  This land piece is also literally on the proposed Peripheral Ring Road –this proposed road will in fact take a small portion of the land –the work on this road will happen in the next two years.  Needless to say that this road will increase the value of the property tremendously.

This investor group is looking at procuring the land and then getting into a JV with a builder to build residential villas or apartments  and exit the investment with the sale of the built up property. The time frame of investment is appx 5-6 years and I expect the investment to give 250-300% ROI during this period.

I have personally visited this land and I am convinced of the viability of this proposal. The risks in this scheme are the following:

·         the delay in signing the JV with a developer; or

·         the delay by the JV partner to deliver the project; or

·         delay in selling the project and exiting it.

The minimum investment for participating in this Rs 30 lacs – as this investment is for buying the 7 acres of land – you will need to invest this money by Jan end. So if you have this liquidity and have a 5 year time holding power - I would surely recommend this investment.

If you are interested and want more details or want to visit the site and meet the key investor, please reach out to me at  (Ph +91 98452 63000)

Saturday, December 14, 2013

How to become a smarter investor in 2014?

Year end is a good time to introspect and plan.  At this time of the year, most of us make New Year resolutions.  I am sure one of your New Year resolutions would be to do well financially in the coming year.

So here are some thoughts on “How to become a smarter investor in 2014”.

  1. Visualise Financial freedom - We all agree that achieving financial freedom can change our lives.  So visualise your life once you are financially free. What will you do from 6 am till  10 pm?  How you will spend seven days a week when you are financially free? What are the projects that you will pursue once you do not need a job to live your life?  I want you to list all the things that you have always wanted to do - but did not do due to time and money constraints. Visualising how your life will change once you achieve financial freedom is really the first step towards becoming a better investor.
  2. What do you invest your time on? The rich people continually invest their time in educating themselves to become better investors. They invest time and effort in getting clarity in their mind on their long term goals – over time, they know exactly what they want. They put time and effort in building networks with like minded people. It is this financial education, clarity of mind and networks that make them rich over time. So these are the three areas where you will need to work on.
  3. Getting rich is not magic or luck – it is 10 year project. Anyone can become rich. All it needs is to break this large 10 year project to 10 smaller yearly projects. Take one project every year and just do it.  Over time you will reach your goal of financial freedom. So while the world may think that you are lucky – you know that you have worked for it – you know that you have invested your time and effort and over time reached the goal of financial freedom.
  4. Where do I start?  Here's what you need to do:
    1. If you have not done it already – start by visualising how your life will change once you are financially free –this is required to motivate oneself over the next few years to sacrifice your today for a better tomorrow.
    2. Make a long term financial plan – I have a 20 year financial planning template that I can share.  It is explained in detail in the book. With the help of the book and the template, you can make a GET RICH PLAN for yourself.
    3. Commit two hours every week for improving your financial education, clarity of mind and networks  -these are the things that will make you rich over time.
    4. Break the long term plan to annual plans and take one step at a time  -  measure the current ROI on your investments and work towards increasing your ROI over 2-3 years to 15% per annum (post tax)
    5. Over 3-5 years, you will see that you are a smarter investor and you can clearly see that you are getting closer to financial freedom every year.

Remember life is a vacation once you achieve financial freedom – all seven days a week you are on vacation.  You can chose to do what you want and refuse what you do not want.

Now that is surely something worth working for – don’t you agree?

Wednesday, November 6, 2013

One day workshop on "Attaining Financial Freedom through Smart Planning and Investing"

Financial freedom means being able to finance your life without depending on your salary. This one day personal development program is aimed at helping you reach financial freedom.

At the end of the program, you will be equipped with 
• A framework to analyse your current financial status; 
• A template to define your personal definition of financial freedom based on your dreams and aspirations; and 
• An understanding of the various investment paths that you can chose to achieve financial freedom

Achieving financial freedom is not magic or luck. You can achieve financial freedom by following a process.

The program faculty is Raja Sekharan, who is the author of this blog and has also authored the book “How to get rich and retire early” He currently advises hundreds of professionals across India in their quest to achieve financial freedom and teaches Wealth management to MBA Finance students. He was Sr. VP - HR for Keane India till 2010.

Who should attend?
This program will be useful to individuals at any level who are keen on achieving financial freedom.

Date: 8th Feb, 2014
Time: 10am to 5pm
Venue: Christ University Institute of Management

To register or for more info please contact- or please fill in the form below.
Registration fees – Rs. 2000   

Saturday, October 26, 2013

Prestige Lakeside - How to make 63 lacs profits by investing 38 lacs in 4 years

I had recommended a property investment in my last blog and quite a few people had reached out to me and few did go ahead with the investment. Many did not as they could not fathom the calculations on how the ROI is calculated.

So I have created an excel sheet that is formula driven –you can download it from drop box url here.
In the excel sheet, you can change the numbers and see for yourself.

Let me share the big picture.  

  • You are buying a 2000 sq ft flat at a cost of Rs 5000 per sq ft plus one car park (at Rs 3 lacs). So you commit Rs 103 lacs for the flat.
  • The flat is ready in 4 years – i.e. Quarter 4 of 2017
  • You pay 20% upfront right away (i.e.20.6 lacs Nov 2013) and take a home loan for the remaining 80% amount (Rs 82.4 lacs) that is paid over 12  equal instalments by the bank
  • The home loan rate is 10.5% and you pay the pre emi for the loan for the next 4 years every month. The pre emi that you have paid over four years totals to Rs 18 lacs.
  • You sell the flat at Rs. 9000 a sq ft – and get Rs 4 lacs for the car park – you get Rs 184 lacs by selling it in March 2018 (you may ask why Rs 9000 - well that is my forecast of the price of the property after 4 years)

You have paid Rs 20.6 lacs now and then paid a monthly pre emi totalling to Rs 18 lacs – so your total outflow has been 38 lacs.

By selling you get Rs 184 lacs – you repay the loan of Rs. 82.4 lacs – you are still left with Rs. 101.6 lacs

Remove the amount that you have invested i.e. Rs 38 lacs – you will be still be left with a profit of Rs. 63 lacs ( let us leave the change out of our discussion)
So you get Rs 63 lacs profit from this transaction  -
Will you be able to save Rs 63 lacs over four years through your salary? Most probably NO
This is one smart way to get rich and retire early
Even though this example is for a three bedroom flat and Rs 100 lacs investment, you can start with Rs. 60 lacs for a two bedroom flat in Prestige Lakeside   - and you can go up to a few crores - the mathematics will not change.
If you have any questions - please do come back to me.
If you want to go with the investment - please reach out to my ex student Varun - his number is 99459 50109 - he works for a good real estate advisory and will help you with all the documentation.
I also would like to have comments from my readers and people who have already invested in this property

Friday, October 11, 2013

One good investing idea for you now

One of the feedback that I received after the last two posts is that – it is good to know what happened – but tell me where I can invest now and make similar returns.

So I am sharing one good property idea where you can make returns similar to the one I shared recently.

Prestige Shantiniketan is a well know property in Bangalore. This is the property where my friend made 65 lacs out of an investment of 35 lacs over 7 years (please see my blog dated Sept 21st 2013).

Now Prestige builders are coming up with a bigger property than Shantiniketan. It is called Prestige Lakeside Habitat. It is in a good location off Varthur lake in Whitefield area – the total land area is around 120 acres.  They are planning 28 towers with a total of 3500 apartments – there will 2 bhk, 2.5 bhk, 3 bhk and 3.5 bhk apartment options. Then there are 350 villas.  The apartments would cost between 60 lacs to 150 lacs (4300 – 5000 per sq ft) and the villas around 2.5 cr to 4 cr (7500 -8000 psft).

The project will take 5 years for completion – so it will be ready by 2018 end.

The builder is likely to launch the project on Oct 20th – if you want to book a flat, you need to pay Rs 5L while booking and if you want to book a villa – you need to pay Rs 10 lacs.
I expect the property value to double by the time it gets ready in 2018. So if you have invested 60 lacs (paid over 3-4 years), you can take a profit of Rs 60 lacs by selling the same flat in 2018. This is my forecast – the location, the builder credentials, the size of the property is what makes me so sure.

So depending on your ability to invest next week and also your ability to arrange funds in the 3-4 years, I recommend you to book a flat or villa.


If you want more information on this – please do reach back to me at or Varun Rajaratnam at  (ph - 9945950109)– Varun is my ex-student and works for Four Clover in Bangalore and I trust him with good honest advice in real estate.


Friday, September 27, 2013

Here is one more story of someone who made 22 lacs by investing 34 lacs within 30 months

In Q4 2010, I came across a project called SNN Raj Serenity that caught my attention (  SNN Builders is not a well known builder  – but Sanjay, one of the owners of the company was living in my flat complex and he was a decent person. The project by itself was in a good upcoming location (behind IIM Bangalore) and the club house and overall design looked good.  Further, the property was priced well and there were many investors who booked flats early. Seeing all this, I had recommended this to friends of mine.
One of my colleagues in the MBA institute (where I teach) booked a flat for 34 lacs. He also shared this with his friends and two of his friends booked two flats for 34 lacs each, purely as an investment.
Now the phase 1 of property is ready and residents are moving in and investors are moving out. The two friends of my colleague sold their flats for Rs 56 lacs each – their investment of 34 lacs over gave them a profit of 22 lacs each over 2.5 years –a 22% CAGR return.
Was it difficult to sell the property? Not really.
Is SNN Raj a tier 1 builder? Not really.
But then the end product looks good and the location is good and the price is still fair.

Want a similar idea for investing today – you can get similar returns by investing today in Shriram Smrithi ( – very similar story – good location, well priced, good tier 2 builder and surely will appreciate over time.
If you want more such ideas  - write to me.
If anyone has any such stories, and want to share it with my readers – then please write to me. I would want to speak to the investor first and then you can publish your story in my blog.

Saturday, September 21, 2013

One good story of someone who tripled his money in 7 years (and made Rs 65 lacs in profit)

In 2006, a friend of mine, working in Saudi Arabia visited us in Bangalore – and invested in a 3 bed room, 2000 sq ft flat in Prestige Shantiniketan  in Whitefield  (
The logic then was that the location is good – IT companies are all around and this property was a large project – 3000 flats, a five star hotel, a mall, a 2 million sq ft office complex and a convention centre– all within the same compound.  Bangalore did not have anything like it then.
That time, the flat was costing appx. Rs 50 lacs – he invested  Rs 10 lacs from his side and took a loan for the remaining amount from HSBC.  His decision was impromptu – he did not come to Bangalore looking for a flat.  But he nevertheless took the call and invested. Did he have Rs 10 lacs? No – how he managed it is another story :-)
Over the next few years, quite a few things happened globally that I do not want to dwell upon. There was also a serious accident in the project site where one of the towers being built just collapsed and that delayed the project by about 2 years – finally in 2010-11 the project was completed.
Now it is a great place to live and work and is a well known address in Whitefield for mid level and senior professionals.
My friend is now looking at selling the property. The flat will go at an estimated Rs. 140 lacs now. Of this Rs. 140 lacs, he will need to repay his 40 lac loan. He will be still left with Rs 100 lacs. The pre emi he has paid over the past 7 years is about 25 lacs.
So his investment of 10 lacs and Rs 25 Lac emi payments over 7 years has given him Rs 100 lacs now - he has tripled his Rs 35 lacs to Rs 100 lacs.
Do you want to do a similar act now?  Write to me and I will give you a few similar ideas. 

Wednesday, August 28, 2013

With the Rupee is at 66 to a Dollar and the sensex below 18000 – what should you do?

The Congress and BJP have joined hands to pass the Food security bill yesterday. There is a general belief that this bill is a vote security bill for politicians and will lead to massive leakage of tax payer’s money.  By spending INR 1.3 trillion per annum on this scheme, the govt would have less to spend on wealth creating assets like infrastructure, education and health. The massive govt purchases of food grains for this scheme will leave less food grains for the open markets and that would mean food inflation and the operational inefficiencies would also mean that the poor won’t get their food.

Not surprisingly the Rupee saw its steepest single day decline in the past 17 years (of 2.84%) and the sensex fell by 590 points.

And there are other events unfolding far away that impacts us -

-The US economy seems to be stabilising and so US Fed is expected to start tapering the Quantitative easing in the coming months.  

-The problems in Syria have escalated since the chemical attack on 21st Aug and that is pushing up the crude oil prices.

Some purists even now tell me that all this is fine – just look at individual companies, their share price and their past performance and look at opportunities to buy at prices that are attractive. If I go by that logic, the market is full of opportunities to buy. HDFC bank is at 561, Asian paints is at 410, BHEL is at 111, L&T is at 705, MARICO is at 207 – all these are great companies and in most cases, at these prices are worth buying right now.

But I believe it is not as simple as looking at individual companies – the macro economic situation does matter. Sliding rupee is going to create problems for all companies in India. Tapering of QE in the US is surely going to result in increased cost of funds globally. The macro situation is fairly unpredictable and when there is such uncertainty, it is best to wait and watch.

So I  recommend that we wait and watch as the situation unfolds.

 -Should you sell your stocks and exit?  That is difficult to answer – I am not selling.

 -Should you invest now?  I recommend a wait and watch policy. As a conservative investor, I would wait till the situation is more stable. May be the buying opportunities would have vanished by then – but that is OK. Peace of mind is more important to me. I intend to wait and watch for some more time.

Tuesday, August 20, 2013

Article in Economic Times Wealth based on my interview

Glad to share this article on "Investing in Land" that was published yesterday in ET Wealth - this was based on an extensive interview with the editor last week and data that I had shared prior to the interview.

Here is the link -

Sunday, August 11, 2013

The impact of Rupee devaluation and where do I invest now?

The USD -INR ratio stayed at 54-55 levels due to the massive inflow of USD into emerging markets as the US Fed kept their economy awash with cheap money. However, a few weeks back, the US Fed hinted at reducing this liquidity, and immediately the Rupee depreciated to levels of 61 to a Dollar. 

A depressed Rupee means that the prices of fuel (which is imported) will be high – and that in turn impacts the prices of transported goods (like food grains and vegetables) and the general inflation. With Inflation high, RBI would not be able to easily reduce the interest rates and that means that the cost of capital to Industries would be high – which in turn impacts the GDP growth and the corporate performance. The devaluation also will make the price of Gold in INR go high. So even though the global prices of Gold have fallen, the Rupee price of Gold is again inching up. Also with this depreciation, the global (FII’s) investing into India lost on their returns and so they withdrew in large quantities – from Debt and from Equity markets in India.   The FII’s moving out of equities has resulted in the sensex being very volatile.

I believe that the Rupee will stay in the 60 plus range – as I believe that India has economic problems that cannot be solved with the current government. The government’s inability to push through reforms announced last year is clearly visible to all.  With elections planned for next year, I do not expect any bold reforms from govt in the coming months. Our current account deficit is high and we are still announcing measures like the food security bill which will put further pressure on the country’s finances.  Only after the next elections, is there a hope of some bolder reform measures – and so till then I expect the Rupee to be under pressure and to be in the 60’s. Due to that:

  • I foresee inflation being high and RBI finding it difficult to reduce the interest rates (despite the new RBI Governor).
  • I foresee Gold hanging on at the current levels  -not giving any great returns beyond 10% per annum– there could also be additional duties on Gold imports (to reduce the imports further).  
  • I see the sensex being volatile till the next elections – export sector like the IT sector would do well – FMCG and Pharma should do better than other sectors. Great companies like HDFC, Asian Paints, HUL  will survive better than other companies. So there can be long term opportunities - but in the next one year, do not expect great returns from stock markets.
  • I believe that the demand supply gap for urban housing in India is so large, that the urban  real estate sector will continue to do well.  So even though there are voices talking about a crash in urban real estate prices in India, I do not think that will happen – the markets will continue to give about 10-15% capital appreciation.

So what should you do?
  • If you have short term money  (less than one year) – keep it in liquid funds or short term debts funds – do not put it in long term debt funds as the interest rates are not expected to go down.  
  • If you have medium term money ( 1-3 years) – for those who do Mutual funds – I recommend sectoral funds in FMCG and Pharma sector.   For those who do direct Equity – you can do select equity investing that can give you good returns. (I am sure my readers know that I have a private equity group for people interested in equity investments – if you want to be part of that group – please write to me at and I will be happy to add you to this group. Here, I share my buy and sell activity real time – and you can chose to follow me. I am a conservative investor aiming at 20% returns per annum over 3 years)
  • If you have long term money (3 years plus) – Urban real estate is a good bet even now. If you are in Bangalore and want some help – you can reach out to me.
  • Gold  - this is neither short term nor long term – it is a separate category by itself. If you have some gold in your portfolio – keep it - it is a good hedge against the flooding of liquidity unleashed by developed countries since 2008. But if you are looking for ROI, investing in gold now would not give you more than 10% per annum for the next one or two years. 

Wednesday, July 31, 2013

RBI’s data on Housing price Index

This is a short note.
RBI has just yesterday released this data on Housing price index that I found worth sharing

The data is self evident – so I do not want to spend your time trying to explain it. But here are the key takes aways for me -
  • There has been an average 19% YOY increase All India (BSE Sensex has given a 12.86% YOY return as of today).
  • Kolkatta at 63.3 YOY growth looks over heated – e careful and avoid buying.
  • Chennai and Delhi are doing really well. If you are buying – please buy fast – do not delay.  And if you are selling your property – please go slow
  • Mumbai seems to have slowed down
  • Bangalore has finally started showing a small growth.
  • Kanpur and Lucknow – not sure what’s happening in UP ( any of my readers from UP want  to explain?)


Saturday, July 27, 2013

Invitation for my first book session in a book shop

Hello Friends - starting March end 2013, till date I have done 43 book sessions  -41 of these 43 sessions were in companies (the remaining two were in the Bangalore stock exchange) and so the audience was restricted to employees in the company.
Here is my first completely open book session - any one can come.
As an author, it gives me great pleasure to invite you to my first book session in a book shop. Atta Galatta is a book shop with a difference -situated in Bangalore, they promote only Indian authors. My session is scheduled for today -  Saturday (27th July) at 5 pm - if you are in Bangalore - please do come.
If you think, some of your friends may be interested - please do pass on this invitation to them as well.
Directions to Atta Galatta

From Koramangala BDA Complex
1. Drive towards Indira Nagar Inner Ring Road
2. Take the left turn next to Sukh Sagar restaurant, towards Jyoti Nivas College
3. Take a right turn, before the college (Next to Milennium Opticals)
4. Atta Galatta is the 2nd building on the right

From Forum Mall
1. Take a turn at the signal towards Indoor Games Stadium
2. After the 1st intersection, take a right turn next to the Airtel  Office
3. At the first intersection turn right
4. Atta Galatta is on the left

Tuesday, July 16, 2013

Mid-year review of my 2013 predictions and where to invest now:

This note is based on my 12 month predictions made in Dec 2012 – and to share with you my sense of where to invest now.
So here are the key predictions from my Dec 2012 blog

·  “The US economy and the US dollar will emerge stronger over the year” – the US economy has emerged stronger that what I had predicted. I had under estimated the recovery of the US economy 6 months back. The US economy is not out of the woods yet – but it is surely doing better than expected.

·  “The European central bank will continue with its policy of monetary easing” – here my predictions have been closer and I do believe that the EU economy will continue to splutter through the year.

· “China and India will do better in 2013 than in 2012” – this has surely not happened.

· “Inflation will fall and RBI will reduce interest rates in H1 -2013” – this has not happened  as envisaged as the inflation has persisted due to the weakening Rupee.

· “USD/INR ratio will go from current Rs 55 range to Rs 57 range” – here I had under estimated the devaluation and we are worse off right now.

· “Gold will beat inflation but will not be a great investment option” – here again I was wrong as the gold prices have fallen globally in USD terms – and has lost about 13% in INR terms over the past six months.

· “Industries that I expect to outperform are FMCG, consumer durables and financial services” – here I was partly correct -  FMCG has given close to 15% in the past 6 months  and consumer durables have hung on and the financial services is down appx 10% in the past 6 months

· “Real estate would do better in 2013 than in 2012” – this seems to be true based on Residex data released till March 2013.

So as is visible, my predictions were off mark – the key reason for this was that 
  • I underestimated the US recovery (this lead to a sharp fall in Global gold prices ); and
  • I overestimated Indian GDP growth (leading to a sharper devaluation of INR)  

So where am I investing currently?

I have parked my funds in liquid funds temporarily – till I find some good investing options.  At this stage, with RBI’s actions not clear, it is best to park funds in liquid MF’s.

I had sold most of my Gold ETF's last year - and I have moved out of gold completely in Q1. I am not recommending gold yet. As long as the US economy does well – gold will not give a good ROI.

I have signed up for a residential property in Bangalore which I believe will double in value over the next 5 years

 In the past 12 months, my investments in Gruh finance and Repco have done well - and my investments in Jubilant foods and Nesco have not done well – but I am OK with these as I believe that over a period of 3 years all these would do well.

 I am looking at opportunities in the equity markets - FMCG companies (Asian paints, Marico etc) is where my eyes are right now.  I believe that with a time period of 3-5 years – there will be good opportunities here.

Monday, July 1, 2013

My presentation in Bangalore stock exchange

Here is the ppt that I used in my presentation in Bangalore stock exchange yesterday.

The session was fully packed with no seats left and people standing at the back. The session lasted for about 2 hours and the overall feedback was that it was a Sunday morning well spent :-)

If you want, you can down load this ppt.

Friday, June 28, 2013

You are invited to a session on Investing

I am taking a two hour session this Sunday in the Bangalore stock exchange - the topic is " Stock picking in Indian markets - the Warren Buffet way" - the session starts at 10 am and the Bangalore stock exchange is just off the JC Road.
So if you are interested and if you are in Bangalore - please do come. It will be a good session - that's my promise.
The session is free.
Please pass this message on to your friends who may be interested.

Saturday, June 22, 2013

My recommendations for investments now:

On 19th June, US Fed indicated that they would end the QE3 by middle of 2014. Ever since then, the markets globally have been in a tizzy. The Indian Rupee crashed to almost Rs. 60 to a USD. Gold went down globally to $ 1200 per ounce from around $1350 per ounce. The Indian stock market fell by 526 points in one single day on June 20th. The Indian bond prices crashed and trading had to be halted on 20th of June.

As we all know, for the past few years, the central bankers in developed economies had resorted to a money printing spree -just to keep their economies propped up. This excess liquidity kept the interest rates in developed economies low and this cheap liquidity found its way into  financial assets globally including the Indian stock markets.

The global investors were riding the proverbial tiger and there was only one way out – to keep on riding or be eaten up. And now the US Fed has given a timeline to end the ride.

So where do we invest now?

My recommendations are as follows:

  1. Equities – For those who are new to equities, you must stay away from the equity market for the time being. If you are into equities already, I believe that you will not make much money in equities till the next elections.  However, there will be opportunities to invest due to the gloom and doom - if one looks at select stocks. For example – TCS should do well as the Rupee devaluation will play to its advantage.  So I would recommend investing in select stocks where there will be opportunities and then stay invested for a few years.  You can write to me and be part of my private equity mailing list where I share my buy and sell activities in the equity markets.
  2. Debt – Long term debt funds are not safe at this situation. I believe with the weakening of Indian rupee, RBI could be forced to raise the interest rates. It is best to keep money in liquid funds or in dynamic funds.
  3. Gold – even though the whole world is looking away from Gold – I am starting to see some value here. If you have gold – hold on to it.  I am not recommending that you buy it now – but I believe if situation in the global markets gets worse in the coming months – then it would be time to invest in gold.

Monday, June 3, 2013

Spring cleaning and my current stock portfolio

One of the reasons I have a reasonably good track record in stocks is because I accept my mistakes and sell without any emotional involvement.

So here I am, selling a few stocks in the coming days – the timing of the sell depends on the market.

I am selling BHEL – where I have made a loss of 19% over two years.  So, assuming my expectations of 20% per annum, I have actually lost 60%. I was hopeful of the power sector story – but the coal scam is unlikely to be resolved till elections time - and I have lost my patience on this one. I have many friends in BHEL and I know it is a good PSU and I am still hopeful that things will eventually do well – and so I may enter this stock again in the future – but right now, I am selling it.

I am also selling Noida Toll Bridge – this is a safe company and it should have shown a ROI of 20% per annum - but has not. I have just made 2% over the past 18 months and that is not a good record. So I am selling it.

Post this sale,  my one year plus portfolio will consist of Page Industires, Havells, Sundaram Finance, HDFC bank, Bajaj Auto, Crisil, Agrotech Industries, Gruh Finance, TCS,  Swaraj engines, Maruti Suzuki,  Dabur India,  L&T, TTK Prestige, Colgate and Shriram Transport finance.  As I see it, all these are good companies worth holding for the long run.

Tuesday, May 28, 2013

Here is an investment idea that gives 7-9% passive income as well as capital appreciation of 15% per annum

Inside Electronic city in Bangalore, where there are thousands of IT professionals working, there is a new facility that has just got inaugurated by a company called Uniworld (  It is a studio apartment complex with about 720 fully furnished studio apartments that comes  with additional facilities like a cafeteria, laundrette, gym, lounges, gaming zone, 2/3 home theatres, WiFi, 100% power back up etc. This complex is meant for working professionals. The room rent starts at Rs. 5500 (on twin occupancy basis) and it is truly premium in the way it is built, furnished and managed. I have known the person behind this venture (Mr. Kush Shah) for about 18 months and I have recommended this investment opportunity to my most of close friends last year and many have invested in the property.  Yesterday, I had visited the complex, for the first time after inauguration in mid April and I sure am impressed - you can see some of the photos shot by me here.


For an investment of appx. 10-11 lacs, you can own one apartment -this apartment will be managed by the company (Uniworld) and will be rented out to working professionals. 75% of the rentals are returned back to investors every quarter and this works out to appx 7-9%. This is pure passive income on an investment secured by immovable asset. The rental income is paid back on a sharing basis –hence, even if your specific apartment is not rented, you will surely get a rental income as long as other apartments are rented out.

The location is so good that there are lots of flats coming up in the same road and the property rates in the area will surely go up by about 15% per annum as there are lots of IT jobs in that area.

Hence as an investor you will get a 7-9% return as passive income and also a capital appreciation of around 15% per annum.

So these are all the reasons why one must invest here.

There is one key risk elements here that needs to be mentioned – the key risk element is mis-management of the complex that could result in the rentals dropping and also lowering the value of the property. Kush Shah, who is the man behind the complex, along with his family, owns about 200 of these studio apartments (out 720 apartments) and has a pretty high stake in the success of the venture. Plus I believe that he has the ability to manage such a venture (that is my opinion though).

Also this is legally  not a residential property and is, I think, classified as a “Hostel” – so you cannot get a home loan for this investment.

Despite these negatives, I believe it is a good investment option and I recommend it whole heartedly to all my readers. Many of my friends from across the globe already own apartments here. As the complex is almost ready, there are just about 10 studio apartments left for investors – so if anyone of my readers want to reach out – you can write to me  – or better still, you can reach out directly to Mr Kush Shah or Mr Deshpande at

Sunday, May 26, 2013

One short term stock idea

Here is an act that I normally do not recommend - but I must confess that I am thinking about it.
To buy or not to buy India cements stock - the stock has gone down due to bad news from IPL. The stock has fallen from Rs. 87 to Rs. 71.5 in tha past 5 days -about 18%.
I believe that this price drop is reactive and I believe that there is an opportunity - a short term opportunity - over time I believe that the stock will stabilise at it's 200 day moving average of around Rs. 85 - but right now the stock is down.
The likely scenario that will play up is the Srinivasan will survive as the BCCI head -till his term ends. Plus India Cements as a company is doing steady even though the cement industry is not doing well overall. Plus this year's IPL is almost over and all the revenues and costs would be accounted for till the next year.
So is the market reaction justified?
Well take you call. I am just trying to seed a thought in your mind right now.
If you have any data /views on this issue - please do give me your comments in the area below
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Thursday, May 16, 2013

Markets are at a 52 week high –so what should you do?

There is lots of low cost money floating around globally –searching for good investment opportunities.  US, EU, Japan, Australia, S Korea, and many more countries including India have reduced their interest rates or maintained low interest rates since Jan 2013. This low cost capital is an opportunity for companies to borrow at a low rate and invest in creating productive assets (read capacity expansion) –which will in turn create economic growth. It is happening to a small extent – but most of this excess cash is ending up in speculation and in high risk assets like stock markets.  A part of this cheap money is coming into Indian stock markets through the FII route and this is the reason for the highs that we saw yesterday.
Globally - most stock markets are at a high right now. What is happening in India is a global phenomenon and we are just bystanders – we can see it, but we are not the real players.

 In India, the retail investors (people like you and me) are wary and not investing in stock markets right now. In fact even the Indian Mutual funds, are selling stocks over the past 3-4 months.

So what should you do? Do nothing – just watch.
The markets will be choppy this year. I expect the Indian markets go higher than ever before in 2013. Currently, our market PE is around 17.5 - our PE was around 21 in 2008-09 before the crash. So we are not too over priced yet. There is scope for the Indian markets to go higher and with the cheap money sloshing around, I expect the markets to go further up in the coming months.
We should be wary of entering stock markets now  do not invest when the markets are high. If you want to exit and encash your profits – do it, but not today.  Wait for some more time. Even though we cannot “time” the exit – I believe the market is destined for higher levels.  You can exit then.
I do not plan to exit though.
Keeping a 3 year time frame, I am wary of investing in stocks currently. I intend to keep most of my liquid capital in debt funds (long term debt funds where we need to have a 12 month lock in). I will surely keep some cash at hand – you never know – life is full of opportunities and something always turns up round the corner.

Tuesday, May 7, 2013

Where am I investing now?

Searching for good equities at the right price is a waiting game – one has to wait patiently.

Over the past few months, there is news of more quantitative easing from Japan and Korea, the US stock markets are at an all time high, the US real estate market looks postive, the jobs data in US is starting to look OK, there is a seeming calm in the EU but the Indian political scene is unstable and does not give much confidence in the short term – with such good and bad news coming in,  the Indian stock markets have to be volatile. 

In the past 2/3 months, I have invested in Gruh Finance, Jubilant Food works and Nesco. All these companies are good companies, but their current valuations are high.  I still went ahead and invested as I believe that over the next few years, the valuations will stay high due to the low interest rate regimes globally and India growth story.

Having said that, this time I am investing through two sectoral mutual funds.  These are in sectors that are fairly ever green – these sectors are here to grow as the Indian  GDP per capita grows. As Indians grow richer over time (or less poor over time), the FMCG and the Pharma sectors will do well.  Riding this wave are a few mutual funds that have given very good returns in the past few years.

In the FMCG sector, there are two funds of which  the ICICI Prudential FMCG fund is the bigger one – it still has a fairly small asset base  of Rs. 214 crores. As the sector is doing well,  this fund has given an ROI of 17% compounded per annum for the past 5 years and 25% compounded per annum for the past 3 years. The fund manager manages about Rs 2500 crores worth of funds, of which this is his best performing fund. I have decided to invest in this fund with a 3 year plus time frame

There are three pharma sector funds - of which the Reliance Pharma fund is the largest with an asset base of Rs 675 crores.  This fund has given 23% per annum compounded over the past 5 years and 12.5% per annum compounded over the past 3 years.  The fund manager manages about Rs 5000 crores worth of funds, of which this is his best performing fund. I am investing in this fund also with a 3 year time frame.

Amongst the two funds, I am betting more on the FMCG fund – that story to me is a more positive story.  Having said that, I do believe that the pharma story is also a good story to place your bets on.   I normally aim at 15% plus tax free returns in whatever I do – and I am hopeful that these funds will meet my expectations.