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This is the advice of Market Veteran NILESH SHAH, Group President and MD, Kotak Mahindra AMC published by Value Research . I did my articleship at Hamam Street, behind the BSE Tower, three decades back. I was attracted to the stock markets, like my colleagues, to make quick money. In those days, the stock market was the Wild West, with terms like ‘company circle buying’, ‘vandho’ (dispute), ‘payment crisis’, ‘galo’ (gap/difference), ‘patavat’ (settlement), ‘bad delivery’, etc. Might was right. Bulls and bears were making money and retail investors like me were getting slaughtered.  Luck guided me to an old sub-broker wearing traditional dagla (overcoat). I am happy to narrate his advice, in native Gujarati, which has helped me immensely over the years in managing money.  1.While we do Laxmi Pujan on Dalal Street every Diwali, you need to worship Sarasvati Maa every day. Knowledge and wisdom are critical to making money in the stock market.  2. Investment is about com...

Q. What do promising companies do when they have already exhausted standard bank finance and are already listed on the exchange, but still have some inadequacy of finance to fund their expansion or attractive acquisition venture in a very short period of time ? Ans: Such companies need some quick money to adjust their cash flows and fill that important gap to pursue their growth strategies and goals. At such times, mezzanine finance comes in as a handy option. Let's take a look at this increasingly useful finance option, study its structure and understand its features from the lender's as well as the borrower's perspective. Mezzanine finance has the characteristics of both debt and equity capital and is essentially a mix of both. This type of financing is usually availed by companies which have either expansion or restructuring plans and acquisition goals. It can be in the form of subordinated debt which is referred to as mezzanine debt or in the form of equity preferred ...

  Note:   Some content of this article has been taken from the book  11 principles to achieve financial freedom - by Nandish Desai   and You were born rich - By Bob Proctor To achieve any goal in life the following three things are a MUST  1.Meticulous Planning detailing what to do, when to do , how to do , who will do what while taking into consideration various scenarios, constraints, available resources ets  2.Super Execution of the plan so as to achieve the planned impact in planned areas within the planned time, with the available resources AND  3.Continuous monitoring of the plan so as to know where have we reached , what is changed, what needs to be changed and so on. Same thing is applicable to financial plan also. Now a days every now and then we keep on reading and hearing in television, Youtube, newspaper, magazines about why financial plan is a need of the day and not a luxury. So, at some point in our life we create our own ...

An economics professor at a college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that socialism worked well since no one would be poor and no one would be rich, thus providing a great equalizer.  The professor then said, "OK, we will have an experiment in this class on the Socialist plan".... All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for rupees - something closer to home and more readily understood by all). After the first test, the grades were averaged and everyone got a B.  The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they likewise studied little.  The second test average was a ...

  CPPI means Constant Portfolio Protection Insurance. CPPI is a more refined / advanced version of a simple capital protection strategy that is usually adopted in Capital Protection Oriented funds that we see in the market. It's aim is to try and maximise the upside from the portfolio, while sticking to the basic principle of downside protection that is a necessary feature in any capital protection strategy. Simple capital protection strategies limit the downside - and the upside too In a simple capital protection strategy for say a 3 year period, for every 100 rupees of corpus, the fund manager will typically buy around Rs. 75 worth of G-Secs, which over a 3 year period would grow to Rs.100, with the help of accrued interest. This 75 guarantees that the capital value at the end of 3 years will not fall below 100. With this comfort, the balance 25 is typically deployed in equities, with an expectation of beating fixed income returns over the next 3 years and thus delivering an over...

In this post we will understand the pitfalls of using EBITDA as a barometer of  a company's business strength and will also understand how Cash Flow from Operations and FCF can help to have better insights in a  company's business strength Analysts often use EBIDTA to evaluate company financials. EBIDTA is essentially earnings before interest, tax, depreciation and amortization and is commonly referred to as operating profit. The operating profit is a measure of how well a company is able to manage expenses in running the day-to-day operations. But EBIDTA may not give the complete picture of a company's business strength.  More often than not companies try to dress up financial statements using EBIDTA and such companies are more likely to do fraudulent transactions.  Since EBIDTA excludes a number of non-cash charges, it does not give a true picture of a company's financial standing . One of the non-cash charge excluded is depreciation. In reality, depreciation entai...

Q.1  What does one mean by Family Business ?  Ans : Family Business refers to a company /firm where the majority voting rights are in the hands of the controlling family; including the founders who intend to pass the business to their descendants. Q.2 What are the strength of  Family Business ?  Ans :  Several studies have shown that family-owned companies outperform their non-family counterparts in terms of sales, profits, and other growth measures. 1.Commitment . The family—as the business owner—shows the highest dedication in seeing its business grow, prosper, and get passed on to the next generations. As a result, many family members identify with the company and are usually willing to work harder and reinvest part of their profits into the business to allow it to grow in the long term VCS TIP -  We  have observed that the commitment level keeps on reducing as the generations pass unless something concrete is done to maintain such high levels of Co...