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What Budget 2018 could mean for the stock market

My father-in-law and niece both have their birthdays on the same day, so usually, 1 February is a day of double celebration in our family. This year however, it was also the day the Finance Minister had some not-so-good news for us (and equity investors)… Currently, long term capital gains arising on sale of listed … Continue reading What Budget 2018 could mean for the stock market

Why are tax savings from interest ignored when computing free cash flow to firm?

Whilst preparing for my CFA Level II examinations, I was really perplexed by the calculation of the free cash flow to firm (“FCFF”) especially with regard to the tax saving from interest expenses. Let me elaborate. The definition of FCFF as per the CFA curriculum is: "Free cash flow to the firm is the cash … Continue reading Why are tax savings from interest ignored when computing free cash flow to firm?

Is delayed gratification the primary reason why investors end up undervaluing high quality companies?

My thoughts on Prof. Sanjay Bakshi’s talk on “What happens when you don’t buy quality” In 2013, Prof. Sanjay Bakshi gave a seminal talk[1] tilted, “What happens when you don’t buy quality”. The crux of the talk was that market participants are unable to delay gratification and thus, heavily discount cash flows occurring far into … Continue reading Is delayed gratification the primary reason why investors end up undervaluing high quality companies?

How I learned the craft of valuation and ended up assisting Prof. Aswath Damodaran

In 2007, I graduated from college without having a clue as to what I wanted to do with my life. So I just followed what others were doing and enrolled in the Chartered Accountancy (CA) program. The Indian CA program is rigorous not just because of its tough exam structure, but also because you have … Continue reading How I learned the craft of valuation and ended up assisting Prof. Aswath Damodaran