"A great deal more fiction is written in Microsoft Excel than in Microsoft Word" - Anonymous Previously, I have written about what, according to me, is one of the biggest mistakes that people make in a DCF valuation. Two years of experience post that article has only reinforced my belief in this as I have … Continue reading How to write fiction using excel
Top 10 mistakes in a DCF
In November, we wrote a post on the biggest mistake in a Discounted Cash Flow (“DCF”) model. There are, of course, a number of other mistakes (albeit smaller in comparison) that can creep into a DCF. And surprisingly, you would find these mistakes being committed by amateurs and professionals alike. Yes, even investment bankers and equity … Continue reading Top 10 mistakes in a DCF
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
Important information you may have overlooked about your mutual fund
The idea behind a mutual fund is to provide convenience to retail investors, who do not have the time or inclination to analyse individual companies to invest in. So a mutual fund, a specialist in this field, does it for them. However, the growth of the mutual fund industry in India with 40 companies operating … Continue reading Important information you may have overlooked about your mutual fund
Why you should never lose (a lot of) money
Very early in my investing career, I came across a link on a website which read: "Want to know Warren Buffett's rules of investing? Click Here" I clicked and this is what I got: Rule No. 1: Never lose money; and Rule No. 2: Never forget Rule No. 1 Needless to say, I felt disappointed. … Continue reading Why you should never lose (a lot of) money
Why you should think beyond fixed deposits
This is a story of two friends – Katrina and Deepika. Both of them got married in the year 1980. Katrina comes from a conservative family whose members mostly "invest" their hard-earned money in a bank fixed deposit. The reason was simple – fixed deposits are “safe”. There is no fluctuation and you consistently earn interest … Continue reading Why you should think beyond fixed deposits
An email exchange with a friend on building wealth!
Below is the edited text of an email conversation I had with a friend about building wealth. It goes without saying that there is a lot more to investing but I feel this will give a broad idea of the magic of compounding to those who are starting out. You can also have a look at … Continue reading An email exchange with a friend on building wealth!
What Monopoly can teach us about real estate investments
A few months back, we had a get together of a few cousins after many years. Reminiscing about our younger days, we had the great idea of playing Monopoly as a way to recapture our childhood. While playing the game, it struck me how Monopoly had some profound lessons on prudence for real estate investors. Before … Continue reading What Monopoly can teach us about real estate investments