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Running and Investing

Action speaks louder than words. Take charge of your investments.



Dear All, 
 
I have been running regularly for the last 1 year and had to stop it some 40 days back for some health reasons.  Its been some 2 weeks since I wanted to restart my running but couldn't actually pull myself and start it.  I wanted the Christmas to get over then told myself to start by 01st Jan but didn't do it.  
 
I knew that I need to run to keep myself fit and healthy, but there was something which was stopping me.  There was a great deal of hesitation, indecisiveness, lethargy and lack of motivation.  
 
I mentally tuned myself and today morning I managed to get up on time and went on to the join my runners group.  I was breathless with the warming up session and felt tired, but I was determined not to let go today.  
 
I started running slowly but steadily and I finished with 8 kms.  A credible distance coming out of a long layoff, I guess.  Its a small beginning but I am happy I have already begun the journey.  Beginning is already half the battle won. 
 
I realized that to start (or in my case to restart) something you need to have lot of willpower, focus, guidance and action.  
 
Thinking about it, I sensed that investing is also similar for most of us.  
As running is good for physical health, investing is good for financial health.  But most of the people I speak to or meet don't have any regular investments.  Unfortunately, investing gets pushed to the bottom of the "to do" list for various reasons like lack of time, knowledge, discipline or focus.  Lot of money is left idle in Savings Bank account or Fixed deposits.  
 
A simple monthly SIP is more than sufficient to start your investments and bring in the discipline.  Can you believe, a small SIP of Rs10,000 per month can createwealth of Rs2 crores over a 20 years period.   
 
Get over the inertia and start right now.    If you think, you would be better off with an advisor guiding you, take the help of one.  He not only helps you to identify the suitable investment options, he nudges you, prompts you and pushes you to take actions.  Action speaks louder than words.
 
Lets start the New Year with new determination to take charge of our finances.  All great journeys start with a first step.  Take the first step now! 
 
Wish you all a very Happy and Prosperous New Year 2015!!
 
 
Warm Regards, 
M. Venkateswaran, A.C.A., CFP CM 
É 9841 567 379
Financial Planning Investment Services |  Insurance Advisory

Happy New Year 2014!

Wish all the readers a very happy, healthy and prosperous new year 2014!!

The last year 2013 was not a great year for the blog.  I have hardly spent time writing anything since March'13.  I guess I would spend more time in 2014 reading and writing more.

Happy New Year 2014!!

ICICI Prudential Life Insurance uses Service calls to churn ULIPs/ULPPs

I have been recently receiving “service”calls from ICICI Prudential Life Insurance Company informing me that their Relationship Manager wants to meet me to discuss about my existing policies with them.  After couple of calls, I yielded to their request to meet the Relationship Manager with the condition that it shouldn’t be a sales call.  They agreed and their Relationship Manager met me yesterday morning.

A short introduction about my investment in ICICI Prudential Life Insurance.  I hold ICICI Prudential Lifetime Pension plan with an annual subscription of Rs10,000 for the last 9 years. 

The first question he asked on seeing me was if I am software professional.  I said no. I don’t know if they are soft targets.  

The meeting, a service call, started with the mention by the RM that I should stop paying the premiums on my existing policy and should invest in a new policy.  The beautiful reason given by the RM was that they have launched a new equity fund where the NAV would be only Rs10 per unit compared to my scheme where the NAV would be Rs78 per unit.  I couldn’t believe what he was saying the first time because this lower NAV is one of the oldest tricks in the market place and I didn’t think ICICI Prudential would do this after so many years.  But he further emphasized that I will get more units by taking a new plan.  This is an outrageous suggestion because if the equity markets perform well, the NAVs would move irrespective of the current value. 

Then RM told me that the new “Maximiser” fund option would have portfolio changes every 15 days compared to portfolio changes in my old “Maximiser” fund, which has 30 days.  This is again totally wrong information.  Here, what he is talking about his portfolio disclosure and portfolio changes.  The poor guy doesn’t understand this difference and tries hard to sell this as a unique feature of the scheme.

I told him politely that I am not keen on that idea and happy continuing with my existing policy.  He tried hard to sell me this idea of lower NAV and frequent portfolio changes but after sometime I had to cut him short.   When you stop premiums on the old policy and take up a new policy, then you end up paying lot more charges.  ULIP/ULPPs being front loaded products would be able to produce returns only when you stick on to them for longer tenures.

What really annoyed me is that ICICI Prudential Life uses a service calls as an alibi to meet their old clients and encourage them to churn products.  This is nothing new in Insurance industry but this happening in an era where mis-selling of financial products by financial product distributors are being looked upon very seriously by the regulators. 

Secondly, the level of understanding the Relationship Manager has with regard to his own company’s products are poor.  He could never understand how the equity market and returns function. 

I am not sure how many thousands of gullible investors have fallen prey to this gimmick of lower NAV and therefore higher units and switched to newer plans.  This is an outright fraud.  I know about ICICI Prudential Life because I own a policy with them but there may be many other people like this in the market.


This brings me to an important point of the need for understanding financial markets and how your investments work.  You need to spend time and energy to understand them or you should consult a reliable Financial Planner/Advisor before buying these kinds of products.  

Gold – Are you a bull or a bear?



Gold has corrected big time over the last 2 trading days and giving shivers to gold bulls.  Is it the end of the bull run in Gold is the common question in the minds of investors?  

What should investors do now? It depends on the nature of the gold holdings one has.  If it is held for consumption purposes, then there is nothing to panic.  Continue to enjoy wearing that necklace or bangles and it is possible that you can now wear it at least now without the fear of being robbed, due to sliding gold prices!! 

Jokes apart, but, if you have been buying gold as an investment asset and that do overdoing it, then you seem to have a problem.   The stress is again on overdoing it.  If you have balanced portfolio allocation, then this price fall should not make you lose sleep. 

If you are somebody who has no exposure to gold at all, then you may use this price correction to start buying like me.  Remember to use the Systematic Investment Plan route in buying gold now, if at all, you are buying. 

This price correction like corrections in other markets, reinforces, the key fact that asset allocation is the most important thing in portfolio construction. 

If you have limited your gold exposure to, say, a maximum of 10-15% of your portfolio size, then this 10% correction doesn’t make any big impact.  Your portfolio value would have gone down by say a maximum of 1.5%.  This 1.5% erosion in portfolio value is not a show stopper in anybody’s portfolio. 

But at the same time, if somebody has say 60% of their investment in gold, then this 10% correction in prices should have dented the portfolio to an extent of 6% or so.  Some may lose sleep on this.  

So, now the obvious question is what he or she should do now? At this moment, there is no clear answer honestly.  The price of gold may recover from here or can fall further accentuated by covering of long positions by gold speculators across the globe.  If you feel you have overweight on Gold currently in your investment portfolio, then you may want to use the rallies to sell in smaller lots.  Just like you are planning to sell,  most of the other gold investors would also be planning as well!! So, to me, this price correction may continue for some more time. 

Let truth be told.  Nobody can predict it with certainty tomorrow’s price!

 You should take this as a reminder to start balancing your portfolio across asset classes.  

A well defined asset allocation is the key to building a solid portfolio in the long run.  

Happy Investing!

Overloaded On Reading

I can never claim that I am a voracious reader.  But in the last 3 months or so, it has so happened, that I have been reading continuously.  Practically thats the only thing I have been doing whenever free at home.  It has reached such a stage that my son told me yesterday that I better close the book I was reading and see whats happening around me. 

The moment I decided to start something one my own, I decided to read a lot more than I was used to, at least in my core area of operations, Personal Finance.  Naturally, when you are on your own, you need to be well-informed in your core area of expertise.  Personal Finance sounds very simple but I can tell it extends way beyond somebody's imagination.  You need to read about the products and the latest developments in the field of Mutual Funds, Deposits, Banking, Taxation, Investments, Real Estate and the list doesn't end.  So this part takes away most of my reading time. 

Then comes the long pending list of books, which I have bought and kept it aside for reading.  I started reading Ponniyin Selvan, the Tamil epic novel by Kalki.  It runs for about 2000 pages.  I bought this from Vikatan Publication in Jan 2012.  It has taken a sweet 14 months for me to start reading it.  I started off slowly but the plot thickens with every page and I got addicted to the novel.  For the last one month or so, I have been reading only this!! I am in the last part of the book and expect to finish it by end of this week.

In the interim, I managed to read two books of Subroto Bagchi, the High Performance Entrepreneur and Go, Kiss the World! 

If this is not enough, I get everyday 4 newspapers to read.  It starts with The Hindu, Business Line, TOI and Dinamalar.  I don't have time to read all the four and have restricted myself to reading The Hindu and BL. 

The agony doesn't end here.  We have subscribed to two lending libraries.  Out of which, one library brings magazines to your doorstep every alternate day.  The magazines we subscribe like Ananda Vikatan, Junior Vikatan, Kumudam, Week, Nanayam Vikatan etc., has to be read and returned within those 2 days.  This adds tremendous pressure to complete the reading in that time. 

The other library is one where you have to go and pick up books.  Considering all the above, I have been delaying picking books from this one. 

The next 6 months is going to be tough for me with the number of must read books is still around 10!

FMPs - Alternate Investment to Bank Fixed Deposits


This time of the year, you see lot of FMPs hitting the market.  Wondering what is FMP!

FMP stands for Fixed Maturity Plans offered by Mutual Funds in India.  Mutual Fund houses collect money through an FMP scheme and lend that money to borrowers for a fixed maturity periods or buy commercial papers or bonds which matches with the scheme maturity date.  The FMPs are debt instruments and they dont have any equity exposure at all. Also, the FMPs would invest in rated securities which gives additional comfort as far as the quality of credit instruments held by the FMP scheme.

It is being positioned as an alternative to bank fixed deposits by the fund houses.   Yes, FMPs are an interesting alternative with highly tax efficient structure due to indexation benefits on Capital Gains.  We will see how this beneficial from a tax perspective.

The process works like this.

What happens in a bank fixed deposit?
You invest Rs10000 and receive back Rs11000. The difference between the original investment and the maturity value is treated as interest income and taxed as "interest from other sources" in case of bank deposits.

What happens in a FMP?
Taking the same example above, the amount invested is considered as the cost of purchase of a financial asset, in this case, mutual fund units and the maturity amount is taken as the sale consideration.  So, the difference between the purchase price and the sale consideration is treated as profit on this asset.

Whats the big deal about this?
When it is treated as interest, it gets added to one's taxable income and get taxed at the applicable income tax rates of the individual (in case of bank fixed deposits)

When it is treated as profit, then the Capital Gain provisions kick in for tax calculations.  As you may be aware, Capital Gains have preferential tax treatment and the highest tax rate is 20% which is lower than the 30% tax rate for general income tax calculations.  Also, you get indexation benefit from financial assets held more than 1 year.  The beauty is if it is held across two different financial years, you get double indexation benefit.  For example, you purchase a 390 days FMPs on 10th March 2013 and it will mature on 05th April 2014.  So, in this case, you will get indexation benefit for 2 years, that is, for FY 2013-14 and 2014-15.  This is called double indexation.

Can it replace the Bank Fixed Deposits completely? 

Okay, then the moot question is can it completely replace the Bank Fixed Deposits in one's portfolio.  The simple answer is NO.  

The following are the reasons why you need to maintain a balance between bank fixed deposits and FMPs:

Liquidity:   The liquidity provided by bank fixed deposits are unmatched currently by FMPs . FMPs are close ended instruments which are listed on the stock exchanges but the volumes are not very encouraging.  For that matter, trading in debt instruments in India is still at a very nascent stage putting at little risk the liquidity of FMPs.

No up front disclosure of Interest rates:  Secondly, there is no guaranteed interest rates by the Mutual Fund houses in respect of FMPs.  Bank Fixed Deposits disclose the interest rates up front but in FMPs it can not be disclosed by Fund Houses due to SEBI restrictions on the same.

Opaqueness in FMP scheme holdings:  It is not disclosed by the Fund House prior to your investment where and which instruments they would be subscribing to.  As such, you have to go with the stated objectives in the Key Information Memorandum of the scheme.  But having said that, I would not give too much weightage to this argument because even banks don't disclose where they invest or lend at the time of taking deposits from the investor.

Suitability of FMP:

Who should invest in FMPs?

1.  People who are in the highest tax bracket as it provides tax efficiency

2.  Investors who have adequate bank deposits to meet emergency situations and looking to diversify beyond bank deposits


So are you looking for tax efficient alternative to Bank Fixed Deposits?  Look no further than FMPs.

Please feel free to write back to us (venkytuty@gmail.com) if you require any further information on FMPs or help in making investment in FMPs.

New Year! New Beginnings! New Hopes!

Dear Readers,

Wish you and your families a very happy, peaceful, joyous and prosperous New Year 2013!!!

As we start the new year, I want to do two things.  One look ahead and see how 2013 is going to be for me personally and sit back and analyse how 2012 was.

In this new year I begin a new journey as an Entrepreneur.  I have started my Personal Financial Planning and Investment Advisory Consulting practice based in Chennai.   This is a very different experience than working in a corporate, which I did for close to 15 years.  The decision to take it up full time is a well-thought out decision over many months, if not years.  I have been passionate personal finance for many years now and this advisory practice is a logical extension of my passion.  When you convert your passion into business, I think you will be motivated to give your best.  That's exactly the reason why I have embarked on this journey of entrepreneurship in the area of my passion.

The last 2 months have been spent on setting up the infrastructure, establishing connects with the people from the Financial Services industry in Chennai, working on creating the product to be offered to the clients, evaluating multiple software to be used in the business.  All these things I did along with the actual work of advising existing and new clients, which led to too little time for other things.  I couldn't concentrate and write the blog posts exactly for this reason.

Now with all things settling down and me turning full time entrepreneur, I believe I should be able to write more frequently both on this personal blog as well as on my business blog, www.acuwealth.blogspot.in

The regulatory challenges in the financial advisory business is the biggest of them all, which I, as an individual don't have any control.  So, I will not unduly worry about it.  The revenue uncertainty, constant need to identify and convert prospects to customers, frequently changing financial products landscape, differing client perspectives all add to the list of uncertainties.  There are definitely lot of uncertainties in this journey but tell me which journey is certain! So I am going to take it as it comes but one thing is certain to succeed, I should give my best at all times!

The year gone by was one of surprises, both positive and negative.  Again, the surprise element is the one which keeps our lives quiet interesting, I guess.   I am not going to fret about the past so would look forward to 2013 with optimism!!

Wish you once again a Happy New Year 2013!! 

Power Finance Corporation - Tax Free Bonds 2012


Power Finance Corporation – Tax Free Bonds – Dec’12                                                  Subscribe

Power Finance Corporation is a “Navaratna” company of Government of India.  It is engaged in the business of lending and advisory services from project conceptualization to post commissioning for clients in the power sector.

Issue Details:
PFC is issuing “Tax Free Bonds” , which are secured, redeemable and non-convertible debentures to an extent of Rs1000 crores, with an option to retain up to Rs4,590 crores of oversubscription. 

Face Value
Rs1000 per Bond
Minimum Application
Rs 5000 or 5 Bonds
Interest Rate
7.69% for 10 years option
7.86% for 15 years option
Mode of Allotment
Dematerialised and Physical Form
Credit Rating
Crisil  - AAA; ICRA – AAA
Listing
Bombay Stock Exchange
Issue Open
14th Dec 2012
Issue Closes
21st Dec2012

Financial Details of PFC:
·         Existing profit making PSU – FY 2011-12 profits of Rs3031.74 crores
·         EPS – Rs23.41 for FY 2011-12
·         Loan Assets at Rs140,819.21 crores as of 30-Sep-2012
·         Consistent growth in loan assets and profits over the last 5 Financial Years

Tax Benefits:
·         Tax Free Bonds – Interest income fully exempt
·         No Wealth Tax applicable
·         Since it is a listed bond, benefits of indexation available in case of sale in stock exchanges

Investment Recommendation:
 The PFC tax free bonds are an attractive investment opportunity for resident individuals who are in the highest tax slab.  With the interest rate expected to move southward from 2013, the tax free rate of 7.69% for 10 years and 7.86% for 15 years is on the higher side. 

This issue has a highest credit rating from Crisil and ICRA indicating sound credit quality and prudent asset recognition norms, which lends a high degree of security to the investors. The listing of the shares on the stock exchanges provides an excellent window for exiting the investment if need arises in the future. 

On the downside, committing funds for a minimum period of 10 years is required.  There is a possibility of interest rates moving against the investor is there, though the chances of it are very low over the next 10 years.   The asset book is skewed towards power sector, which is going through a difficult phase all over India.  The State Electricity Boards which are one of the primary borrowers of PFC is in doldrums across many states in India.  Considering that there is a major reform process initiated in the power sector recently by the Central Government and most of the state electricity loans are guaranteed by the respective state governments, the possibility of default is limited.  But the risk is definitely there.

Verdict:
Considering the overall risk profile of PFC and its good performance over the last several years, we think it is an attractive opportunity to lock-in some money at the current rates.   This is a good quality debt instrument with add on benefits like tax free status, easy liquidity through stock exchange listing. 

Couple of caveats is that you should have exhausted your Provident Fund and Public Provident Fund contribution limits before you are looking at this.  Secondly, you should remain in the tax slab of 30% during the entire tenure of the investment.  That is, it may not be suitable for people who are going to retire in the next few years.

We recommend the investors to go for the ten year option.  Yes, NRIs can also invest in these bonds. 

If you need any assistance in investing in this Bond issue, please feel free to write to me at venkytuty@gmail.com or call me on +91 98415-67379.  

Disclaimer:
This is not an invitation to subscribe to the Tax free bond issue of PFC.  You should consult your personal financial advisor or take your own decision on this investment.  Please read the offer document completely before making any investment decision.

Disclosure:
The author may or may not be investing in this bond issue.  Also, if you decide to invest through us, we may be getting some commission from the product manufacturer. 

Trivandrum Diary

Couple of weeks back I was in Trivandrum to attend one of my former colleague's marriage.  Probably, this is the second time I have visited Trivandrum and got to see a city a "little" bit.

I travelled by the Trivandrum Express, which starts pretty early.  So if somebody is travelling in this express, they have to take a day off as it leaves Chennai by 3.25 PM! I have noticed since the last few train travels, I am becoming really hesitant in travelling anything other than 3 AC.  I have to now consciously work towards breaking this.

Few things which caught my attention:


  • The Kerala houses which you see from the train are very enticing.  Not because of its size but for the greenery all around the house.  
  • I don't know who and how the city's new areas are planned and developed.  I find it extremely difficult to accept the fact that all the roads are of 15 feet width.  Not more than 1 car can pass through at a time.  I saw it almost all the way up to Nagercoil on my way back. Whats the logic to have such narrow roads?
  • A visit to Trivandrum is incomplete without a visit to the now world famous Sree Padmanabaswamy temple. On the day I went, during Navaratri, we were waiting for the puja's to get over and darshan allowed.  Everybody, more than 500 people, were neatly standing in a queue with no commotion or noise.  
  • Thanks to the riches, the temple is now heavily protected by the Commandos in uniform at all the four entrances.  Kerala Police officers in plain clothes, a dhoti and angavastram, man inside the temple.  I don't know what to say, but you see policeman with revolvers hanging from their hips even inside the Sanctum Sanctorum.  


Overall, the city still retains the town like feel, which is good!


The dying art of "Sambar Powder Making"

From the time immemorial, I am used to eating Sambar Rice (sadham) as the first course in our traditional meal.  For that matter, our everyday meal is a traditional meal with 3 courses.. can't help it! One of my pet grouse in this regard is the general decline in the quality of the Sambhar being made at home.  (ok, I am making a bold statement here with the understanding that my wife doesn't read blogs, at the least my blog).

I wore my investigative hat to find out what is really causing this gradual decline in the quality.  I found out that in our house, we have moved away from the age-old traditional way of making the sambhar powder.  It used to be an elaborate exercise involving drying, frying, grinding of what not spices.  So the most plausible alternative to that is to buy the ready-made sambhar powder.

We moved to the ready-made sambhar powder few years ago and have experimented with all available brands starting from Sakthi Sambhar powder to Aaachi to Ambika, but never satisfied with any one of them.  But I always used to crib to my wife that the Sambhar is not up to the mark and I used to make some unwanted jokes like that she should go back to taking lessons on how to make sambhar all over again.

Since couple of weeks the quality of sambhar has improved dramatically, increasing my curiosity to what has happened to cause this positive surprise.  The answer lies in the packet of home-made sambhar powder delivered from my in-laws place.  What a difference to the taste of sambhar?

Now I have started telling my wife that instead of learning to make sambhar, she should learn the secrets of making the sambhar powder.  If luck shines on me, I will able to impress my wife to start making the sambhar powder at home instead of the off-the-shelf sambhar powder.   The only reply I have received so far is a "stern look"! 

Shriram City Union Finance - NCD Issue - Invest

Overview: 
Shriram City Union Finance, a non-banking Finance Company (NBFC) from the Chennai headquartered Shriram Group of Companies is launching a secured Non-Convertible Debenture from 12 Sep 2012.  Shriram City Union Finance plans to collect Rs250 crores with a green-shoe option of another Rs250 crores.  

The NCD has a 3 year and 5 year option investment option.  The coupon rate for the 3 year investment is 11.5% and the coupon rate for 5 years is 11.75%.  Please note these rates are applicable only for investments less than Rs5 lakhs under the Reserved Resident Individual Category.  The face value of every NCD is Rs1000 and investors can invest in multiples of Rs1000.  

Shriram City Union Finance is an existing profit making company engaged in the business of lending for consumer durables, two-wheelers and small businesses.  The business is concentrated in the four southern states and Maharashtra, which accounts for more than 65% of the branches.  The objective of the issue is to use the proceeds to repay existing loans, expand business and other routine business purposes.  The net interest margins made by Shriram City Union Finance are mouth-watering at more than 7%! 

Credit Rating:  
One of the important points to note in case of these long term debt instruments is how sound their business is.  This is known through the credit rating assigned by the various credit rating agencies employed by the issuer for this purpose.  

The NCD of Shriram City Union Finance has Crisil’s investment grade rating of AA-, which denotes "high degree of safety regarding timely financing of financial obligations".  

Mode of Holding: 
Please note, it is mandatory for all the applicants to apply for these NCDs only in the dematerialised form.  That is, you need a Demat account to apply for this issue.  


Investment Alternatives:
While making each and every investment it is very important to analyse what are the available alternatives.  In this case, the available alternatives are bank deposits and already existing NCDs from Shriram and other companies like Tata Capital, which are listed on the Stock Exchanges. 

Bank deposits currently don't offer similar returns for either 3 or 5 year deposits.  The only advantage they would provide is deposit insurance guarantee for a aggregate sum of Rs1 lakh for every investor.  

Looking at the other option of existing listed NCDs, there are few NCDs which are available at a little higher yield to maturity, like Tata Capital.  But the biggest problem in India is the lack of liquidity in debt segment of stock exchanges.  The average traded volumes are much lower in the region of Rs30 lakhs per day.  You may get a slightly better yield if you are able to pick up existing NCD's from the stock exchanges, but for a layman this would be a tough ask.  

Taxation:
All returns from NCDs are taxable under the "Income from Other Sources" head as per the Income Tax Act.   Therefore, the effective yields on the NCDs would be less compared to the coupon rate what has been mentioned above, depending on the tax slab you are in.  The issuer, Shriram City Union Finance, would not deduct tax at source (TDS) for the NCDs irrespective of the amount invested.  

Investment Recommendation: 
Considering the fact that the deposit rates are moving down and further expected to slide, I believe that this a good opportunity to lock a portion of your fixed income investments at an attractive interest rates. I would suggest that you may use this opportunity and apply for NCDs not exceeding 2% to 5% of your overall portfolio value. (For portfolio sizes which are bigger than Rs30 lakhs).  For others, you may go up to Rs50,000.   
  
As there are no put or call options in this issue, there is no threat of early redemption by the issuer.  


Hope you find this information useful and please do let me know if you require any help in applying for this NCD.   

Update on subscription status:
As of 14th Sept 2012, the issue has been subscribed 0.83 times, that is around Rs206crores out of the total issue size of Rs250 crores.  
Retail subscription less than Rs5 Lakhs - 1.92 times
All other categories have minuscule subcriptions  

Disclaimer:
Please note these are my personal views on this investment and I strongly urge you to check with your Personal Financial Planner before you decide on investing in this NCDs.  The views expressed here are my personal views and no way related to my current, past or future employers.  This post is not a solicitation to invest in Shriram City Union Finance NCDs.    

Investonomics by ICICI Securities

Last saturday, I attended a session hosted by ICICI Securities called Investonomics in Chennai.  This is a lecture series sponsored by ICICI Securities to educate the customers and in this program, we had Mr Krishan Sharma, Head of HDFC MF Training division as the guest speaker.

Krishan Sharma chose a very interesting topic called " Investing - The Challenge Within". The gist of the discussion is that it is we the investors fail to take advantage of the market and its returns because of the contradictions and paradoxes, as humans, we live with.  Everybody knows buy low and sell high.  But hardly few practice it.  The second thing is equities are held for the long term.  Long term is almost in perpetuity, as you equity holder is part owner of the business and normally owners don't sell businesses.  Again most of us don't know why we are buying something and why we are selling something. The other interesting point he brought out was about the price we pay to buy businesses.  Good companies are not necessarily good investments! This line is profound.  Good investments are something you buy at a good price.  So, these are few of the contradictions and paradoxes investors face and he urged them to raise above this to succeed in investments.

He was of a strong view that Indian stock markets are poised for multi-fold growth in the next 20 years or so and equity is one asset class which nobody can afford to miss.  Valid points I would say.  The only thing he is from a business which relies heavily on equity investments therefore, we should take this advice with a pinch of caution. Overall, it was a good meeting to re-emphasize on the fundamental concepts.

Coming to the other things which I observed during this 2 hours session are:

1.  The majority of the attendees are above 50 years.  Yes, this is true.  I could hardly find anybody in 20-30s and very few in 30-40s.  I don't understand if the younger generation doesn't have time or they don't invest at all!

2.  The meeting was followed by "High Tea", which means, there is Vadai, Bonda and Coffee on the house.  As usual, people can't form a single queue and everybody was jumping the queue.  Our guys will never change!