RBI’s CREDIT POLICY AND INDIAN STOCK MARKETS

Posted on July 30, 2013 by Fauji

Today the RBI announced its new credit policy. Nothing new. Interest rates were expected to remain the same. And Mr Subba Rao kept status quo. Will it have an impact on stock markets? The markets spooked due to dollar appreciation rather than his announcements and fell by 244 points. Continue reading →

Posted in Macro Economy, Stock Investing | Tagged | 2 Comments

DIVERSIFY INVESTMENTS AMONGST ASSET CLASSES

Posted on July 16, 2013 by Fauji

This post is inspired by one of the readers, Ms Manisha who sent in a query  seeking my advice on five asset classes to invest in in order to diversify her portfolio.

I had written in one of my earlier blogs, “Which is the best asset class to invest in” that there are only two main classes. Risky and Risk Free and then I had given divisions in both of them. I guess it is time to probably ease out the decision making for my readers by suggesting a few classes suitable for every salaried or earning individual. Continue reading →

Posted in Fixed Income, Mutual Funds, Personal Finance, Real Estate | 6 Comments

MAIN KYA KAROON, MAIN KYA KAROON?? BUY OR SELL

Posted on June 26, 2013 by Fauji

I just remembered the opening lines of a song from the Hindi movie Barfi ,seeing the gyrations of the stock markets. A lot of my readers have been calling me or querying on what next and what to do? Continue reading →

Posted in Mutual Funds, Personal Finance, Stock Investing, Value Investing | Leave a comment

RUPEE CRASH, SENSEX DIVE & EXPENSIVE HOLIDAY

Posted on June 20, 2013 by Fauji

The heading of my blog seems incoherent. But let me explain. I have just returned from a holiday to Turkey. And towards the end of my visit my ATM withdrawals had become expensive. The Rupee had depreciated by 10%. Yes. When I left India I had bought dollars at Rs55.20. My last withdrawal at Selcuk, Turkey was exchanged at Rs 60.03.  Continue reading →

Posted in Personal Finance, Sensex, Stock Investing | Leave a comment

TAX ON MUTUAL FUNDS

Posted on May 13, 2013 by Fauji

Mutual Funds are not only subject to market risks but also to taxes. So, if you pay your taxes, you better know the tax provisions too.

For an investor the options given by schemes are Dividend Option and Growth Option. In growth option only capital gains are involved at the time of redemption. However, in the dividend option, fund houses from time to time pay a dividend to the unit holder and those dividends are subject to taxes. A point to note is that the tax on the dividend distributed is paid by the MF but it effects your financial health, therefore, you must understand it. Continue reading →

Posted in Income Tax, Mutual Funds | 1 Comment

PONZI SCHEMES & INVESTORS

Posted on May 3, 2013 by Fauji

Of  late there has been a lot of focus on Charles Ponzi. It seems he is more well known than Mahatma Gandhi based on the internet queries and hits for him.  Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, commonly known as Charles Ponzi, was an Italian businessman and con artist in the U.S.A in the early 20th century. He became famous in North America in the early 1920s as a swindler for his money making schemes.  Ponzi promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in Continue reading →

Posted in Behavioural Finance, Personal Finance | Leave a comment

PPFAS LONG TERM VALUE FUND

Posted on April 29, 2013 by Fauji

For all of you who have been patiently waiting for the “new fund offer” of a mutual fund I had advised earlier in my blog, the wait is over. PPFAS has opened the new fund for sale of units wef 13 May 2013. All readers of fauji finance are advised to take the “Direct Investment” option. This cuts out the commissions paid by the AMC and benefits the investor.

The first investment can be by cheque filled with the form and deposited either directly with the Mutual Fund/AMC at their Mumbai address or deposited at the nearest CAMS centre near your town/city. After you get the folio number and you are registered as a customer with the Mutual Fund, you may go in for a Systematic Investment Plan (SIP) with a fixed amount per month which you can invest for at least ten years without the pressure of withdrawing.

Although the AMC states “Scheme shall be investing in Indian equities, foreign equities and related instruments and debt securities. Buying securities at a discount to intrinsic value will help to create value for investors. Our
investment philosophy is to invest in such value stocks. Long Term refers to an investment horizon of 5 years and more.”

 I again reiterate, as per faujifinace long term in Stock Markets implies at least 10 years  ie at least one recession and boom cycle in the economy. Though sometimes recessions or depressionscan be as long as 15 years. Check out the great depression of 1929. So beware.  But I am quite hopeful of decent returns in the long term from this fund.

Download Form for PPFAS Long Term Value Fund

Disclaimer: I am personally investing in this Mutual Fund.

Posted in Mutual Funds, Personal Finance, Value Investing | 9 Comments

INFOSYS AND THE STOCK MARKETS

Posted on April 13, 2013 by Fauji

Yesterday Infosys came out with its financial results and the stock markets tanked downwards. The second-largest IT services company in the country, Infosys Technologies Ltd saw a sharp and unprecedented decline in share prices, registering by the end of Friday a decline of 21.3 per cent in value and a loss of Rs. 36,000 crore for the company in market capitalisation.  WTF? A clear example of market frenzy which is dominated by gamblers and punters and not investors. 

The company registered a net profit of Rs. 2,394 crore in 2012-13 which is up by 3.4 per cent over the previous year. A business which has given humongous returns to shareholders who invested at the right price and kept that investment locked up. Infosys is not winding up like Kingfisher Airlines. It is a business which is up and about. Growing steadily. It can never show growth rates which it showed when it was a young company because of a large base and matured business now. What was Infosys fault?

The Hindu newspaper report says, “With a low and wide-ranging revenue guidance (or forecast) for 2013-14, pegged at six to 10 per cent (far below the industry average of 12 to 14 per cent) and the 2012-13 results falling short of its own predictions, the IT bellwether painted a cloudy and dismal picture for the ‘sunshine’ sector.” 

So, it was a result of prediction going wrong and not the business going wrong. It is like a T 20 match where you predict  that Chennai Super Kings will win the match against Rajasthan Royals by 14 runs. Let us say at the end of  the evening CSK , instead of  a margin of 14 runs win the match by 3 runs. Will you as a CSK fan mourn that win? I doubt. Similarly, end of day Infosys is still one of  the best run professional company, it still is generating upwards of Rs 2200 crores profits every year, it is still giving its shareholders decent returns — dividends, bonuses and is still paying salaries to its employees. Did Infosys deserve this? You decide. Meanwhile, the same share will bounce back in the next two to three trading sessions, making you wonder on the shenanigans of the stock markets. 

I have been approached by a few readers whether they should buy Infosys at these levels? I have not analysed and researched Infosys and have thus not arrived at a fair price to buy. The business is good and intact, is the price good? I can’t say.

Posted in Behavioural Finance, Stock Investing | Leave a comment

PPFAS LONG TERM VALUE FUND GETS SEBI CLEARANCE FOR LAUNCH OF NFO

Posted on April 13, 2013 by Fauji

In one of my recent blogs I had asked my readers to keep money ready and get their KYC done so as to invest in PPFAS AMC’s new fund offering (NFO). I got a call from them yesterday that they have received SEBI approval for their scheme and the NFO will come out in the next few weeks. You can check the mail of the Fund Manager Mr Jayant Pai to me. 

I would suggest the following procedure:-

(a) Have your KYC status OK. You can check your status at this site. KNOW YOUR KYC STATUS.

(b)  If your status is not OK, it could be because of two reasons, one is you have not applied so far. In that case download this form and fill it up and deposit as per instructions.  FRESH KYC APPLICATION FORM. 

(c) You had your KYC form filled before 01 Jan 2012. In that case you need to fill up CHANGE IN DETAIL FORM. Fill up only part B of the form and forward. 

(d) Download the form from PPFASAMC website. They will upload it in a few days. 

(e) Make the first investment offline. Form + Cheque to be deposited at any of the designated CAMS centres. LOCATION OF CAM CENTRES IN INDIA.  Their toll free helpline is 1800-200-2267.

(f) In case there is no CAMS centre in your town, send the cheque and form by post directly to PPFAS Corporate Office at PPFAS Mutual Fund,Great Western Building, 1st Floor, 130/132, S. B. S. Marg, Diagonally opposite Lion Gate, Fort, Mumbai – 400 001.

(g) After the first investment all others can be done on line through their website www.amc.ppfas.com.

“We have received all requisite approvals from SEBI and plan to launch our scheme (PPFAS Long Term Value Fund) next month (May 2013). 
 
We thank you for your patience and support and hope you will come on-board at the New Fund Offer (NFO) stage.
 
The various channels through which you could invest are :
 
1. Investing online through our website www.amc.ppfas.com  
 Unfortunately, as per current regulations  online investing through our website can only be undertaken once your folio number has been generated. Hence your initial investment (either during the NFO or later) will have to made offline. All subsequent investments can be made online after procuring your Login ID and Password. 
 
2. Investing through offline and online distributors who have empanelled with us. Two online distributors have come on board so far viz. www.fundsindia.com and www.fundsupermart.com.
 
3. Downloading the Application Form from our website, and submitting the duly filled form to our Corporate Office (PPFAS Mutual Fund,Great Western Building, 1st Floor, 130/132, S. B. S. Marg, Diagonally opposite Lion Gate, Fort, Mumbai – 400 001) or to any CAMS office in India, The list of CAMS offices are contained on our website.
 
4. Completing the Application Form appended along with this letter and contacting your Relationship Manager at PPFAS so that we can have it collected from your doorstep if you are located in Mumbai.

If you choose to invest online through the PPFAS AMC website, your investment will automatically be channelised into the ‘Direct Plan’ option which will will give you the benefit of a lower expense ratio as compared to the ‘Regular / Distributor Plan’ 

As of now, the minimum subscription amount for lumpsum as well as SIP investments is Rs. 1000/- (Rs. One Thousand only) and in multiples of Rs. 1/- thereafter. We are offering monthly and quarterly options and the SIP dates on offer are : 1st and 10th. 

 
We will also be posting regular updates on our Facebook account (https://www.facebook.com/PPFAS) and Twitter account. Our Twitter handle is @ppfas.
 
 
Warm Regards,
Jayant R. Pai, 

 PPFAS Asset Management Private Limited

Posted in Behavioural Finance, Mutual Funds, Personal Finance, Value Investing | 2 Comments

INVESTING IN PRESENT DAY MARKETS

Posted on March 28, 2013 by Fauji

The stock markets are going through a volatile and uncertain phase. Government decision making is paralysed due to the Mulayam-Karunanidhi salvos. Business houses are struck with a double whammy of increase in cost of doing business in India and consumer disinterest due to rising costs.

The greatest challenge for the investor is seeing his investment getting eroded. But if you are an ‘ investor’, that is your greatest strength too. The investment perspective of investing in tough times seems a curse rather than a blessing until the sell off ends and some semblance of stability returns.

Remember, ultimately the vicious cycle of poor economic growth will be broken and neither securities nor the economy will go to zero, just as they did not go to infinity in the heady days of 2008. Buying early on the way down looks a great deal wrong, but it isn’t. As Seth Klarman of Baupost Group says, “If you look  to Mr Market for advice, or if you imbue him with wisdom, you are destined to fail. But if you look to Mr Market for opportunity, if you take advantage of the emotional extremes, then you are very likely to succeed over time.”

Historically, little volumes transact at the bottom of the curve. Therefore, an investor should put money amidst the throes of a bear market, appreciating that things may get worse before they get better. 

Success in stock markets comes to those who follow a process and do not sway with the moods of the market. It is very difficult psychologically to operate in an uncertain and unsure environment.

In one of the previous blogs I had written about Parag Parikh Financial Advisory Services(PPFAS) launching a mutual fund. It is a fund house which has a process in place and should do well for a patient, intelligent “investor”. They are about to announce the New Fund Offer(NFO) dates. One can directly get in touch with them to invest rather than through an agent or a  distributor at http://amc.ppfas.com

Posted in Mutual Funds | 4 Comments