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Rajesh Jain – Friend Of The BJP


wealthymattersRajesh Jain is a Mumbai based serial entrepreneur , investor, technologist and committed BJP supporter.He is the founder and Managing Director of Netcore Solutions Pvt Ltd.Should you wish to get to know him better,you can catch up with his views on his personal blog Emergic.org. He has been a key backroom player in creating the Narendra Modi wave on social media.He started the network of professionals called Friends of BJP and funded the right-leaning website NitiCentral .

He made many millions early on, when he sold his portal IndiaWorld-India’s first Internet portal which was launched in 1995-to Sify ,in 1999, for 500 crore.

He is currently invested in 11 companies through his own fund -Emergic Venture Capital.

  1. Novatium – Network Computers ($100 PC)
  2. Rajshri Media – Broadband and Mobile Portal
  3. Midas – Communications Equipment
  4. n-Logue – Rural Services
  5. ValueFirst – Enterprise Mobility (SMS)
  6. Greynium – Local Language Portals and Classifieds
  7. mChek – Mobile Payments
  8. New Horizon Media – Local Language Publishing
  9. Yos Technologies – Personal Healthcare Records
  10. Intelizon – Solar Energy for Rural Electrification
  11. Mobifusion – Consumer Mobile Apps

With Narendra Modi becoming a popular search term on the internet, it should be interesting to watch the what Rajesh Jain does next.

Should you be interested in an interview,check out the one here:Link

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World’s Greatest Money Maker – Warren Buffett.


This is a BBC documentary I watched on Saturday on the internet.It was aired in India a few days ago. My friend Avishek Jha saw caught it on TV and was pretty insistent that I watch it.

This BBC documentary seems to have been made a couple of years ago and has probably been aired in the UK ,before being broadcast in India.So my apologies to my UK readers for re posting old stuff.

This documentary focuses more on Warren Buffett, the person,the manager,the entrepreneur and the philanthropist rather than just the investor .I think the movie is worth watching and at least I came out learning a couple of new things about the man.Here are the links to the documentary.Happy Watching!

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Jack Canfield on Finding a Mentor


Nobody but a person who has already become what you want to be can tell you what you need to do to get yourself there.Here’s Jack Canfield on how to get the mentor of your choice.So all you would be ace investors , entrepreneurs and would-be billionaires here’s something for you:

Edward Zajac – 94 year old investor


This is a story I came across in the Economic Times.It seems to be a reprint from Bloomberg.I have this story pinned to my notice board just to remind me how Dumb Money can become Smart Money.Here is a person who seems to have made good money without trying to become an expert at investing.He has accepted his lack of expertise and found a way to benefit from the expertise of the “smart money”.His method involves just looking at some basic facts before putting his money in a company.The skills required are really basic.The rest of his magic merely seems to be a result of compounding due to his Time in the Market and the wisdom that comes from experience.To follow him we don’t need to understand financial statements or master technical analysis.

 Buy & hold strategy not dead yet for 94-year-old investor

wealthymatters.comNEW YORK: Stick with stocks, says investor Edward Zajac. He should know. The 94-year-old has been trading for 72 years and said he’s made about $2.5 million.

“I am a live, open-hearted investor,” said Zajac. “I’m willing to hold that stock 5, 10 years, if I have to.” Zajac, who lives with his daughter in Henderson, Nevada, bought his first stock, Petroleum & Resources, in 1937 while attending the University of Illinois. He’s invested full-time since 1968, after retiring from installing computer systems to travel the US in a recreational vehicle with his wife. Read more of this post

Rakesh Jhunjhunwala on ET NOW


This is a video of a short interview of Rakesh Jhunjhunwala aired on ET NOW.I caught it on TV earlier this week.I thought of putting it up here for the actionable information it contains.So Gook Luck! But do remember not to be too greedy as even the legends can be wrong.

Recurring Deposits


wealthymatters.comA Recurring Deposit(RD) is a type of term deposit account opened by a person/persons with a bank or a post office wherein the investor or investors deposit a fixed amount of money every month for a fixed tenure . This scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum at the end of the tenure. The interest on RDs normally offered by banks is one percent below Fixed  Deposit(FD) rates compounded quarterly.Often there is nothing extra by way of  interest offered for senior citizens.Otherwise the rules for operating a RD account are the same as that for a FD account.The PO offers a fixed 7.5% interest compounded quarterly for a 5 year term.

RDs are great for people to develop the savings habit.It is especially useful to teach kids to save especially the Post Office Recurring Deposit (PORD) which has a minimum deposit of 10 rupees per month.Often banks package RDs as schemes to become or to make your child a lakhpati,millionaire etc or as schemes to build the down-payment on a house or vehicle.  Read more of this post

The Perfect Business


wealthymatters.com

The best and easiest way to make money either as a businessperson or an investor is to get hold of an as near to perfect business as possible.The best businesses have the following features:

  1. High profitability. If the business provides customers a product or service they need or want very much, and only this business can provide it, and there are few substitutes available then this firm can charge a premium price far above the costs it incurs.
  2. High returns on capital. A business with high margins ceases to be very attractive if it is very capital intensive and requires massive amounts of capital to launch and/or remain in business. The greatest businesses require little or no money to start, can grow without major additions of capital, and do not require much maintenance cap ex.
  3. An enormous moat. To ensure high margins and return on capital  in the future it’s critical for a business to have major competitive advantages that are unlikely to dissipate over time. The key here is lack of change .Rapid change as in the hi- tech sector,benefits consumers but is very bad for investors. To quote Warren Buffett, “We see change as the enemy of investments… so we look for absence of change. We don’t like to lose money. Capitalism is pretty brutal. We look for mundane products that everyone needs…. I guarantee that CokeWrigley’s , and Gillette will dominate. The Internet won’t change what brands people like.”
  4. Profitable reinvestment opportunities.  The greatest businesses can reinvest their robust free cash flows back into the business at equally high rates of return on capital. Consider this: Warren Buffett has often lamented the fact that See’s Candies has never been able to expand much beyond its historical West Coast markets. It’s a fabulous company and was one of his best acquisitions ever, but the inability to reinvest its free cash flows back into growing its operations makes it an inferior business to, say, Wrigley, which has been able to grow globally over the years. Read more of this post

Psychology of Wealth


wealthymatters.comThe question why some people accumulate substantial wealth and others struggle so much in this field has attracted the attention of  quite a few psychologists.There have been many studies to correlate various personality traits and behaviour patterns, cognitive patterns , self motivation habits, moods and emotional behaviours and social behaviours with the wealth a person accumulates.

The results of these studies have been used to construct the various quizzes here http://www.marketpsych.com/personality_test.php .They are free and a pretty good way to get to know both one’s strengths and weaknesses as an entrepreneur , investor and/or speculator.

Taking these tests is a great way to get to know the strengths we can play to and the weaknesses to guard against.The results sheets also have many good psychological  tips to work around our individual weaknesses.

The Difference Between Stock Market Investors and Speculators


wealthymatters.com

The following is an excerpt from Seth Klarman’s ‘Margin of Safety.’I got around to reading this book based on the recommendations of one of the readers of this blog.Thank you Andy!I think the following is a nice way of making a distinction between stock market investment and speculation.BTW the book is pretty nice and I will blog more about it as and when I come across more interesting stuff.

 

 

 

To investors stocks represent fractional ownership of underlying businesses and bonds are loans to those businesses.Investors make buy and sell decisions on the basis of the current prices of securities compared with the perceived values of those securities. They transact when they think they know something that others don’t know, don’t care about, or prefer to ignore. They buy securities that appear to offer attractive return for the risk incurred and sell when the return no longer justifies the risk.Investors believe that over the long run security prices tend to reflect fundamental developments involving the underlying businesses. Investors in a stock thus expect to profit in at least one of three possible ways: from free cash flow generated by the underlying business, which eventually will be reflected in a higher share price or distributed as dividends; from an increase in the multiple that investors are willing to pay for the underlying business as reflected in a higher share price; or by a narrowing of the gap between share price and underlying business value.Speculators, by contrast, buy and sell securities based on whether they believe those securities will next rise or fall inprice. Their judgment regarding future price movements is based, not on fundamentals, but on a prediction of the behavior of others. They regard securities as pieces of paper to be swapped back and forth and are generally ignorant of or indifferentto investment fundamentals. They buy securities because they “act” well and sell when they don’t. Indeed, even if it were certain that the world would end tomorrow, it is likely that some speculators would continue to trade securities based on what they thought the market would do today.Speculators are obsessed with predicting-guessing-the direction of stock prices. Every morning on cable television,every afternoon on the stock market report, every weekend in Barron’s,every week in dozens of market newsletters, andwhenever businesspeople get together, there is rampant conjecture on where the market is heading. Many speculators attempt to predict the market direction by using technical analysis-past stock price fluctuations-as a guide. Technical analysis is based on the presumption that past share price meanderings,rather than underlying business value, hold the key to future stock prices. In reality, no one knows what the market will do;trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.

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