holdyourthoughts

The markets tanked and then recovered in 2009. And what a recovery it was. Stocks have gone up 3,4 times in the last 6 months. Not the frontliners but some of the midcaps. The frontliners are just about back to where they fell from in Jan 2008. So, in a span of 2 years people who have stayed invested in the market are back to even. Those who had the guts to buy when there was mayhem around have actually made stupendous returns. But actually most retail investors have lost money. They came to the party late and left early, trying desperately to recuperate some of their losses! The lessons from all this are: 1. Ignore the market. Focus on the businesses. 2. Buy when there is blood on the street (old jungle saying!!). 3. Sell when everyone and their uncles are buying (remember Reliance Power IPO?) 4. The money is made while buying, so make sure even if you get an average deal while selling, you still make money. 5. Over the long term, trading makes only one person rich - your broker!!

Over the last decade that I have been investing and trading in the stock markets, I have had the opportunity to try my hand at many approaches to make money. I have done long term investing (bottom-up stock picking), top-down stock picking, momentum trades, technical analysis, swing trading, day trading and derivatives (main options) trading. I have made and lost money in all of these endeavours. The only thing that I have gained in knowledge and an insight of what works for me in the stock market. And I have decided to stick to my knitting in the future. Firstly, I have put some portion of my portfolio in exchange traded index funds to capture the index returns. I have invested in both the Nifty and the Junior Nifty ETFs. For direct stocks, I am investing in companies with the following characterisitcs:  1. I look only at small or mid cap companies which can grow in the future.    2. Reasonably high RoCE or RoE with stable return ratios  3. Consistent record of sales and profits ove...

I have a lot of people ask me about what I think about career decisions. Some come to ask for job roles in foreign countries, some ask about how to get a different job role, some enquire about career progression and some others ask about how to increase their salaries! What I always end of telling people is make choices based on what you really think is important to you. Think long term. Think if five years from now the choices you make now will make a difference to your life. Young(er) people have a tendency to look only at a short term view of life and don't really want to think about the long term. (It's like in the stock markets, traders think long term is six months!!). It's critical, to my mind, that people think long term - atleast have a plan for the next 3 years. There has to be a road map that you carry in your head or written down somewhere which helps you in the general direction you want to go. Unless, you know where you are going, you really cannot get anywher...

It has been nearly half a month since I am back from China. Interesting how time flies. The China trip was a great experience that something I would remember for a long time.I have bought a new Nokia E63 phone which I am using as my ipod as well so have downloaded a few audio books and listen to them while I drive to work. I have split the audio books in 25 mins pieces so I can listen to them comfortably while I drive. Most of the audio books are about personal leadership, vedanta(!!), personal finance and stock markets. So its a interesting experience to listen to these diverse topics. I think it is good to listen to hear motivational podcasts/audiocasts on a regular basis. It really helps open up the mind to newer ways of thinking. I have always maintained the most important factor for success is a great attitude. That is the differentiator between someone who just 'floats' through life and someone who takes control of his destiny.

We made our presentation to the Big Shoe Company. I thought it went pretty well. I presented strategy for online marketing to them. That is what I thought what they wanted to know the most. But selling shoes online is going to be fairly tough for an unknown brand. Once we were done with the presentation, we were back to the hotel and started working on our consolidated SME report. By Wednesday we had completed the SME report and also the final presentation that we were planning to give Madam Bao Hui, a member of Chengdu Municipal CPC committee, and Chairman of General Labour Union. Loren did not want to present because he had one more presentation that day, so we egged on Vandana  to do the job. The final meeting with the chamber of commerce was in a swanky 5-star hotel. There was local media coverage as well. The President of the Chengdu Chamber of Commerce was there to greet us. We had four presentations on general themes which was concluded by the final SME report. Madam Bao then ...

On Wednesday (11/4/2009), we went to visit the bigger of the two shoe companies. We were all hoping that like the first shoe company, the team would get another pair of free high-end shoes!! We went and met the son of the Chairman. He is very young and is in the process of taking over from his father. Their problems were also similar in nature: talent retention, management effectiveness and building an online shoe retail business. We will be going back to them on next Tuesday (11/10) and I will be presenting them on how to market shoes online. What I saw actually put me off. I am not really very keen on working with this company. This company is the classical example of the "Chinese sweatshop". The workers need to work from 8 am till 10 pm everyday. For 28 days a month. They get only 2-3 holidays in a month. The pay is poor (average worker earns 1300 RMB) and typically stays less than a year. The company has no brand and manufactures shoes for a fairly well-recognized US bra...

Today we concluded our presentation for the first show company, one which we have termed as Shoe One. The presentation went really well. I discussed in detail about the importance of creating a business plan and how to go about creating one. The things to focus on in a strategic business plan and things to avoid. After me Vandana discussed motivation and HR systems. Loren concluded with a passionate discourse on building corporate culture. In total the presentation lasted for 1 hr 40 mins. The president then called for a break for the employees to get together and gather their thoughts before starting the question answer session. After a short 5 minute break we started the Q&A session and it went for over 1.5 hours. The questions and the candour felt very nice. The general manager herself asked most of the initial questions. Once the session got into full swing even other members joined the fray. The Q&A over, the president and the general manager thanked us profusely and the ...

Today we went to the electrical company to present our recommendations. The presentations went really well. Loren did a great pitch on developing marketing channels. I really like the way he puts a lot of effort in his preparation. That's an important lesson to be learnt. After Loren, I did my pitch on production planning followed by Vandana on HR team motivation and best practices. The finishing touches were provided by a very passionate pitch by Ravi on branding. After we were done, the General Manager thanked us profusely and took us out to lunch. This was perhaps the largest mean in China so far in terms of variety. The dishes included baked fish, sardines, oysters, crabs, prawns, chicken, pork, beef, duck, frog, rabbit and other vegetables. In total, there were about 24 dishes, give or take a few!! While returning Lauren helped me pick up ibuprofen and a Chinese mouthwash for my toothache. After taking the medicine it feels a bit better now but the soreness remains. Tomorrow...

The last few days I have been really busy with work so did not get a chance to update my blog. After we came to Dujiangyan we spent the rest of the day more or less lazing around. The hotel we are staying looked really nice at first. It's the Tiandiren Business Hotel and the rooms looked really cozy. It was later that we realized the food (breakfast) served is awful. Loren and I bought marmalade from a nearby store and we have Chinese bread with it everyday. Also, there is warm orange juice (never had warm juice in my life!!), and fried eggs. I call them the "saviour eggs". Then we also have eggs boiled in green tea, which should been tasting different as per the local people here, but tastes the same to me as any other boiled egg in the world. We have "discovered" a small Chinese fast food restaurant close to our hotel where we have been going for our food. The place has good fairly good food. The chicken and mushroom rice was quite like the Chinese food we ha...

Today we spent the whole day in sightseeing. We left Chengdu early morning. Well, not really early morning. It was around 9 am when we left the hotel and got onto the bus. I was surprised to see the driver wearing a red IBM jacket. It seemed it was presented to him by an IBM group that he had taken on a tour previously. We first went to the Panda zoo. The weather was extremely foggy and damp. So, we were told that most of the pandas may not be coming out and playing in the open. After walking (and it was steep - like climbing up in a hill station) a fair bit, we did spot a few pandas. We were lucky to see about 10 pandas including red pandas. We then went a saw a nice short documentary on the life of the pandas. After the panda zoo, we headed towards the Pauguang monastery in Chengdu - the 4th largest in China. It was really beautiful. The startling thing there was the food. We ate at the canteen run by the monks there and all the food was vegetarian. But, the dishes looked and tasted...

Yesterday, we went to our first client visit. Loren, Doris and I were accompanied by our two interpreters who had actually setup the meeting. The company had sent a 6-seater Buick for us. We drove for about an hour before we reached the company. The office was located in a pretty shabby neighbourhood. But the office and factory itself was very very big and swanky. I was, in fact, very surprised to see such a large campus for a supposed SME. The company was the largest private sector player in its domain and was planning an IPO in the near future. We were welcomed by the CFO, Vice President and Head of Corporate Management. We were served with Jasmine tea and hot water! Then we went through a preliminary introduction of the company's profile. We were also shown a video about the company that was fairly comprehensive. Then we went into a detailed discussion about the company's operations, challenges, future strategies and growth plan. It was a fairly detailed and frank discussio...

Yesterday (Saturday) afternoon Loren, John and I went out in search of lunch and thought we would get into KFC. There was a Japanese fast food joint right next to KFC called Tonya - which apparently means "Three Pigs" in Japanese (translation courtesy Kenji). I had Eel rice and Miso soup. The food was pretty good and very cheap. Only 25 RMB. We then came back and after a while all 7 of us (Ravi, Vandana and Hina had still not joined the team) decided to go and walk around Chengdu. Zach and Belinda were our local guides. We started at around 2:30 pm from the hotel and walked around Chunxi Lu and also the main town square. We kept walking and walking and walking. I think we walked till about 6:30 pm. I have not walked so much in a long time. But it was not very tiring because the weather was pleasant, maybe a bit on the colder side. After all that walking we decided to have Hot Pot for dinner and walked some more to find a restaurant. Zach and Belinda did not have much idea so...

From Bangkok Airport I am sitting and penning this down in the Bangkok airport. My flight, for the first time in my life, was 50 minutes ahead of schedule! After getting off the flight, I had to walk what seemed about a 1.5 kms to get to terminal C3, where I sat down waiting for John to arrive. He arrived within a few minutes and we started chatting. Before joining IBM, he was a school teacher! Now he works with the GMU team in STG. We went and had coffee together. My cold coffee had too much cream and a lot of ice-cream in it!! My stomach am still filling full. This is after a decent late night dinner (1:45 am) served in-flight from Kolkata to Bangkok. The braised chicken was really nice. I had diet coke to go with it. Need to keep a check on my calories. Have made a lot of effort this last year to lose over 10 kgs, so cannot just pile them back on. It's 8 am in Bangkok now and John and I are waiting for our connecting flight to Chengdu which starts boarding at 9:35 am. Chengdu R...

Tonight I will be leaving for China. Packing is complete, courtesy my wife :-) I almost was making a mess of the start. My flight from Kolkata leaves at 2:30 am on Oct 16. I was under the impression that my flight was on Friday night. I was telling about my itinerary to my father-in-law and he told me that Oct 16 2:30 am is Thursday night and not Friday night as I was thinking. I immediately realized my mistake! So, spent fast-forwarding all my pre-travel arrangements by a day. Now, more or less everything is done. Just need to get some sleep in the afternoon as its unlikely that I will get any sleep in the night. The toughest part of traveling on work is leaving the family behind. I specially miss my two-year old son. I spend most of my free time playing with him or talking with him. so, will miss him a lot. Next post will possibly be from China!!

Just a week to go for the CSC China team 5's in-country assignment to start. I have already received my Chinese visa. Now we have received information about our hotel bookings in both Chengdu and Dujiangyan. I have also got my e-tickets for a Thai Airways flight from Kolkata to Chengdu via Bangkok. The only thing I need to do is to pack my bags, which I think I will leave for the last day :-)

Some people need to have a well-defined routine in life. They follow that routine diligently and any deviations from it are despicable. For others, routine is abhorring. They much rather “go with the flow”. I am in the first group. It is important for me to have a well-defined routine. I get fairly disturbed if my routine is interrupted or disturbed in any way. I am open to changing my routine over time, but it is usually not a sudden impulsive change. Knowing myself, I have set about to fix a routine for myself which will help me put focus on my life's priorities: Health, Friends & Family, Career and Money. Here is the outline of the plan (open to changes): Weekdays Between 6:30-7:00 AM – Rise and Shine :-) 7:00-7:30 AM – Walk for 30 mins 7:30-8:15AM – Daily dose of Newspaper (Telegraph, Business Standard, Anandabazar Patrika) 8:15-8:30 AM – Breakfast 8:30 – 9:00 AM – Get Read for Office 9:00 – 10:00 AM – Drive to Office 5:00 – 6:00 PM – Drive back from office 6:00 – 9:00 P...

The trick to working better and improving work productivity is not to work harder and burn the midnight oil as some would think. It's to take a break and also to do less! This has been something I have been trying to tell all the people who work with me. It's important to do LESS and do it better than to take on too many things on hand and then deliver poorly. And now, Harvard Business Review has a research report out that confirms this view. You can find the link to a detailed report here on the Wall Street Journal So, focus on quality of delivery. Do less. Learn to say NO to tasks building up to overwhelm you.

A very interesting event is on these days. Professors of India ’s elite institutes IITs and IIMs are protesting in unique ways like day long fasting to protest what they are calling an injury to their autonomy of recruiting good teachers and pay scales. I think this is a farce. This is just a way to arm twist the HRD ministry to increase their salaries. I have nothing against the IITs, IIMs. In fact, I have had the opportunity to study in one of them. But, what make those institutes great are its students and not so much its faculty. If you gather together some of the best academic brains in the country in one place, you don’t really need excellent teachers to produce great results. In fact, excluding very few of the faculty most others are of very ordinary standard. But then again, that’s true of every university, college in the country. That is one of the main reasons why we have not seen any great research work come out of the IIT/IIM system. Whatever good comes out the institutes...

Today, for I had the "fortune" of visiting the largest and supposedly the best government hospital in Kolkata. I had gone there with my wife to visit one of lab assistant's who works in her college. While she went to meet and enquire about the condition of this person, I was walking about on the ground floor emergency ward. What I saw shocked me. This was the first time that I actually have been to a government hospital and the condition was simply deplorable. It was dirty, with paan stains all over the place, overcrowded with people, with patients lying on stretchers on the floor, and with a disgusting and nauseating smell emanating from every corner. If this is the condition of the "best" hospital then I shudder to think what is the state of the other more ignominious ones! This got me thinking about the concept of a welfare state - a haloed concept popularized in India by the founding fathers of our country. The problem I, and a lot of pragmatists like me, h...

Recently, Idea Cellular has been running an advertisement starring Abhishek Bachchan as a doctor who suddenly with an idea of asking people to walk and down. At the end of this rather humorous ad, Abhishek Bachchan is seen swatting flies as he has no patients anymore. Everybody has become "fit" after walking and talking!! I liked this ad for its humor quotient. Then one day, when I was struggling to find time for my daily walks, I realized that I could implement this in my life. I have a few hours of conference calls in the evening every weekday. So, I had a great opportunity of utilizing some of this time for my daily dose of walking. And that is exactly what I am doing now. Last couple of days, I have been doing 40-45 mins of walking during my calls (ones where I am there more as an FYI and not an active participant). I really think its a great way to utilize the time and stay fit at the same time.

My goal for the CSC assignment is to: Be part of a global high-performing team to help organizations who in normal course would not be able to afford IBM's services Build long lasting relationships with the team members Explore, understand and appreciate the Chinese culture (both social and work) Work on a project with a "different and unique" flavour

I have been placed in the China team for IBM's CSC (Corporate Service Corps) program. There are ten members in the team from different countries. We are supposed to be travelling to Chengdu in the Sichuan province during October-November. The program has a three month preparation period during which we need to learn about various things. For example, during the first month, we are supposed to learn about the team and also start learning about the Chinese culture, economy and business. Till date we have had two meetings (these days early all meetings are "virtual", telephonic ones) in which we have had a chance to interact with our team members. We have also been assigned a team mentor (someone who had been to Chengdu as part of a previous CSC group). For greater details, you can look at www.ibm.com/corporateservicecorps

In Malcolm Gladwell's book Outliers, a study done by Anders Ericsson on violinists shows that it takes about 10000 (ten thousand) hours of practice to become an expert at something. When I read this for the first time, I was fascinated by the fact that it takes such a long time of dedicated effort to become really good at something. Today, I was reading a book on trading strategies and it mentioned that a traders life is divided into decades. The first decade he makes his mistakes, the second decade he makes his money and the third decade he enjoys the money. That set me calculating and trying to tie Gladwell with the traders cycle. If a person spends 3 hours per day for 5 days a week for 52 weeks a year, he will need about 13 years to be an expert at trading. And that is assuming that he is passionate about it in the first place. So, now we know, why we haev so many people failing as traders. It's just that they have not served their time as yet!!

The game to gather the maximum amount of money before the new SEBI regulation of not allowing any entry loads (and consequent commissions to distributors) kicks off on August 1 has started in earnest. nearly all big fund houses are running after new IPOs with fancy names to gather as much money as possible to rake in the moolah. They are afraid of losing out on business after the new regime starts. Then only funds with "superior" short term performance will be able to get more money from investors and other funds whose performance is lacking will not be able to "bribe" their way into investor portfolios. In the existing system, large distributors promise fund houses large investments in return of hefty commissions (6-7%) and foreign trips etc. All this comes from the entry loads charged by the funds to its investors. Fund Houses choose this route to bring in money as their revenues depend on the assets they manage as fund management charges are a percentage of the t...

Today was my 33rd birthday. I was thinking of making a few resolutions for my year ahead. My so-called "New Year Resolutions". Instead, I thought that I will make only one resolution and then track its status on my blog to see how I am progressing on my commitment. So, I have resolved this year to reduce my weight by another 10 kgs. (I have reduced about 10 kgs in the last year, so its not as improbable as it sounds). My current weight is 77.8 kgs and my July 19, 2010 target is 67-68 kgs. To start off, I created my walking plan using the free online walking planner from the American heart Association's website http://www.startwalkingnow.org My target body weight is around 63kgs, so if I am able to reduce the 10 kgs it would be really great for me. The main trigger is to ensure overall better health and that I do not land up with a heart attack at 50.

I was watching Randy Pausch's lecture on time management on youtube. IF youhaven't already watched it, I suggest you do. Here is the link: http://www.youtube.com/watch?v=oTugjssqOT0 There are a few of Randy Paush's videos in youtube including his, bu now famous, "The Last Lecture." He is an amazing speaker and I have listened to a couple of his lectures over a dozen times. In the Time Management lecture, Randy refers to doing things you really love. He said make a list of 100 things you want to do before you die. His clarified that the number was not cast in stone but was merely a starting point. I thought about it for a long time. Deeply. And guess what, I was struggling to out even one item on my list!! This came as a rude shock to me. It means all my childhood dreams and passions have somehow left me (or lying dormant deep inside me) in the fast-pace of life. I asked a couple of my friends and most had trivial things to say like "world tour", etc..not...

Today something new has happened. In this Lok Sabha elections, for the first time during my living memory, I have seen a comprehensive defeat of the Left Front in Bengal. Mamata Banerjee has managed to join hands with the Congress and has managed to get 26 seats out of 42. The last time I think that happened was before I was born!! Let's see what the new team does for Bengal and Calcutta. We need to get a lot of development done for Bengal and Calcutta.

I am thinking of building a mid/small cap portfolio of not more than 10 stocks with a part of my monthly investable surplus. The strategy that I have thought of is to have a 70:30 debt:equity ration. So, I will be putting about 30% each month in either a recurring deposit or PPF. The rest of 70% I am planning to break up into two chunks of 40% and 30% each of mid-cap/small-cap stocks and equity mutual fund SIPs respectively. In the equity mutual fund space, I think I will focus more on large cap funds like HDFC Equity, Franklin Templeton Prima Plus and Reliance Vision with an allocation of 10% each. Amongst the stocks that I am currently looking at are: 1. Opto Circuits 2. Sintex Industries 3. Yes Bank 4. Sundaram Transport Finance 5. Bartronics 6. ICSA 7. Everest Kanto Cyclinders 8. Power Finance Corp 9. IDFC 10. Voltamp Transformer 11. Punj Llyod 12. Savita Chemical 13. Pidilite 14. Blue Star 15. Voltas And maybe a couple of cyclicals/special situations like Tata Steel, Tata Motors, ...

Today the market corrected about 2%. And I was overwhelmed with greed and bought Essar Oil from a trading perspective. The trade till now has not gone as per plan. It is down about Rs 6 from a purchase price of Rs 160. I have a stop loss below 152 (yesterday's close) and a target of 170. Let's see how the trade plays out.

Every one seems to be of the opinion that India is going to have a fractured mandate in the elections and the market will correct 10-20% after the results are out. The percentage of the fall is to be determined by the group that comes to power with the maximum fall reserved for a combination of the Left and Mayawati!! I wonder. In my experience markets rarely, if ever, oblige the popular opinion. Will the markets see a steep decline or will it witness a runaway rally? Only time will tell. For you and me, its best we reserve some cash to take care of opportunities that may come tomorrow.

Looks like the Nifty going to take a 100-150 point downward journey from here. There was a fair amount of profit taking at the end of the day with Sensex closing below 12000. For long term investors, it might be a good idea to wait for some more time till the election results are out. There is an event risk to the market associated with the election and for most retail investors it makes sense to watch from the sidelines rather than jump into the whirlpool. For traders, portfolio protection can be bought in the form of Index Put Options.

The near 50% rise from the October lows in the Indian stock market indices (from 8000 to 12000) have started the debate of whether this is the beginning of a new bull market or a bear market sucker rally. Most people have been surprised and caught unprepared for this steep bull rally. I have used this rally to prune my portfolio to a more manageable number of stocks. To be honest, I am as confused as the next guy on whether this is the beginning of a new bull market or a bear market sucker rally. Personally, I think it is a violent bear market rally and markets will test the previous lows. Now, what will trigger the fall is anyone's guess. Maybe politics, maybe the 'swine flu' or maybe a bankruptcy declaration by a company like General Motors. But something will happen to take the markets lower. I will take some more money off the table in the next week, before the election results are out. At worst, I will miss 5-10% of the upmove if a stable government is formed. On the o...