The Capital Asset Pricing Model (CAPM) is a financial model used by experts to establish a relationship between risk and return from an asset. But a common stock investor can also utilize the CAPM model. We can use it to tune our return expectations from stocks. Generally, when we buy stocks, we do it with…
Berkshire Hathaway is an American company run by the legend Warren Buffett. But why an Indian blogger (me) is writing about the company? Recently I was reading Berkshire’s Annual Report (2020). In the first few pages itself, it became evident that it is an uncommon company. The report had no flashy images, no charts, no…
Once a person said, I have a fixed deposit of 65 lakhs in a bank. He asked if a bank closes what happens to the deposits? The answer is in the term called “Deposit Insurance & Credit Guarantee Corporation [DICGC]”. We will discuss about DICGC in this article. In a comparatively extravagant world of cryptocurrencies and the stock…
It will not be wrong to say that Philip Fisher was one of the first influencers who promoted the concept of fundamental analysis of companies. He also wrote a book called Common Stocks and Uncommon Profits way back in 1957. But the book is as relevant today as it was ground-breaking during its first publication. The focus…
Knowledge about how to build a stock portfolio is perhaps as essential as the stock analysis itself. Though the former looks more daunting to me. There are processes and financial models (like DCF) in place, using which one can analyze a business. But when it comes to stock portfolio building, there is no established process. A portfolio that might look apt…
Let’s learn to analyze a stock from the perspective of the total return it yields for shareholders. To get a feeling about the total return, we will have to look back and brush up on some basic concepts. Suppose there is a company that makes a cash profit of Rs.10 Crore. How to utilize the profit? Considering…
[Updated] Discounted Cash Flow (DCF) method is a better way of intrinsic value calculation. The DCF model is derived from a concept called Net Present Value (NPV). Why Intrinsic Value is required? Because based on it, one can judge if the stock is fairly priced or not. DCF method is not an easy way of doing price…
Before we can do a leverage analysis of a company, we must know the basic definition of “leverage.” What is leverage? There can be two sources of capital for a company. First, equity and second is borrowed money (loan/debt). When a company uses loans to fund its capital requirements, we can say it is leveraged. What does the…
Let’s compare Indian Banks to know which are the best banks and which are avoidable. A Screener for Top 20 Banks. Since 15th-Feb’21 nifty bank has corrected from 37,300 levels to 33,100 levels as of today (10-May’21). This is a correction of almost 11%. [For a broader perspective, check out our guide on Top Stocks…
Long back, I faced an issue with my health insurance policy. Our claim got rejected on the grounds of pre-existing disease. It happened in Yr-2008 when I used to work in Kolkata. We were very unprepared for the claim rejection. Moreover, I was also unaware of the criticality of such a clause. Hence, that episode made…
The year 2020 was tough (COVID-19). The second wave in the year 2021 seems to be even more lethal. During these times, people have realized that good money habits can prove to be saviors. Whenever humanity comes under stress, people tend to resort to basics. Food, shelter, health, family takes priority. But to better manage…
In our series of articles about stock basics, we talked about the economic moat of a company. A wider Moat gives an edge to the company over their rivals. Such companies operate with high margins. But how to identify moat companies? In our previous article, we’ve talked mainly about the qualitative factors that give moat to companies. But it is also…
