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Finbridge® sets the benchmark for undergraduate finance education in India. Master real-world finance through live projects and industrial training that accelerates success in elite finance roles of Portfolio Management, Investment Banking, Equity Research, Institutional Equities, Family Office and Private Equity. With campus placements at esteemed firms it empowers students to become the youngest investment analyst in India.
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8 core modules and 2 electives
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Industry designed curriculum taught by experienced investing practitioners & senior corporate executives through real world case studies and live research projects.
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The CFA designation is globally recognized in over 170 countries as the most respected qualification in investment management. Finnacle, led by India's most experienced CFA mentor Laukik Shah, is India's largest CFA classroom training provider with over two decades of unmatched experience. We consistently achieve superior results with pass rates up to 71%, significantly above the global average. Our Basic CFA Exam Prep focuses on mastering the curriculum for exam success , while our unique Advanced CFA Training (Finbridge®) program ensures not just clearing CFA exams but exclusive premium campus placements in core finance at some of the highest starting salaries.
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CFA Charter
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Yes in CFA Advanced Training - 100+ campus recruiters spanning premier core finance firms of India.
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10 subjects in Level 1 & Level 2 respectively and 6 subjects in Level 3
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CFA Level 1
SD Jain College
I am grateful to the amazing faculty at finnacle for making my CFA Level I journey so smooth. The way they explained concepts, kept us motivated and guided us throughout really helped me stay consistent. They prepared us really well for the exam with clear teaching, regular mocks and doubt solving sessions that made a huge difference. Honestly, I couldn’t have done it without them. Highly recommend it to anyone starting their CFA prep.
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CFA Level 1
H.R. College
I was able to pass CFA Level I all thanks to Finnacle Institute. I like the way Laukik sir teaches and makes all concepts clear. I love that there are pre-recorded lectures so I can easily watch them to clear my concepts. Even all the chapter tests, subject tests and mocks were very clear and helpful. Even the planning and timeline given in class were the things that kept me disciplined. The app has a good interface and there were no issues. I am now preparing for Level 2 through the Finnacle Institute so I am very happy and hopeful for the future.
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CFA Level 1
NMIMS
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![India should make a friend in China, not an enemy. Let’s understand why. Government is promoting make in India through various schemes like production incentives so that we manufacture in India.
Why? So that we hire more labours, we import less goods and we export more. But in order to import lesser and export more, our local goods must be much cheaper than China. To manufacture a cheaper final good, we need a cheaper raw material.
Now, we get raw materials at cheap rate if we buy raw material in bulk. 100 kg raw material price versus 10,000 kg raw material price, obviously will be cheaper. Now, if we buy raw material in bulk, we’ll have to manufacture in bulk.
And here’s the problem. Let’s understand with the example of an air conditioner case study. We need a compressor to make AC but compressor means we import from China.
And why? Because the entire size of India’s air conditioner market is 40 to 50,000 crores. AC companies generally make 6% profit. That leads to a 2,400 crores to 3,000 crores of cash.
A single company GREI in China makes a revenue of 2,18,000 crores and on a 12% profit margin, they generate 24,000 crores of cash. One single company. Because they manufacture in bulk, they have higher profit margins.
They are able to sell it at cheaper cost to the entire world. That is why China is the biggest exporter of ACs in the world. Now, India has two options.
Either maintain friendly relations from China, so that things like compressor, China keeps selling time to time or take risk, start manufacturing in bulk, even though India will not be able to sell the entire goods. But then we need to start exporting. Some smart companies like Daikin from Japan have already started doing that.
Daikin has announced a very big air conditioner manufacturing capacity in India. But they know they won’t be able to sell all the ACs in India. That is why they have decided to now export from India to the rest of the world.
[Economy, Global trade, Global economics, Macro economics, India China, Finance, Stock Market, Investing, Finnacle]
#economy #globaltrade #globaleconomics #macroeconomics #indiachina #finance #stockmarket #investing #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/484067596_18453237601077931_234654507244509417_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=105&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=IpomzIdASVkQ7kNvwHU_m0S&_nc_oc=AdkrVxdgRTSCTqWS2lKTPFM2XUcclNSe5n8Qf4FRXhJCF5GFhH8YsyYoZJpB2kdf7Eg&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkrUgV_73CBvU_qjWGGR4Cu-fxhx4veH4wBAdRmiEakfg&oe=69382209)
![Today, we will actually understand how understanding pin codes of India can help you make smarter and better investments. So India is actually comprised of two India: India 1 and India 2. India 1 is approximately 13-14 crore of population that earns anywhere between 6,000 , 8,000 or 10,000 dollars per annum where the rest of India generally earns anywhere between 1800 to 2000 dollars per annum. So a lot of people believe that India’s per capita income is approximately 2700 today. It will go to 10,000 dollars in the coming 10-15 years which is a common thing if the country grows at 8-9%, this is bound to happen. So as we become more richer, we’ll start behaving like rich countries like Japan, China, Korea. So what people think is that in China, 20 kilos of rice is being consumed per person. And in India, only 10 kilos of rice is being consumed per person. So when India will also earn like China, even we would be consuming more rice. Now that’s a stupidity. People eat noodles day in day out, we don’t. So we might never consume rice equivalent to China.
Hence a better strategy is if you look at people in India, there would be multiple pin codes in India today like in Mumbai, you’ll find multiple pin codes where the population on an average is earning 10,000 to 12,000 dollars per annum. So if we understand, let’s say the case study of quick service restaurants like McDonald’s, Pizza Hut, Domino’s A lot of investors say that as India will grow richer, they will start eating in more fancy restaurants and they won’t go to such pizza burger outlets. But when I see such Mumbai pin codes, I see the QSR chains like McDonald’s, Pizza Hut, Domino’s actually growing crazily even in those areas. So this gives us an investment idea whether India becomes more richer or not, such businesses are bound to survive in long term.
[Stock analysis, Stock picking, Economics, Macro economics, Micro economics, Finance]
#stockanalysis #stockpicking #economics #macroeconomics #microeconomics #finance #stockmarket #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/484010374_18452597116077931_3620777185935807988_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=105&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=GXqkND6QQzoQ7kNvwEQpfFl&_nc_oc=AdkHU07NJe8R2kr8WLAyrk6pjm3RdSkM4U9z1qrTOabfGGvURSuImHyJl7cMjwOOzmk&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfngpATDFm1tYl6DZpOjd7pDG7w698fv1u2bZtSoLL_Bkw&oe=6937F64B)
![This is India’s Amrit Kaal period have been stated consistently by everyone. From 2047 to 2053, we have got an opportunity to grow. But why this ending? Okay, let’s understand.The country has to understand to earn money in Indian equity markets. Population growth is equal to economic growth. Because people grow more, they consume more.
Now, population growth comes from two aspects, birth rate and death rate. The net net will get population growth rate. If 2% is birth rate and 1% is death rate, means more than 2% people are getting born.Whatever was the population, 1% of that people are passing away. So, net net your population is growing from 1%. Now, over a period of time, when birth rate declines and death rate grows up or remains stable, overall population growth starts slowing down.
Population starts getting aged. And such changes do not reverse. Singapore, Korea, Japan have been trying since decade to increase their birth rate, but it is not happening.Such things have also started happening in India. In a lot of urban areas, India’s birth rate has actually come lower than the death rate. That means slowly and steadily when India is growing old.
Today, our median age is 28. That means half of the people are young and half of the people are aged. Over the coming periods, 2047 to 2053, India’s median age will become 40.Now, history economics proved that above 40 years of age, people start consuming lower. Less car, less AC, less house. People’s requirement reduces.
That is why GDP growth slows down. So, if India today is standing at a per capita income of $2,700 and we want to become a developed nation, that is a per capita income of approximately $20,000. If we grow at 7%, then also in 25-30 years, we will be able to reach $12,500-$13,000.But if we grow at 9-10%, then we might be able to reach $20,000 per capita income by 2050. Now, the surprising thing is, in the last many years of data, India has never grown at 9% or above consecutively for two years. That is why the government has to kick-start the growth reforms.
[Indian Stock Markets, India growth, India economy]
#indianstockmarkets #indiagrowth #indiaeconomy #indiagdp #investing #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/483904717_18452213074077931_1983418643668278397_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=104&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=g8IO8abwRSIQ7kNvwE51CPn&_nc_oc=Adm8G-uV83lOK8m6OLQ2sURz5D_ehaCVVu45HtavGU25bJOP8v3Iltn3MUgQKIJ60-0&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afl-DOkUIIx-opjFuDrZGbOV3X5MHZqEQz7pbaCFNnWdJw&oe=69381523)
![If as an analyst you want to analyze any particular segment of equity market has got very heated up or very expensive and some profit booking might happen, a very powerful indication to detect that is 5-year rolling return concept. What is that? At whatever period you are standing, you need to analyze, if you had invested in that index 5 years ago and held it, then what is the compound annual growth return of 5 years? For example, if you invested in 2005 and sold it in 2010, imagine small cap on mid-cap index was at 100, at the end of 2010 it was at 250, so your Compound annual growth return for 5 years will be 20%. At any point of time where you are standing, you have to calculate that 5-year return.
And the history suggests that whenever a 5-year return of any index has crossed more than 20%, it is bound to happen that profit booking will happen. Because generally equity markets in long term provide 12-13% return. So, 20-22% return actually is providing a lot of huge alpha.
Now, the reason could be anything behind selling, sometimes war, sometimes excessive valuation, sometimes margin selling by the retail investor, IPO boom, etc. But that has always majorly happened if you analyze the past data. And if we look at similar data in 2024 or 2025, so the 5-year rolling return of small cap, mid-cap index in 2024 had already touched 21%.
And the initial periods of 2025, if we compare the 5-year rolling return, it was at a staggering 26-27%. So, the market corrections should not be a surprise for all. And yes, we are not saying this after the correction.
We have been consistently guiding people regarding the small cap, mid-cap, IPO bubble in the last 4-5 months.
[Nifty50, Stock market crash, Investing, Indian stock market, Finance, Nifty, Finnacle, Stock Market correction, Sensex]
#nifty50 #stockmarketcrash #investing #indianstockmarket #finance #nifty #finnacle #stockmarketcorrection #sensex](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/483162454_18451238587077931_1872617034794381555_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=109&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=ZkAQZYITcMgQ7kNvwGZB-L8&_nc_oc=AdmN0coh-EpgtfYGYdIVsv6lPfYlgUTYdp-510JELeI69PhcUkg_aI8uzd7YecMVj9Y&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkeDFkveGGlrnpXqM-vUymia5_3aSKTwuG_0GCzWqY2JQ&oe=6937F4AF)
![There is a lot of chaos going on in media regarding the selling that FII’s have been doing consistently in Indian equity markets but our point is do FII really matter that much today as they matter 10 years ago? Let’s look at some data if we analyze the last 5 year and 10 years of net inflows into Indian equity market FII’s have only invested 31 billion dollar cumulatively in last 5 years and 55 billion dollar in last 10 years. Now compare this to the amount of money that DII’s have put in the market in the last 5 years cumulatively. They have put in 129 billion dollars and in the last 10 years cumulatively they have put in 180 billion dollar. Approximately FII’s are putting in more than 3 or 4 times the money into Indian equity today as compared to FII. Even if we see the analysis of holding how much percentage of equity do they hold. There has been consistent decline in the percentage of equity held by FII from 22.5% to 17.8% of market today. Whereas the holdings of DII have actually gone up from 10% of the market to 17%. Even if we analyze one very super data point that in a one single year. More than 1 billion dollars of inflow who has put how many times DIAs have put in 7 times in the last 10 years. Whereas FII has only put in 3 times in the last 10 years. Yes, FII’s matter, but not as much as they used to.
[Investment, Foreign Investment, Finance, Stock market, Economics, Indian stock market, Macro economics, Finnacle, Micro economics, Finnacle]
#investment #foreigninvestment #finance #stockmarket #economics #indianstockmarket #macroeconomics #finnacle #microeconomics #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/482692030_18450901342077931_155113522533556306_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=IKJTJIQ9JXUQ7kNvwGXMfqw&_nc_oc=Adlt4eKfmLT3H6O-ngAbxDuTanmcYUuGi3OR3AVMFc8ZzSssslBL792yHBn95QIkbsI&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afk4XBBBh_2StqKvPRHHjDygr1f68vnrj0u78S-iyZ-iKg&oe=693815E4)
![Although calculating financial ratios seems so easy, the ratios are freely available on a lot of websites, but financial ratios can lie and this is the main difference between a young starting investor and a mature professional investor. Let’s understand that with an example of return on equity versus incremental return on equity. So if you look at this number, return on equity means the amount of money you have invested in the business in the format of equity, how much profit are you earning on that? So here I have created some sample data, which shows a very stable business.
It used to earn 10% on equity, then 16% on equity, then it’s consistently earning around 20% return on equity. So a lot of young investors will see that wow, this is a very stable company, but a smart investor, an experienced investor will go one step further. They will go towards incremental ROE.
Now what is that concept? Whatever money you are putting incrementally in the business in a year, like from year 1 to 2, we have invested 200 more rupees in the company. The money we put in today, we get a benefit in the next year. So if you see the profit of the company, which put 200 rupees in its incremental this year, because of that next year the company’s profit increased by 100 rupees.
Similarly, in the 2nd to 3rd year, we invested 300 more rupees in the company. Because of this, in the 3rd to 4th year, the company earned 75 rupees additional. Similarly, in the 3rd to 4th year, we ended up investing 375 rupees more into the company.
Due to that, we again earned 75 rupees more in terms of profit. So what is incremental ROE? Incremental profit due to incremental investment. So if we calculate the returns based on how much extra we earned or how much extra we invested, you will see that consistently returns have started declining.
[Financial Ratio, Financial Analysis, Fundamental Analysis, Stock Market India, Stock Market, Investing tips, Finnacle]
#financialratio #financialanalysis #fundamentalanalysis #stockmarketindia #stockmarket #investingtips #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/482213318_18450536773077931_8705137765446061116_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=d-x3bFAFL34Q7kNvwHT_VbM&_nc_oc=AdnidABNRDgb5dAJogAaw2Z3LZl-vw1MlWD8iW-TrZgtfUiP-az2KTLqYNRWaFz7KUY&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AflbdiFOdLHz53RQhDafH-q6aVZ5KeFhrcb-iIvr61Nf2A&oe=69380BD6)
![Although India’s economy macro factors like fiscal deficit, current account deficit, growth rate, inflation are all pretty good, why are still FI’s selling heavily? Let’s understand. Number one, because FI’s invest huge amount of money, they want large companies and they have very limited options in India. Approximately today there are only 565 companies with a market cap of more than 1 billion dollars, that is approximately 8000-9000 crore.
Actually such companies are called as small caps in America. So broadly they have options to invest in Nifty 500 companies only. The second biggest reason is currency depreciation and the effect of long term capital gain tax.
Imagine a US FI wants to invest in India, they want to invest 1 dollar. After converting at the exchange rate, they will invest 80 rupees in Nifty. We have assumed 1 dollar is equal to 80 rupees.
Now approximately Nifty goes up by 12% in a year. So their investment in rupees becomes 89.6. Now they will sell the investment. That will lead to a capital gain of 9.6 rupees and over in that tax of 12.5. So they will end up paying 1.2 rupees in tax.
So their net value of investment would be ending value minus tax that is 88.4. Now the American investor wants to convert the rupee back into dollar because in his country dollar only works. By the time he is converting, let’s imagine rupee fell, rupee depreciated. 1 dollar became 84 rupees.
So 88.4 rupees which he had, when he will go to convert, he will get only 1.05 dollars in dollar terms. That will be just a return of 5% whereas he earned in Nifty 12%. Now at a time when the American bonds which are considered as the safest asset class in the world.
They are providing him a return of 4% and Nifty struggling to provide double digit returns. He can earn 5% of India simply in his home country. That is one of the main reasons FIs are pulling back their money from India and taking it back to US.
[Investment, Foreign Investment, Finance, Stock Market, Economics, Indian Stock Market, Macroeconomics, Microeconomics, Finnacle]
#investment #foreigninvestment #finance #stockmarket #economics #indianstockmarket #macroeconomics #finnacle #microeconomics #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/482056583_18450204223077931_6383075708137324999_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=107&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=2T45GZks6n4Q7kNvwFvz6Co&_nc_oc=AdnaO11nUW_p_uyQrplC8PWUbQbqwtUpnfy1tXB3am3F9GSO83IgKXsClXRdHCUACbI&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Aflek7FNZTxOtKpAKLCY2ii4aaVu41WjWcrNdHSumzCdSw&oe=693812E2)
![There have been consistent corrections in the past few months into small cap and mid caps and a lot of young investors are confused what to do with SIP to continue or to stop. Why this panic? Because 3 out of 4 SIPs which are running today have literally started in the last 5 years and such people have not seen a very big correction in equity markets. My personal advice for my money would be I would continue my SIP in mature good experience funds.
Why? Number one, let’s imagine I will show you various periods where dot to dot index has actually provided 0% return like December 7 to September 10, November 10 to November 13, January 18 to January 21 and so more. But if someone would have continued their SIP during this period, the returns for various period are clearly mentioned here. You have sufficiently on reasonable returns even with continuing SIP in a falling or a stable market.
Second data point, let’s imagine there is some investor who starts the SIP when Nifty falls by more than 20% in the last one year versus there is some investor who is starting his SIP when Nifty small cap index has risen by more than 20% in the last one year. The return difference in both the kind of investors is hardly 2%. So the edge really is the psychological one.
I know a lot of people would be seeing their SIP in negative returns today. Those who have especially started in last one and a half year. But it is part and parcel volatility is part and parcel of Indian equity market.
Till the time we don’t become the next Japan where population is not growing, GDP is not growing in the long term of 8 to 10 years, the returns would be sufficiently well.
[SIP, Mutual Funds, Investment, Stock Market, Finance, Investing, Indian Stock Market, Finnacle]
#sip #mutualfunds #investment #stockmarket #finance #investing #indianstockmarket #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/481483465_18449752273077931_1757815706072363665_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=109&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=64OJV8tVug0Q7kNvwErAmRa&_nc_oc=AdkSzy54LtJPXRz_44wAXMiHNIsW1EEsh-X_KiOGtVCsxMJR6-eoPfVgza5sk44f21w&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afl9OmRfy2_tv5kSEFd0CMshgBzaeMZtKB9jQrkurHsYaQ&oe=69380171)
![We warned you 10 times in the last 6 months that small cap and big cap markets might correct a lot. We at Finnacle don’t believe in post-mortem analysis, that explain the event after it has happened. We believe in teaching people in a pre-mortem manner, that how you can learn to detect events earlier . If you see the sequence of reels that we posted on 23rd May 24, we guided people, don’t have FOMO, it’s okay if returns are low but these are very high levels of valuation. On 2nd August, we removed this myth that Nifty never gives 12% returns, the returns of Nifty can anywhere be between 7% to 12% per annum.
On 23rd August, we helped you understand the market madness, how every Aera Gehra Nathu Gehra stock was growing up and from September 24, markets consolidated and started correcting a bit. On 26th August, we explained you why everyone who is investing in thematic funds like defence fund etc. is a very wrong timing, the stocks have already risen a lot.
On 30th August, we helped you understand that large caps might be a bit safer place to invest in current market. On 10th September, we helped you understand how to spot sector bubbles where a lot of just revenue growth stocks were getting high valuation but they were not generating much profits and cash. On 16th September and 5th October, we helped you understand that don’t buy stocks just looking at growth, also look at valuations of the stock.
On 21st October, we helped you understand how to identify market’s top because corrections started severely from December and January period. In December, we helped you remove a myth that SIPs won’t be able to save market corrections. A lot of people argued with us but look what is happening today.
Now, if you actually want to understand, you have learned that yes, you should invest after doing a good fundamental analysis. On 9th January, we posted a reel on what are the right kind of sectors that a young fresh investor can start studying. So please watch that.
[Nifty50, Investing Tips, Stock market, Indian Stock Market, Finnacle, Stock Market Crash]
#nifty50 #investingtips #stockmarket #indainstockmarket #finnacle #stockmarketcrash #smallcapcrash #midcapcrash](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/480550000_18448903453077931_3937154284176564793_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=104&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=qO4Q50uEu7MQ7kNvwGIgg8b&_nc_oc=Adnw8RDlErXc19zmg202oC-6Ose-VQ61JSKNEN4NPACEBxuQOVPFiKJnQjmyDfvF0Ko&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afmzp2volGaD32RNhuYtGJ3eAiUwHWdph83wWZC_AfzO5g&oe=69381327)
![Trump, China, India tariffs—these four words have been blasted by the media since Trump got elected. Let’s understand their effect. Imagine both India and China export to the U.S. China manufactures something for 3 Yuan and sells it for 7 Yuan. If 1 dollar equals 7 Yuan, China sells to the U.S. for 1 dollar. Since manufacturing costs more in India, India sells at 1.5 dollars.
This makes Americans buy more from China than India. Then Trump imposes a 50% tariff on China, making its goods cost 1.5 dollars. Consumers, now paying more, get irritated. They don’t want to spend extra for the same products.
To counter this, China prints more Yuan, increasing supply and depreciating its value. If the Yuan depreciates to 10.6 per dollar, China can sell for 0.66 dollars. With a 50% tariff, the price returns to 1 dollar, keeping its exports competitive despite the tariff.
Meanwhile, India struggles because a weaker Yuan makes Chinese exports cheaper. To stay competitive in the U.S. market, India may also need to devalue its currency and adjust to the new economic reality.
[Stock market, Tariffs, Tariff, Trade war, India US Tariffs, US Trade war, Trump, US tariffs, Global Trade, Modi Trump Meet, Modi USA visit, Finnacle]
#stockmarket #tarrifs #tarrif #tradewar #indiaustarrifs #ustradewar #trump #ustarrifs #globaltrade #moditrumpmeet #modiusavisit #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/480405898_18448578619077931_9198933876495017856_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=111&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=bsAi4PKEcagQ7kNvwGQN1Jr&_nc_oc=Admodq6LPp0ksXT8gcfRT7jdlFBDs3eszH44Ip-uxTXLJVD6gmWqFY5B_ZoOS8Dq26o&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfmoVImF7vhY0DbINm5EBlXiZp8zdDn-VtNBUXV9zWS6EQ&oe=6937F422)
![A lot of investors are confused that why even in a growing Indian economy, FMCG stocks are not performing well. Let’s understand with an example. So, let’s imagine this is P&L of a company.
They make 100 rupees of revenue with 20% of profit margin, leading to a 200 rupees of profit. Now, a company has majorly two options if they want to increase profit. Number one, grow revenue, correct? Or number two, grow profit margins, correct? Now, if we want to focus on growing revenue, there are broadly four options, correct? Either increase the number of users, or increase the usage, meaning the same people are buying more quantity, or help them buy premium product, or help them sell a complementary product with an existing product.
For example, people do toothpaste more, but that’s done now. Usage means toothpaste twice a day, so the quantity of toothpaste will increase. Premium means, now buy a toothpaste, expensive one, which is more whitening in nature, or with salt.
And for example, along with toothpaste, buy a teeth cleaner as well. So, that is how revenue is grown. Now, if you see the basic FMCG categories in India, tea, soap, shampoo, detergent, here the growth that was to come on the user base, that has come.
So, the only way to grow top line is to increase usage, or create more premium products, or develop new products.
[FMCG stocks, Growth Strategy, Investing strategy, Stock picking, Stock Analysis, Finance, Investing, Finnacle]
#fmcgstocks #growthstrategy #investingstrategy #stockpicking #stockanalysis #finance #investing #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/477687202_18447767158077931_7054446591578125417_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=110&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=iKU1KpfBDKEQ7kNvwEKTBoT&_nc_oc=AdkqFU01C2A6qzJFxaD4QGf2_pD8312uDLWX7MPd-FmuxoAcLaeEw6-E0Im6JhCZ4IY&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkfuqLnqYKyMpC3imsrn8TM72fy4xGW06uLZxdAKUBnfQ&oe=69381278)
![As an investor, never come in, you know, talks of management, you know, this management is very visionary, he’s talking about outstanding growth targets, he’s talking about great plans,you know, promoters often give a lot of talk. But in the end, the reality of business, how quality it is, should be reflected in return on capital employed of a company. So if consistently for the last 10-15 years, you are seeing the ROCE of a company consistently below 12-13%, means is hardly able to make a return on capital.
But in bull markets, you know, a lot of great speeches are being given about the great future of the company. Please be very sure before believing them. A lot of money is actually lost by investors by coming, you know, mixing this emotion with the fundamentals of a company.
[Stock Analysis, Stock Market India, Indian Stock Market, Finance, Investing, Finnacle]
#stockanalysis #stockmarketindia #indianstockmarket #finance #investing #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/475983183_18446296726077931_5560256305964820786_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=102&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=-IFfu7oJv60Q7kNvwFGfReS&_nc_oc=Adnk4q-oLHCo5PB_15LVGGdJF6TcgxdFVoyH9IDEtdaMfDi9Y4a0FsJtuBNmFHvJ9PA&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfmVoZ-NndI-1p50dCe5FvMfFK4Y3TeLgzNx398tzRCgGg&oe=6937F396)
![Today we will learn a very beautiful rule about investing by playing a game. Come on, let’s focus here. Imagine I give you two options.
Company A and Company B. Company A has been very profitable in the last 10-15 years. But due to competition, last two years the company is having loss. Company sells basically IT hardware product.
Now to improve this situation, they hired a new CEO. But the key points are, this CEO has never worked in IT sectors. Earlier he used to work in a biscuit manufacturing company and he has no experience of turning around a loss-making company into a profitable company.
Versus Company B. It is a 100-year-old company. But due to competition again, last 4-5 years their profit and revenue are down. Now they bought a new CEO to improve their situation.
Now this CEO is a retail sector expert and he is the guy who founded Apple Store. So he is great. Now if I tell you to bet your money on which business will be more successful in future, where you will bet? I am sure 99.99% people will bet here.
Only 0.01% people will bet here. Now the most important thing is, Company B is JC Penney which went bankrupt and Company A was IBM whose stock went up 7 times in 10 years. That is how difficult turnaround investing is.
[Stock analysis, Finance, Stock picking, Investing 101, Indian Stock Market, Finnacle]
#stockanalysis #finance #stockpicking #investing101 #indianstockmarket #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/475799598_18445683694077931_2528716434060831223_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=111&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=U2rOkd3y0T0Q7kNvwGcpScI&_nc_oc=AdkF_9vkrQcgEv4omdYa3FyMi0J0LN8YYKh6ewlnUp8cYoz23sPqYByx8G7w1DMY0qQ&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afkl1qu6QuAklRGQi97cTj7a5RufFkUyy6LwM5fZKp2REA&oe=69382279)
![With a lot of increasing competition in various sectors in India, like in retail for DMart through Zepto and Instamart Blinkit, or for Asian Paint through entry of Birla Paints, you know, JSW, etc, a lot of investors are concerned with the falling profit margins of the existing players, like Asian Paint, for example, correct? But according to me, the most important metric to track in an era of increased competition is market share. If an existing incumbent player is able to maintain his or her, you know, market share, he will be able to survive the competition because losing margin is still okay. You can pick it up later on with better products, with improved pricing, correct? But losing market share basically means losing customer, losing mindshare of customer, losing, you know, trust of distributors.
So don’t get so anxious with falling margins. Focus more on the market share of companies which are facing competitive intensity.
[Stock market, Financial analysis, Stock tips, Finance tips, Stock tip, Indian Stock Market, Finnacle, IPO, Stock market scam, Investing]
#stockmarket #financialanalysis #stocktips #financetips #stocktip #indianstockmarket #finnacle #ipo #stockmarketscam #investing](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/475279052_18445237768077931_5609406193617394106_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=106&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=tIlM9cRBpvEQ7kNvwGhXPuy&_nc_oc=Adkq23lIz1z3zTePZ9vsUANbV1dwIaGEq8DxdjYc3YhC9RxizOspJAS_ZJ4FIgUuwvQ&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afk-XEiavNJ8YmMDhtEi1u97spcH7tQlyvBib9rwkRW2mQ&oe=693801F2)
![The real skill in investing is not picking right stocks, but it is actually saying no to bad stocks. Let’s understand with an example. Imagine there are 4,000 stocks in India, out of which 25% are good, 75% are bad.
That means 1,000 stocks are good, 3,000 are bad. An investor has an error rate of 20%, which means when he analyses a good business, he will only buy 80% of them. And when he is analysing a bad business, he will only reject 80% of them.
That means by mistake, he will end up buying 20% of the good business also. So such an investor will invest in a total of 1,400 businesses, out of which only 800 businesses are good. That means the overall success rate of 57%.
It is brilliant. Even Warren Buffett’s success rate is 55-56%. Now this investor has two options.
Number one, either to improve this or reduce this particular error. Let’s imagine he improves this. Now he selects 90% of the good business, but still he is selecting 20% of the bad businesses.
So in total, he will invest in 1,500 stocks, but out of that 900 were good. His now success rate would be 60%. Focus, his success has only improved by 3%.
Whereas if he focuses on reducing the error rate, he will invest still in only 800 good business, but now he will only buy 300 bad business. A total of 1,100 business and 800 are good, leading to a success rate of 72%.
[Stock market, Financial Analysis, Stock tips, Finance tips, Stock tip, Indian Stock Market,Stock Analysis, Investing, Finnacle]
#stockmarket #financialanalysis #stocktips #financetips #stocktip #indianstockmarket #stockanalysis #investing #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/474695603_18444460522077931_3700301104247969228_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=104&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=ZtbmLTj_FvIQ7kNvwHAJfcf&_nc_oc=AdnOtBz8ucu1Dojc3W-KjVxkNr_PNAxkNF2gfkA24t1uDci0-1vrC1iUyS-SGElH2zI&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkWcHIy7fFfYbFq1GFvMcUckapbQGTiNHpR6D3KW38rUw&oe=69382012)
![A lot of investors in India have this very big misconception that multinational companies automatically are good for Indian shareholders and they become great investments. But let us understand one very important fact. A lot of MNCs in India, correct, have both listed company and private unlisted companies, which funnily have same line of business.
For example, both are soaps sellers and they are of the same brand. So what happens, if this company would have done all the business only in listed entity. Let’s imagine revenue of Rs 1000, cost of Rs 400 and profit of Rs 600 . If we assume the promoter owns 60% of the company and shareholders own 40%, So, 60% of 600 is Rs 360 will be the promoter’s profit and Rs 240 will be the remaining shareholders profit. But if I divide the business into listed and unlisted, correct, 500-500, so 200-200 cost and 300-300 profit. So, 60% of Rs 300 is Rs 180 belongs to the promoter and the next entire Rs 300 belongs to the promoter because it is a private, completely owned company of the same MNC, leading to a total profit of Rs.480 versus only Rs.360.
[Stock market, Investing, Indian stock market, Finnacle, Finance myth, Finnacle]
#stockmarket #investing #indianstockmarket #finnacle #financemyth #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/474257854_18444195289077931_8570065625670315663_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=FfD313TX1GsQ7kNvwHS7L3V&_nc_oc=AdmVHwmlF4fzPsdRqq8-BYQYCh1QCUrRQC3ySy0EPYUBWMJA4PqUBjWHdohzvWiREWA&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AflrIDfbtUozcIrXK4oBoxle5nG_7v-aEMdcbXyHNs5nbg&oe=69380272)
![Every investor overall would be much better off if they avoid buying these four type of companies. Number one, companies where a promoter has past fraud issues. Whenever you think about buying a stock, just search on Google promoter name plus past fraud, promoter name plus money life article, promoter name plus SEBI issues.
If you find anything hanky-panky, please avoid the stock. There are many options. Second, avoid turnarounds.This company was consistently loss-making now something is happening due to which it is making profits.I know there are some examples like Tesla or Eicher Motors which have turned around successfully. But for one good turnaround, there are 100 bad turnarounds.
So you will save your money. Point number three, avoid high-debt taking companies because that reduces flexibility of a promoter to take correct business step. Because in a business downturn, instead of growing the business, the major mind of that promoter will go towards interest payment and debt repayment. Finally, avoid companies where major revenue growth is only due to inorganic growth meaning companies are increasing their revenue by purchasing them.
In the end, the core business should also be growing properly.
[Stock analysis, Finance, Stock picking, Investing 101, Indian Stock Market, Finnacle]
#stockanalysis #finance #stockpicking #investing101 #indianstockmarket #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/472383480_18443860240077931_5321962422353351097_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=106&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=P2NMVcDggfgQ7kNvwFHF82p&_nc_oc=AdlSMEIhMIsJw9ezas8addxC46ahPNdiZSPwNOrdoPEVosmCxJbkiH_40CIAz7Ne9y8&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkXmr-r43k5xBPK9Ob7gw19277jhTkluUSz6b5qBD0Qow&oe=6937F03D)
![The most important financial ratio that will segregate a fundamentally powerful business from a not powerful one is return on capital employed. Why? A lot of people try to analyze a lot of activity. Is the management good? Is the product unique? Is the company have moat? Are the employees good? But the key point is everyone’s effect will come on return on capital employed only, which basically means if a company has used 100 rupees of capital, what is the operating profit they are making? In our example that is 10%.
So if management is good, that means their capital allocation is good, they have beaten competition again, they should be able to generate more profit. If their products are unique, obviously they would sell it at a higher price. Again, their return on capital input should be higher.
If they have moat, which means that competition is not able to beat them, again that should result in high ROCE. If they have quality employees, that means they will use less money, they will produce good products. Again, the ROCE should be higher.
So in nutshell, a higher ROCE is actually a leading indicator or a very good indicator that a business is fundamentally very strong. So check historical long term 10-15 years of ROCE if you actually want to understand the fundamental strength of a business.
[Finance ratios, Financial analysis, Fundamental Analysis, Stock market India, Stock market, Investing tips, Finnacle]
#financeratios #financialanalysis #fundamentalanalysis #stockmarketindia #stockmarket #investingtips #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/473037598_18443563168077931_4380976386037347127_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=Me7ugmnbVmsQ7kNvwFMzJac&_nc_oc=AdlyJKpNuux9_zp18c0m96F4Bai3sJcmGBsqBJGsQ4vZhOy-NPBYNQaePGWJQ75Qcy8&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afmqn8ttWgItOQZuC_95Jsap9GUiP9Om_ytIW3CKEL0Urw&oe=69381D10)
![A lot of investors consistently check Sensex and NIFTY’s historical PE and compare that with current PE to derive a conclusion whether the markets are overvalued or undervalued. But according to me, that is not a correct approach. See, if you see the index of India, whether NIFTY or Sensex, approximately 60-70% of index constituents are asset-heavy businesses like Reliance Industries or all the banks.
And to value an asset-heavy company, you need to focus on the book value. Book value is nothing but asset minus liability. So, actually checking the trend of price-to-book ratio and how it has behaved historically.
The highs of price-to-book ratio and the lows of price-to-book ratio, comparing it with the current levels of price-to-book ratio can be a much better indicator to help you derive overall market undervaluation and overvaluation.
[Sensex, Nifty, Nifty50, Nifty Fifty, investing, Stock analysis, Indian Stock Market, Stock Market India, Finance, Finnacle]
#sensex #nifty #nifty50 #niftyfifty #investing #stockanalysis #indianstockmarket #stockmarketindia #finance #finnacle](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/473588725_18443083282077931_3316546020484665458_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=RPlIdSRJ4lwQ7kNvwFqBLjm&_nc_oc=AdmkaWpElbtD_siwnOWJUljTtJwyQg1yIruGtjquMc3j0hxtS5HLg-29hykqh-iQIiQ&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afki7V7Wt8G20CWLvhCmAwV-EwfohEs3j4fPGBZd50r8dQ&oe=69380CFF)
![A lot of people struggle to actually find the right sector they want to study to invest in Indian equity. I keep on hearing, there are so many sectors, which one should I start studying? Let’s take something from Warren Buffett and Charlie Munger’s playbook, fish where the fishes are. Basically, some businesses inherently are very strong.
They have less competition or competitive advantage due to which companies in those sectors are able to generate very healthy return on equity, the first sign of a good business. So as per a newsletter I was reading, you know, that was published in 2021, they did this case study, you know, in Indian market, they identified all the companies, which for a very long period of time, have been broadly consistently able to generate return on equity above 15 to 16%, which is called a bit healthy in India. And majority of the companies fall within this five sectors.
Basically, if there is a big pond, and there are a lot of fishes in it, a fisherman has a very high probability that if he puts a net, then he will get some fishes. That’s how if you’re studying, you know, majority of companies in this sector, you will end up discovering they are reasonable businesses to own, valuations aside, whereas compare a pond, you know, a bad sector, where there are one or two good companies, hard work will be a lot, rarely you will be able to find good investments. So this is something that you can start studying.
[Stock market, Financial Analysis, Stock tips, Finance Tips, Stock tip, Indian stock market, Finnacle, Stock Analysis, Investing]
#stockmarket #financialanalysis #stocktips #financetips #stocktip #indianstockmarket #finnacle #stockanalysis #investing](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/472771960_18442385707077931_1627932600471704265_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=105&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=JbVSierxhsMQ7kNvwEYv-nd&_nc_oc=AdmwaEYizHJ2ZeiaH9gW1_4vaXtaufk7tQQTqW7aIw61SG5YJ3oQ0tFuRoRuHlLV-m4&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_Afncad-sw9yOljQZkjE2bT10xjVVWFiaB8LaWtGH4OFdjQ&oe=6937F000)
![Reading past special resolutions is a very important activity if you are investing in Indian market. Special resolutions basically means where a company’s promoter needs majority votes of minority shareholder to take a major decisions. If you want to understand the current such proposals being put by promoter, check corporate announcements on BSE, NSE or the past resolutions you can find in every year’s annual report or on some websites like Ingovern SES and IAS proxy.
Now why this is so important? Let’s take example of a current pharma company. They have a market cap of 300 crore. They have sold their entire business to a promoter’s different entity only just for 93 crore.
And the 93 crore the company will receive they are telling they will do real estate and capital market broking with this money. Basically all the minority shareholders 8730 minority shareholders would be left with nothing but lemon. 300 crore company sold to promoter’s friend in 90 crore.
Correct? And the stock is continuously lower circuits. Right? The funny thing is the majority of minority investors doesn’t even know where to vote for special resolution. You need to daily track company’s corporate announcements for the same.
So when you are researching a company checking promoter’s past action is very important.
[Fraud, Scam, Stock Market Scam, Finance, Financial Scam, Stock Market India, Investing, Indian Stock Market, Finnacle]
#fraud #scam #stockmarketscam #finance #financialscam #stockmarketindia #investing #indianstockmarket #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/472812512_18441879520077931_1711535105674603990_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=104&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=szTYgOe_jqEQ7kNvwFAnuu6&_nc_oc=AdnKCjsRS3Q76W7QoWKFIl3AKyRPMqYEYhs3HYhorEgBO4BWukRqghUKsag8YAubs6k&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfmROpmExgcgGkd452YGuTeITeCe_IlCy9M9TWnjUP9Gyg&oe=6938042D)
![As you all know, reading is a very important habit to develop if you want to succeed in the world of finance and investing, correct? And we keep on reading books, so I have come up with two very important recommendations for all the budding analysts in India. Number one, read this book called The Bull written by Maggie Mahar, right? One of the most fantastic documentation of one of the biggest bull markets and bear markets in the United States, correct? The foreword has been written by Warren Buffett who rarely writes foreword. It’s a great book to understand indicators of market tops and market bottoms.
The second book here is by Scott Fearon,The Dead Companies Walking. This book contains good case studies to actually understand what kind of, you know, abnormalities you can detect in a company that may help you avoid a manipulative business, right? If you are in developed market, you can use such, you know, things even to short a particular business in India, you can just right away avoid buying those companies. Both are fantastic, unique books that you won’t hear a lot in market, but fantastic understanding.
[Book review, Book recommendation, Bibliophile, Business book, Finance book, Finnacle, Investing book, Stock market book]
#bookreveiw #bookrecommendation #bibliophile #businessbook #financebook #finnacle #investingbook #stockmarketbook](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/472412761_18441476251077931_467246519057798001_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=103&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=FmlSKKovOA0Q7kNvwHJgJir&_nc_oc=AdnRanRJiRzIMs8yIo20EjZwUB0cunXj7m_uJaLiulS4lJY4Vz7RgISVnqer91eF8UE&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfmSawllsprg6CDMtDPNDAZClpowTZdJ33osyFVWiXs99g&oe=69380BAC)
![Everyone says buy low PE stocks, low PE stock. But what exactly is PE ratio? What is low? 2, 5, 10, 15? Let’s understand the basic meaning of PE. Imagine a company’s price is 100.
They are making a PAT of 10. The PE ratio will be price divided by PAT. That is 10.
Assuming this company is not able to grow, they are just able to maintain the PAT. So every year they will be able to generate 10, 10, 10, 10, 10, 10 rupees of PAT. So basically, if I buy this share for 100 rupees, it will take 10 years for my investment to recover.
That is the meaning of PE ratio. And if the company’s price was 50 and I would have bought it at 5 PE, I have paid 50. My payback period would have come within 5 years.
I would have paid 50 rupees, the company would have earned 10, 10 rupees every year and given it to me. That is why it is said that a low PE is better because the payback period of our investment is low. But such basic knowledge sometimes can be harmful.
Imagine a company’s price is 200. The company’s PAT is 10. Hence, the company is putting at a PE of 20.
But what if the profit of the company is doubling every year? Within 3.25 years only approximately, the price I paid 200 would be recovered. Sometimes even a high PE stock can be undervalued.
[Stock market, Financial Analysis, Stock tips, Finance tips, Stock tip, Indian stock market, Finnacle, Stock Analysis, Investing, Valuation]
#stockmarket #financialanalysis #stocktips #financetips #stocktip #indianstockmarket #finnacle #stockanalysis #investing #valuation](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/472237083_18441090847077931_5011369062025889640_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=106&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=KOdVAnMVKLwQ7kNvwE8Omhz&_nc_oc=Admvzl_Wvp64MO6ZF0rcpJUADA0NjtDe5btC1neRZWfiT2bAfxQ7ORbmiU29p1gd2Y0&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfmUC9ov6w-QpLFv8tlahuPXf3ZyOaNcbevRImD_0ZcS_A&oe=6937F349)
![One of the most powerful ways to value a stock is the reverse DCS valuation technique. Let’s understand it. Imagine a company today has a profit after tax of 100 crore.
The market is giving them a PE of 40. That means the market cap of the company PAT multiplied by the PE ratio is 4000 crore. Now if you want to make let’s say 25% return by buying the stock with a holding period of 4 to 5 years, the company will have to reach a market cap of approximately 12,000 crore.
That is how we’ll make this return. We’ll buy at 4000 crore and we’ll sell at 12,000 crore. Imagine the company historically gets a median PE of 25 by the market.
So it’s reasonable to assume at the end of 5th year also the market would be giving them approximately 25 PE. Now again with this equation, we have the market cap, we have the PE ratio, we can reverse calculate the amount of profit that this company will have to report at the end of 5th year. Then only we’ll get a market cap of 25 PE.
Now when we see current PAT and we see the expected PAT, the company will have to grow their profit at 37% CAGR. Now when you are analyzing this company and you believe this growth is very high, it is not achievable, the stock currently is overvalued and vice versa undervalued.
[Valuation, Financial Model, Stock Market, Financial Analysis, Stock tips, Finance Tips, Stock Tip, Indian Stock Market, Finnacle, Investing]
#valuation #financialmodel #stockmarket #financialanalysis #stocktips #financetips #stocktip #indianstockmarket #finnacle #investing](https://scontent-iad3-2.cdninstagram.com/v/t51.75761-15/471958872_18440489107077931_5276287480393997856_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=100&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=DaV8G4f481gQ7kNvwH6-A2k&_nc_oc=Adl6rtJ3aasKrLHzO_-gMLnpHm_LrrY9RrdfDN7C7eit4TZVGPOSEX2g1UoLgNgHLUQ&_nc_zt=23&_nc_ht=scontent-iad3-2.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfkdiMSXzskLk9MqJcZ4t1Ml3ycezPT2MPTqQ9MatFKbSA&oe=6937FCE1)
![With lot of accounting frauds coming these days and also due to the Adani hype, lot of people want to understand What is forensic accounting? How to detect accounting manipulations? That can simply be detected by understanding a relationship between revenue and cost of a company. Imagine, this is a real company which claims that they do a manufacturing revenue of thousand crore. Okay, now that power and fuel costs reported in expenses is only 0.02 percent.
That is 20 lakh rupees. For a manufacturing company, just doing 20 lakh rupees for thousand crore revenue power expense won’t make sense. Point number two, they just have a fixed asset of 15 crore.
That means the asset turnover ratio of company 67 times. For one rupee of investment in plant, you can generate 67 rupees of revenue. Again, such numbers are rarely seen.
Now when you see they have paid approximately 90 employees, 3.3 crore as salary. This data you get in annual report of a company. This will show that although the revenue per employee is 8 crore, the salary per employee is only 3.6 lakhs per annum.
Again, hard to digest but the most important part is two most important person in a manufacturing company, the production and a logistic head are being only paid 12 lakh rupees per annum to generate 1000 crore of revenue. So on in all, the connection between revenue and cost won’t make sense.
[fraud, scam, stock market scam, finance, financial scam, stock market india, investing, Indian stock market, finnacle]
#fraud #scam #stockmarketscam #finance #financialscam #stockmarketindia #investing #indianstockmarket #finnacle](https://scontent-iad3-1.cdninstagram.com/v/t51.75761-15/471464038_18439934281077931_8638512283198377516_n.jpg?stp=dst-jpg_e35_tt6&_nc_cat=101&ccb=7-5&_nc_sid=18de74&efg=eyJlZmdfdGFnIjoiQ0xJUFMuYmVzdF9pbWFnZV91cmxnZW4uQzMifQ%3D%3D&_nc_ohc=12ge-RC0MsAQ7kNvwHYHSXp&_nc_oc=AdldbTmB82LjrWwW_H4W-UxDblRd0xU_adLA8AS94ihkPl2EXjJYqysCmuJBm7K_RBc&_nc_zt=23&_nc_ht=scontent-iad3-1.cdninstagram.com&edm=ANo9K5cEAAAA&_nc_gid=hagqwBcgkEnDNv74dlZaow&oh=00_AfnYG_pvmDU4EFqNPE437Tid43cBh75dee_ONZL1MT5SLw&oe=6937FBCA)
![Sometimes buying bad companies in equity market actually may provide you good return. So, in some sectors like steel, paper, sugar, textile, chemical, which are called commodity business, what happens is products are not differentiated. For example, if I keep cement of two companies in both of my hands, both are grey powder, you won’t know which is Shree Cement or which is JK Lakshmi.
Generally, in such businesses, all the company’s products sell at same market price. That is why a company which can control their costs, which are low cost producers actually win the game. In this business, what happens sometimes due to market demand and supply, the price of product goes a lot high or goes a lot down sometimes.
During such scenarios, actually buying a bad company gives you more return. Let’s understand with an example. Suppose a good company is selling a product in 10 Rs,100 quantity and cost is 5 rupees for 100 quantity.
So, the profit would be 500 rupees, correct? 50% profit margin. Now, if the price of product goes to 15 rupees, the revenue would be 1500, the cost would be 500 and the profit would be 1000. Revenue went up by 50% but profit went up by 100%.
But a bad company whose costing was bad, its profit will go from 200 rupees to 700 rupees. A revenue of 50% growth will give a profit growth of 250%. That is why a stock gives a lot of return of a bad company.
[stock market, financial analysis, stock tips, finance tups, stock tip, Indian stock market, finnacle, stock analysis, investing]
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