Here are tips and hints I’ve gathered from Ajit Dayal’s discourse on letters that Warren Buffet has written to his shareholders over the years:

A more appropriate measure of managerial economic performance to be return on equity capital (ROE)
In businesses that have little product differentiation and in cases where the supply exceeds production, producers are content recovering their operating costs rather than capital employed
Always commit a big percentage of insurance company net worth to equities only when we find (1) businesses we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) priced very attractively. (4) is the most difficult to find.
No matter how good the businesses are, there is a price to pay for it, and one should never pay for an overvalued business.
Find avenues of investing that earn you way more than the current rate of inflation, else you stand to have your purchasing power diminished.
Always pay a reasonable price for a good quality business than pay a bargain price for a poor business.
Look for companies that buy back shares during an auction [auction = panic selling in the market = market fall]. Companies that buy back their own shares are usually confident about their growth and are actively doing to ensure it.
Also during an auction, loook at buying shares of good companies that may become available at bargain prices.
Avoid buying shares of companies where two or more other companies are looking at a possible take over as then the target company may most likely already have gone above it’s fair intrinsic value.
According to him, such businesses must have two favored characteristics:

1.

An ability to increase prices rather easily (even when product demand is flat and capacity is not fully utilised) without fear of significant loss of either market share or unit volume, and
2.

An ability to accommodate large dollar volume increases in business (often produced more by inflation than by real growth) with only minor additional investment of capital.
Learn to differentiate true goodwill and no-will! A company with less in the way of tangible assets but high on true good will (an intangible asset) will return more in inflationary years than other companies.
Dividends are good and should be paid out, but if the company has high asset/profit ration, then dividend payout will deteriorate the chances of the company’s growth.

Introduction

For those of us nris who are new to the concept of a Permanent Account Number (PAN) card, it is essentially akin (or trying to be so) to the Social Security Number (SSN). The similarity (today) begins and ends with it slowly becoming the one stop number for all activities, as a source of verification as well as identity in India. I’m no expert on PAN cards and hence this is about as much as I’ll say on the topic. If you wish to read more on the subject, you may refer to the PAN card page at the official income tax website of the Indian government.

We shall be looking at the online application procedure for procuring the PAN card, as that would be most convenient to NRIs and even Resident Indians.

… and taking each day and night at a time…

Have been doing a lot of investments related reading, in order to work out an ideal investment strategy (I know I know there never really is one).

I found 2 gems on the topic recently, through different sources:

1. The magic book that beats the market by Joel Grenblatt
2. Interpretation of financial statements by Graham and Meredith

I recently finished reading The last rites and other stories by Bhabendra Nath Saikia. The only thing I can say about the book is that it’s a must read. The stories encompass every humn emotion and quirk in a very realistic and chilling manner.

On the music front I have been impressed with the songs from Life in a Metro, along with those by Rabbi Shergill.

After making over 2,00,000 people register for the Mutual fund Investor Number [MIN], the government turns around and states that MIN shall be replaced by PAN for all transactions over 50,000 Rupees.

The rationale being dished out is that the PAN number is to become single point of identification for all individuals. This is retarded, considering that the MIN number was to come into effect next month and the bill for the same was passed this January.