Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Red Notice

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If you are a frontier investor, you must read this book, Red Notice by Bill Browder, and promise that you will not invest in Russia. It is a thriller investment memoir and eye opener at so many levels, opens the riddle called Russia.

While corruption is a fact of life in most of the frontier markets, but nowhere as pronounced and inter-twined with capital markets as Russia because the man running the country, Putin, is personally involved in clipping the ticket from every oligarch. I find it credible that Putin’s personal net worth is 200 Billion USD or more today.

Bill tweets at

Makes you want to thank God that you are not born in a communist regime. It makes scams like Satyam, Enron, Worldcom look like walk in the park and a dinner in Hilton.

Written by amitdipsite

February 9, 2019 at 5:22 am

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No backflips for this undertaker

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Munger said the only person happily back-flipping (making money by definition) if there were to be a plague in the society, would be an undertaker, whilst everyone else bewails.

Back in 2013 I wrote about a funeral company in Australia, Invocare, which was/is a market leader in Australia and New Zealand with 35% market share of private cemeteries. After Peter Lynch’s book One Up On Wall St. the funeral stocks were re-rated after 1990s. Understandably, this business is more steady than FMCG or Utilities. These are extremely cash flow positive, depressing (no many like entering this business), and near monopolies like local quarry (heavy transport cost of rock, making the local one only commercially viable alternative). People from 10 sq. km, radius visit one closest to their home.

Back in 2013, it was trading at 26 times earnings, and has traded roughly around that.

I read another update from this company recently making me chuckle. It complains over the effective flu medication, reduced death rate in 2018 as a cause of one-off downtrend in revenues. No doubt, people will catch up with dying few months later. The company is now available at 13-14 times earnings.

Stock Performance



Stock exchange update



Written by amitdipsite

February 3, 2019 at 9:00 am

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IMO not a single large real eatate developer in India has gone without some sort of palm greasing.

Extent of profit extraction and greed has been different but equating every such lapse of corporate governance with fraud presents good opportunities.

As we spreak DHFL is now being priced for bankruptcy or closer at 3800 Crores market cap valued at less than 0.4 times book value. However WGC and DHFL sold a subsidiary, Aadhar Housing yesterday, at 3 times book.

Unless we are talking about cherry picking loan book, which is not the case, it will be interesting to see in hindsight how two companies of the same group can be priced seven times apart in valuations (3 times book vs 0.4 times book).

Written by amitdipsite

February 2, 2019 at 7:13 pm

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What is your excuse for not working hard – 2 ?

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Blind person working on a construction site, uses rope to carry bricks on his head.



Written by amitdipsite

December 31, 2018 at 4:53 am

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What is your excuse for not working hard?

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Written by amitdipsite

December 31, 2018 at 4:45 am

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Which version is correct?

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Few months back in a book that I forget the name of, I read that it took equity investors of 1929, using S&P yardstick, 25 years to break even, i.e until 1954 to make the money back they lost.

Today, I saw a PPT forwarded from someone a slide in which sort of contradicted the above assertion, that was presented by Samir, that S&P returns were ~4x during this period. The context of the presentation was equity as an asset class in comparison with other asset classes, that point was made appropriately. However, its another proof on how statistics can be deceptive.



In my previous post, Fooled By Charts, I mentioned how unwise it is to assume that S&P delivered 300X in the previous century whereas, it actually returned ~17X only, and that, long term (multi-decade charts) should be

A) Inflation adjusted

B) Log scale adjusted

Here is that chart post adjustment.


When you invest in frontier markets, you should not be impressed with the stocks that have been 10X in the previous decade, the reason being, there could have been an incidence of hyper or excess inflation in those economies, masking the real return.

Over the previous 148 years (1870 to 2018) S&P has returned 4% CAGR, adjusted for inflation or 25x, but if you do NOT adjust for inflation, the return vaults to 500X, a twenty fold multiple.

148 years s&p.JPG

Please do your own due diligence and consult your investment adviser.

Written by amitdipsite

December 28, 2018 at 5:40 pm

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Fooled by charts: BEFORE / AFTER

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When you date a girl (BEFORE) and then get married (AFTER), the experience varies, its all good because you get exposed to your own shortcomings 🙂 necessary for your growth.

I have been deluded by the charts on two counts:

A) I thought that bear markets typically last 1/3rd of bull markets in duration.

B) I have also been convinced that stock market index returns 100 x over the life time of an individual.

Both the above statements are broadly correct but not if you try to probe further into them.

When you scrape a little deeper and try to find the adorable pancreas (or kidneys for that matter) under that pretty face, you can’t find, they aren’t adorable, beauty is skin deep 🙂

Once adjusted for:

A) Inflation

B) Use Log scale

The picture doesn’t look pretty as they show in BEFORE / AFTER advertisements. In fact, it has the reverse effect.


BEFORE Simple Dow Chart show 295x returns.

Dow was trading circa 71 in 1915 to 21000 today, WOW! 295X.

Who doesn’t want to make 295X or even more by ‘better than index’ stock picking. Punjabi might say SADKE JAWAN meaning I am in awe or breathtaking.


AFTER, let us look beneath the surface and gradually take the first layer off, lets adjust the chart log scale on Y axis, after all, earning 50$ on 500$ is not the same as earning 50$ on 50,000$.


AFTER, now adjust for inflation. Buying 1 Liter of milk in 1980 at 0.25 INR is not the same as buying it in 2018 for 70 INR. Returns from DOW are now a humble 11X over a 100 year period from 1915 (1700) to 2018 (21000). Looking this the enraged punjabi might say  KANJAR MARJAANEYA, FITTEMUH CHAPPED MAARAN? , meaning “you jerk (and other expressions that do not have an equivalent english counterpart) shall I slap you for deluding me with the first chart”.


Inflation and Log adjusted Bear Market chart shows bear markets last a decade or longer every 10-20 years.

bear market

Please do your own due diligence and consult your investment adviser.

Written by amitdipsite

December 25, 2018 at 3:38 am

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