Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Money in Niche (even Water) not generic (Organic Lemonade)

leave a comment »

Written by amitdipsite

April 8, 2021 at 6:50 pm

Posted in Uncategorized

Bangladesh surpasses India’s per capita

leave a comment »

Written by amitdipsite

April 2, 2021 at 4:22 am

Posted in Uncategorized

Quality of Life, US is lagging

leave a comment »

The minimum wage in the United States is $7.25 per hour which is now, not even in top 10.

A single barometer is quite incorrect like per capita income. You have to look at in the context of Gini-cofficient or equality in distribution of wealth.

The Organization for Economic Co-Operation and Development developed a list of each country’s minimum wages. The ten countries with the highest minimum wages per hour (in USD) are:

  1. Luxembourg ($13.78)
  2. Australia ($12.14)
  3. France ($11.66)
  4. New Zealand ($11.20)
  5. Germany ($10.87)
  6. Netherlands ($10.44)
  7. Belgium ($10.38)
  8. United Kingdom ($10.34)
  9. Ireland ($9.62)
  10. Canada ($9.52)

You have to factor in a few other criteria to judge the quality of life.

1) Can you buy a house and take holidays: Median House Price divided by Median salary. If the country has ratio of 20 that means buy a house will take 50 years of savings if you save 40-50% of your after tax earning vs a ratio of 5 that makes a difference in your quality of life. This ratio has been going up since the 1980s due to interest rates and urbanisation.

Even this ratio of Median House Price to Median Salary is not completely right. The average house in Europe is half the size of house in Australia or Canada for the same price.

2) Free and quality public schooling

3) Free and quality public healthcare

4) Work culture: Nobody works outside 9-5 Monday to Friday in New Zealand. Some Australian self employed people prefer working on a Saturday. There are 25 annual leave and holidays in Australia and New Zealand compared to 10 in the US, also people work longer hours in the US on a working day. Norway, New Zealand, Netherlands and Germany are experimenting with 4 day work week.

US has been dropping on all criteria in the OECD average for over two decades. The one exception is the listed US companies which have excelled despite lowering quality of life standard relative to the OECD average.

Written by amitdipsite

March 27, 2021 at 1:21 pm

Posted in Uncategorized

2 Types of people

leave a comment »

One type donates 100s of millions of dollars anonymously eg: https://theedgeleaders.com/secret-generosity-anonymous-philanthropists/

Others donate 100,000$ for Media Blitz eg: Mark Cuban https://www.cnbc.com/2020/06/11/mark-cuban-donates-100000-to-national-association-of-black-journalists.html

https://clutchpoints.com/mavs-news-mark-cuban-donates-100000-to-coronavirus-relief-fund-for-black-journalists/

One type write deepest human mysteries without any authorship eg: Vedas of India. Written by so called Vyasa – meaning The Author / Compiler.

Others fight for first, second, third authorship daily in 1000s of University research papers read by no more than 10 people in the world.

Written by amitdipsite

March 19, 2021 at 5:10 am

Posted in Uncategorized

King of Wrong Timing

with 2 comments

That would be me.

On the 31st of March 2020 I wrote a post, how to play the comeback, https://lifeandequities.wordpress.com/2020/03/21/how-to-play-the-comeback-in-equity/ and in June 2020 No More Fear – https://lifeandequities.wordpress.com/2020/06/08/no-more-fear/

In life, I am quite averse to leverage, loans and such. But recommended taking a leveraged bet on reversal of certain ETFs in certain industries (many months later after until September 2020- Dr. Fauci was saying – we may never make a medicine/vaccine). In fact, the normality was so certain to me that I thought of buying ETFs that would grow 3X the normal ETF. They work by buying underlying swaps. If the index goes 1x per day the ETFs go 3X. They tend to work best when there isn’t daily ups-downs – i.e. volatility drag – but they work remarkably well when there are 70-80% up days and 20%-30% down days. And they tend to work for short term – few months. My recommendations were $TPOR $BNKU $FAS $NAIL $DFEN $FNGU, $DPST

These 3X ETFs – leveraged ETFs – were new to me – they can lose 50% value in a week or gain 100% in very volatile week. In fact DPST ETF went from 50$ to 100$ about 8 times from March – September. I held them only for 5 months from March – July, but most of the gains were made from October 2020 – Feb 2021.

Whilst I did not make outsized gains of 400-500% that could have been made its a good tool (3X ETF) in future industry specific cycles.

800% up
500% up
50$ to 100$ about 8 times, then 500%
1000% up

But now is exactly NOT the time to buy the 3X Industry Long ETFs. As Munger said, “have an assorted collection of tools to be used at the right time”. Leveraged industry specific ETFs are attractive tool in the arsenal when a specific industry is reflective of despondent sentiment.

Written by amitdipsite

March 12, 2021 at 7:34 am

Posted in Uncategorized

Why is India’s per Capita income rank 141

leave a comment »

India’s per Capita income is behind that of Kenya, Nigeria, Angola, Ghana, Congo, Honduras despite the fact that India born first generation immigrants are CEOs of Microsoft, Google, IBM, MasterCard, Pepsi -each company’s as big as India’s entire market cap.

Lack of transparency, corruption, abuse of power, and absence of rebellion and temperament to suck up to the situation.

https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Here is a proof Indian Government’s contribution to the World’s Treasury of Knowledge: Covid Cure from Herbs. Coronil

https://www.bbc.com/news/56172784

India’s per Capita income rank is 141 out of 187 countries, so are we still blaming Britishers after 100 years?

Written by amitdipsite

March 3, 2021 at 3:16 pm

Posted in Uncategorized

Minimum Wage – No debate here

leave a comment »

I am neither Biden nor Trump supporter and believe they are equally bad but Biden is tad less worse and presents optically as a decent human being. Current US Govt. move to introduce minimum wage is very welcome despite the fact that it will decimate many industries. The trickle down theory has its flaws as much as Alan Greenspan’s assumptions that Large Corporations like Citibank are living organisms, they know how to make the best long term decisions and survive. Not they don’t, a couple of rogue CEOs will plunder the organisation and risk its survival. Without resorting to a more restrictive and large set of regulations a single shot of minimum wage will realign and readjust the economy and redistribute wealth better then scores of half witted still born ideas.

In my post in 2018 “Addiction is good for investors” I wrote that the solution to

poverty stricken lower middle class is to solve it with a silver bullet of “Minimum Wage” at least in the developed countries.

Reference: https://lifeandequities.wordpress.com/2018/05/26/addiction-is-good-for-investors/

“As Investors we like to invest in those companies that have “stickiness” for their products which may or may not be a good thing for society. As investors we like to see the company gradually decimate its competition and go on to rule as a monopoly. As egalitarian members of the society we expect everyone to have a respectable living. The easiest solution that I know of removing poverty is to fix a minimum wage, 16.5 $ per hour for example here (https://www.employment.govt.nz/about/news-and-updates/minimum-wage-to-increase/)

In Australia today in 2021, the minimum wage is 19.84$ per hour while in USA it is 7.25$, in country currency. After exchange rate differences and PPP poorest Australians earn double that of poorest Americans. I.e. There is not abject poor working Australian.

I also write in 2016 that income inequality will not be addressed until minimum wage is introduced.

Reference: https://lifeandequities.wordpress.com/2016/11/12/scrapping-5001000-is-good-for-gold/

“Primary loser will end up being un-organised sector. Don’t expect income equality anytime soon until minimum wage bill is proposed.

This is just first of the US challenge to uplift lower middle class. God forbid if you do not have insurance and break you arm or skull you may not survive in the US. That cannot be said of EU countries, Canada, NZ or Australia.

Welcome move on minimum wage without resorting to the perils of communism. In the US minimum wage did not increase since 2009 https://www.cnbc.com/2021/02/01/map-shows-where-in-the-us-15-dollar-minimum-wage-would-have-biggest-impact.html

It is wishful thinking that the rich will take care of the poor via initiatives like Giving Pledge. Probably it might when in 400 years, top 10 people control 90% of worlds assets and are kind enough with giving. Fingers crossed for that one.

Written by amitdipsite

February 27, 2021 at 7:29 am

Posted in Uncategorized

Yield yardstick – Stock overvalued since 30 years

with one comment

Written by amitdipsite

February 26, 2021 at 1:06 pm

Posted in Uncategorized

AGM with Munger

leave a comment »

Written by amitdipsite

February 25, 2021 at 3:42 am

Posted in Uncategorized

Rounded Bottom : Vente-Unique.com

with one comment

https://www.investopedia.com/terms/r/roundingbottom.asp

I like rounded bottoms.

Jokes aside, there is an under-the-radar Ecommerce company called Vente Unique, based in France, sells Furniture in 11 European countries. I added it in the portfolio 5 months ago. It has been profitable since the very first year of operation, an unusual feat, in an industry where making losses and bleeding the competitor is the norm. CAGR of revenues and profits in its history has been in double digits.

It gives a 2% dividend yield as well, remarkably attractive in a continent which has maximum negative interest rates assets. After COVID the pace of growth has accelerated. This quarter the growth was 63% https://bourse.vente-unique.com/pdf/cp/20210210_ca_t1_2021_en.pdf

It gets better, the company is buying back shares as well.

The only problem with the company at the moment is the market cap which does not allow large funds to participate. The leader in the US is Wayfair – 30 Billion$ market cap (https://finance.yahoo.com/quote/W?p=W&.tsrc=fin-srch), the leader in Australia is Temple and Webster (https://finance.yahoo.com/quote/TPW.AX?p=TPW.AX&.tsrc=fin-srch Disclosure: Also invested in Temple and Webster since the last year)

Much slower growing online furniture companies like Westwing Germany (900 Million Euro Market Cap) are trading at 3 times revenue. Market Leaders (Wayfair, Temple and Webster) are trading at 4-6 times revenues and 100 times earnings at market cap of 30 Billion USD and 1.3 Billion AUD. Temple and Webster has been a monster, a 100 bagger in the past 5 years.

Online furniture purchase is a very new habit of consumers, accelerated by COVID, not cracked by Amazon. If you remember Munger, the generalist magazines were beaten their brains out by specialist magazines. Same way in the next 10-15 years a website that has 50,000 styles of T shirt or Sneakers or Hiking Equipment and a bigger breadth and depth will be more attractive to customers than Amazon (a generalist). There are two businesses Amazon does not enter, large bulky furniture and 5$ knick-knacks.

If the market cap of Vente Unique were to quintuple overnight from 160 Million Euros to 800 Million Euros, it would be probably trading at fair price of 5 times revenues and 80 times profits. The company has proven that it can be profitable in all the markets it enters in the European Union. What is lovable about this industry is the its boring, stagnant and does not attract cream of the crop.

The opportunity of furniture sales in European Union alone is over 200 Billion $, Vente Unique’s revenues are currently 1/2000th of this pie, not two hundredth but a two thousandth. Remember Holiday Inn growing for decades at 25% in a no-growth-industry. There is much to be loved about a no growth industry (Peter Lynch’s investing pattern). This size of the industry implies the company can be 10x or 50x its current size and still have a long runway to grow.

Balance Sheet is spotless, if you exclude cash of 17 Million Euro from the Equty of 18 Million Euro, the ROE translates to 500% (5 Million $ profit on 1 Million $ equity).

There is, to my knowledge, for such a profitable operator, only one thing that can go wrong if the management doesn’t change. An EMP attack on Earth from Aliens resulting in prolonged electricity outage on the planet. Govts. across the world will have a bigger fish to fry than worry about Ecommerce or Crypto trading.

No institutional ownership and coverage on this stock. I can only say that this ecommerce operator is laughably cheap at 1 times revenues and 20 times earnings, even after going up 600% this year.

Good luck to all.

Written by amitdipsite

February 14, 2021 at 4:15 pm

Posted in Uncategorized