Views on Life & on Equity Investing

Wonder, Wealth & Abundance

GDP Growth != Equity Wealth Creation

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10 year returns

As you can see. Frontier market economies are growing rapidly. Yet the 10 year returns have been up to 70% down. Despite the high quality of companies and near monopolies the economic growth has not translated into equity returns.

India is 56th fastest growing economy as of 2019 but stock performance has beaten top 20 fastest growing economies over a 10 year period. USA is 101st fastest growing economy yet the stock performance of US Equities has been dazzling as you can see 197.7% returns In S&P 500.

Economic growth does not translate to wealth creation for investors. It could be a cycle but to be seen if African stocks can make a comeback.

I invested in about 10 very high quality African companies. Cadbury Nigeria, CIPLA Uganda, NSE Kenya Stock Exchange (monopoly), DSE Tanzania Stock Exchange (monopoly). Most of the the stocks are down 50-80% over a 5 year period. Being too early is same as being wrong.

The only exception to the rule in Africa have been two companies where we made money

1) BOSCH FREN SISTEMLERI TURKEY (BOSCH BRAKING)

https://finance.yahoo.com/quote/BFREN.IS?p=BFREN.IS&.tsrc=fin-srch

2) HIGHTECH PAYMENTS MOROCCO

https://www.marketwatch.com/investing/stock/hps?countrycode=ma

 

Written by amitdipsite

July 25, 2020 at 8:47 am

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Two extremeties

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There are stocks that are considered stalwarts, (jinki misaalein di jaati hain), books have been written about them heaping praise.

Yet they have not grown for 22 years. Example Cocal Cola 1998:- 42$ 2020:- 46$

Then, a second category of less known companies, not penny stocks and not junk but half to 1 billion dollar Market Cap companies that move on COVID news of an impending breakthrough of COVID vaccine or permission for COVID testing for sports leagues or viral medicine to reduce symptoms of COVID. There have been 100 plus such moves this year by dozens of companies this month.

Yesterday: 21st July 2020 there were about 10 such moves. Two are highlighted below. 250% and 420%.

So what is the right thing to do?

Written by amitdipsite

July 22, 2020 at 6:25 am

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Concentration

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The most famous value investor in the world, Warren Buffet’s company has 20% allocation to a single stock Apple Inc.

Berkshire’s holding in Apple, in terms of market value amounts to 20% of the market value of Berkshire.

Written by amitdipsite

June 24, 2020 at 6:13 pm

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Games Workshop

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I wrote a detailed post on Games Workshop in 2017. The stock is up 20x in 5 year and 10x in 3 year. I sold at a mere 50% gain. If only I could see the future.

https://lifeandequities.wordpress.com/2017/07/27/stunning-annual-report-games-workshop/

Written by amitdipsite

June 22, 2020 at 3:14 pm

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Rule of Law and Judiciary undermined

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https://www.nytimes.com/2020/06/21/opinion/trump-bill-barr-geoffrey-berman.html?action=click&module=Opinion&pgtype=Homepage

https://www.nytimes.com/2020/06/20/nyregion/trump-geoffrey-berman-fired-sdny.html?action=click&module=Top%20Stories&pgtype=Homepage

Trump is a real shame on human beings. He is an embarrassing manifestation of what  hatred for the other people on any basis, color, race, wealth, gender, nationality, economic interest, selfishness can still achieve. He won an election because more than 40% people could be swayed by fear mongering, parochial outlook, hatred and behavioral and psychological targeted ads. (See The Great Hack: https://www.netflix.com/au/title/80117542)

There was a neighbour where I grew up who smoked 100+ cigarattes a day and lived to 80+ and my dad used to say this guy has failed all cigarettes. (I know too small a sample size).  Likewise, Trump has failed this quotation, “If you don’t care who gets the credit you can get anything in the world”. Trump has no filter in his speech, appeals to narrow outlook, divides people, steals everyone’s credit, an egomaniac yet he is the President of the largest economy. People make a mistake that only heavy metal musicians have energy and country music are meek and hitting furniture as they walk doddering through life, somewhat similar story here in misjudging arrogance for energy.

Truth is that most companies and countries do well despite their CEOs or Presidents rather than because of them as that success does not depend on 4 year term but the long term values in a society. Its confusing in the short term, if you consider Universe having a cause and an effect, and some underlying organisation as to why pedophiles like Jeffrey Epstein were so privileged.

Interesting collection of what Trump says and what he means.

WTS (What Trump Says) “The media is totally unfair.”
WTM (What Trump Means) They insist on reporting the facts.

WTS. “We’re going to Make America Great Again.”
WTM. He has no idea what’s going on.

 

WTS. “We’re going to Make America Great Again.”
WTM. Lets make America White

 

WTS. “We’re going to Make America Great Again.”

WTM. Lets make America Christian nation.

 WTS. “We’re going to Make America Great Again.”

WTM. We will establish white skin colour based supremacy.

WTS. “A lot of people don’t know this, but…”
WTM. Until being told that morning, he didn’t know that.

 

WTS. “He’s an idiot.” “A loser.” “Weak.”
WTM. Somebody who disagrees with him.(See American Dream: https://www.netflix.com/au/title/80206395)

 

WTS. “He’s a good person.” “A fabulous find.” “Major talent.”
WTM. Somebody who agrees with him, but you wouldn’t want them to babysit the kids.

 

WTS. “Tremendous.” “Amazing.” “Fantastic.”
WTM. He likes it.

 

WTS. “Disaster.” “Total catastrophe.” “A disgrace.”
WTM. Doesn’t like it.

 

 

WTS. “I’m highly educated. I have the best words.”
WTM. Which he highlights by limiting his usage to about 200 of them.

WTS: “That’s a fact. You know it, I know it, everybody here knows it.”
WTM: He either made it up, or saw it on InfoWars.

 

WTS. “I will let you know in a brief period of time.”
WTM. He has no idea what’s going on.

 

WTS. “There’s 2 sides to every story.”
WTM. White supremacists make up a large part of his base.

 

WTS. “I don’t have time for political correctness.”
WTM. He thinks demonstrating empathy makes him look weak.

 

WTS. “Absolutely. 100%.”
WTM. Probably not.

 

WTS. “We’re going to build a wall and get Mexico to pay for it.”
WTM. Xenophobes make up a large part of his base.

 

WTS. “I’m not going to tell you, so as not to alert the enemy to my plans.”
WTM. He has no idea what’s going on.

 

WTS. “I love the poorly educated.”
WTM. He loves the poorly educated. They make up a large part of his base.

 

WTS. “Everybody hates the United States.”
WTM. Since last November 8.

 

WTS. “Fake news.”
WTM. Once again, someone has unearthed evidence.

 

 

Written by amitdipsite

June 22, 2020 at 3:11 pm

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Casino

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Fire of commission free trading apps commingle with fuel of 0% interest rates, an attractive warmer for teenagers and 40 million out of work adults, result is marijuana for kids and suicide for young traders. Robinhood does it again.

https://www.cnbc.com/2020/06/18/young-trader-dies-by-suicide-after-thinking-he-racked-up-big-losses-on-robinhood.html

Written by amitdipsite

June 20, 2020 at 4:10 am

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Interview of Rayshard before being shot

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https://www.youtube.com/watch?v=qBJLMRiVMQY

What a shocking system we have in place which does not allow people to get back their jobs or a normal life. Every job application has a question, “Have you been convicted, committed a crime”. They cannot get their jobs back despite trying.

Hence, once a criminal, always a criminal to provide food on the table.

Rayshard was shot by police on 12th of June in a wonderful country where prisons are listed equities and are for-profit-corporations. https://edition.cnn.com/2020/06/19/us/rayshard-brooks-atlanta-shooting-friday/index.html

Written by amitdipsite

June 19, 2020 at 6:13 pm

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Why is India #139 on per capital income

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If you want to look at the most incompetent country in the world – India would top the list. Nearly in every sphere including sports, economics, innovation, politics, literacy, fundamental research, India trails its potential. There are several generational and historical reasons for some of these long standing issues, however at this stage the incompetence is out of paralysis and corruption.

My role is to clearly highlight the issues.

India takes action when no option is left, and not out of a proactive or strategic choices amongst spectrum the opportunities being available. To some extent, it is human nature to get as lazy as possible, especially when it comes to the Government and Government personnel – broadly speaking.

The main reason for failure is not the people, but the Government. Unless a revolution were to happen it could take India another 150 – 200 plus years to have a comparable level of economic per-capita standard as the western countries. We know from experience that it doesn’t have to be, 20-30 years time frames are sufficient for a substantial improvement and reform from Finland, Singapore, Norway etc.

We also know that we do not have to find oil reserves in this day an age or coal to change the fortune of a country.

India’s first four decades after 1947 were lost to the incorrect socialistic ideologies and xenophobia. Only when the reserves were insufficient to meet oil imports (another example of no choice left) India decided to reluctantly open to western economies and companies.

Without major and groundbreaking reforms in the below areas, India’s potential is not likely to be realised in the next 50 years.

  1. Education
  2. Healthcare
  3. Police
  4. Innovation
  5. Science

It will be wishful to think India would become a developed country by 2050 at the per capita basis, I would wager more like year 2200. Take India’s police which is ruled by colonial law of 1861. There have been 40 years of debates, discussions, committees (of course created by Government, National Police Commission 1977, Ribiero Committee 1998, Padmanabhan Committee 2000, Malimath Committee 2003, Soli Sorabjee Committee 2005).

Being sick and tired of all the debate, inaction and committees, Supreme Court  of India ordered the states to reform to provide Police and operational independence from politicians.

Thinking Big

I have not seen any ambitious vision except speeches. Leaving all the onus on private sector is the reason it will take 200 years for India to reach its potential rather than 20. India has only 52 cities with over 1 million population, there should be 500 plus cities in India with over a 1 million population, Chinas has nearly 400 such cities.

Lesson: You cannot change what is old, you can mould the new in whatever shape or form, whether that is a person or a piece of land.

Take barren 100 Square Km of land and make a new city out of it rather than reforming Chandni Chowk in old Delhi. Gurgaon is an example of new city on erstwhile agricultural land.

In extremes there are two types of people, A) Who know very little, could be 2 years out of college, but ambitious or cocky to become a CEO of the company in the next two years B) Know a lot and have been working for over 20 years yet hesitate to even write Senior So and So designation on their resume.

If India were to create 1000 toll bridges, they would ALL be profitable in an under constructed country like India. Its not like making a Chinese ghost town where nobody lives and that is an unproductive asset. We should invite 20 Trillion dollars invested at negative rates of interest globally to invest in the infrastructure.

India’s per capita Income ranking

Why is it that Google, Microsoft, Adobe, IBM, Mastercard Global CEO were born in India? Yet India shows little progress. Why is India’s GDP Per Capita ranking is #139 after more than 75 years after independence from Britain https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Why is it that a single company like Apple, Microsoft valued at 1.5 Trillion Dollars and entire set thousands of NSE and BSE listed companies are not valued that much?

Written by amitdipsite

June 14, 2020 at 9:57 am

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Happiness

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Person to a Sage, “I want Happiness”

Sage, “I is Ego, leave that aside, Want is desire, leave that also, then you can be Happy”

A couple looks at neighbours clothes in neighbour’s backyard from their room and the wife comments, “They are so dirty, neighbor doesn’t know how to wash laundry”, this goes one for several days, every time the same comment, but the husband keeps quiet.

Then one morning wife remarks, neighbors clothes are so clean today, wonder who taught them how to wash.

Husband replies, “I got up early today and cleaned our windows”.

Written by amitdipsite

June 13, 2020 at 6:21 am

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‘I can’t breathe,’ another victim, ‘I don’t care,’ police responds.

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Seems like there is a long list of George Floyd’s in the United States, how brutal and heart breaking.

www.nbcnews.com/news/us-news/i-can-t-breathe-oklahoma-man-tells-police-dying-i-n1229586

Written by amitdipsite

June 11, 2020 at 2:10 pm

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