Day: July 16, 2015

Categories
Raoji's Corner

Mukeshbhai as a wealth destructor

There was an interesting article in Value Research Online on how Warren Buffett calculates ROE

Basically,he uses “owner’s earnings” to calculate ROE which is computed as below:

Owner earnings = Net income + Depreciation and Amortisation – Capital expenditures

The good folks at Value Research used this measure on Nifty companies and lo and behold, they found that Reliance has an ROE of -13.84% as opposed to a reported ROE of 11.92%

No doubt the heavy capex of Reliance is playing a role in having a negative ROE

But if the cash flows now don’t kick in, Mukeshbhai may well turn out to be the biggest wealth destructor India has ever seen.

Categories
Quotes

The pompous Mr.Narayana Murthy

“Almost all inventions such as cars, electric bulb, radio, television, computers, Internet, wifi, MRI, laser, robots and many other gadgets and technology happened thanks to the research by Western Universities.

On the other hand, let us pause and ask what the contributions of Indian institutions of higher learning, particularly IISc and IITs, have been over the last sixty-plus years to make our society and the world a better place? Is there one invention from India that has become a household name in the globe? Is there one technology that has transformed the productivity of global corporations? Is there one idea that has lead to an earth shaking invention to delight global citizens?

Folks, the reality is that there is no such contribution from India in the last 60. The only two ideas that have transformed the productivity of global corporations-The Global Delivery Model and the 24-hours workday-came from the company called Infosys.”-said Mr.Narayana Murthy

Categories
Links

Linkfest:July 16,2015

Some stuff I am reading today morning:

Arbitrage funds are the real stars of the equity party (ET)

Default fears grows for state electricity boards (Mint)

US Fed on track to raise rates this year (Money Control)

States seek to have their own land laws (BS)

Emkay Research Report:Banking & Financial Services (RJ)

Short Investing Philosophies in 10 words or less (Motley Fool)

Stock Market hoaxes (Moneybeat)

Why buy and hold works (Common Sense)

Pope Francis takes the zombie side (Daily Reckoning)

How Warren Buffett calculates ROE (VRO)