Book Review: Bulls,Bears & Other Beasts

One of the drawbacks we face as Indian investors is that most financial literature (books etc) are US based and as such, their learnings may or may not apply in the Indian context

This book, Bulls,Bears & Others Beasts-A Story of the Indian Stock Market-by Santosh Nair does a wonderful job by filling in this gap.

The book traces the journey of a trader who trades for a living in the Indian Stock market over the last 25 years.

All the events that transpired since then-Harshad Mehta Scam,Ketan Parikh scam,Satyam scandal,bear raids,corruption,promoter shenanigans etc are covered faithfully in the book.

Some of the events mentioned in the book were eye-openers for me-how “The Old Fox” hammered Suzlon’s shares in Oct 2008 was one of them.

One phrase I loved in the book was a financial analyst talking about Company’s financials-“All milk is adulterated.The difference is in the degree”

This book ought to be compulsory reading for people wanting to know how the Indian stock markets really work.

Go Buy It.

Book Review : The Most Important Thing

This is that rarity – a useful book‘ is the blurb Warren Buffett uses for this remarkable book by Howard Marks,the legendary fund manager of Oaktree Capital.

In this book, Howard Marks shares his wisdom and explains the most important things an investor should focus on

The things he feels investors should focus on are:

  1. They should have second level thinking-ability to go beyond superficialities and think differently from the crowd
  2. Investors should focus on relatively inefficient markets where hard work and skill can pay off.
  3. Be able to accurately estimate the intrinsic value of the asset
  4. Understand “well bought is half sold”. A weak/fundamentally poor asset can be a great investment if bought at the right price.
  5. Understand risk.Returns alone tell very little of the quality of investment decisions without evaluating the risk taken to achieve it.
  6. Recognize high risks primarily comes with high prices
  7. Control risks.Loss is what happens when risk meets adversity.Remember great investors are considered great not just because of their high returns but because of absence of disasters
  8. Remember that some of the greatest opportunities for gain and loss will come when people forget that most things are cyclical.
  9. Be aware of the mood swings of the investment markets-between euphoria and depression,between overpriced and underpriced….rarely stable.
  10. Protect yourself from the emotions thar will make you lose money-fear,greed,delusions,social proof , envy,ego and capitulation
  11. Do the opposite of what others  do – be contrarian
  12. Find bargains that provide value at unreasonably low prices
  13. Be a patient opportunist-wait for investments to come to you,don’t go chasing investments
  14. Ignore forecasts,ignore forecasters and ignore people who think knowledge of the future is essesntial for investment success
  15. Have a sense of where you are in the market cycle
  16. Appreciate the role of luck…its possible most “skilled investors” are “lucky idiots”
  17. Invest “scared”.Worry about loss.If you avoid the losers,the winners will take care of themselves

All in all,a fantastic book.The kind of book you will read again and again to draw water from its well of investment wisdom.

Go Buy it.

Book Review: Zero to One

Billionaire Peter Thiel is  one of Silicon Valley’s most successful investors and entrepreneurs

In his book, “Zero to One-Notes on Startups”, Peter lays out his thoughts on startups and how to build new businesses.

Zero to One ( 0 to 1) means building something new (think Uber,Amazon etc).

One to N (1 to n) means copying something that somebody else has created in your own geography or some other incremental change (think Ola,Flipkart etc)

He opens the Book with a provocative Question:

“What important truth do very few people agree with you on?”

And its business corollary:

“What valuable company is nobody building?”

Both are very tough questions and I still have not found the answers to both.

The book contains lots of such thought provoking ideas and questions

For example,both capitalism and competition are anti-thesis of each other…Capitalism emphasizes on the accumulation of Capital while Competition destroys it

Another illuminating aspect is his take on how Venture Funds should deploy their funds in startups.His approach can be useful for investors in their asset allocation to stocks.

In his opinion,there are 7 Questions each startup/business must answer:

  1. The Engineering Question-Can you create break through technology which is 10x better than the Competition?
  2. The Timing Question-Is now the right time to start your business?
  3. The Monopoly Question-Are you starting with a big share of a small market?
  4. The People Question-Do you have the right team?
  5. The Distribution Question-Do you have a way to deliver/sell your product?
  6. The Durability Question-Will your market position be defensibile 10 and 20 years from now?
  7. The Secret Question-Have you identified a unique opportunity that others don’t see?

All in all, a great book on business by one of Silicon Valley’s topmost thought leaders.

Go Buy It.

Book Review: The CRISIL Story

Disappointed.

This is the feeling I had after finishing reading “The Crisil Story” By Hemanth Gorur and Sumit Chowdhury

I am fond of CRISIL as I started my career in India at Nirlon House,Mumbai where CRISIL used to be head quartered.

If only I had bought CRISIL stock then,I would be chillaxing in the Bahamas !

Anyways,this book is a disappointment as it does not justice to the CRISIL story.

Setting up an independent ratings agency without any international collaboration is a humongous achievement.Starting from scratch to the heights it has reached today is a story of Indian ingenuity,grit,integrity and intelligence

Yet the authors fail to capture the drama and the excitement of this story.

Instead,the book is a tedious read with a hagiographic account of the events that transpired.

Hopefully, some one else will come along who can write a better book on CRISIL.

Till that time,we will have to make do with this one.

Book Review: A Feast of Vultures

“In India, everyone has a price”

This is the central premise of the book “A Feast of Vultures-The Hidden Business of Democracy in India” by Josy Joseph

The author proves this point by quoting a variety of examples-
-How stenographer R K Dhawan owns a bungalow in posh Delhi’s Jor Bagh

-How Congress typist  Vincent George owns multiple properties

-How Sudhir Choudhrie and Suresh Nanda manipulated defense deals

-How a Army Chief took bribes

-How Naveen Jindal destroyed the environment

-How Mukesh Ambani usurped an orphanage property to build his house and so on.

The most startling revelation in the book is that the author alleges that Jet Airways Boss Naresh Goyal gave a ‘supari’ to the Dawood Ibrahim gang to get rival East West Airlines owner Wahid killed.

Reading this book fills one with despair on how India works-with its middlemen,corruption, ruthless industrialists,rapacious politicians,thieving bureaucrats etc

One flaw in the book is that the author’s leftist,pro-AAP and anti-Modi biases are obvious.Also,the narrative is a bit meandering which could have used a tighter editorial control.

Read this book to know how our country really works