Category: Excerpts

Source:Mahesh

Amazing such an angel exists in the notorious Chennai Auto Driver fraternity !

Source:Arora

Finding good investment ideas in the small and midcap space in India is hard work, especially given the history of poor corporate governance standards.

Using screeners on the reported financial statements to find high growth businesses with high ROEs may seem to be the easiest way to find good ideas.

However, investors would be better off spending their time understanding the source of high growth.

Blindly relying on the company’s reported financials and/or management commentary can be injurious to portfolio returns.-from 2Point2Capital

Source: S Ketharaman

Amid the panic and confusion caused by India’s ban on 86 percent of cash in circulation, there’s hope that the pain in the stock market won’t last beyond a quarter or two, and that everything will be hunky-dory once banks have dispensed enough new notes.

What if that optimism was unfounded?

Suppose that by the end of the year fund inflows double from the $75 billion already taken in by Indian lenders between Nov. 10 and Nov. 18. That would mean a return to the banking system of $150 billion, or roughly the entire stock of high-denomination cash held by the public before the ban.

To Modi’s government, that would signify an embarrassing win for money launderers’ shenanigans.  If authorities respond by registering tax claims on a fifth of new deposits — in proportion to the government’s own estimates of the size of the parallel economy — then up to $30 billion of money coming into banks could be immobilized by disputes.

 Even if all of it is ill-gotten, the signal such a large expropriation would send to other wealth owners could have a chilling effect on conspicuous consumption as well as purchase of new property

The taxman’s wrath, which would reveal itself only after the deposit surge tapers off, is yet to figure in investors’ calculations.-wrote Andy Mukherjee