Investing Reflections On India

Let me preface this note by stating emphatically that I am an economics novice.   But I’m going to take a stab at this problem because it’s crucial for the individual investor.   Please let me know if I’ve made glaring errors in the facts. The theoretical definition for intrinsic value = present value of all future cash flows. For this we need the amount and timing of all future cash flows, and the long-term risk-free interest rate. We can assume the long-term risk-free interest rate to be the rate on 10-year Indian government bonds since they’re free from risk of default (the government just needs to turn on the printing press) and the 10-year are reasonably well-traded implying a closer approximation to the actual cost of money. This rate stands at about 8.3% (27 th June, 2011) and can be plugged in our present value calculations. But the other two variables – amount and timing of future cash flows are the difficult items. So, how can we, as individual investors get ...

I’m creating this blog as a log of my notes on public Indian companies from the perspective of an individual investor.  My notes are solely concerned with the business of Indian companies and not the investment value of them.  Therefore, none of the companies noted here are recommended for purchase, holding or sale.  In fact, the companies noted here are random with a bias towards smaller companies since large companies are well-covered by brokerages, rating agencies and others. Why am I sharing my notes with the world?   I have several reasons.   -          -   I want to enhance my business thinking and the discipline of writing down my thoughts on various companies should clarify my thinking -          -   I would like to express my thinking, which may benefit readers in some way -          -   Engage in intelligent conversations with like-minded investors and perha...