Diary of a Rural Manager!

“Never invest in a business you cannot understand.” - Warren Buffett Experience is a bad teacher as it gives the test before lessons. I have invested last year amid the SENSEX meltdown ( Portfolio in Aug 2020 ) and ( My Investment Universe ). The wealth was created in the bear market (60% upsurge). I have tried to document personal decisions and convictions from the experience in the equity market. Any stock market is driven by herd mentality and kept afloat by confidence. The system is inherently a closed-feedback loop. Hence, sharing experiences matters. My investment philosophy is really simple: invest in great businesses. My diligence is also focused on finding the sources of the competitive advantages of these companies, their track record of dealing with technological disruptions, and the wisdom of their capital allocation decisions. Lessons 1. The long-term target is to own 10 to 20 stocks in the portfolio. I have trimmed down the portfolio from 34 to 21 stocks. No individua...

This post is in the continuity of the personal-finance series where earlier blog post: Personal Finance - Investment  was published in May 2020. RBI published a very important ‘ Indian Household Finance Survey ’ in August 2017. The report highlighted that: The average Indian household holds 84% of its wealth in real estate and other physical goods, 11% in gold, and the residual 5% in financial assets. A disproportionately high share of wealth allocated to physical (i.e. non-financial) assets, such as gold.  Under-investment in long-term insurance and pension products. Households can move up between 0.4 pp (percentage points) and 1.6 pp by taking on insurance to avoid the burden of emergency credit associated with medical costs Disproportionally large reliance on unsecured debt, mostly from non-institutional sources (e.g. moneylenders). ...

As reading and writing are essential to participating in society, a person has to be financially literate today to plan for the future. This is essential without indulging deep into technical and jargon-filled financial concepts. The ability to save and the power of compounding is not quickly understood by many people. Investment can be done in various asset classes like equities through mutual funds and stocks, Bonds through mutual funds, Gold, P2P crowd-lending, National Saving Certificate, Public Provident Fund, Fixed Deposits through Banks, NBFC (HDFC Ltd.), Post Office, Real Estate and Currency. I have started my career in the shadow of the 2008 financial crisis and have been at the receiving ends of the global recession of 2020 due to Covid-19. Both catastrophes have revealed that we could all benefit from a clearer understanding of how markets work. Let us look at the 2007-2010 period for the fall and rise of Sensex. The meltdown in the global financial system proved to be the...