Interesting Columns ... Good Read

1. How Genius think - http://www.psychologytoday.com/blog/creative-thinkering/201109/how-geniuses-think

(GENIUSES LOOK AT PROBLEMS IN MANY DIFFERENT WAYS; GENIUSES MAKE THEIR THOUGHTS VISIBLE; GENIUSES CONNECT UN_CONNECTED THINGS AND MAKE SENSE OUT OF THINGS OTHERWISE GO BLIND ...)

2. Change is inevitable so plan for it - http://blog.penelopetrunk.com/2005/05/07/career-change-is-inevitable-so-plan-for-it/

(Today people start working when they are 22 and don’t stop until they are 65 or older. It makes sense that the career you pick when you are a 22 will not be appropriate when you are 44. People change. Thank goodness, or else we would get bored being ourselves.)

3. Resume advice you never heard - http://blog.penelopetrunk.com/2011/10/05/resume-advice-you-never-hear/

(If you cannot tell stories about yourself from multiple angles, then the single story you have on that paper controls the rest of your life. You deserve more than that)

4. 16 Ways to Jump-start Creativity - http://creativethinking.net/articles/2011/02/15/jump-start-creativity/

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BRAINSTORMING BOARD

Put up a bulletin board in a central area and encourage people to use it to brainstorm ideas. Write a theme or problem on a colored card and place it in the center of the board. Provide pieces of white paper on which people can write their ideas to post on the board. E.g. suppose you have difficulty closing a particular sale. You could describe the sale situation on a colored card, post it on the brainstorming board and ask people to post their ideas and suggestions.

STUPID IDEA WEEK

Make idea generating fun. Have a “Stupid Idea” week and stage a contest for the dumbest ideas. Post entries on a bulletin board and conduct an awards ceremony with a prize. You’ll enjoy the camaraderie and may find that the stupid ideas stimulate good ones.

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5. An Interview with Michael Michalko about Creative Thinking - http://creativethinking.net/articles/2011/09/13/an-interview-with-michael-michalko-about-creative-thinkering/

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Children are naturally creative. Why do so many lose that talent as they grow older?

We were all born spontaneous and creative. Every one of us. As children we accepted all things equally. We embraced all kinds of outlandish possibilities for all kinds of things. When we were children we knew a box was much more than a container. A box could be a fort, a car, a tank, a cave, a house, something to draw on, and even a space helmet. Our imaginations were not structured according to some existing concept or category. We did not strive to eliminate possibilities, we strove to expand them. We were all amazingly creative and always filled with the joy of exploring different ways of thinking.

And then something happened to us, we went to school. We were not taught how to think, we were taught to reproduce what past thinkers thought. When confronted with a problem, we were taught to analytically select the most promising approach based on past history, excluding all other approaches, and then to work logically within a carefully defined direction towards a solution. Instead of being taught to look for possibilities, we were taught to look for ways to exclude them. It’s as if we entered school as a question mark and graduated as a period.

Thomas Edison made it a habit to keep a lookout for novel and interesting ideas that others have used successfully on other problems in other fields. To Edison, your idea needs to be original only in its adaptation to the problem you’re working on.

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Robin Sharma's 22 Ways to Become Spectacularly Inspirational

1. Do important work vs. merely offering opinions.

2. Lift people up vs. tear others down.

3. Use the words of leadership vs. the language of victimhood.

4. Don’t worry about getting the credit for getting things done.

5. Become part of the solution rather than part of the problem.

6. Take your health to a level called superfit.

7. Commit to mastery of your craft instead of accepting mediocrity in your work.

8. Associate with people whose lives you want to be living.

9. Study for an hour a day. Double your learning and you’ll triple your success.

10. Run your own race. “No one can possibly achieve real and lasting success by being a conformist,” wrote billionaire J. Paul Getty

11. Do something small yet scary every single day.

12. Lead Without a Title.

13. Focus on people’s strengths vs. obsessing around their weaknesses.

14. Remember that potential unused turns into pain. So dedicate yourself to expressing your best.

15. Smile more.

16. Listen more.

17. Read the autobiography of Nelson Mandela.

18. Reflect on the words of Eleanor Roosevelt who said: “Great minds discuss ideas; Average minds discuss events; Small minds discuss people.”

19. Persist longer than the critics suggest you should.

20. Say “please” and “thank you”.

21. Love your loved ones.

22. Do work that matters.

ref: http://www.robinsharma.com/blog/02/22-ways-to-become-spectacularly-inspirational-2/

The seven essential mental activities

The seven essential mental activities -

Focus Time. When we closely focus on tasks in a goal-oriented way, taking on challenges that make deep connections in the brain.

Play Time. When we allow ourselves to be spontaneous or creative, playfully enjoying novel experiences, which helps make new connections in the brain.

Connecting Time. When we connect with other people, ideally in person, richly activating the brain's social circuitry.

Physical Time. When we move our bodies, aerobically if possible, which strengthens the brain in many ways.

Time In. When we quietly reflect internally, focusing on sensations, images, feelings and thoughts, helping to better integrate the brain.

Down Time. When we are non-focused, without any specific goal, and let our mind wander or simply relax, which helps our brain recharge.

Sleep Time. When we give the brain the rest it needs to consolidate learning and recover from the experiences of the day.

ref: http://blogs.hbr.org/cs/2011/06/this_week_the_us_government.html?cm_sp=most_widget-_-default-_-Maintain%20Your%20Mental%20Well-Being

Lazy Financial Portfolio for 2011

ref: http://moneylife.in/article/the-lazy-portfolio/18090.html

lazy portfolio for 2011

As we said, lazy portfolios should have the best of funds ranked for three types of investors—aggressive investors who can bet on return-maximising funds; slightly less-aggressive investors who need some protection from the sharp slide that equities suffer periodically; and those who want to invest only in funds that are especially mindful of the downside. Each of these portfolios also has a progressively higher level ofinvestment in fixed deposits and the best of equity funds. (See box “Methodology” for details).



The aggressive portfolio
For the aggressive investor, we have put together the best equity diversified growth funds over a five-year period. But a good portfolio should have an ideal mix of equity and debt. We recommend that only 20% of yourinvestments should be parked in fixed deposits. As much as 80% of your assets should comprise equity funds. We suggest a combination of the top four equity funds and bank fixed deposits in terms of returns over a five-year period. So which are the MFs that you could possibly put your money into? Refer Aggressive Portfolio table for the list of equity funds you should consider.

The balanced portfolio
For the less aggressive investor, who would put equal weight on return and risk, a higher debt component would do a better job. Apart from 40% of assets being allocated to FDs, the balance 60% should be allocated to equity funds.



This portfolio would provide the perfect mix for protecting somewhat against a downslide while leaving sufficient headroom for capturing opportunities in equities. Balanced Portfolio table gives a selection of the shortlisted funds in this category for this class of investors.

The conservative portfolio
For conservative, risk-averse investors, who are worried about protecting their wealth first, we would suggest a higher weight to the debt category apart from giving minimum exposure to equity funds. A sound strategy would be to park 60% of your assets in FDs. The balance 40% should be distributed in the four top-performing equity funds. Conservative Portfolio table provides the break-up of the selected funds in this category.



That’s it. That’s all you need to do to beat many fund managers and all the wise brokers. Having done that, relax, take off your shoes and sit back in the comfort of your couch. You can now start reaping the rewards from your lazy portfolio, while enjoying your life and yet making big bucks on your investments.

ref: http://moneylife.in/article/the-lazy-portfolio/18090.html

How to run a Business successfully !

1. Do what you love


2. Start your business while you're still employed


3. Work Terribly Hard & Sacrifice, Sacrifice, Sacrifice


4. Make Optimism your Watchword


5. Write a Business plan


6. Know your customers first & Determine how you'll make a profit


7. Start with as much of your own money as possible


8. Start Small , keep your edge & Get it working

ref:

How to start Business - http://www.elertgadget.com/palert/tips_on_how_to_run_a_business_successfully_207822.htm

How to start Business - http://sbinfocanada.about.com/cs/startup/a/10startingtips.htm

Tips to start Small Business - http://smallbusiness.findlaw.com/starting-business/starting-business-overview/starting-business-overview-tips.html

Sam Walton: 10 rules of running a successful business - http://www.powerhomebiz.com/vol76/walton.htm

10 tips to run a Successful Business - http://smallbiztrends.com/2006/11/ten-quotes-to-run-your-business-by.html

How to handle Failures !

Key to Success - Never Quit

Accept the responsibility of your own failure & the fact that failure is part of life. Give yourself time to come out of failure. Use that time to analyse the reason for failure. If you think that you WRONG, try to change yourself. If you are RIGHT & recognize the fact that it's not the end of the world & there are plenty of opportunities around you if you can explore. Just make sure that you are OPEN to listen the events happing around you. Forget the past and focus on the future. Give your best shot !


Failure is common to all of us, one of the most important life-skills you can learn is how to respond to it. Mature people know how to turn every failure into a learning experience, a stepping stone for future success.


Being defeated is often a temporary condition. Giving up is what makes it permanent - Marilyn Vos Savant


I am not judged by the number of times I fail, but by the number of times I succeed… and the number of times I succeed is in direct proportion to the number of times I can fail and keep on trying - Tom Hopkins


I’ve missed more than nine thousand shots in my career. I’ve lost almost three hundred games. Twenty-six times I’ve been trusted to take the winning shot and missed. I’ve failed over and over again in my life. And that is why I succeed - Michael Jordan

Key to Success - Never Quit

Key questions for a successful 'Business Plan'

Key Questions to be asked as part of 'Business Plan':

* What product or service does your business provide today?

* How does your business produce or provide the product or service right now?

* How will customers use your product or service as it exists right now?

* How will your business generate immediate revenue?

* Who are the primary clients your business will target immediately?

* How will you market your startup to prospective clients with the resources currently at your disposal?

* How are you different than your competitors right now?

* What secondary and tertiary client bases you will target once you’ve achieved success with your primary base?

Once each above question, evaluate your findings with these six questions:

* What worked and what didn’t?

* What was the result of each action step?

* Was the overall experience positive or negative? Why?

* What did you learn during the process?

* Which steps can be modified or improved for better results? How?

* Which need to be deleted all together?

ref:

http://entrepreneurindia.in/the-one-paragraph-startup-plan/8022

How Much are You Really Worth?

How Much are You Really Worth?

Let's think that we can invest Rs 10,000 per month. Over a 30-year period this investment will mean a total earning of Rs.36 lacs. If invested at 10% per annum (rate of return) at the end of every month during this period, this will mean a sum of Rs 2 Crores 23 Lacs 70 Thousands at the end of 30 years. Check the following table to find out results for different periods and different rates of return:

Rs10,000 Per Month Will Become		At 10% Per annum		At 9% Per annum		At 8% Per annum		At 7% Per annum
		Rs Lacs		Rs Lacs		Rs Lacs		Rs Lacs
After:
30 Yrs		223.70		182.58		149.73		123.42
25 Yrs		131.77		112.12		95.74		82.07
20 Yrs		75.67		66.96		59.41		52.85
15 Yrs		41.43		38.03		34.96		32.20

The above data give you an idea about the size of your investment for the rest of your working life. This is true at every investment and at any rate of return on account of regularity and time value benefits...

The Truth About Your Money Now !

Let us try to find out the quantum of real gain/loss in value of your money with reference to a 8.5% annual rate of inflation that we should normally plan against. A sum of Rs 1,00,000 will be worth the following amounts after the periods mentioned in column 1 at various rates of returns as indicated in the following table:

After :	At 10%	At 9%	At 8%	At 7%
10 years	1,14,717	1,04,705	95,486	87,004
15 years	1,22,869	1,07,140	93,306	81,154
20 years	1,31,601	1,09,631	91,176	75,697
25 years	1,40,953	1,12,181	89,094	70,608
30 years	1,50,969	1,14,790	87,060	65,860

**(Tax Effect Not Considered)

Thus, if you are earning a rate of return lower than the rate of inflation, you will not be actually growing your money...

Similarly, the more the actual growth rate of your money is above or below the inflation rate, the faster your real money will grow or deplete, not proportionately...

Stock Market Analysis : Underpriced market vs Fairly priced market vs Overpriced market

Think before you Leap !

This is certainly the best time to invest in market. The problem, however, is that most of us would have exhausted all our money when the market was at peak. By the time market crashes, most of the investors would have lost a good portion of their investment. This is precisely to avoid such situation, asset allocation makes sense.

Underpriced market: PE < 14

Usually a PE of less than 14 is taken as a sign of underpriced market. In an underpriced market, investors can invest 75% of the money in equity and equity oriented mutual funds and 25% in bonds and conservative mutual funds. Since the stock market is down, many good stocks will be available at very attractive price.

In March, 2009, the Indian stock market was underpriced. It gave humongous return in a year. A good number of investment turned multi bagger in a span of 1-2 years.

Fairly priced market: PE >= 14 & PE <= 20

You can identify fairly priced market by looking at the PE once again. The PE ratio of 14-20 is a signal of fairly valued market. This is the time when most of the stocks are fairly valued. Hence the potential of price appreciation is less.

The best strategy in such a market will be to rejig your portfolio and assign 50% of your money in equity or equity oriented mutual funds and 50% in bonds and conservative mutual funds. There could be other option such as investing 100% in balanced funds. The balanced funds invest equal proportion in stocks and bonds.

Overpriced market: PE > 20

Overpriced markets usually have a PE in the 20s. The market is all time high and the fall is imminent. The question is not of if but of when. There will be temptation to ride with the crowd. However, you should act just the opposite.

Since the market is overpriced, the potential of price appreciation is very low. You should invest least amount in equity and equity oriented mutual funds. The proportion, in an overpriced market, should be 25% in equity and equity oriented mutual fund and 75% in bonds and conservative mutual funds.

In Dec, 2007, the Indian stock market was at peak with a PE ratio of 27. The market hasn’t reached that even 4 years from then. Investors who invested major portion of their money in that period lost a large part of their investment. The PE graph shown below is for the period between Apr, 2007 and May, 2010.

An interesting story about 'Financial Portfolio Allocation' by Nilesh Shah

ref: http://www.moneycontrol.com/news/market-outlook/nilesh-shahs-best-bets-for-long-term-returns-_541244.html

It's all about the game called 'Personal financial Planning' !

There used to be two bank General Managers. Lot of VRS were been given in banks then. So, both of these people took VRS and moved out. Let’s define them as Mr. Deshpande and Mr. Patel. Mr. Patel invested all his retirement money of Rs 30-40 lakh into 16% bonds and in those days debentures were giving 16% return, far more than today's 9.5%. On a Rs 30 lakh kitty 16% will turnout to about Rs 5 lakh and that was good enough in 1997. Mr. Deshpande actually invested in asset allocation principal - so something he put in equity mutual fund, something he put in fixed income and something he put in real estate in Pune.

By 2000 the equity mutual funds have delivered pretty good return courtesy the technology boom and the fixed income mutual funds also delivered good return because interest rate were dropping. Mr. Deshpande kept on moving from equity into fixed income through asset allocation principal. In 2001, markets crashed, obviously Mr. Deshpande lost lot of money but because he was shifting from equity into debt he didn’t lose money on the principal side, he lost money only on the gain said.

Come 2004 when the bonds came from maturity Mr. Patel 16% became 7%, by then inflation had moved up and on Rs 30 lakh instead of earning Rs 5 lakh he was earnings Rs 210,000 whereas Mr. Deshpande who was invested in equity mutual funds could still afford to earn more money as equity market started moving on.

Today Mr. Patel is actually looking for a job. I mean he is doing a part time job in order to supplement his income. His standard of living has come down dramatically whereas Mr. Deshpande because of real estate and equity mutual funds delivered good returns is still able to enjoy retirement life. So when you want to have the safety of fixed income, do remember that it will have a impact if it doesn’t keep pace with your inflation. It’s really tough after retiring as General Manager of a bank you want to do a part time job late in your life !

It's all about the game called 'Personal financial Planning' !!

Peter Lynch's eight simple principles for success in investing

1. Know what you own

Seems elementary, right? But as someone who talks to lots of investors, I can report that you'd be shocked at how few investors actually do their research. Scroll down to No. 7 for a good first step in getting ahead of the game.

2. It's futile to predict the economy and interest rates (so don't waste time trying)

After 2008's crash, I noticed a distinct increase in armchair economists. We financial types do enjoy water cooler talk about interest rates, trade deficits, debt levels, etc. But there's a danger in converting thought into action.

The U.S. economy is an extraordinarily complex system, with 300 million people acting in their own self-interest and responding to each others' actions, government incentives, and external shocks. And that's before we factor in our increasingly frequent interactions with the rest of the world. Trying to time the market is futile. Set up a financial plan that allocates your assets based on your risk tolerance, so that you can sleep at night.

3. You have plenty of time to identify and recognize exceptional companies

Lynch mentions that Wal-Mart (NYSE: WMT) was a 10-bagger -- i.e. its stock rose to 10 times its initial price -- 10 years after it went public. Even if you had gotten in after waiting a decade, though, you'd be sitting on a 100-bagger.

Some would argue that it's still not too late to get in on Wal-Mart, decades after going public. While the company's no longer a monster growth story, it continues to crank out 20% returns on equity year after year. That type of consistent ROE is a huge positive indicator of management's ability to effectively allocate capital. I could tell a similar tale about Microsoft's early growth years, right on down to its still-impressive current return on equity (42%).

Amazon.com (Nasdaq: AMZN), though only 13 years old as a public company, has seen its stock double since its 10th birthday. Of these three, it's the only company still trading at growth-stock valuations. Bulls are hitching their wagon to Amazon.com's ability to expand its role as the premier online retailer, and its upside in the cloud-computing space.

The lesson of Wal-Mart, Microsoft, and Amazon.com? You don't need to immediately jump into the hot stock you just heard about. There's plenty of time to do your research first. See No. 1.

4. Avoid long shots

Lynch claims he was 0-for-25 in investing in companies that had no revenue but a great story. Remember, the guy who averaged 29% returns went oh-fer on long shots. You and I are unlikely to do much better.

I've said it before, and I'll say it again. Use companies with proven track records as your baseline. ExxonMobil (NYSE: XOM), IBM (NYSE: IBM), and Procter & Gamble (NYSE: PG)are selling for 9, 11, and 16 times forward earnings, respectively. This is what the market is charging for solid, low-to-moderate-growth companies that dominate (or at least co-dominate) their spaces. Expect to pay more for higher-growth prospects, but make sure the risk-reward trade-off on an unproven company is worth it.

5. Good management is very important; good businesses matter more

The pithier Lynchism is: "Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it." For a prototypical example of a so-easy-a-caveman-could-run-it company, think the aforementioned Procter & Gamble.

6. Be flexible and humble, and learn from mistakes

Lynch has said: "In this business, if you're good, you're right six times out of 10. You're never going to be right nine times out of 10.". You're going to be wrong. Diversification and the ability to honestly analyze your mistakes are your best tools to minimize the damage.

7. Before you make a purchase, you should be able to explain why you're buying

Specifically, you should be able to explain your thesis in three sentences or less. And in terms an 11-year-old could understand. Once this simply stated thesis starts breaking down, it's time to sell.

8. There's always something to worry about.

Lynch noted that investors made a killing in the 1950s despite the very new threat of nuclear war. There are plenty of fears to choose from right now, but we've survived a Great Depression, two world wars, an oil crisis, and double-digit inflation.

Always remember, if our worst fears come true, there'll be a heck of a lot more to worry about than some stock market losses. Lynch's parting shot is that investing is more about stomach than brains.

ref: http://www.fool.com/investing/general/2010/05/21/how-peter-lynch-destroyed-the-market.aspx

Which stocks to sell in difficult times !

It sound so easy to say ‘sell poor stocks’ . Here is a small note on what is a poor stock – and what are the characteristics:

1. Has a negative cash flow – and not because of growth investing. If the company is still ‘buying’ markets, establishing itself etc. in a difficult market conditions, the capital market will punish such companies real hard during hard times, so be careful.

2. Too much of debt: In an easy debt market in the world many companies take on too much debt to grow. When interest rates go up such companies will be hurt real bad. So high debt equity ratio, and low interest coverage ratio, expensive roll overs and inability to convert debt into equity will all bring the earnings and the price expectations to new lows. Infrastructure companies with many SPVs fall in this category, be selective avoid over-leveraged companies.

3. If the price has gone up more on p/e increase rather than earnings increase: a sure-fire sign of a share being over-priced. In real estate terms if the rents are stagnating and the ‘price’ of the house is going up, it is time to think of it as a bubble. May burst later, or much later but be prepared for the burst that is all.

4. Warnings before quarterly results: When a company revises its quarterly, and half yearly EARNINGS, the capital market ALSO reduces the expectation (price-earning ratio) thus dramatically hurting the price. See the high standard deviation in the price of Icici Bank.

5. After issuing the warning if the company actually follows it up with poor results and does not know how to cope with it, the market will kill it further. Of course the market may do it on the sell side too (Bharti fell to 245, remember?).

6. Company talking big – expansion, merger, foreign acquisition, etc. but has accumulated losses! If you had bought this share at Rs. 30 and is now quoting at Rs. 150, RUN with your clothes intact. If the share price falls, there will be NOBODY to buy it! So I am repeating point no. 1 – see whether the CASH is coming in or going OUT.

7. See the origins of bulk sales of the companies shares. This is a little tricky, but not impossible. Keep your eyes and ears open.

8. Keep reading message boards – Moneycontrol.com, Myiris.com, etc. they all have shareholders, employers, suppliers, etc. willing to tell you things which the media does not know. Keep track.

9. See whether there is a spate of resignations, large scale flight from one company or from the industry? Look at the mutual fund and life insurance industries! There is a massive reduction of people – and it is not the low end employee’s fault. It also reveals the culture of the company – and that is useful.

10. See the SEBI website / IRDA website to see whether the company has been warned, punished or warned your mutual fund, life insurance company or your broker – tell tale signs to change your broker.

these steps will keep your life, wealth and happiness – ALL intact immaterial of whether the market is at 18700, 13800, or 9800…or 76,000!

ref: http://www.subramoney.com/2010/09/index-will-double/

NCFM - NSE’s certification in financial markets

NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM). Currently, certifications are available in 19 modules, covering different sectors of financial and capital markets. Branches of the NSE are located throughout India.

NCFM is an online testing and certification programme. It tests the practical knowledge and skills required to operate in the financial markets. Tests are conducted in a secure and unbiased manner and certificates awarded based on merit of the candidate to qualify the on-line test.

NCFM Modules:

1. Financial Markets: A Beginner's Module

2. Securities Market (Basic) Module

3. Currency Derivatives: A Beginner’s Module

4. Mutual Funds: A Beginner's Module

5. Equity Derivatives: A Beginner's Module

6. Interest Rate Derivatives: A Beginner's Module

7. Commercial Banking in India : A Beginner's Module

8. Capital Market (Dealers) Module

9. Derivatives Market (Dealers) Module

10. FIMMDA-NSE Debt Market (Basic) Module

11. Investment Analysis and Portfolio Management

12. Commodities Market Module

13. Options Trading Strategies Module

14. Surveillance in Stock Exchanges Module

15. NSDL-Depository Operations Module

16. AMFI-Mutual Fund (Basic) Module

17. AMFI-Mutual Fund (Advisors) Module

18. Corporate Governance Module

19. Compliance Officers (Brokers) Module

20. Compliance Officers (Corporates) Module

21. Modules of Financial Planning Standards Board India (Certified Financial Planner Certification)

22. Information Security Auditors Module (Part-1) & Information Security Auditors Module (Part-2)

23. NISM-Series-I: Currency Derivatives Certification Examination (NISM-Series-I: CD Examination)

24. NISM-Series-II-A: Registrars to an Issue and Share Transfer Agents - Corporate Certification Examination

25. NISM-Series-II-B: Registrars to an Issue and Share Transfer Agents – Mutual Fund Certification Examination

26. NISM-Series-IV: Interest Rate Derivatives Certification

27. NISM-Series-V-A: Mutual Fund Distributors Certification Examination

28. NISM-Series-VII:Securities Operations and Risk Management Certification Examination

29. Certified Personal Financial Advisor (CPFA) Examination

30. Financial Modeling Module

31. Financial Services Marketing Module

32. Issue Management Module

33. Equity Research Module

34. Market Risk Module

Ref:

NCFM -

http://www.nseindia.com/content/ncfm/ncfm_introduction.htm

http://growthinvestment.wordpress.com/2008/04/18/ncfm-certifications/

NCFM modules -

http://www.nseindia.com/content/ncfm/ncfm_modules.htm

NCFM Study Material - http://nikhil-barjatya.tripod.com/ncfm/ncfm.htm