Sunday, 29 July 2012

Cast Away


It’s Saturday afternoon and I have nothing concrete to do. I see the contents of my hard-disk .Yes; I’m in the mood to watch a good movie. A friend gave me a couple of new stuff and one of this movie was called ‘Cast Away ‘ .The protagonist was played by ‘Tom Hanks’ and directed by ‘Robert Henrick’. Well I heard it was a classic and decided to watch it.
It began with the protagonist being this employee of Fed Ex who was obsessed with time and wanted to ensure his delivery standards were impeccable. Well yes, fair enough. He was a workaholic and due to which most of his relationships were put on the back burner. Correct, not correct, don’t know? To each his own.
Then comes the day when he was summoned to Malaysia to check on the processes there. As the aircraft was flying over the Pacific Ocean, it suddenly faced a deadly storm .The aircraft succumbed and so did the fed ex employees in it. But fate had a different story for ‘Chuck Nolan ‘(Tom Hanks). He managed to survive with this float and was thrown on a desolate island.
Now begins the real story. No job, no people, just sheer him and the island. In the beginning he’s desperate with several attempts to get help. However that seemed futile. He even tried to kill himself by hanging himself with a rope .But the branch broke, thus another reminder to him that he was meant to live. He accepted his fate and chose to move on. Some Fed-ex packages were sent to the shore. Most of the items inside seemed useless (divorce papers, video tapes, girls dress, volleyball). However, most of these things become useful when there’s absolutely nothing to your aid. As he was dying of hunger he had to make do with whatever was available. He satiated his thirst with coconut water and learnt the art of nailing fishes. To add on to it, he learnt how to make fire purely out of wood and friction. Something that we read only in our history books but never experienced. He also managed to extract his own tooth and became his own dentist. That sight was disgusting as blood gushed out and that pain put him to sleep. Compelling times enforces compelling remedies. The volleyball turned into his best ally, at all times whom he could confide into everything. He called it ‘Wilson’. This is the best part about the movie. The relationship between the man and inanimate object is woven so well .It actually seemed so beautiful. Nature and he merged as one entity. He made weather charts and could forecast what was coming. Something that most us would not be able to comprehend as we are too busy to watch nature closely or we have sabotaged to it to an extensive level.
Four years that he lived there, he craved for his loved ones .Something that he did not value too much with his job .He cherished them now even more. More so, he thought it was about time to take the risk and venture out of the island .Isolation was something he could not deal with anymore. He managed to make a raft with logs tied together .He used the video tapes for it. A plastic plank found on the island was used as a sail. He managed to construct a pretty formidable structure. Made me wonder and understand, that our brain is a beautiful faculty and can be used in the most creative manner when needed .It prompts you when desperation or need glides in. He tied his ‘Wilson ‘securely to the raft as he was his only companion. He managed to sail quite a distance but lost ‘Wilson’ in the journey. Four years had made him tired and weary and so wasn’t alert enough when Wilson moved away. When he woke up to realize it, he was shattered. His emotions were so real ,it made me want to cry too.
Finally, a ship located him and took him back home. Most of them had assumed he was dead. The fed –ex team hosted him a grand welcome back party. But he did not feel ecstatic to be back as his long time girlfriend had married someone else because of his long absence. Her photograph was the sole inspiration for his survival on a lonely island .Coming back and not having her felt void and ruthless. Made him question the very purpose of his existence.
This movie probably dint have the perfect ending, although I loved it thoroughly. It had so much silence unlike the chaotic movies today .But it brought in a lot of meaning .Every emotion was captured so well .His transition due to circumstances was enthralling and kept me captivated throughout. From the first time he eats a ‘raw fish and crab ‘to how conveniently he knives out blood from his palms to create Wilson again.
From what I gather from the movie is, we as human beings feel it’s easy to conquer nature and make it dance to our tunes. But nature will always take its course. The storm brought the protagonist to live like the most primal human being .That’s how perhaps people lived once upon a time until we ushered in technology and probably will live like that again cause nature will have its threshold. Also how important it is to nurture relationships and value it because it’s painful when you get isolated and there’s no love .That the basic most thing in our DNA.
This writer has somehow visualized it perfectly and the director has executed it carefully capturing every nuance of movement and emotion. This movie is certainly an impressionable one and will always be on my ‘all time favorite list’.

Tuesday, 24 July 2012

‘Not Phony’


Well writing a blog at this time at night may just seem gibberish. But I seem to have the intense urge to tell you what it’s possibly like to live without a mobile phone for like the last five whole days.
I was a ‘phoneaholic ‘like most people nowadays as my eyes yearned for the sight of the phone every few seconds. I had to reply to every whatsapp message spontaneously. Saying this I recollect a lot of people warning me about my phone addiction and how it could perhaps just disorient me. But that’s obviously something I chose not to take seriously. Then finally life chose to teach me to live without it.
In the beginning when I left my precious thing in the cab I cursed my luck to no extent. Filed an ‘FIR’, checked on the new phone models and the constant ‘feelers’ of me wanting to check on my phone. No focus at work. Felt completely entrapped and compelled to feel recluse .For a day I felt like the wild animal trapped in the cage, nowhere to go. I felt completely isolated and lost cause that was my only access to mobile information. However the more I thought about it, I realized something very essential just happened. Life just asked me to shut up and take that needed break.
 Slowly and gradually it felt nice. It gave me the space and time to introspect and know what’s actually happening in my life. I was so caught in the maze of the phone that I lost out on so much precious time. It gave me the time to read or spend more time with family. It actually helped me eliminate some amount of clutter in the head.
While reminiscing, I recollect my childhood days when we were so technology deprived .However we managed to be more active and connected. I still managed to be way closer to my friends. The relationships were deeper and more meaningful .Today even with the best of technology kids have become more petty , trivial and fragile in their relationships .My conclusion being you don’t necessarily need technology to maintain or have beautiful relationships if the intent behind is positive.
I still don’t have a phone as I write this, however I certainly know it has taught me to be more judicious in the future. However enamored you may be with the recent technology, it is bound to lose its novelty.
Currently I am in a consolidated period, wherein I’m grateful for the loss of my phone .It has taught me how to save up on so many things more precious and valuable. If people did survive once upon a time happily without the luxury of this technology, we too can. Not that I’m against any of it, but the balance usage of it becomes imperative.
Pointers to mull over:-
*mobile phones are a luxury not the dictator of your life*.
*Simplicity today is rare. But I’m positive in times to come it’ll be a more valued entity*.
*Everything is a cycle. What happened in the past is destined to repeat in the future*
(Cause we come from nature and we will merge back with it).
I really hope that you all validate the same and perhaps let me know if you have experienced the same ever.




Friday, 20 July 2012

Markets ,Success and You.


I am a part of the financial markets; at least that’s what I console myself with. And I love it. Not just because it’s glamorous or an opportunity to earn a quick buck, but cause it’s the best teacher. There are days when I’m thrilled and top of this world and there are days I feel like I rather not live. I sway than the worst times in the volatile markets. Markets get affected by every sentiment and emotion and so do I. But the point remains is that worth it. Does any one prefer a volatile market .Not really? (Maybe the derivative guys but mostly not) .So do I want to be that volatile market. Obviously not.
As an investor it is the fundamentally good stocks that people look at .It is the stock that has sustained for years .The main reason being its consistent and sound. It’s a disciplined entity. Its important that you become that stock .That stock which people have cherished over years and made ample money for others. How does that happen? .Its the faculty called ‘mind’ that needs to be trained. It has to be nourished with the right goals with strict discipline. It is something that you need excessive control over.
Letting it trail and dominate can lead you to that downtrend. I have learnt couple of things the hard way and I still will continue to. It is that dedicated ‘focus ‘with absolute ‘planning acumen’ that will give you that boost. The markets highlight the very same thing. The one’s who are disciplined with their timing and have the focus of their targets, are the ones who manage to make some money. (As they say nothing comes free).
Another thing that I was thrown light upon recently was the concept of ’technical analysis’. I do feel lucky that I’m learning from the best guru of ‘technical’s who’s none other than ‘Dr. C.k Narayan .And I’m the happiest cause I get to interact with him daily .The funda of this concept says ‘price is everything’ . It intrigued me highly but slowly and steadily it made a lot of sense. (Read about it if you can). However I correlate this price to a’ character ‘. The price is the character of the stock. It gives you a gist of the stock. Likewise for a person the ‘character’ is most important as it forms the yardstick for the future .Its a gamut of lot of actions .A good character in the long run is likely to gain .That’s nature.
So at this stage, I look at it this way. Can I at the end of my life ‘write a book ‘on something similar to ‘efficient market hypothesis. Life will be like the markets with its ups and down, but you have to be the stock that’s resilient. Life is not perfection; it has to be converted into one. When circumstances are not in your favor, you have to be that ‘Negative beta’ stock which still sways the other way round.
Success is a relative term but it will only be the asset of the few who possess the above.
(Written to motivate you and me.)

Friday, 29 June 2012

Mental Web

                                                                                                                           


It is a deterrent;
A mental calamity;                 
Unknown to few, known to many;
Kills for certainty.
It knows no freedom;
Knows no joy;
You remain in a shell;
And mind is not productively deployed.
Shun the notions;
Kill the tumor;
Usher in fresh air;
And stick to humor.
The worlds massive;
With loads to explore;
Time is precious;
So let’s not waste any more.
Abandon it,
Loathe it;
Cause we have one life to live;
Let that ‘it’ not be ‘FEAR’.

Saturday, 23 June 2012

Cafe by the beach


Man v/s Food…Well yes this story never ends. Most of us like exploring into this specific segment.
 Catching up on new restaurants and experimenting with cuisines..Well anything to pamper our pallets.
I too did the same for the last couple of years..Felt like catching up on the number of years that I missed out on. For someone as cynical as me, most restaurants seemed like the usual.
Today we chose to head to this place called ‘CafĂ© by the beach. Beaches are not typically my thing. But somehow got a very different vibe from this place. It was Sprawled over a large area and floored with sand all over. Overlooking the beach as it is, some sort of equanimity prevails. The ambience is the USP which is perfectly lit with these small caged lamps. They were hanging all over the place and it did captivate me. As it finally poured the weather seemed in tandem to the place.
Well what we ordered? Parpadelle pasta in saffron chili sauce, nachos and couple of mocktails. Like the look of the place, the presentation of the food matched it impeccably. I chose to highlight the presentation because that’s where it stopped. The taste was mediocre. Looked perfect but perhaps not something you would relish. The mocktails perhaps were a tad better than the food.
Somehow the food is something that most people who come here may not complain about…The ambience covers for it beautifully. For all those who look forward to a romantic outing this place may surpass their expectations. To top it there are these beautiful looking cottages with couches in there. People wanting more privacy may head there too* wink wink *.
Perfect place to end a stressful day and unwind. Certainly one of the places I liked most. I rate it a 3/5.
Suggest you go there and let me know..!


 P.S : Location ; Choupatty.

Friday, 22 June 2012

Equity and mutual funds....


Mutual Funds industry is in a tricky situation. This industry experienced a very positive inflow from the span of 2003-2008.However since 2008 this industry has seen a jerky ride.
FY 12 and FY 11 lost 1.6 million and 1.8 million equity folios respectively. The inflow was more into debt funds like the FMPS, liquid funds and short term MIP’s. Also the gold etf’s saw a major surge.
Although the top MNC’S are making a fair share of their profits, the retail investors over the span of last four years have gained nothing. We are at lower levels than what it was in the 2007.
Currently there are many issues in India and globally that is crippling the equity segment in general. The negative IIP ‘S, high inflation and low GDP numbers are the drivers of the negative sentiment in the equity markets.
Globally the Euro zone is on tenterhooks. Events like the Greece elections, G20 Meetings will help derive a conclusion. It becomes imperative for the Euro to sustain for the positive trend to begin. Also the QE3 in the US is an important event. The employment figures there look dicey.
These factors will have an impact but a temporary one. However the good news is that at this point the market looks fairly priced as all the negatives have been factored in. In the past few months the market has corrected significantly.
Also interest rates have peaked out, gold imports have been reduced and global crude prices have corrected quite a bit. The Rupee has seen 20% erosion in the year. There’s a strong buzz that RBI may further cut rates.
All these factors have placed a good possibility that the equity markets are bottoming out. The equity markets may gradually pick up from here on.
In turn the investors can be more positive about the equity mutual funds. If interest rates further slash and debt funds are unable to beat inflation, the obvious route is equity mutual funds.
The latest news declared that equity Mutual funds ended in a green led by positive market rally. All the funds in Equity and Balanced category advanced witnessing no decline. The same trend was followed even by sectoral categories. None of the funds in any category witnessed any decline.
Knowing there’s a good possibility the markets will be a better and if the funds are systematically chosen and actively managed, the equity mutual funds are definitely a good arena to invest in.

Present and Future King :FMCG Sector


The staggering population of 1.2 billion is generally considered to be a bane .However if seen from the FMCG sectors’ perspective, then it’s a rooster that lays golden eggs.
This I am saying because an unexplored market is awaiting the FMCG sector to dawn upon it. When I say unexplored I am implying the rural markets of India.68% of the Indian economy resides here and accounts for 40% of Indian Economy. Obviously the Corporates can’t afford to neglect this segment. More so about 50% of the population is below the age of 25 years. So to the youth with additional disposal income is another segment that needs to be tapped.
 If statistics are to be believed then the Indian organized retail is just a mere 5% of the US $450 billion market. Thus being the second most populous country in the world we have immense scope for growth.
Let me put forth a gist of why there will be momentum in this sector:-
  • Rapid increase in the rate of urbanization.
  • Rise in disposable incomes enabling the companies to focus on premium product brands.
  • Constant innovation in existing products from customer feedback.
  • Penetration to rural markets with strong distribution channels.
  • Rise in rural non-agricultural income and benefits from government welfare programmes contribute to top-line growth for FMCG companies.
  • Investment in this sector stocks also attracts investor’s attention because the demand for FMCG products is throughout the year.
  • Media playing an important role in creating awareness of products in rural areas.
Further let me add on to further figures why investing in FMCG stocks is worth it.
SENSEX Vs BSE FMCG Index
Sensex Vs FMCG Sector Returns
FMCG sector is performing well due to strong characteristics and dependence on consumption in domestic market. The returns table (above) portraits that it registered lower drop in 2008 i.e. during slowdown in the economy. The performance of FMCG sector was laggard in 2009 when economy was recovering and major sectors started performing well contributing to growth in SENSEX. However, performance of BSE FMCG index in 2010 was outstanding on back of fiscal stimulus but got hit again in 2011 due to European debt crisis and domestic reasons. In 2011, SENSEX was volatile and gave negative returns of ~25% at end of year whereas; FMCG is the only sector which gave strong returns of ~9% in 2011.
Also according to the Economic Times, The FMCG Sector has been the best performing asset class against Nifty.
The past five-year average returns by the category of Equity FMCG funds have been about 19% against a meager 3.5% returns by the Nifty. In fact, over the past three-year period, average returns by the equity FMCG funds turn out to be as high 35%, surpassing even the returns of Gold ETFs that gave 25% during this period. The three-year returns by the Nifty, on the other hand, are as low as 2.9%.


Why FMCG is top performer among other sectors?
In last 15 months, FMCG sector attracted many investors and gave strong returns to them. The other sector indices gave negative returns in the range of 2% to 38% due to slowdown in the economy, high interest rates and rising inflation
Sector Wise Performance in Stocks
Let me venture into something more captivating. They say all that glitters isn’t gold. But FMCG sector outshone the metal by a decent margin.
Gold may have outstripped other asset classes after the financial meltdown of 2008. However, there is one segment in equities which has surpassed the returns of even the yellow metal - the Fast Moving Consumer Goods or FMCG sector. This sector, has in fact emerged as one of the top performing assets over the past three years.
In 2009, for instance, while gold returned about 24% in terms of absolute gains, the BSE FMCG index generated more than 40% gains in that year alone. Similarly in 2010, the BSE FMCG Index generated returns of close to 32% while gold delivered returns of 23% that year
And even as the year 2011 may have been a bit subdued for the FMCG sector, with the BSE FMCG having clocked just about 9.5% returns against 32 % for gold, this year so far has been another spectacular year for this defensive sector. Since January this year, the BSE FMCG has generated a gain of about 16% against returns of 5% from the yellow metal.
Although a lot of investors would have participated in the gold rally, not many would have realized that while their investment in gold since 2009 till date may have fetched them absolute gains of about 113% an investment in FMCG stocks (BSE FMCG) would have generated about 136% during the same period.
Investments can be done by direct equity mode or via mutual funds.
Let us look into some company financials that have performed spectacularly in this sector.
Peers comparision

The table comprise of some best listed FMCG companies in India. The outperformers among these companies are HUL and ITC with strong revenue Rs 199,390 mn and Rs 221,598 mn respectively in FY11. The EBITA margin across the sector has remained in the range of ~15% to ~26.5%. However, EBITDA margin for ITC in FY11 was 37.5%. The companies HUL and ITC registered PAT of Rs 23,066 mn and Rs 50,700 mn in FY11.

Investing through Mutual Fund Route
There are two sector funds available in market which invests mainly into FMCG stocks. So, you can opt to invest in these schemes considering historical returns, portfolio and risk analysis. The returns from mutual fund schemes have outperformed benchmark index from 2009 onwards till date
MF schemes
SBI Magnum FMCG Fund
Fund background: This sectoral fund was introduced from July 1999. The asset management company holding this scheme is SBI Funds Management Ltd. The minimum investment amount required is Rs 2000 and minimum SIP investment is Rs 500. The fund manager is Mr Saurabh Pant since June 2011.
Objective: To achieve maximum growth opportunity through investments mainly in FMCG stocks.
Top Holdings in portfolio: SBI Magnum FMCG Fund invests ~95% fund amount in FMCG stocks. The portfolio has 14 stocks from FMCG and consumer durable sectors. Top holdings of this scheme are ITC (~30%), HUL (~12%), VST Industries (~9%), Marico (~8%), Agro Tech Foods (~7%), Glaxo Consumer Healthcare (~7%), Emami (~6%), etc.
Investment style: Invests mainly in large cap stocks with top down approach.
ICICI Prudential FMCG Fund
Fund background: This scheme was introduced from March 1999. The asset management company holding this scheme is ICICI Prudential Asset Management Company Ltd. The minimum investment amount required is Rs 5000 and minimum SIP investment is Rs 1000. The fund managers are Mr Punit Mehta and Yogesh Bhatt since February 2012.
Objective: To generate long term capital appreciation by investing predominantly in equity and related securities of FMCG companies.
Top Holdings in portfolio: ICICI Prudential FMCG Fund invests ~80% fund amount in FMCG stocks. The portfolio has 9 stocks from FMCG, textiles and chemicals sectors. Top holdings of this scheme are ITC (~35%), HUL (~16%), VST Industries (~8%), Marico (~8%), Britannia Industries (~7%), Page Industries (~6%), Pidlite Industries (~4%), Dabur India (~3%) and Tata Global Beverages (~3%).
Investment style: Invests mainly in large cap stocks with top down approach.

To conclude, I would like to say FMCG sector is a safe bet if invested at least for the period of 3-5 years. Companies are getting into innovative modes to penetrate into rural areas. There could be a slight constraint due to factors like inflation due to which margins may come under strain. However volumes will be the deciding factor. Also HNI segment is on a rise and is so is the general income levels on the whole. If risk needs to be minimized then fmcg sectoral funds are a better bet.
To reaffirm, Nielsen’s research report entitled “Consumer 360”, the Indian FMCG market is estimated to grow to USD 100 billion by 2025 from USD 13 billion in 2012.Hence enter when valuations are cheap and reap excellent returns.