Having just finish filing the income tax return in a mad rush towards the end of the 31th July deadline, I must say that it's good to see the progress being made in the way the tax filing process is being automated and brought online
The pdf and excel based IT forms are indeed very handy, but from what I could make out, are useful only for those with salary income and maybe something for the banks.
If you have multiple income streams, then good luck filling out the forms without a CA! Even with a CA, I seriously doubt if all IT returns are filed correctly.
The problem is not the forms or the CAs, but the very complex income tax rules in India. Steps have to be taken to simplify our tax rules to ensure that most people do not see filing tax returns as a pain in the backside, and consequently do not shy away from filing their taxes.
31 July, 2011
17 April, 2011
Pantaloon Retail
I first thought about buying shares of Pantaloon Retail a few years back while standing in a very long queue at Big Bazaar. While looking around at all the people struggling to actually pay money I was thinking it might be a good idea to be receiving all this money - as a shareholder :)
I did buy some shares in October 2008 (with an eye on on upcoming stock split; which I now know may not be a great idea) and then again in September 2009. Though the stock went above Rs. 500 at a point, it is now at Rs 277; which by the way is the same as I bought it at around 2 and a half years back and lower than what I got it for a year and a half back.
What now? The queues are still there, and the chain is growing, so I'm going to go with my gut and buy some more!
I did buy some shares in October 2008 (with an eye on on upcoming stock split; which I now know may not be a great idea) and then again in September 2009. Though the stock went above Rs. 500 at a point, it is now at Rs 277; which by the way is the same as I bought it at around 2 and a half years back and lower than what I got it for a year and a half back.
What now? The queues are still there, and the chain is growing, so I'm going to go with my gut and buy some more!
11 April, 2011
Following up on MeraFoF
Following up on MeraFoF, it has been tracking the Sensex, but lagging a bit behind. The lagging part is not too good, especially if you want to base your investment strategy on it.
Of course, 4 months does not conclusively prove anything, and I remain convinced that over the long run, the MeraFoF would prove to be an investment with lower than average risk and higher than average return.
Of course, 4 months does not conclusively prove anything, and I remain convinced that over the long run, the MeraFoF would prove to be an investment with lower than average risk and higher than average return.
19 March, 2011
Buying Before a Bonus Issue or Stock Split
Does it make sense buying a share just before a bonus issue or a stock split?
I just did that (see previous post) and now I am wondering whether that was a wise decision.
Here is the math: KVB bank offered 2 shares at Rs 150 for every 5 held.
I bought my shares at around Rs 550 so my total investment would be...
550x5 = 2750
and then...
150x2 = 300
... which means I buy 7 shares at 3050, or Rs 436 per share.
KVB is at Rs 390 (18 Mar), which means that I have already lost around 10%.
Anyway, lesson for the future: The market will account for these events i.e. bonus, or splits do not come cheap or for free. On the day of the split/bonus the stock price will go down proportionately.
Because the previous post has so little detail... the reasons I bought this stock in the first place were that its financials looked pretty strong (to me), offered regular dividends, and the bank was on an expansion plan. They also offer the highest rates I've seen on term deposits, so they must be doing something right (or so the logic goes).
These reasons still hold true for me and I'm sure the stock will pick up. The lesson here is that bonuses/splits can be safely ignored when deciding to buy a stock.
Links:
KVB on Google Finance
KVB on MoneyControl
I just did that (see previous post) and now I am wondering whether that was a wise decision.
Here is the math: KVB bank offered 2 shares at Rs 150 for every 5 held.
I bought my shares at around Rs 550 so my total investment would be...
550x5 = 2750
and then...
150x2 = 300
... which means I buy 7 shares at 3050, or Rs 436 per share.
KVB is at Rs 390 (18 Mar), which means that I have already lost around 10%.
Anyway, lesson for the future: The market will account for these events i.e. bonus, or splits do not come cheap or for free. On the day of the split/bonus the stock price will go down proportionately.
Because the previous post has so little detail... the reasons I bought this stock in the first place were that its financials looked pretty strong (to me), offered regular dividends, and the bank was on an expansion plan. They also offer the highest rates I've seen on term deposits, so they must be doing something right (or so the logic goes).
These reasons still hold true for me and I'm sure the stock will pick up. The lesson here is that bonuses/splits can be safely ignored when deciding to buy a stock.
Links:
KVB on Google Finance
KVB on MoneyControl
06 March, 2011
Karur Vysya Bank
Bought Karur Vysya Bank @ 547.57 on 15 Feb 2011. Will buy more @ 150 in the rights issues around the corner.
15 January, 2011
SIP even if you have the cash
The reason you want to invest in a mutual find via a SIP is simply to average out your costs. Smart strategy given the uncertainty of the stock market. But what if you have cash sitting idle in your bank account? My opinion: its still worth opting for the SIP.
However, rather than leave the money in your savings account earning a measly 3%, put it in a few staggered fixed deposits. Stagger them so that they mature in 3, 6 and 9 months so that you can get better than 3%.
The only irritant here is that in most cases the banks offer the best rates at 3 months 16 days, 6 months 16 days and so on and not 3, 6, or 9 months. The reason for this is that the banks would like to incentivise such deposits so as to give them a bit of a buffer to get back the money they've lent out. A very good explanation for this can be found on the TOI here. How it works exactly is a bit of a mystery to me as I am sure lenders and borrowers do not synchronise their transactions. What this certainly means is that on an average most deposits will be for longer terms than the borrowings.
Assuming this is the case and assuming you'd like to invest Rs 10,000 a month over a year, you could:
Smart personal finance should not be maximising potential returns and taking unreasonable risks but about getting reasonable returns while taking reasonable risks. Putting in a large investment in one go is taking an unnecessary risk given that the stock market may move adversely at any time. Its best to take a safe FD route while still investing in the SIP.
However, rather than leave the money in your savings account earning a measly 3%, put it in a few staggered fixed deposits. Stagger them so that they mature in 3, 6 and 9 months so that you can get better than 3%.
The only irritant here is that in most cases the banks offer the best rates at 3 months 16 days, 6 months 16 days and so on and not 3, 6, or 9 months. The reason for this is that the banks would like to incentivise such deposits so as to give them a bit of a buffer to get back the money they've lent out. A very good explanation for this can be found on the TOI here. How it works exactly is a bit of a mystery to me as I am sure lenders and borrowers do not synchronise their transactions. What this certainly means is that on an average most deposits will be for longer terms than the borrowings.
Assuming this is the case and assuming you'd like to invest Rs 10,000 a month over a year, you could:
- Leave 40,000 in your savings account. This takes care of the first 4 months.
- Deposit 30,000 for 115 days (or closest best rate).
- Deposit 30,000 for 6 months 16 days.
- Deposit 20,000 for 9 months 16 days.
Smart personal finance should not be maximising potential returns and taking unreasonable risks but about getting reasonable returns while taking reasonable risks. Putting in a large investment in one go is taking an unnecessary risk given that the stock market may move adversely at any time. Its best to take a safe FD route while still investing in the SIP.
06 January, 2011
MeraFoF
Following up on my post on building the core portfolio, I have decided to track the core portfolio, or MeraFoF as I'll call it. I'm starting with 02 Dec 2010 as the base date. No scientific basis to this date except the fact that the sensex closed near the 20K mark on this date, 19992.7 to be exact. I've 'allocated' around Rs. 3333 to each of the funds identified, and this is what I have...
The portfolio value as of 02 Dec 2010 was Rs. 19,997.
Value as on 03 Jan 2011: Rs 19,962 as against the sensex which closed at 20561. So in the past month while the sensex has gone up by around 3%, MeraFoF has gone down by a fraction of a percent.
Not good. Lets see what happens next month.
The portfolio value as of 02 Dec 2010 was Rs. 19,997.
Value as on 03 Jan 2011: Rs 19,962 as against the sensex which closed at 20561. So in the past month while the sensex has gone up by around 3%, MeraFoF has gone down by a fraction of a percent.
Not good. Lets see what happens next month.
02 January, 2011
50 Punjab and Sind Bank Shares
... is all I got of the 300 I applied for. In fact all of the 8 people I have spoken to have been allocated 50 shares irrespective of what they applied for. Actually no, one of them got nothing.
50 shares is nothing write home about. I got them at 114 and they closed at 128.35 on the 31st December. I think the Indian investor has unreasonable expectations when it comes to IPOs; we tend to demand that we get returns in the range of 25-40% at the very least. And that too on the day the stock lists.
As I mentioned in an earlier post about the PSB IPO, I too went in with the idea that I would get huge returns on listing, sell of immediately and encash my profit.
How much was my profit by the way? Turns out not too bad...
Was it worth it? Absolutely not.
50 shares is nothing write home about. I got them at 114 and they closed at 128.35 on the 31st December. I think the Indian investor has unreasonable expectations when it comes to IPOs; we tend to demand that we get returns in the range of 25-40% at the very least. And that too on the day the stock lists.
As I mentioned in an earlier post about the PSB IPO, I too went in with the idea that I would get huge returns on listing, sell of immediately and encash my profit.
How much was my profit by the way? Turns out not too bad...
- In 2 days of being listed, the stock closed 14.35 rupees higher. On 114, that means a return of around 12.5%. Not bad at all for 2 days.
- If I consider an overall 'investment' of 36,000 rupees (for 300 shares @ 120 put in on the 14th December), I am looking at Rs 717.5 in half a month. A return of around 2%. Which translates to 48% per annum.
Was it worth it? Absolutely not.
01 January, 2011
Happy New Year 2011
A very happy and prosperous 2011!!!
For the record, here are a few resolutions for this year...
A note about the sensex. It has been easing upwards since the last year and a half or so and has been swinging between 19000 and 21000 ever since late September. I have a feeling the new year will bring some cheer and free up the sensex. I see it going up smartly in the new year.
All the very best and happy investing!
For the record, here are a few resolutions for this year...
- Move all current mutual find investments from current funds to those I proposed earlier in a post about building a core portfolio.
- Identify a set of 8-12 good mid cap stocks to invest in.
- Buy the stocks identified above and beat the sensex (at the very least :)).
- Decide once and for all whether I want to buy a house or not; if yes, buy the bloody house.
A note about the sensex. It has been easing upwards since the last year and a half or so and has been swinging between 19000 and 21000 ever since late September. I have a feeling the new year will bring some cheer and free up the sensex. I see it going up smartly in the new year.
All the very best and happy investing!
Subscribe to:
Posts (Atom)