Saturday 6 January 2018

Note on deactivation

I grow up with Indian mythology of sharing. Whatever we have, share with people. Being in stock market since 1994, I started sharing knowledge via stock market advisory service from 2011. Various commendable recommendations as well as predicted market direction well ahead of time during the period via blog as well as advisory.

Due to unfavorable regulatory environment, I am choosing to deactivate this advisory service. Link of blog written in this regard.

Advisory service is deactivated from 01-Jan-2018
Let’s see what call SEBI takes on its consultation paper issued in 2016.

I am thankful to you for availing my advisory service / visiting my website / following on facebook / twitter

Best wishes to you to create wealth and good fortune  

Saturday 30 December 2017

|| Shree Ganeshaya Namah || Advisory Service Deactivated

At the new beginning, we usually have a ceremony.
Ceremony usually begins mentioning its grace of god i.e. || Shree Ganeshaya Namah ||

Can an end also be marked with grace and blessings of god :)?

With grace of god I am deactivating stock market advisory service business from 01-Jan-2018 :D

Looking back…

I made a humble beginning in year 2011-12.
In first year of business operation, I did not get any customer. Guess, having worked in finance domain in past, I don’t had marketing experience.

In later years I work on marketing and got clients from India as well as abroad.
Lots of overwhelming & dramatic result happened post launch of mobile app, which got 1500+ download in just three months of launch.

In 2011-12 securities market business environment was open / liberal in India. In later years it got complicated with new contradictory regulations in 2013, 2014 & 2016, which are taking securities market business to license raj era officially.

It’s strange but true that I am taking this decision in “Modi Sarkar Raj” which won election on promise of ease of doing business and Make In India. But in reality Modi says “Only rich institutions should do business in India” there by denying wealth creation opportunities to 130,00,00,000 Indians

Intention of blog is not to blame someone, but together we can understand each others view point. May each person of India take benefits of development and growth of country.

Below are blogs written in this regards

Whats next

My registration is valid till 2019
I will wait for SEBI takes call on it own consultation paper issued in 2016. If on or before 2019, SEBI’s call on consultation paper is “ease of doing business”,
a) I may activate / start offering paid advisory service
b) Else post SEBI’s call on consultation paper, I don’t mind even offering free advisory service to people via existing set up like blog / facebook / twitter / mobile app in open media and in return / asking people to make charity or help other people
c) I may choose to close down advisory from proposed deactivation status
It’s preferred to have predictable legal environment.

Thanks you and as always enjoy, keep smiling & blessings
Happy Investing

Thursday 7 December 2017

Modi Win & Government Failed, Deprived Indians

This blog is not a political statement.
Wish people / society moves from scarcity to abundance

In 2014 people voted Modi with
: Lots of optimism
: Anticipated breakthrough development
: Expectation of big bang changes / reform in India
: Glorious future for India

In Reality
: Modi win and government failed
: Modi missed big bang reforms
: Modi failed short of people’s expectation
: Modi didn’t do anything wrong, but he didn’t do the right things

The term big bang reform / major changes was very much popular at the time of 2014 election. Let’s quantify in words what is mean by “big bang changes” / people expectations. Neither people define nor Modi define it, let’s put in simple word as “Affordable Life”

What is “Affordable Life”
If a persons work sincerely in a day, then he should have reasonably priced home, quality education for children, convenient transportation, fair & transparent law and order,  quality food, reasonably priced medical facility , savings for future etc

Lets see how Modi failed short of people’s expectation

1) Smart City vs Rebranding / Renaming Exiting City As Smart City

Initial plan was to build “NEW” 100 smart city and not as seen today i.e. rebranding / renaming existing city as smart city

Past : One state one city strategy
In last few years, I lived at Pune, Mumbai, Bangalore & Hyderabad.

Apart from financial capital Mumbai, lots of development happened in Pune in past few decades in Maharashtra. In Karnataka you may not have heard any well-known city name apart from Bangalore. Even though today we have two states, Telangana & Andhra Pradesh as separate, still they have joint capital Hyderabad. Simply because prior to division of state, only one city was developed i.e. Hyderabad

Result of this kind of strategy
Outcome of this kind of strategy is people all across small city or village migrate /wish to live in metro city for education / job / business. Off course this can be politically motivated, people making policy say starting an education institute / software hub / offering tax concession at industrial area, can buy land in designated zone well in advance to have unfair benefits

How big can be unfair benefit?
Lets make hypothetical unrealistic projection
Pune’s population increased from 15+ lakh in 1991 to present around 60 lakhs
Approx 45 lakhs addition of people
Say 11.25 lakh units of residential house / flats (assuming hum do hamare do, nuclear family structure)
Let’s make more assumptions. Had development had not happened property rates would have been lower say construction cost 1700 per square foot + land cost 1000 per square foot.
Present average property purchase rate say 6500 per square foot.
Average house / flats size say 700 square foot
Unfair benefit per unit 700*(6500-2700) = 26.60 lakhs
For 11.25 lakhs units amount will be 26.60 lakhs *11.25 lakh = 299250,00,00,000 i.e. approx 3 lakh crore per city.
There numbers are hypothetical unrealistic and can be debatable. 

Whatever may be real number, question is why people should spend large part of their active working life, to have “Makan”
Rather than investing in “Makan”, can investment be routed to productive assets for well being people as well as country?

How new smart city could have been benefited

Residential: lower real estate cost i.e. better life
People spend less time of active working life in job / business, i.e. spend more time with children, spouse, parents, and also spent time on personal interest / development / entertainment 

Commercial: lower cost i.e. eases of doing business
Not every person is interested working in industrial / software park. Lots of people want to do business on their own. Today in big city rental cost of shop /office for business are too high.. I have seen people paying 20,000 to 50,000 per month i.e. paying 2 lakhs to 6 lakhs as yearly rental in good locality. High rental is big barrier for doing business. Though people have interest to do business, they can’t afford rental cost.

People can buy properly to do business rather paying rental
Say 300 sq feet shop area can be available at low prices, say a rate of 4000 per square i.e.  12 lakh per business shop. People can afford to buy shop and do business rather paying for rental.

Lower cost of products and services
In mall or QSR prices are inclusive of rental cost. If rental cost can be brought down, cost of products and services will be lower.

More prime market space to do business / large people engagement
Some part of city is well known for shopping. Space limitation is there for new businessman to enter in this market. If we can have say 5 to 7 new smart city per state can lead to more prime market space available to do business.

Inclusive growth
More people can be financially engaged

New investment cycle & growth
Development of new city can lead to investment cycle

2) Complex Laws vs Simple Fair & Transparent Laws

Recently Modi made statement that government has scrapped more than 1,200 redundant laws. How many of us aware of name / contents of these 1200 laws?

Reality is laws which are used in day to day business are highly complex / bureaucratic. They should be simplified and made fair and transparent.

Other recent news says The Directorate General of Foreign Trade (DGFT) has issued notices to about 100 Indian units of multinationals, demanding refund of around ?5,000 crore that it said they wrongly claimed since 2003 under an export promotion scheme for services

These companies are not sham company or doing business with black money. It just those laws are complex and interpreted differently by company as compare with DGFT.
In year 2017 government is going back to accounts of 2003

Every few months I saw some business news arising out of complex laws

During negotiation at the time of Jewellers strike in 2016, news appeared that jwellers are ready to pay tax but they do not want central excise officers to visit their premises.

How much comfort does corporate or people have while interacting with government agencies?

Let’s talk about demonetization as it has got a very clear message from people

In 2008 world faced financial crisis, but Indian economy was resilient. It is said that India has parallel black economy so world crisis had not affected India in great way.

On 08nov2016, Modi launch surgical strike on black money and corruption via demonetization.

Black money
Black money term is used for people as well as government..

a) People stand with patience in queue for long hours to get notes deposited / exchanged.
Poople have respect for Modi, so they did not complain about it

b) 15lakh crore + money / old notes were in circulation at that time. Almost all money / old notes found to be deposited in bank / exchange with new notes. Why almost all black money find way to bank?

People hate bureaucracy / complex income tax law / office. People converted almost all black money. As laws are complex, people find smart / intelligent ways to convert money.

Simple message people respect Modi but hate government / bureaucracy. Wish government respect people and simplify laws.

Earlier Modi launched “swachh bharat abhiyan” with broom in hand. Later he comes to know unless people participate in it, it can’t be successful. If people have more respect for local government body in their area, they will keep city clean. People respect foreign, so when Indian goes foreign they don’t litter there

If government respects people by making simple fair and transparent laws as well as interaction with government agencies, people will follow it.

Corruption term is mostly used / associated with government or government agencies. Corruption is not required when in ordinary course of life people buy / sell goods / services

Government made telecom and coal auction online i.e. corruption free /transparent manner. Does all transaction at / interaction with government agencies is corruption free?

3) Make In India By Foreign Investment vs Make In India With Indian money
Modi went all around world for MakeInIndia with foreign investment. Not sure how much is delivered.

Modi ignored / underestimated power of money that Indian people have / can invest. Modi can get dramatic results, if he can crate investment opportunity for Indian people to invest in Indian projects

4) Less Work More Credit
GST was initiated by congress; BJP opposed it when it was in opposition.
Now Modi claims credit for it

May be at some point of time the black economy will be converted into white
i.e. unaccounted trade will be accounted trade
i.e. business will remain same (black + white) but accounted business (white) will increase.
Increase in white trade will increase in GDP
& Modi will claim credit for it.

To sum up
Modi has chosen technique which will take long period of time for success of India. It may take a decade or more for glorious golden future for India rather than five year election term.
Wish people / society moves from scarcity to abundance

Usually I don’t write blog on criticism. But, recently I have written few blogs with criticism. Hope I am back on constructive side to create something beautiful

Also read my 2014 blog :)

Sunday 26 November 2017

Is SEBI Holding Back India And Indian Investor?

Intention of this blog is not to blame but let India and Indian people rise & shine

Who is Holding Back India, lets define
A person / institution “extract money” by misselling product or services to people rather “taking money” for product or services provided

Example can be given as
: Hospital asking for surgery / treatment in ICU with intention to make money for them rather than improving health for patient
: Cartelization by cement companies by selling / maintaining higher prices of cement even when demand was lower. Making handsome profit even at lower capacity utilization.
: Cartelization by builders by maintaining higher prices of property even when demand was lower
: Cartelization by telecom companies by charging Rs 100 to Rs 250 for 1GB of data prior to Jio’s entry
: Companies used to sell vanaspati tel (which is 60% cheaper than milk) as ice cream to make more profit
: Few decade ago toothpaste company used to opposing salt & coal (to kill competition), now selling its product with salt and coal

Sebi got statutory powers post Harshad Mehta scam. Thanks to SEBI, now a day we don’t have big scam like Harshad Mehta/ Ketan parekh. But while bringing regulation over decades, SEBI has been instrumental to institutionalized securities market business in India.

I) Primary market

PE investment in, IPO system out
In earlier 1990 we used to have lot’s of IPO. Even company like Infosys has got itself listed. Post listed to year 2000 (software rally) it appreciated by 245 time i.e. 245*100= 24500 % return
It has created enormous wealth
Now IPO is regulated but very few IPO. Sometimes IPO prices are also high
Mostly large company comes out with IPO. Now companies go to PE investment or other option if they want money
Think over if company at early stage (small / medium size) comes out with IPO, it can create wealth for small investor.
How many small investors invest in PE fund??
Too much regulation killed the spirit of IPO or way for small investor to access to create wealth.

II) Secondary market
a) Mutual fund: Due to nature of product, business is run by institutions
Number of AMC is 42 (as of Nov-2017)

b) PMS
For registering as PMS: Net worth requirement is 2 crore and fees are 1 lac for application & 10 lac for registration (valid for 3 years), renewal fees 5 lac.
Payment of fees allows / make eligible to business but can not help / guarantee of income / revenue. Registration fees is like license fees to do business. 
Higher / lofty entry barrier
Number of PMS is 259 (as of Nov-2017)

c) IA / RA
Net worth and registration fees are lower as compared with MF & PMS
Advisor / analyst can do financial planning
Total number is 772 +443 (as of Nov-2017)

Lets start with
i) Who create wealth in stock market?
We talk about Rakesh Jhunjunwala (In India) or Warren Buffet (In world) as investment guru in stock market. People with highest talent (like IIM, IIT pass out) may not necessarily make highest profit / money in stock market. It’s more about judgment / vision / reading between lines / mindset / predicting ahead of time.

What do this means is people with highest talent / most sophisticated IT system / highest capital may not necessary biggest wealth creator

ii) Due to entry barrier in MF/PMS business is run by institution

Except few fund / scheme you may find some of top holding in can be same / similar / well known companies in various mutual fund holdings.
When institution sells ULIP in 2008, are they more concern about their profit or investor’s profit?
In 2015, market was down & institutions promoted SIP.
For MPS, minimum investment requirement by investor is 25 lac or 50 lac (not for small investor)

Is institution more interested in their profit or have genuine intention for create wealth for investor?

iii) Restriction of doing business on IA / RA

Investor can get input from print-tv-online media

“There is no free lunch”
: Say a broker is giving research report. He is interested in broking income.
: Information / discussion on TV. Media is interested in income via advertisements
: Fund manager talking about his investment (and stating cleverly that it is not recommendation), is interested in taking his stock price up or increasing investment return 

Investor can get input from print-tv-online media without risk profiling and KYC.

But as per SEBI regulation, for IA to give advice to investor, risk profiling and KYC is compulsory. Investor should give / share details of his income per anum, various assets and investment done to IA and also reply to questionnaires of risk profiling.

People are hesitant to give their personal details like income and assets.

In addition SEBI has put complex restriction on trading “Independent research analysts, individuals employed as research analyst by research entity  or their associates shall not deal or trade in securities that the research analyst recommends or follows within thirty days before and five  days after the publication of a research report”

So IA can’t invest in stocks which are recommended to clients

Grey area
It is possible
: One arm of institution buys a stock and afterword other arm of same institution recommend same stock to public
: One arm of institution recommends a stock to public and other arm of same institution sells stock /books profit.

So all these regulations since 1992 leads to
: Small investor should do SIP / MF investment
: HNI can do PMS
i.e. only institutions should do business in India.
Investors will be at mercy of institutions for their return on investment

III) Word of wisdom
“Transparency” is the only way to rise for India
i) Single law should be applicable to all Intermediaries and print-tv-online media
ii) Anyone talking about a stock should disclose
present holding,
purchases / sale in past one year &
purchases / sale in next one year
directly or through group company / subsidiary / related party
iii) Small token of amount should be taken as registration fees

Sunday 7 May 2017

Narendra Modi Creator & Destroyer Of Indian Business

  • Narendra Modi Creator & Destroyer Of Indian Business
  • Narendra Modi Brings Beurocrasy & Red Tape
  • Get Well Soon Narendra Modi

This blog is not a political statement.
A blog / post on appreciations has was written in past
Purposes of blog is not criticizing Modi, but wish to have ease of doing business in India. Modi has done various creditable jobs. But Modi went miserably wrong in brining reform in security market business in India. Rather regulation had brought red tape, bureaucracy & enabling business only to rich institutions.
Let’s see how changes made by Modi Sarkar has affected securities business
Posts winning of election Modi Sarkar come out with new regulation called Research Analyst regulation. (RA Regulation)
1)   Only big institutions should do business (No place for small advisors)
What’s new regulation says
“Independent research analysts, individuals employed as research analyst byresearch entity  or their associates shall not deal or trade in securities that the research analyst recommends or follows within thirty days before and five  days after the publication of a research report.”
What old Investment Advisor Regulation (IA regulation) says
“An investment adviser shall disclose to the client its holding or position, if any, in the financial products or securities which are subject matter of advice. “
a)   How it affects SME / entrepreneurs
New regulation had put restriction on investment by investment advisor in stock he recommends to clients
When an advisor gives recommendation to clients he should not invest in it. And if advisor invest in stock, he should not recommend it to clients
There will always be few gems (top quality recommendations). Either advisor should invest (and did not recommend to client) or recommend to client (then did not invest himself)
Simply what it means a person who cook delicious food, should not eat it ;)
You may also find smart advisor will shy to come in media/ CNBC to discuss their investment idea…thanks for Modi
b)   How it helps big institutions
Big institutions will have separate subsidiary for each business, so it does not affect them.
c)   How does it affect small investor community?
When there is a talk about large wealth creation, big names come in mind like Rakesh Jhunjunwala (In India) or Warren Buffet (In world). How frequently you heard a name of Institution as super wealth creator.
When institution sells ULIP in 2008, are they more concern about their profit or investor’s profit?
In 2015, market was down & institutions promoted SIP.
Now putting a restriction on advisor likely affect common investor as smart analyst will not help investor community
d)   Will small investor understand it
Investor will never understood though his interest get sacrificed
What has happen now, Modi created a big wave in economy as well as in stock market. All sins of institutions are washed and will get washed in good karma of Modi
2)   Complexity in doing business – red tape & bureaucracy
IA regulation put compulsion for doing risk profiling. Regulation clearly mentions that “income details” and “existing investments/ assets” should be taken from client
Investor can open demat & trading account without doing risk profiling
Investor can buy or sell stock as per his wish without doing risk profiling
Investor can take input new paper or CNBC or other media & buy or sell stock without doing risk profiling
But if Advisor wants to give recommendation, he should do risk profiling
My personal experience, I have seen investor says “I want to invest few thousand / lakhs in stock market, why should I (investor) share my income or asset details?”
It is more likely that small investors will do SIP & big investor will do PMS which will help institutions & will kill SME / entrepreneurs /small players
3)   Unfair advantage to big institutions
I have seen Portfolio / fund managers talking positively about their investment (stock) in public media like CNBC tv.
Portfolio manager did not get any consideration for talking positive, but it is likely that that stock may go up & Portfolio manager get indirectly benefited. And after few weeks /months, Portfolio manager can exit stock & at the time of existing stock he may not inform on CNBC.
IA is put under IA regulation & RA regulation restriction I am not sure but I guess IA regulation & RA regulation is not applicable portfolio managers & AMC
Law should be same for all intermediaries as well as print-tv-online media in securities business.
4)   No value for talent courtesy NiSM
Indian people are known for their talents. Lot’s of Indian people are working abroad at senior posts. Institutes like IIM, IIT, IISc, XLRI. NIFT  ICAI, ICWAI, CFA, ICSI, medical collage conducts various education programs
All above institute / university certificate is valid for lifetime Vs NiSM certificate is valid only for 3 years.
NiSM does not give value to Indian talent
Think opposite what will happen if in future IIM, IIT, IISc, XLRI. NIFT  ICAI, ICWAI, CFA, ICSI, medical collage etc institutes decides that their certificate will be valid for 3 years and every 3 years all students should reappear exams?
New technology / medicines / operation methods are developed; a MBBS does not give exam every 3 years
New budget comes every year. Now GST is coming. CA or law practicing people does not give exam every three years
Few years ago service tax (a new law comes in India), but that does not mean a CA or law practicing people gives exam once again
People do business in new way: Flipkart largest retailer in India does not own any inventory? Does that mean IIM – MBA qualified people should give exam every year?
NiSM is education institute or money printing press?
NiSM is a printing press of money: Rs 10,000/- per square feet per month?
NiSM charges Rs 1500 for two hours for a small 4sq foot by 4sq feet area
Roughly say Rs 50 per hour per sq feet or say Rs 500 per day (10 hours) or say Rs 10,000 per square feet per month (Rs 500*20 days)
Everyone for every 3 years, IA needs to pay money for two exam IA level -1 & IA level-2 exams.
Nism certificate should have lifetime validity
5)   I believe most of regulations as well as consultation papers will help big institutions to expand business while curbing small players. May be blog is becoming lengthily, let me add just one point from 
Oct-16 consultation paper on IA regulation.
What is proposed “No person shall organize or offer any scheme/competition/game/”
What I believe “Schemes/competitions/ games is best thing happened to India. Schemes/competitions/ games should be promoted /encouraged”
Why I believe so
i) Talented people can express their skills through this platform, so these platforms should be encouraged.
ii) Before 1990 very few singer were controlling music industry. We have lots of new singers come in limelight after they got chance to participate / win competition in TV program started in 1990+ like Sa Re Ga Ma (recent say Indian idol, etc)
iii) Indian people (investment advisor) are not so rich that they can afford advt in prominent newspaper or TV channel.
iv) It will also in line with “make in India” initiative of government. We should see some big Indian people name / institutions coming out in securities market,  in next 10 to 15 years with help of Schemes/competitions/ games
v) Competitions/ games promotes entrepreneurship spirit, so it should be respected
Regulator should ask Schemes/ competitions/ games should register with IA / RA regulation or other regulation
With this kind of restrictions, only institutions will do business in India. It will deny large population to take advantage of Indian talent
Role of SEBI
Over the last 25 years SEBI has indirectly institutionalized India’s securities market. But there is big question mark whether small investor has created wealth in Indian stock market? Indirectly SEBI has killed the spirit of India’s securities market entrepreneurs as well as affected returns of small investors.
BSE website shows around 3.41 crore investor base. Investor base / penetration can be compared with mobile penetration / bank account penetration in India for better comparison. Simple regulation will help to build large Indian investor base investing in stock market.
How an IPO has link to IA regulations?
In earlier 1990 we used to have lot’s of IPO. Even company like Infosys has got itself listed. Post listed to year 2000 (software rally) it appreciated by 245 time i.e. 245*100= 24500 % return
It has created enormous wealth
Now IPO is regulated but very few IPO. Sometimes IPO prices are also high
Mostly large company comes out with IPO. Now companies go to PE investment or other option if they want money
Think over if company at early stage (small / medium size) comes out with IPO, it can create wealth for small investor.
How many small investors invest in PE fund??
Too much regulation killed the spirit of IPO or way for small investor to access to create wealth.
Similarly SEBI is & will deny small advisory business / SME / entrepreneurs / players to do business
It is more likely that small investors will do SIP & big investor will do PMS which will help institutions & will kill SME / entrepreneurs /small players
Will it affect political career / future for Modi ?
Apparently Indian public can’t afford Rahul Gandhi or Kejriwal as prime minister. There is no apparent competitor for Modi. We will vote for Modi in 2019 election too
Long live Modi