Sunday, 28 January 2018
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.
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
AtulGandhi.com
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?
Demonetization
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.
Why
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
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 :)
https://atulgandhicom.blogspot.in/2014/05/india-aspires-for-glorious-golden.html
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
Intermediaries
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
iv)
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.
v)
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
Why??
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
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