What makes people act honest?

So I was at Visharam ghat at Mathura couple of weeks back, I was strolling around and enjoying the serene river view of Yamuna, soft winter air was blowing in my face – overall weather was so pleasant then one feels relaxed and calm. One of the things that everybody who visits Yamuna does it bring back a loti/kalash filled with Yamunaji. I had filled kalash with Yamuna and got it sealed by welder, however it was still not covered. As per Hinduism to protect it from aa pavitra, it needs to covered with jute cloth.

So in pics this is what empty kalash looks like and next to it is filled & covered with kantan/jute.

[gallery ids="510,511" type="rectangular"]

 

So I was strolling on small by lanes of Vishramghat searching for a shop that could put jute cover on kalash, when I spotted one shop selling empty & filled kalash. I went nearby store and saw owner gathering his stuff, I asked him if he can cover kalash with jute and he replied positively, but questioned how many pieces? I said only 1. He hesitated and then said thik hai sir, dukan band kar raha ha thaa, par koi baat nahi. I asked how much would it cost me and he said Rs125/-, I was shocked to hear it and said “bhai itna mehenga kyu?” he replied thik hai sir Rs20 (bies rupaiya) de dena. Now I was like…what…? He replied sir bies neeche koi nahi karega…I was still thinking what’s happening, did he quote Rs20 or he meant Rs120/-. So finally thought to clarify and asked bhai Rs20 ki Rs120 ? and he smiled and said sir Rs20/-…I was oh ok.

I handed over my kalash to him, while he went inside to search for raw material, while I took seat outside his shop. He came back with jute material & started working, then he asked me “sir aapne kya suna thaa?, I replied ek soo paaches (125), he smiled while working on kalash.

Once done he handed me kalash, I gave him Rs100 and said paaches (25) le lena, he replied back with smile koi baat nahi mein bies (Rs20) hi lunga and I was left speechless.

Makes me wonder why people act the way they do, sometime we run in to thieves and some time noble guys. Guy had every chance to make that extra buck but he didn’t, he kept his word.

World & People never fails to surprise us I guess, have little faith :)

Costly typo or more?

So if you have used Tinder & Twitter or either of it, you already know about #OnTinderAtTinder. So basically you have nice looking pic on app but in real life you look totally different and its not just limited to female, males do equally indulge into same. Just try it or ask your work colleague ;). Anyway point is, nice looking pic entices you and when you in meet in real life , you are in for a surprise. In Stock market language that's kind of Value Trap, you look at the stock, you see the "attractive valuation" you buy it and then after holding for long time you understand you have got into Value Trap. Valuation were not attractive but cheap and some times stock deserve to to trade at cheap valuation. RS Software is probably Value trap, read on to know more.

This has to be very costly typo or whatever it is, not sure who is responsible for this error – auditor, company officials or somebody who made that particular excel or some secretary who mailed wrong file or did mistake in calculation or company software (so company who made that software would be responsible) etc  etc.

So this company called RS software has been in limelight for giving phenomenal return – 279% over 33% by Nifty over last 5 years…that’s pretty awesome (period from 2011 till 2014)



However then came correction, stock corrected from high of ~396 to ~120.



And on 23-jan-16 company declared its 3QFY16 results, given below



Just look at that line item number 14, showing share of profit /loss of associates – Rs2,009 lakh or Rs20cr effectively wiping up of all the loss company had reported during the quarter. (wrong result copy on BSE)

Now comes the best part or the part where somebody would lose his job & correction in market cap.It happens that it was typo, it was suppose to be just Rs20 lakh or Rs0.20 cr, meaning loss continues (corrected result copy on BSE).



As of today company has a market cap of around Rs180cr and cash of Rs125cr....one is probably looking at a value trap.

So  long time ago in early days in my career, I remember during one meeting with a company a senior analyst was enquiring with company management about internal controls, risk management, auditors etc and management was like,” ya we use state of the art system” and analyst probed further like what softwares do you use? I was like what does that mean?…what do you mean by that? And bingo management was pretty much caught off guard and they said we use all original softwares by microsoft ,sun, oracle etc etc the best of the best. And if you know how organization are run, one ought to have ERP, to avoid such (above one mistakes) typos and frauds that anybody may try to commit knowingly or unknowlingly. Needless to say installing an ERP doesn’t guarantee that such thing would not happen.If you understand this software you would know that these don’t allow power to be in single hand. Hence committing fraud always needs more than 1 person, moment the number increases chances of fraud reduces, because not everybody has black heart. Hence we have infosys , HDFC, Unilevers, Asian Paint and many such good names.

 

Why did Stock go up so fast?

This happened to me some time in 2014, just after Modi had won landmark election mandate....still gives me hearty laugh

 



Why did Stock go up so fast?

So I met an acquaintance after long time, after exchanging usual pleasantries, talks took turn towards stock market. This acquaintance is typical trader, who only believes buying today and selling tomm. These kinds of guys are very impatient; temperament is of action & reaction. Their mantra is “if you move you survive or you die”, “make money today, who has seen tomm”. In past whenever we have spoken on few occasions I always tell him “I don’t do trading its doesn’t suit me. I buy and hold for 2-3 or more years – long term investor thing”. But man being man created by nature, he doesn’t believe that is possible, there is always circling question on his face that clearly announced “how can one survive without trading?”



This one time I visited  him and he had looks that  had complaint written all over it. He reminded me of one stock that I had discussed during last meeting with him and I quickly admitted yes, and that broke the dam. In bit harsh tone he said “you say you only do long term thing”, I nodded my head in admission and he replied “but this stock went up 5 times in less than a year, how do you explain that?”. I was not sure what to say, but acquaintance being impatient, again repeated the question and demanded answer from me how did stock rise up so fast when same was suppose to happen over 2-3 years.  I knew I have to get out or else guy would probably sue me for loss in probable profit he could have made. I said “it’s all because of Modi winning election” and made quick dash, not before he asked for another stock tip and I gave him name in hurry. I hope stock doesn’t go up so fast and so soon.

Why do we lie?

I was on my way for a client meeting with a colleague, given it would be rush hour we thought of travelling local by first class. On my way to station, I was trying to recollect likely ticket cost I paid last time for journey. I thought it would cost around 240 per ticket and we were 2 so it would be 480. I removed 500 note from purse and walked towards ticket window. I handed money and said “first class, 2 churchgate return”, person nodded and started punching on computer and took money. He handed me 20 rupees and ticket. I took it and was moving away from window towards station he called “hey wait”. I came back to his window and he handed me cash worth Rs260/-. I was shocked, I was wrong by miles, each ticketed cost Rs120/-. Ticket cashier had opportunity to take that extra cash home, but he didn’t. Makes me wonder, what makes one lie?

The Emotional Investing Roller Coaster

courtesy BlackRock