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How To Calculate Owners Earnings

Owner earnings is different from the company’s earnings. In this post, I will explain what is Owner earnings of a company and teach how to calculate the owner’s earnings. It’s a long post please get a cup of coffee and read full.
 
Owner earnings is a valuation method detailed by Warren Buffet in Berkshire Hathaway’s annual report in 1986. He stated that the value of a company is simply the total of the net cash flows (owner earnings) expected to occur over the life of the business, minus any reinvestment of earnings. read more

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I have written earlier in my blog on managing the personal financial portfolio and asset allocation which I follow personally, you can read it here. But I am no genius, so writing this post to help you understand a very popular stock investment, asset allocation and money management strategy known as “The Kelly Criterion”.

First a word on who is Kelly?

John Kelly was a physicist working with AT&T’s Bell Laboratory. He developed the Kelly Criterion to assist long-distance telephone signal noise issues in AT&T. In 1956, John Kelly published a paper titled A New Interpretation of Information Rate, now available as a book – Bet Smart: The Kelly System for Gambling and Investing. In the paper, he draws an analogy between the outcomes of a gambling game and the transmission of symbols over a communications channel. This is basically an allocation technique also called the Kelly strategy, Kelly formula, or Kelly bet, that we can follow in our investments that you will read in this article. Kelly’s original paper can be found here ( not easy to understand, lots of mathematics there). In the paper, Kelly described a simple and elegant way for investors to strategically allocate capital in the face of uncertainty. This is what is now known as the Kelly Criterion. read more

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First lets see the fall of NSE in Mar 2021:

Source: https://money.rediff.com/index.html

On 03-Mar-2021 NSE closed at 15,245.60, and on 26-Mar-2021 closing, its 14,507.30. That is 700+ points fall.

Why Indian stock markets are falling in March 2021?

Disclaimer: This is my personal view not written or told by experts anywhere. Most experts are saying that it is due to resurgence of the Novel Coronavirus (COVID-19) in India. Sudden spike has spooked investors. Well that is also true. I am just adding one more reason of the fall written below. read more

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Share or Stock Buyback or Repurchase Explained

Lots of investors are still confused when they hear XYZ company is buying back its shares from the public. They do not understand what exactly is Share/Stock Buyback/Repurchase. 

Please note that all these mean the same thing:

– Share Buyback
– Share Repurchase
– Stock Buyback Share or Stock Buyback or Explained
– Stock Repurchase

Let me first explain in short what exactly is Share Buyback.

A share buyback happens when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors. Once this happens the owners of the public and private investors decrease in the shareholding pattern. One immediate and short term effect of this is that the EPS (Earning Per Share) increases of the company. This increases the valuation of the company in the stock market and may take the price of its share a tad higher. read more

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Intraday Margins Are Increasing What You Can Do

This post was sent to my email subscribers on Mar 1, 2021. If you want to receive such info in your email please subscribe above.

I hope you know by now that the margin blocked for Intraday trades is increasing in a phased manner from Dec 2020 and will go on till September 2021.

This circular was put out by SEBI in Jul 20, 2020. It basically says to increase intraday margins in a phased manner from Dec 2020 to Sep 2021.

Here is the details of the margin increase in 4 phases. The new changes will take effect in 4 phases: read more

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Union Budget 2021 India VIX Will Crash

This post was written on 01-Feb-21 at 11.46 am.

Today, Monday, 01-Feb-21, is Union Budget 2021 day. Its live now in the Indian Parliament. Finance minister Nirmala Sitharaman is announcing the budget in the parliament now.

Whenever there is a major financial event, as a trader you should keep a track on India VIX:
https://www.moneycontrol.com/indian-indices/india-vix-36.html

As on 11.46 am it has already crashed more than 3.9% because the announced has started – the fall will be much swift from tomorrow. With time and very fast it will keep crashing irrespective of the movement of Nifty/stock markets. read more

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Why You Must Hold Some Good Stocks Forever

In this post, I will discuss why holding a few good stocks forever is good. What is forever? 10 years or more.
What is the likelihood of holding a share for 10 years? Well very likely. But how many investors hold even a single share for 10 years? Very few.

Well, I do have a course on how to select stocks to hold for the long term. I do not have a page on that because of the reason given above – not many investors hold a share for 10 years. If interested you can WhatsApp me.

We all know Warren Buffett is one of those who have made billions out of stock investing. I do not think anyone else will beat his returns in future. Why because we have become short-sighted as far as returns are concerned. read more

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Budget on 1 February 2021 What You Can Do

Article written on: Monday, 25-Jan-2021

All stock traders small, big and HNIs even FIIs will keep an eye on on the Budget that will be presented by Finance Minister Nirmala Sitharaman on February 1, 2021. The Budget is being presented at a difficult juncture for the economy. According to the first advance estimates, India’s economy is projected to contract by 7.7 per cent in 2020-21.
This budget will be presented in a very interesting situation as far as stock markets are concerned.

Why?

First, read the above paragraph. I repeat – This Budget 2021, is being presented at a difficult juncture for the economy. According to the first advance estimates, India’s economy is projected to contract by 7.7 per cent in 2020-21. read more

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Bajaj Finance Ltd. Is A Fundamentally Strong Stock

I keep sending investment ideas, not tips, to my customers who have done my course.

Here is what they get as my paid members which is not sent to free newsletter subscribers.

On Jan 18, 2021 at 1:28 PM, I sent a mail to my mailing list that has email of people who have done my Nifty or BN course.

Here is the screenshot of the email sent date as proof (a copy of the email goes to me as well):

Here is the screenshot of the email sent:

Copy of the email in text (only after the stock already rallied):
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Hi, read more

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Date 18-Jan-21 A Note On Stock Markets

I kept telling via my emails, that Nifty is due for a fall. If you have not subscribed to receive my emails please register here:
https://www.theoptioncourse.com/beginners-get-option-beginners-course-free/

Recently it fell from 14600 levels to now 14300.

NSE on 18-Jan-21

Source: https://money.rediff.com/index.html

What will happen next?

Two major events are coming:

1. 20-Jan-21 – Biden taking over as President of USA. (I think if he takes the oath and become President of USA he will be the oldest man to become the President of USA. read more

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