Tuesday, October 26, 2010
Red Box
Saturday, October 23, 2010
Quotes From Book: The little book that beats the market
- Saving : It takes a great amount of discipline to save any money. After all, no matter how much money you earn or recieve from others, it's simply much easier and more immediately rewarding to find something to spend it on.
- On Academic theories behind irrational behavior of stock market: In fact it is such a good question that professors have developed whole fields of economic, mathematical, and social study to try to explain it. Even more incredible, most of this academic work has involved coming up with theories as to why something that cleary makes no sense, actually makes sense. You have to be really smart to do that.
- Individual stock picking: Choosing individual stocks without any idea of what you are looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.
Tuesday, October 19, 2010
Book Summary: The Dhandho Investor
Initial few chapters talk about the investment strategy taken by successful people. It is a very interesting read about how Patels in US own more than 50% of the motel business. How Richard Branson and Laxmi Mittal have made their fortune.
Then he goes on to describe the "Dhandho Framework" (Investment Strategy). I am jotting down the 9 investment principles outlined in the book.
- Focus on buying an existing business
- Buy simple business in Industry with ultra low rate of change
- Buy distressed businesses in distressed industries
- Buy businesses with a durable competitive advantage
- Bet heavily when odds are overwhelmingly in your favor
- Focus on arbitrage
- Buy businesses at big discounts to their underlying intrinsic value
- Look for low risk high uncertainty business
- It is better to be a copycat than to be an innovator
In summary, the author urges you to find out simple businesses which you can understand. Do your due reading, find out what are the factors in that business. If you don't understand, don't invest. Then within that industry find out businesses which are fundamentally strong but for some reason their stocks are trading significantly below the intrinsic value. Of course it means more study and analysis. You should do a rough odds estimate of what are the chances of getting good return and what are the chances of break even , and what are the chances of being complete failure. If the odds are heavily in your favor, then put good amount of money on such bets. You should be patient for a duration of around 3 years. As businesses take time to solve their issues and uncertainties to disappear. This is the strategy taken by author and his 2 idols Warren Buffet and Charlie Munger. Hope it works for you too.
Saturday, October 16, 2010
Cool Advertising
Tuesday, October 5, 2010
Drawing with SDEdit
Today I had been assigned the task of creating sequence diagram for one of the project I am working on. As with most of the things this was first time for me.
A sequence diagram helps you in understanding flow of control from one component to another component of your software when a particular action (ex. User presses a button, or your web service receives a request, or a scheduler wakes up and starts some action) is triggered. It is the intermediate step between writing problem on a document to converting solution in a programming language (Java, C/C++ etc)
Anyways since I was new to doing this, my first thought was lets do it in Microsoft word or Powerpoint. But very soon I realized the futility of this approach. I will have spent whole day on drawing lines and blocks. Then someone suggested to use Microsoft Visio. I installed it too, but only to realize that it doesn't have capability to draw sequence diagrams.
Then I searched for tools. There are many tools available on internet but most of them are commercial. Finally I stumbled upon SDEdit. This is a java based tool and available as open source. Perfect for my needs. However understanding the working of this tool required reading the help text for 30 minutes or so. It uses commands to draw and is not as intuitive as MS Word or powerpoint. Reminds me of latex. But the end result was very beautiful. With just 10-12 commands I had drawn the sequence diagrams and created pdf out of it. It even allowed me to create pdf in landscape mode (better for viewing). Overall a very useful tool. Please share your experience and let me know if you have used other similar good open source tools for UML etc.
Monday, October 4, 2010
Auto ride and wait
These days auto rickshaw is my main mode of commute. So far it has been going smoothly for my daily commute from home to work and back. But today was different.
After leaving from home, I prefer to walk little bit. First reason is to settle the heavy breakfast I had. Another is to avoid the rickshaw-wallahs near my home. They typically charge more. For a Rs 30 fare, they will ask around 50-60. So I walk till the McDonald’s nearby. McDonald’s being the hot spot; it is easy to get a ride from here.
However today as it turned out, either all the autos were full or those who weren’t didn’t want to go to Bhau Patil Road (my office location). I had talked to almost 15 drivers but with no luck. One was going in the same direction but had another female passenger. So the auto-wallah asked the girl if I could share the auto. Maybe out of apprehension or maybe she thought she had the exclusive rights, she didn’t budge. “Main doosra auto le loongi. Mujhe nahin jana”. To end this discussion I had to tell the auto-wallah to let go. I waited for another 5 minutes and then suddenly an auto stopped in front of me.
The driver was an old fellow. All the white hairs and must be above 70. He agreed to take me and turned on the meter. No haggling. And thus ended my almost 20 minute wait. This ride was very joyous and I didn’t mind leaving some tip for the gentleman.