Alien Analysis 2007 (Vs) 2009

Let's analysis what changed the economy across the globe during the biggest recent recession happened in 2008. Obviously Corona Virus is a new story and lets analyze that after the entire situation settles. Let's imagine an Alien was sent to Earth and asked to analyze the economic situation in the world between 2007 and 2009, which was just a year before and year after the recession 2008

In 2007, Alien saw people were happy in going for parties quiet often, fireworks celebrations happen now and then, People celebrated New Year, Diwali, Christmas, Ramzan and many other festivals joyfully across the globe. People exchanged greetings, sweets, gifts happily among their friends and relatives

The same alien comes back in 2009, He saw almost the same what happened in 2007. There are few who are badly hit due to 2008 recession

Both in 2007 and 2009, he saw almost same number of office buildings, factories outside the city, almost same number of vehicles moving in the highways, schools teaching their students the same way as before

Also saw computers were faster in 2009 compared to 2007, Medicines are better, Cars gave better millage, Social media has grown up exponentially

Now, he started to look at the numbers, For his surprise he saw US households are $16 Trillion (Rs.1,19,00,68,80,00,00,000) poorer in 2009 than they were in 2007. He also found 10 Million ( 1 Crore ) more Americans are unemployed compared to 2007. Stock Market has reduced to Half its worth compared to 2007 (I'm giving these analysis considering Americans, since US is the biggest economy in the world, so you can estimate the economic situation of other countries, which were still worse)

Alien was totally confused and found that humans almost behave the same way as 2007 inspite of this huge economic crisis and lowered financial numbers because humans have changed their stories & belief what they told to themselves in 2007, those were:

1. Humans don't believe the stability of housing prices anymore in 2009

2. Humans don't believe the prudence of Bankers anymore in 2009

3. Humans don't believe the ability of financial markets to accurately tell the risk of the price anymore in 2009

I would like to conclude that no one in this world can accurately tell the risk on the pricing part. This is what exactly our universe has thought us in Recession 2008.

Have a Great Day

B G Nareshkumar

Room for Errors in Engineering & Investing - Battle of Stalingrad

I would like to begin this blog with a true story during World War II and how that knowledge can be considered for our investing

During the World war II, the most toughest fought battle between German troops and Soviet Union was The Battle of Stalingrad in late 1942. It was considered the German Tanks were one of the best engineered and efficient in fighting any situation. Germans believed it was one of their biggest assets

German troops had 104 tanks in the battle which were kept inactive few weeks, which were parked reverse in the grasslands outside the city. Germans thought they can be used in frontline anytime and relied on it

For their Surprise, Less than 20 tanks were operable and rest other failed to work during the need in the frontline. Everyone was left with high disappointment and later the situation was analyzed and Germans found, during the inactive time, the field mice damaged the insulation covering the electrical system

Can any engineer think of this situation while designing the tanks ? Can this be addressed as a failure in Engineering ? No, this is an situation which should be considered for unimaginable errors and any great engineering should allow some matter of doubt and Plan B should be kept in place. We can plan for every risk except the things that are too crazy to cross our mind

We know how a great business mind (Bill Gates) thought of this scenario and got prepared during his initial stage of business. He kept 1 year salary for all his employees and company expenses left in the bank and started the implementation of new ideas. He was prepared for the worst and had the plan to serve the days when no payments were received and carry forwarded the innovations

In Investing, it is always advisable to have your 6 months emergency fund in bank ( liquid cash ) before you start your investing and trading activities. Never think that you are all right with all the analysis and go ahead and invest all in one go. There is always an "Room for Errors"

It is always advisable to do SIP ( Systematic Investment Plan ) to beat any inflation and to have control over the market and emotions

Let's take an example: Consider we are investing in US Stock Market from 1900 to 2000 (Is that possible to be alive for 100 years ? lets believe, why not ? ) ok, for an example let's consider this for now. Below numbers were taken from a survey

Scenario 1: Let us take this person named "Naresh" 😉 invested $1.00 ( One Dollar ) every month since 1900 in US Stock Market irrespective of rain or shine. He keeps investing every month at what ever the price the markets was trading. He literally doesn't care anything. In reality he definitely cares for people😍

Scenario 2: Let us consider a person named "Vanitha" (Hope my wife doesn't see this blog) thought, may be investing during recession is too scary and waited for the recession to over and started investing $1 every month and sells everything when recession starts and saved $1 per month during the recession and invested that back when recession is over

Can you imagine how much Naresh & Vanitha would have saved / earned in 2000 ? By Investing just $1 every month for 100 years, Naresh would have earned $4,35,551.00 ( Rs. 3.26 Crores ) & Vanitha would have earned $2,57,386.00 ( Rs. 1.93 Crores )

This is just One Dollar a month ( Rs. 75 / Month, over 100 years. Rupee has depreciated a lot, so the worth over the past years would be even less ). Can you imagine a small SIP compound like anything for you in future

Never water the plant heavily today to get the fruit tomorrow. It takes time and you need to water the plant everyday with same amount of water. Imagine a huge tree as you can see in the movie Avatar giving lakhs of fruits a day in your garden. Make this a reality, start today.

Strong Disclaimer: Above blog is for your information, it is strictly not a trading or investing advise. Please contact your financial advisor, gain more knowledge before investing.

Have a Great Day

B G Nareshkumar

Invest Rs.137 everyday for 20 Years = Rs.27.90 Crores

Few people made use of this beautiful wonder of the world called compounding (8th wonder of the world). There is also 9th Wonder of the World called "Compounding by Consistent Investing"

If you are really serious about it, it will definitely disturb your sleep tonight. For this analysis, i took a stock which most people said it doesn't move for years and most people (not the wise investors) think it was an useless stock but still in the top 10 list of Nifty 50. By now most people would have guessed the stock. Yes, it is none other than ITC, Kolkata based Indian Company

1910 to 1970 - Called as "Imperial Tobacco Company" , 1970 to 1974 - Called as "India Tobacco Company Limited" , 1974 to 2001 - Called as "I.T.C Limited" , 2001 to Present - named as "ITC Limited"

Many know this as an Cigarette manufacturing company, but they have many other businesses, which we can see later in this blog. I have made 2 scenario's in reading this company returns & wealth generation:

1. Invest Rs.50,000 in 2000 and left for compounding

2. Invest Rs.50,000 in 2000 and keep investing Rs.50K every year (which is Rs.137 everyday)

Let's take the 1st scenario: Assume i have invested Rs.50K in 2000. The stock price of ITC in 2000 was Rs.15. I could have owned 3333.33 (roughly 3333) shares for 50K. The company have given 3 bonuses and 1 split and a remarkable dividend rate every year since 2003

By this way, we would be holding 1.5 Lakhs shares by now and have collected Rs.1.039 crores as dividend and Rs.3.15 crores net worth. Together on total = Rs.4.189 crores. This is just by investing the initial amount of 50K and holding on to the stock. Literally not doing anything

Let's take the second Scenario: Invest Rs.50K in 2000 and keep investing Rs.50K every year (which is Rs.137 everyday). we would have collected the same 3 bonuses and 1 split and the dividend rate every year, but the difference is compounding by consistent investing. Check the magic (sorry logic) below

If the above was done, we would be holding 10,02,400 shares. Dividend Received = Rs.6.85 Crores, Holding worth = Rs.21.05 Crores. On total it is Rs.27.90 Crores

For this i need to invest Rs.137 everyday consistently. Is that a tough job ? What if i had invested more than 137 rupees everyday and if i have the capacity to invest Rs.500 everyday, what then ? You calculate yourself

Please note (Disclaimer): you need to choose your company wisely. Not every company behave this way. This post is not an trading advice, this is for your information. please consult your financial advisor for investing / trading

Let's have a quick look on 

click here for Brands of ITC 

They are into FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri Products, Information Technology and Cigarette Manufacturing Businesses. Market Capitalization of the company is Rs.2,56,200 Crores, You can own a piece of this company by just investing Rs.210 (value of 1 share as of 29th July 2021)

Now you know the value of Rs.137 and what this amount can bring to you in future. So spend very reasonably, save money and own the quality businesses. Also remember every Rupee we spend today is worth more than Millions in future if it is invested wisely

This blog is only for Long-Term consistent investors. You don't need to be a billionaire to invest in Stock Market but definitely you need to invest in quality Stocks to be a Billionaire.

Have a Great Day 😊

B G Nareshkumar

If i Invested 1 Lakh in 2000 ?

Let's take an example of investing 1 Lakh in the year 2000 by identifying the potential company, which has a greater value and visionary leaders. Let's take INFOSYS for this case study

The Stock price of Infosys in the year 2000 was Rs.100. Let's say i invested Rs. 1,00,000 in Infosys in the Year 2000 ( I wish i would have done that 😊 ) and maintained the holding of 1000 shares for 20 years. Can you imagine the worth of that 1000 shares now, ok let's do a simple math

Infy has given 1 split and 5 bonus during this 20 year period and the ratio details are as mentioned in the chart. Also Infy has a track record of giving dividend every year as below

So, if i just invested 1 Lakh and holded the share for 20 years (doing nothing, just simply sit and watch), by now I'm settled and my only job will be to think of the world tour. Yes, it would have given the total dividend of Rs. 1.99 crores and the total worth of the holding would be Rs. 15.36 crores. On total i would have made Rs. 17.35 Crores

Isn't that a Wow factor. Why to wait, start finding 5 right companies and invest 1 Lakh each to go round the world 5 times after your 50s. 😉

Best Regards,

B G Nareshkumar

Mesmerism

Franz Anton Mesmer was a doctor in Germany lived in 18th century. Mesmer used to cure his patents using a special technic which he called as "Animal Magnetism" 

In this curing process, Mesmer used to keep magnets on the patients body and hold to it and says a fluid flows into their body and that cure most of the diseases. This process sometimes continued even for hours. People believed it and many got cured from some of the dangerous diseases those days

In the late 18th Century, King Louis XVI appointed few commissioners to investigate this animal magnetism process and report to him. Those commissioners include Chemist Antonie Lavoisier, Doctor Joseph Guillotin, Astronomer Jean Sylvain Bailly & American Ambassador Benjamin Franklin

The commission after the series of investigation found that there was no fluid flowing into the body for any cure, it is only their imagination of getting cured by this process actually made them cured. This is a process by patients telling their subconscious mind that they got cured. this is later called as Mesmerism, which is also now-a-days called as Hypnotism

Above was an historical proof that one can get cured from any disease or one can achieve anything they wish if they Feel, Believe, Think and Act on those thought process. This was later mentioned in many of the books as the theory of Law of Attraction.

Have a Great Day

B G Nareshkumar

Investing in Lottery (Vs) Investing in the company which sells Lottery

Imagine, If we grew up when inflation was high, we invested less of our money later in life compared to those who grew up when inflation was low. If we happened to grow up when the stock market was strong, which means we invested more of our money in stocks later in life compared to those who grow up when stocks were week

A study says, in the United States, the lowest income households on average spend $412 a year on lotto tickets (Lottery). The same survey says 40% of Americans cannot come up with $400 in an emergency. Americans spend more on Lottery tickets than movies, video games, music, sporting events and books combined

Instead of investing in Lottery tickets, if that amount was invested in quality stocks after analyzing the demand and product of the company, it will definitely bring fortunes. Let's workout this way, why don't we invest in the company which sells Lottery tickets, if that was listed in the exchange ?

Few points which i learned that needs to be kept in mind all the time during investing / trading:

• The Hardest financial skill is getting the goalpost to stop moving, Never be Greedy
• Social Comparison is the problem here
• "Enough" is not too Little
• There are many things never worth risking, no matter the potential gain

Have a Great Day

B G Nareshkumar

IoT - Internet of Things

Internet of Things describes the connection / network of Physical Objects. These are software's or sensors or other technologies which helps the physical objects to speak among themselves. This looks crazy that i never imagined that there will be times where objects speak among themselves

When i was in late 90's never imagined of everyone having a mobile phone and every phone has a camera to it and anyone can make an international phone calls from anywhere in the world. This has just happened in matter of decade and the development is so fast

Now that not just phone calls, we can make a video call from anywhere in the world with the help of the internet. There are developments happening for 3D technology in communication remotely, going forward i believe there will be 3D communication everywhere

Let's imagine our Airconditioner, Lights and Television in the living room are speaking to each other. When i switch on the Television, it automatically tells Airconditioner to switch on as i was sitting and watching the television and after 15 minutes it tells the lighting system to switching off or dim its power as it might not be necessary. it all happens when i just switch on the Television. Wow

Let's imagine our Car and home lighting systems are interconnected, when i drive the car out for a grocery purchase, after 15 minutes, the sensors check for the car and if the car is not available in the parking lot, it switches off all the lights and electrical systems at home. How does that feel ? Wow

This advancement in Technology keeps humans to remember less and gives less work to our brain, Let's compare our past: we had only landlines, how many phone numbers we remembered and now when we can store the phone numbers in the phone itself, how many we remember ?

Also it is a fact that, Any advancement which keeps humans lazy has a greater market and the companies are targeting on that to make money 

Going ahead, physical objects will interact more among themselves and humans might interact less.

However, everything has its own advantage and disadvantages. Let's use technology and let us not allow the technology to use us.

Best Regards,

B G Nareshkumar

Affiliate Marketing

These days companies spend huge amount of money in marketing their products to attract customers. Let's take a multi-national company who has its presence in many countries and its customers speak various languages. These companies would spend more on advertising / marketing their products in different languages, one way of marketing their product would be through Affiliate Marketing

Through Affiliate Marketing, the companies pay a commission to the affiliate marketer for selling their products. These marketers do not own the product but they market it through social medias or through their own websites and gain commission based on the product and the companies' offer

This is another way of making money online without any investment. All we need is good Internet and knowledge about the product. Affiliate Marketing doesn't have any age factor. Anyone can do this online. There are many affilitizer who does this for companies and we need to enroll with them for getting paid

For example: CJ Affiliates are one of the big affiliates who has tie-up with many companies and products ( https://www.cj.com ) , VCOMMISSION is one of the Indian Affiliate Companies who does in India ( https://vcommission.com )

Chrome affilitizer can give the information on which company has the tie-up for affiliate program for any product, for this we can install this affilitizer through chrome extension tool. Once you find this affilitizer, you can do your marketing through the specified link provided by the affilitizer company and get the job done

Below is the screenshot information on the affilitizer available for the product

Below is the screenshot of the croma website and it has the affiliate with the company named PAYOOM. Once we register with this company, we can affiliate any product with croma and get commission for that if the product is sold through us

Best Regards,

B G Nareshkumar

The Secret - Law of Attraction

The power of our feelings, thoughts, belief and action. Yes, this is defined by wise people as the Law of Attraction - "The Secret"

In one of the ancient languages - Tamil, there is a old saying "YENNAM POL VALVU (எண்ணம்போல் வாழ்வு )", which means your life is an exact replicate of how and what you think

Many wise people years and decades ago said this and that actually worked for them and they kept as a great secret all those years and few unsuccessful people who know this fail to practice

Most important is the Positive thinking and we always should think only of what we need and imagine as if that has already happened and thank this universe for having all those. One should never have a Negative thinking, which will attract only negative energy

Everyday soon as we wake up, before we go to bed and when ever we feel low, we should keep saying our Affirmations and this will bring us good things. What are Affirmations ? Affirmations are basically a statement, which is like saying thanks to this universe for what we need and this statement should be written as if it has happened

For example: if we need to be wealthy and we aim to earn "X" dollars & to be healthy. Our Affirmation should be "Thanks Universe for giving me X Dollars" , "Thanks Universe for giving me good Health"

Once we have our Affirmation in place, we need to Visualize the same. By having this visualized we will feel positive and we will attain our goal easily and this universe will make it happen. Our Feelings, Thoughts and Beliefs have this power to bring that to us

Once we have our Affirmation and Visualization in place, we should act for that dream to come true. take a small step everyday to attain those in future. Infact, this universe will make us to keep a step forward everyday what we think when we have that positive thinking

Subconscious Mind

Our Subconscious Mind have the power to attract what we instruct that. Our Conscious Mind is like a Captain of the Ship and Subconscious Mind is like the Crew Member of the ship. The Crew Member exactly behaves as what is instructed by the Captain

So, we should carefully control our conscious mind on what instruction it gives to our Subconscious mind. Our Subconscious mind doesn't know what is right and wrong, it exactly behaves as what was instructed. if we give instructions like "i can't", "This is not possible", then our subconscious mind will obey that and it will execute the same

if we input "I can do it" words in our subconscious mind, it will attract those and the same will happen in our life. So the biggest secret is what we THINK, FEEL & BELIEVE and that will happen to us definitely

Best Regards,

B G Nareshkumar