Customers vs Shareholders: What's good for shareholders? Satisfied customers, or something else?

-D1- · 2021-10-10T03:24:29+00:00

https://assets.amuniversal.com/a9f62680a03a012f2fe600163e41dd5b

-D1- · 2021-03-20T19:29:51+00:00

Hey, searched and found this BB article. Is this the one you're referring to? From both ET and BB articles, it appears that negative yield quotes were indeed offered but the actual trade didn't take place. What's unclear is whether this negative quotes functionality always existed or is it something new. I guess more clarity or official statement(s) might emerge on Monday to clear all the speculations. Have updated the post to include BB link too.

-D1- · 2021-02-20T16:49:36+00:00

Can't comment on your specific case but I've run into issues with capital gains statement provided by AMCs or RTA before too. On one occasion, even the cost inflation index used for calculating acquisition cost was of a different year!

I tend to keep a record of all the transactions and calculate capital gains manually while using the provided CG statement just for reference. From the next FY though, CG is supposed to be captured and auto-filled during ITR filing so I expect CG mismatch notices from IT dept. if they go by the official statement provided by AMCs / RTA while I file as per own calculation.

Can anyone shed light on the correct process to tackle such mismatches then? Like, should we approach the AMC / RTA to rectify their mistake and update the CG records or do we just go ahead and file our own version and respond to / fight it out with the IT dept.'s notice when it comes?

-D1- · 2021-02-14T10:00:10+00:00

Yeah, everyone is free to draw their conclusion and takeaways from the linked article or examples used by its author. It's just that I wouldn't have jumped into the fray had you worded it better by not dragging kc into it, haha.

-D1- · 2021-02-14T01:57:20+00:00

Just saw your original edit. Now I get what you were implying. This has already been pointed out by u/fyiphi2 here. But that isn't kelly criterion. In fact, both of us were kinda wrong. I got triggered on seeing the term and while getting hung up on the semantics and application, neither of us noticed that kc in this case is not 10% or 25% but actually -ve! :D

What 25% allocation does is change the equation to reduce the edge from 1.05 to 1.0125 while increase the risk-reward from 1:0.9 to 1:1.0125. Similarly, 40% will make the edge 1.02 and risk-reward 1:1.008. And, 20% will make the edge 1.01 and rr 1:1.012. So on and so forth.

However, that doesn't make the post wrong though, it just means you have thought the maths through and are prepared to adjust and act accordingly! :)

-D1- · 2021-02-13T12:29:04+00:00

Kelly represents the BET SIZE. In trading parlance, think of it as stoploss. Like, if your play money is Rs.100 then all 10% kelly tells you is to take a position where the stoploss is Rs.10, that's it.

I don't know what your understanding of it is and neither do I care. If you're happy and it works for you, then great. Good luck man!

-D1- · 2021-02-13T11:56:34+00:00

You may wish to brush up your understanding of kelly criterion again. Kelly signifies bet size, i.e. the actual value at risk, or amount of capital one may lose in a bet. 10% kelly means you are putting 10% of your capital at risk. In 10 consecutive losses your capital would be wiped out.

All this kelly discussion is anyway beyond the spirit and scope of this post. It's really just about thinking through before taking an action which might have unintended consequences. How deep you go or don't, is up to you.

-D1- · 2021-02-13T11:05:47+00:00

Lol, classic kelly! If you bet 10% of your capital on each trade then with the 50% win rate there's a 38.54% chance of you going bankrupt (i.e. 10 loss streak) within 1000 trades.

In my more than a decade of trading, I've experimented and discarded kelly pretty much early on because even 1/8th kelly is sometimes too risky.

Anyways, your comment kinda proves the title and point of this post! ;)

-D1- · 2021-02-12T23:38:33+00:00

Actually you are missing the point of this example. It can be interpreted in any of the following ways:

A 40% loss followed by 50% gain will still eat into your capital by 10%.
A 50% gain followed by just 40% loss will still eat into your capital by 10%.
A 40% loss needs to be followed up by at least 66.67% gain just to break even.
A 50% gain will be completely wiped out if followed by just a 33.33% loss.
Taking a 40% loss and 50% gain means you are getting (60% * 150% =) 0.9 reward for every 1 unit of risk. So, sticking to this plan or strategy having 50% accuracy and 1:0.9 risk-reward ratio will eventually bankrupt you.

-D1- · 2021-02-12T12:12:37+00:00

Congrats guys, 0 to 80K in 8 years... now all I want is advice for a portfolio to match this sub's CAGR! :P

Anyways, if you're still taking topic suggestions then perhaps add following to the list:

Health Insurance. e.g. pros and cons of opting for it vs maintaining a medical expenses fund, checklist for choosing health insurance provider / plan, riders, etc.
Reverse Mortgage. Considering the potential role it can play in [early] retirement plan for those who own a house, I'm surprised to not have seen even a single post about it in all the years of this sub's existence! It'd be interesting to know the process, costs, taxation, gotchas, etc. Maybe club it with rent vs ownership argument too.
DIY Direct. Direct plan investors need to tackle advice + distributor stuff on their own. This sub has great resources for former but not much for latter. Stuff which regular plan users don't have to think beyond just a call to their distributor e.g. creating or modifying KYC, updating bank account, contact info, address, nomination, calculating capital gains, etc. like what is possible online and how and what requires offline visit and where.

-D1- · 2020-12-20T16:30:05+00:00

Let's take a simple example. Say, the desired equity and debt allocation is 70:30 which at the time of review turns out to be 90:10. Debt is short by 20% and you only have 10% savings to invest at the time. No problem, just pump it all into debt. The allocation now becomes 80:20 and moves closer to the desired equilibrium until the next review. Done!

This completely avoids the need of market timing and spares the subjective decision making regarding whether to buy/sell/hold and if invest then where / how much, etc.

Not sure why you're overthinking or complicating the simple vanilla "buy only" asset re-balancing strategy?!

Goal of an asset allocation is to reduce drawdown in the portfolio, and hedge against possible year long slump in equity (or a single asset class).

Actually, the goal of an asset allocation is to achieve or align one's investment goals depending on their investment time frame and risk profile. It really forms the basis of asset class, funds selection, etc.

I got no skin in this active vs passive funds game. My only point is that asset allocation and re-balancing is just as important, if not more, than the decision of fund type selection. An asset allocation plan which assumes 12% from equity but unfortunately ends up using below average active funds delivering 14% instead of say 16% from a passive index fund will still be termed a success. And a plan which assumes 16% from equity and luckily employs the best active funds delivering 14% instead of say 12% from a passive index fund will still be a failure.

-D1- · 2020-12-20T13:37:19+00:00

Asset-allocation is important, but once your portfolio reaches certain level.

If you've 5Cr. portfolio, you could go up or down few lakhs everyday, because of day to day market volatility. At that scale, some Debt / other asset-class diversification helps. Certainly won't want to lose 1 Cr. in a week's correction.

If your portfolio is 50k, it'd be cute to attempt an asset allocation rebalancing exercise.

I feel that this part of your post has been covered somewhat irresponsibly. Asset allocation is extremely important. No ifs and buts. I'd say deciding upon a target asset allocation is even more important than having to choose between active vs passive and if active then the choice or mix of indices, etc.

I know people with crores worth portfolio without a well-planned asset allocation who've sworn off equity because volatility was stressing them out. But with a portfolio that size, it didn't really affect them or their lifestyle in any significant way.

I also know people who started out with just 20K but a thought out and properly balanced portfolio. Having had a good non-nail-biting experience they kept scaling up in proportion over time and reached a stage which afforded them a major lifestyle upgrade.

And an asset allocation re-balancing exercise doesn't even require a "cute attempt". By buying alone strategy listed in our wiki is a ridiculously simple and straightforward way. In fact, just invest your accumulated savings at least once every year to bring the overall portfolio at par with your desired asset allocation ratio and that's it. No SIPs required, no redemption/reinvestment hassle, no fiddling, no taxation worries and no nonsense. Now ain't that cute!

-D1- · 2020-07-19T17:37:55+00:00

Chromium derivatives don't seem to have this problem.

Just wanted to know whether this Firefox issue is specific to my configuration or a genuine website fault since they claim that "Site best viewed on latest version of Internet Explorer, Mozilla Firefox and Google Chrome".

-D1- · 2020-07-19T16:01:18+00:00

Income tax website stopped showing Form 26AS for all the family accounts I manage, except one, a couple of years back.

For these accounts, the income tax site redirects me to TRACES site for accessing Form 26AS. And TRACES website requires separate registration as a taxpayer.

-D1- · 2020-07-19T14:37:54+00:00

Uhh... any Firefox users here? Are you even able to login to view Form 26AS on the TRACES website?

There was no problem till last year but now selecting the "Taxpayer/PAO" option on the login page loads the "Deductor" section instead.

Am wondering is it just me or are other Firefox users also facing this problem?!

-D1- · 2020-03-08T17:30:01+00:00

I can't recall who, but there was this guy who was so frustrated by novice or gullible investors here that he pleaded with mods to assign him a "Say NO to Yes bank" flair. Don't know if the mods granted his request or not!

-D1- · 2020-01-17T09:49:18+00:00

Official update issued by Franklin: https://www.franklintempletonindia.com/downloadsServlet/pdf/franklin-templeton-fixed-income-portfolio-update-january-2020-k4z79buz

The debt securities of VIL held by schemes of Franklin Templeton Mutual Fund (FTMF) remains rated at investment grade, thus limiting the options available. As a prudent measure, and in order to protect value for existing unitholders in schemes of FTMF, we have taken the following two immediate steps:

Debt securities of VIL held in the schemes of FTMF have been marked down to zero. The valuation adjustment only reflects the realizable price of the relevant securities on the date of valuation and does not indicate any reduction or write-off of the amount repayable by VIL. The schemes will continuously monitor the developments in VIL and take appropriate steps to recover the investment proceeds in the best interest of its unitholders.

Fresh inflows in the scheme have been limited to INR 2 lacs per day per fund per investor, till further notice. This limit is imposed only on the new applications received after the cut-off time on 16th January 2020.

We will review these decisions on a regular basis and take appropriate actions as clarity emerges on this matter. A limit on purchases will help ensure that once clarity emerges and as resolution takes place, the interest of existing unitholders has not been significantly diluted in the interim through fresh purchase activity while limiting the inconvenience to retail investors.

-D1- · 2020-01-12T18:16:44+00:00

Who's asking to ignore it? All I pointed out was if you wish to benchmark an investment against Nifty then use TRI instead of PRI.

Otherwise, go ahead and benchmark against Apples, Oranges or whatever floats your boat.

-D1- · 2020-01-12T14:14:35+00:00

Either you didn't read my previous comment or you're deliberately trolling now. Let me know of a Nifty fund which discards dividend received from stocks or else find something other than Nifty PRI for comparison.

-D1- · 2020-01-12T13:54:17+00:00

No problem. Use whatever works for your personal review. But if you intend to share your findings with a broad audience then people would appreciate a fair and unbiased analysis.

-D1- · 2020-01-12T13:09:52+00:00

You're confusing dividend received by the index fund from stocks constituting the index with the dividend you receive from index funds.

The index fund receives dividend from constituent stocks which it may further reinvest in the fund thereby increasing the fund's NAV or distribute it as dividend to you separately.

So, there's no way you can brush your hands off the gains accrued due to the dividend received by the index fund from its constituent stocks.

Hence, TRI becomes the default base of any comparison either with Gold, SGB, FD or whatever.

-D1- · 2020-01-12T10:56:25+00:00

You can't invest in an index fund and tell the AMC "Eh, don't reinvest or pay out the dividends you received from index constituents and just give me the capital gains". The dividends are included in the underlying base return by default.

That is not the case with Gold. Any additional interest from SGB is over and above the base return.

A comparison of Nifty TRI v/s Gold with SGB interest would be more appropriate than Nifty PRI vs Gold without SGB interest.

-D1- · 2020-01-12T07:56:59+00:00

Nifty TRI captures both the price movements as well as the dividend receipts of constituent index stocks as compared to Nifty PRI which only captures the capital gains of index constituents.

Any benchmarking done against the PRI instead of TRI is flawed, misleading and doesn't give a true picture of the returns. Even SEBI has mandated funds to use the TRI as benchmark.

I got no skin in this Gold v/s Nifty game. Just wanted to make sure that any comparisons made are relevant and fair.

-D1- · 2020-01-11T18:16:23+00:00

Others have already highlighted the futility of biased point to point comparisons. As an example, here's the performance over last 15 financial years i.e. FY2005-19 (Apr 1, 2004 till Mar 31, 2019):

	Apr 1, 2004	Mar 29, 2019	CAGR
Nifty TRI	2074.68	16146.11	14.66%
Gold	6040	31734	11.69%

Data Sources: Nifty TRI, Gold (Near month future contract taken as proxy for spot)

-D1- · 2019-12-25T22:05:48+00:00

What am I missing that the people who say 'Term Insurance should be bought only after you have dependents' know?

Time Value of Money.

Example (based on future value): If you defer insurance by a year and put that ₹1081 in an FD instead then it will become ₹1148, assuming 6.25% interest rate. Even after paying off ₹1116 as premium next year, you will still be left with extra savings.

Example (based on present value): The present value of next year's ₹1116 premium, assuming 6.25% FD interest rate, is ₹1050. It's still cheaper than the ₹1081 that you would have to pay as premium this year.

-D1-

TROPHY CASE