R Balakrishnan, Author at PrimeInvestor

Governance - 8 checks to assess management quality

Stocks

Governance: 8 checks to assess management quality

The Adani saga (still continuing, I guess) brings forth the issue of governance, management quality, and other qualitative factors that many investors consider as essential check boxes. During the time I spent in CRISIL, ‘management quality’ would set a cap on ratings. But what is ‘management quality’?

Premium article available only to subscribers.

R Balakrishnan February 14, 2023 No Comments

Fundamental analysis or technical analysis: which is better

General

Fundamental analysis or technical analysis: which is better?

There are more theories on what works in stock investing than there are listed stocks. Each one seems to be successful at some point in time. However, there is still no single universally applicable formula. I am still in search of that magic formula. If any of you do find one, please post it in the comments section.

But if there can be said to be two warring camps on the right approach to stock investing, these are usually fundamental analysis and technical analysis. Both have loyal camps of followers who swear that their method works best.

Premium article available only to subscribers.

R Balakrishnan January 24, 2023 No Comments

The search for high interest rates: where to draw the line

General

The search for high interest rates: where to draw the line

Low interest rates and rising inflation are a dilemma for savers. There is a constant conflict between risk and return. As far as the retail investor is concerned, he looks forward to being ‘protected’ by the regulators. Financial literacy does not come easy and ninety percent of us would not know the difference between a fixed deposit and a debenture. And we would be forgiven in thinking that the term ‘secured’ debenture or bond means that every rupee we invest is safe! But where should we draw the line in the search for high interest rates?

R Balakrishnan November 27, 2022 6 Comments

General

Mutual funds vs PMS – Pros and Cons

For investors who can write a single cheque of Rs 50 lakh or more, Portfolio Management Services (PMS) have emerged a popular vehicle for investment into equities. In effect, PMS is identical to investing directly in shares, the main difference being that you have given absolute power to the PMS agency to buy/sell shares on your behalf and your portfolio choices are left to them.

R Balakrishnan October 25, 2022 15 Comments

Stocks

Here’s a hot stock tip

Today, everyone seems to be part of Whatsapp groups, Telegram channels etc which specialize in giving stock tips. As an individual, it is an extremely demanding ask to keep searching for new stocks, new ideas etc. There is a constant bombardment of ideas and stock tips from the media- television channels, internet business websites, free data providers, charts, tipsheets and more.

Premium article available only to subscribers.

R Balakrishnan September 22, 2022 No Comments

How to approach risky, but rewarding small caps

Small caps are always alluring to the investor. Everyone knows that it is difficult to make quick money in large well-known and well-researched stocks. We all want to find that small gem which turns a lakh of rupees into crores. The most money is made in such cases when we can spot a company that will turn out to be a market-leading name in five to ten years. Today, the investor population has increased dramatically. Besides, information is available to everyone. This makes small cap investing both interesting and risky.

R Balakrishnan September 1, 2022 5 Comments

General

Navigating regulatory risks in stocks

Indian investors can pay dearly if they choose to ignore regulatory risk. The risk of a regulator suddenly putting a spoke in the wheel of a sector or company that’s sailing along, cannot be quantified. It is a subjective assessment.

R Balakrishnan July 21, 2022 No Comments

General

How I handle bear markets

As per the above table, we are not yet in a bear market, though it would seem to be just round the corner. But what the data shows is that the period taken to recover from the onset of a bear market back to regaining the previous peaks can be as short as three months or as long as 74 months.

R Balakrishnan June 28, 2022 14 Comments

Commentary

Governance at mutual funds: What you should know about the inside workings

While one doesn’t know enough yet to comment on the veracity of these allegations, this does shine the spotlight on the issue of governance at mutual funds. There’s a lot of song and dance on whether listed public companies are managed in the interests of their shareholders. But what about mutual funds?
MFs are essentially custodians of public money, where both profits and losses are entirely passed on to unitholders. I give money to a fund manager to deliver a certain return from an asset class. But I am paying a fixed fee to him which he gets whether he does better or worse than the market. This pass-through nature of mutual funds means that the unitholder is most affected when the fund is mis-governed or mis-managed.

R Balakrishnan May 24, 2022 2 Comments

General

What they don’t tell you about M&A

In an M&A, company A buys out company B, triggering positive and happy noises in the market. Share prices of both companies jump in joy on the announcement. The news then gets digested and analysed. Shareholders of both companies realise after a bit, that they should have sold out in the first few days after the announcement, rather than swallow stories of ‘synergies’, ‘cost savings’, ‘market leadership’, ‘inorganic growth’ and other jargon that are usually peddled to sell mergers, in company releases and analyst reports.

R Balakrishnan April 24, 2022 2 Comments

Stocks

Arbitrage opportunities in share buybacks

The share buyback offer of TCS which closed last week, attracted a record number of applications from investors who wanted their shares to be bought by the company and extinguished. TCS had offered to buy back shares worth Rs.18,000 crores at a price of Rs.4500 per share.

R Balakrishnan March 27, 2022 8 Comments

Stocks

LIC IPO – the elephant makes an entry

On the LIC IPO, a lot is at stake. Rules have been bent, timelines collapsed and all the corners cut to meet deadlines and valuation numbers. The secondary market price is extremely critical for the government as it will decide the annual dilution of five percent that is likely to happen, to reduce the government ownership to seventy five percent over five years. So, for those who are worried about the price now, there is hope.

R Balakrishnan February 20, 2022 9 Comments

Governance: 8 checks to assess management quality

Fundamental analysis or technical analysis: which is better?

The search for high interest rates: where to draw the line

Mutual funds vs PMS – Pros and Cons

Here’s a hot stock tip

How to approach risky, but rewarding small caps

Navigating regulatory risks in stocks

How I handle bear markets

Governance at mutual funds: What you should know about the inside workings

What they don’t tell you about M&A

Arbitrage opportunities in share buybacks

LIC IPO – the elephant makes an entry

About Us

Useful links

Legal/regulatory

Track us on social media