Ethical Investing

If one doesn't agree with the line of business, should one invest in it? There can be many arguments for and against ethical investing.

For example, I don't agree with treating schools and hospitals as "business". In my opinion, these are fundamental rights of a citizen. So, no investing in ,say, apollo hospitals.

However, I don't mind investing in cigarette or alcohol. I don't want anyone to smoke cigarette or drink alcohol but betting that the business would do better is a different thing. Consider the medical profession. Obviously, doctors want to treat people which is good. Have they ever considered the profession risky? No because they are pretty confident that there won't be dearth of sick people. I find doctor's position similar to mine. Doctors don't wish anyone to be sick but would definitely hope they are enough sick people to pay their monthly bills.

In conclusion, it is not as black and white as one might imagine. What is ethically acceptable will vary from person to person and from case to case.

Home sweet home

Thanks to my son's curriculum, I keep getting chances to dabble with poetry. Here's about home.

Often I think of a beautiful town
    that is seated by the sea
in thought it goes up and down
    never satisfies the inner me
shadowy lines of the trees
    steady influx of bustling bees
impressions my boyish imagination catch
    fails before my home to match

Injuries and Fundamentals

Sports is a microcosm of life. It has been more than a month since I sustained ATFL. It is frustrating not to be out there playing and enjoying the sport of football. Even worse, amateur volleyball tournament happened and I couldn't give my best. Just a moment of stupidity from my fellow player cost me more than what I deserve. Sports injuries give you a good life lesson.
In sports, you will be in the game if your warmup, strengthening and preparation are greater than the intensity of your play. Likewise in life, you will be in the game if your earning is greater than your expenditure. Both cases, we don't have an absolute figure as to what should be achieved. Stay above the water level, you will live no matter how deep the water is.
An excellent post about football injury. https://blog.playo.co/taking-care-of-football-injuries/. Do small things right to get big things right.

Contrarian Position

Is it safer to take contrarian position in stock market? In one of the Dilbert comics, the supposed technology prima donna will keep putting down all the ideas. He will justify his tactics thus... People will forget your wrong predictions on things that everyone got right. However, when any of the ideas expected to be right go wrong, you will be remembered as a genius who predicted the right wrong right. When I first heard of holding a contrarian view in the market, I thought on the lines of Dilbert's prima donna. On further reading, I realised that my understanding is incorrect.

In value investing, contrarian position is to pick good stocks that crowd deemed worthless. The success of such a method of investment is glaringly obvious. isn't it? Pick cheaper stocks and reap the benefits when it surpasses everyone's expectation. Is it as simple as it sounds? Definitely no.
The golden standard of stock market investment, Berkshire Hathaway, has utmost one great idea per year (as per Charlie Munger). Now, we must imagine our expected hit rate. Good news is that we don't need many great ideas in our life time. We need to invest a lot of time and patience in identifying rare good stocks and keep faith in them against market noise. If we can do this, we can emerge victorious.

Stock market is often compared to Pari mutuel system. Here is an excellent write-up on it. Given the huge house commission costs of pari mutuel betting system, even with good analysis it is difficult to avoid losses. The only people who successfully beat it are the ones who wait for the mispriced gambles and bet on it. Of course, stock market doesn't have huge transaction costs. Still the lessons from pari-mutuel-system is applicable for stock market.

WAIT FOR THE MISPRICED GAMBLE.

Gone with the wind

I came across a news - "Man travelled from France to UK in just 22 minutes, Future is here".
Being in investment game, we would be bombarded with such blown-out-of-proportion positive and negative economic news. It is important to keep a level head and read between the lines. Regarding the news, the man did really travel in hoverboard from Calais,France to Dover, England. But the distance is somewhere under 100km. Don't get me wrong, this is a great achievement and might lead to more innovations in long distance private travel. However, the achievement is blown out of proportion. We can imagine a parallel in economics world. GDP jumped from 7 to 8% etc. It is really important for investors to do proper research and understand the extent of any news being positive or negative. It will serve us well.

Value Investor's CheckList

Deviation from any of the points below means risk of not being a value investor.

1. Focus on company's intrinsic value - what a company is actually worth
2. Define circle of competence and search for ideas only within it
3. Conduct in-depth fundamental research and analysis and not rely on tips
4. Focus on company's business and not on macro-economic forecasts
5. Understand business will have cycles and immediate past performance will not necessarily show the future
6. Be a contrarian in choice after careful analysis
7. Think long term
8. Be patient for the right pitch since great investment ideas are rare
9. Focus on avoiding permanent loss compared to minimising stock price volatility
10. Focus on absolute returns and not on relative performance compared to index or anyone else's portfolio
11. Admit to mistakes and actively seek to learn from them

Closet Indexing

Closet indexing is a strategy used to describe funds that claim to actively purchase investments but wind up with a portfolio not much different from the benchmark. This essentially means investors are not actively seeking out good stocks. They rather run behind the stocks making the index.

Different drawbacks for different players
1. When a retail investor does closet indexing, he is not doing due diligence in picking stocks.
2. Fund managers are expected to beat or atleast secure draw with the index. If managers are not taking the risk of finding good stocks, they would tow index's line. In such cases, fees that investors pay for the manager becomes unnecessary. Retail investors are better off buying index funds with much lesser fees.
3. Going blindly with stocks representing the index would invariably reinforce the idea that those stocks are good stocks. This positive spiral will bloat the stock prices of the index stocks.

Investor Or Speculator

1. Are you an investor or a speculator…or are you both?
Till date, I have been purely a speculator relying only on tips given by magazines and friends. I want to be both, an investor for achieving bigger financial goals and a speculator for making quick small profits.
2. Which was your last stock purchase that qualified as a Graham-styled investment- (1) It was based on thorough analysis, (2) promised safety of principal and (3) a satisfactory return?
I haven't made any such investments.
3. Which was your last stock purchase that qualified as a speculation? Why do you think it was a speculation?
BlueDart. It's a speculation because I am not worried by the underlying value of the asset. I bought purely to gain some money during its price upswing.

Stock Market - Entrance exam

1. What is my biggest fear of being a stock market investor?
2. What would happen if that fear came true?
3. Would it stop me from trying again?

1. Watching my capital getting erased slowly while I don't get the courage to exit my favourite stocks.
2. If the fear became true, then I had truly failed as an investor. I would take a break from investing and do retrospection.
3. If I don't fix the faults that I identify, I would not return to stock markets again.

Digital Overdose

My wife borrowed a book for reading. Instead of checking the contents directly, I went to "Amazon" to "look inside".
Quirk#2

Queen vestige

I read "Notes from underground" and "Crime and Punishment" in English. It didn't occur to me, the work is Russian and I could have bought Tamil translation.
Quirk#1

IELTS Result

I kindof dropped the ball on capturing my thoughts in a blog. Its been more than a year since I got my results. Here it is.

Listening - 8.5
Reading - 8.5
Writing - 6.5
Speaking - 7
Overall band score - 7.5

Writing is definitely a disappointment. Otherwise, not a bad attempt.

Writing Test - Task 2

Most countries allow 18 year olds to drive a car. Some people say this is a good age to start driving. Other people say that minimum age to drive a car should be at least 25 years. Discuss both these views and give your own opinion.

In recent past, there has been an increase in number of accidents, caused by young drivers. This has shifted the focus of policy makers towards the driving age limit. It is conceivable that 18 years olds are good enough to drive safely but, in my opinion, age limit must be increased from 18 years to 25 years.

It is quite evident from casual observations that the majority of young drivers are college-goers. Most of them have to travel a long distance daily from their homes to colleges. Ability to drive a car on their own give them the freedom from travel worries. It helps them to concentrate on studies. Not only they manage to attend college regularly but also get a sense of responsibility at a young age.

While it is convenient for young students to be a legally licensed driver, it does not translate into convenience for the commuters, in general. A recent study has stated that the traffic in metropolitan has increased by ten-fold and that new car owners of age group, between 18 and 25, are responsible for eighty percent of the increase. Clearly, increasing the age limit will alleviate the traffic problem.

The department of transport safety, in 2001, funded a research on correlation between number of accidents and the driver's age. The research also concluded that the accident rate drops dramatically beyond the age of 25. The city planners are already mulling a band on car owners below 25.

In summary, there are lots of points in favour of increasing the driving age limit to twenty-five and it would be in everybody's interest to do so.

Word count - 271
Grammar & Spelling mistakes - 2

Writing Test - Task 1

You are moving out of your accommodation and think that it might suit a colleague who is arriving next month. Write a letter to this colleague. In your letter
- say why you are moving
- describe your accommodation
- explain why the accommodation might suit him/her.

Dear Mr.Johnson,
    I am writing in regard to your transfer from Mumbai office to Chennai office. I came to know that you have not managed to find a suitable accomodation in Chennai, despite three months of search. This letter is to inform you that I would be vacating my apartment and it is available for rent from next month.
    In an incredible coincidence, I am also getting transferred to another location. The branch, in Kochi, needs my help in ramping up it's operations and I am moving out this month itself, due to the urgency of the situation.
    The apartment, that I live, is situated in Marine Drive, one of the loveliest places in Chennai. There are three bedrooms, a huge living room and a modular kitchen. Drinking water is a problem, though. The apartment association, usually, arranges for paid water services.
    The apartment is very near to our office. I came to know that you have two kids. There is a very reputed school closeby. The neighbourhood offers lots of recreational activities which you would appreciate and enjoy.
    Please reply if you are interested. I might get the house owner to reserve the apartment, on your behalf.
Your faithfully,
Ram Sunder

Word count - 202
Grammarly check - 2 spelling mistakes.

IELTS - Speaking Test review

After a week of no preparation whatsoever, I sat down to take a speaking test from IELTS Liz. Here's the review.

ums/aahs

On an average, I was doing this 4 to 5 times, It needs improvement. I am not particularly worried about this. If conscious, I can avoid these.

silence

Surprisingly, there were not much of silence. I guess ums/aahs and silences are a tradeoff when you are thinking about the content. So, the idea is to get both counts summed to zero.

Vocabulary

On an average, I was using 3 words that are rare and highly relevant to the context. Good job.

Complex sentences

There were at least 2 sentences that were complex in nature. I feel I overdid it sometimes. I should try to avoid going into Christopher Hitchens or Thomas Pain mode.

Tenses

I am doing alright in this. Not sure if I should intenstionally touch upon all tenses in every answer.

Intonation

I can improve in this. Given the number of ums/aahs, it is difficult to continue to the flow and show the intonation.

Mistakes

I was making at least 1 mistake per answer. Mostly pronunciation.

Repetition

I can feel the want of words in few answers. I repeated "lots of" many times and other words too. Certainly, it doesn't show my range. I need improvement in this.

Full Test 1

I attempted the full IELTS test. This is one of 4 tests offered by the consultancy.

Listening Test

It didn't go well. Got 32 questions correct. Band score 7.5.
1. I am faltering in Direction related questions. Need to improve.
2. I need to be careful with the grammar and fit the answer in a proper way.
3. Sometimes answers won't be readily available in the recording. I need to learn to write down words as narrated in the recording and give answers according to the question.
4. Special attention must be given to the last 2 sections as it gets progressively tougher.

Reading Test

This was online test. So, I couldn't put my strategy of underlining text into practice. There were 6 wrong answers and another 3 which were deemed wrong but I didn't agree with the test makers :). Y/N/NG is giving a challenge since I am not getting it even after seeing the answers. Band score 7.

Writing Test

Strangely, this has started to become my strong point. Since its online test, I could make many corrections easily. It is kind of cheating but still I am beginning to feel confident about writing section.

Speaking Test

It wasn't a proper test since I misunderstood the interface for good part of section 1. I am not in my final stretch yet but it is starting to look good.

Takeaways

1. Practice listening tests.
2. Get better on Y/N/NG questions.
3. Able to sit through the entire duration without discomfort. (didn't even take water)

Task1

You have received a letter from bank stating that 240 dollars are overdrawn and there will be charges of 80 dollars which will be deducted from your account. Write a letter to your bank manager mentioning that the information is incorrect.
Dear Sir/Madam,

    I am writing in regard to the impending penalty that would be imposed for overdrawing money from my account. The information about my withdrawal is incorrect.

First of all, I have been your bank's loyal customer for the past 15 years and I am disappointed that the bank has decided to penalise me, even if the allegation is true. Recently, my account status has been upgraded from gold to platinum as a reward for my continuing association with the bank. Surely, a penalty is an inappropriate way of treating a platinum customer.

Second, it is incorrect to state that I had overdrawn a sum of 240 dollars. My account balance has been consistently hovering above 70,000 dollars for almost 5 years now and the bank's withdrawal limit is 10,000 dollar per month. Given these details, I wonder how can I get into a position to overdraw 240 dollars. This conclusion of overdrawing is clearly a mistake from the bank's side.

I would urge you to withdraw the fines imposed and it would not hurt to hear an apology as well.

Yours faithfully,
Ram Sunder

Task2

Children are engaged in different kind of paid work. Many of people consider it inappropriate and many think it as a learning experience for taking responsibility? Give your opinions.

Recently, there is an increase in number of companies that offer part-time jobs to children. The society is divided in its opinion on the subject. In my opinion, there is merit in exposing children to work at early stage but there are more disadvantages than advantages in doing so.

Part-time job for children is a great opportunity to experience what it is like to work in a job, earn because of it, and take responsibility. Usually, a child gets this opportunity late in it's life. An early exposure would give a chance to experiment and learn the various aspects of workplace. However, such advantages are not enough to really convince the usefulness of this idea.

First, children need their free time to themselves. It is essential that children play, socialize and have fun. The famous academician, John Wright, has wrote in his book "The budding minds" about the necessity of leisure time for kids. He claims that the period of leisure is equally, if not more, important to a child's growth as studies.

Second, child labour is known for its misuse by employers. In a recent study, it was reported that the age group of 15 to 18 is the most susceptible group for employment injustice, namely lesser pay, more work hours, and worse work conditions. It is easy to understand why this is so. A younger workforce is most likely to not know about any of the labour rights and would, invariably, be afraid to speak out.

In summary, children are better off studying, learning and enjoying their student's life. Although, part-time jobs offer some lessons to children, it is certainly not worth pursuing this path.

Writing task 2 - Virgin attempt

Topic

In recent years, more and more people are choosing to read e-books rather than paper books.
Do the advantages outweight the disadvantages?

Answer

There is a growing trend of people preferring to read the contents via e-books instead of paper books. In my opinion, the pros outnumber the cons in favour of e-books.

Traditionally, paper books have brought a sense of seriousness and respect to the art of book reading. Avid readers opine that reading is an experience by itself and that paper books gives an illusion of direct communication between the author and the reader. One cannot imagine a book library with only tablet computers lying around.

While granting the beauty to the old school way of book reading, it is important to look ahead to the needs of future generations. Younger generation of readers do not prefer the heavy books. They are attracted to the notion that a small thin book-sized computer can hold the contents of countless books. Statistics indicate that the adoption of e-books is higher in the age-group of 10 to 30 years compared to the age-group of 50 years and above.

The most important aspect of e-books is that they are paperless. With ever increasing population and the corresponding demand for books, e-books does nature a great favour. A recent study showed that an average New York Times best seller is responsible for the destruction of hundred trees. While printing industries have invested in recycling papers, they have not found a permanent solution to save tress that are cut for producing books.

In summary, people are justified in switching over to e-books. Though paper books have retained their aesthetic appeal, they cannot offer the convenience and various other advantages that e-books offer.

Self-Review

• Though I thought I would be loquacious as usual, my word count hovered just above 250. 264 is a very good number.
• I pride myself that I am better than even native speakers in getting the singular/plural part of the grammar correct but I got few mistakes. Need to review properly.
• I have highlighted what I thought was wrong grammar. Mostly, I have not used the article "the" properly although I am not sure if I am right about the mistakes. :)

Lessons in time management

• Time taken: 34 minutes.
• It is evident that I can write fast. However, need to test the speed in full fledged test. With task 2 being the last section, the energy levels are bound to be low.
• I have decided to allocate 10 minutes to get my thoughts together. It is worth investing the time.
• It is definitely worth spending good amount of time in the introduction. Paraphrasing is hard especially if the vocabulary is limited.

CLB 9 or CLB 10 or IELTS 9

Aim for the stars. If you fail, you'll land on the moon. So, they say. Is it necessary, however?

I am writing IELTS for Canadian immigration. Although I can make myself a plaque if I get IELTS band 9, it serves little practical purpose. It is sufficient if I aim for CLB 9 or 10. Between CLB 10 and 9, there is a CRS score difference of 12 points. This may or may not be a game changer. Let's see what scores would give me CLB 9 or 10.

So, my aim is to get L8.5 R8 W7.5 S7.5. If I miss CLB 10 due to any of the tests, I shouldn't lose my sleep over it. CLB 9 is also good enough.

IELTS Letter Writing Strategy

Beginning

Formal

I am writing in regard to the scholarship program at London University.
I just want to let you know that..

Informal

It has been long since we last were in touch with each other but I haven't forgotten the wonderful times we spent together last year. It's my birthday coming up and I wanted to invite you over to stay at my place for the celebration.

Ending

Informal

It will be great to catch up again soon. Give my best to everyone in the family.

Formal

I look forward to hearing from you.

Signing off

Informal

Take care,
Rajini

Formal

Yours sincerely, - if person's name is known
Rajinikanth ShivajiRao
Yours faithfully, - if person's name is unknown
Rajinikanth ShivajiRao

Letter structure

title
opening statement – reason for writing
body paragraph A (one point with detail)
body paragraph B (another point with detail)
body paragraph C (final point with detail)
closing statement (if needed)
signing off
name (choose a name or use your own)

Timing

Atleast 3 minutes to decide the points and their places in the letter.

Writing Task 1 - Personal letter - Virgin attempt

Found a topic to write a letter for, here. I noted down few hints and started writing. Overall I took around 17 minutes to complete the letter and had enough time to check for grammatical errors. In few places, I managed to rephrase the sentences. Here's the topic and my letter.

Topic:
You have just spent a week with a friend on holiday. When you got home, you realised you had left your wallet there. Write a letter to your friend. In your letter:
1. thank your friend for the holiday.
2. explain that you left your wallet in their house.
3. give them instructions of how to send it back you.

Letter:
I am writing this letter in regard to the wallet that I lost in your home. First of all, I had the time of my life holidaying at your place. Your arrangements were meticulous and wonderful. Since you took care of all the expenses during the holiday, I didn't realize that I left my wallet in your home until after I arrived here.

The wallet consists of credit cards, personal identification cards and 1000 rupees in cash. Please feel free to destory the credit cards as I would be applying for new ones anyway. It is important that they don't get misused by anyone. ID cards are the most important items in my wallet. Please send them by courier service, specifially DHL. I cannot trust any other courier company for transporting them. As far as the cash is concerned, you are welcome to keep it as a parting gift. If you insist on returning the cash, please use NEFT for money transfer. I believe you already have my account details.

Most importaintly, I left my wallet in the second drawer of the guest cupboard. I am sorry for the inconvenience caused and I am looking forward to having another eventful holiday with you in the future.

Yours lovingly,
Ram

Total words: 207