InvestingTurtle Wealth

The Best Investing option for GOLD!

Human loves Gold, Especially Women and Govt. it’s one of the most liquid assets in the world, Gold has been one of the most favorite investments by Indians from centuries, we are also in top 10 Countries holding Gold Reserves.

As the Interest rates have seen the south side in Indian Markets, retail investors have found Gold to be one of the safest and easiest investment, that has a probability to beat the Interest Returns, with Safety and Liquidity in the Game, also Gold has always seen as a sense of prosperity and an emotional connect in Indian Families,

Interest rate going down, Gold Going up, and the economy in a tough time has yielded a great demand in Gold.

This day as gold has started inching up in the extreme North Direction and doing it all-time high, a lot of investors do call us asking 2 questions:

  1. Is this the right price to enter in Gold?
  2. Which is the best instrument to invest in Gold?

Let us understand what GOLD has done for us over past Decade

Source: YEARLY GOLD CHART OF MCX

Gold has generated 2.70 time return in last 10 years, but the catch here is that from 2012 to 2018, good 6 years gold was at the same price, and there was nearly 0 Return (off course nobody would have hold equities if there is no return in 6 years, but gold we hold, right?)

We have many Gold investment options like:

  1. Buying Physical Gold – Jewelry
  2. Buy GOLD ETF/MF
  3. Buy Gold in MCX
  4. Buy Gold Sovereign Bonds
  5. Surprise!

Our whole approach when investing in other options than buying physical gold is where we can find security and more returns and that’s what is more imp.

Source: SPIDER ACE Data

As you see above 10 years data for Gold which is in White which has generated 273% returns, but the companies who do the business of Gold has given much more superior returns than Gold, Titan being one of the Undisputed brands in Gold business  PAN India with the highest market share has given 921%, outperforming 3.30 times vs Gold and  Muthoot holding the highest market of Gold Loan (which has practically near to 0 NPA Possibility) has generated 740% returns, outperforming by 2.70 times vs Gold.

Now why this has happened?

The simple reason is that Business Gets Valuation and that is the reason the Organized Leaders in the Gold business always will fetch higher valuations as the business of gold is bigger than the Business of Investing in Gold and they will, therefore, do much better in comparison to Investing in Gold.

So Next time when you or your family Questions should we invest in Gold? You know where you should contact

Investments in securities are subject to market risk and there is no assurance Or guarantee of the objectives of the Portfolio being achieved or safety of corpus. Past performance does not guarantee future performance. Investors must keep in mind that the mentioned statements/presentation cannot disclose all the risks and characteristics. Investors are requested to read and understand the investment strategy, and take into consideration all the risk factors including them financial condition, suitability to risk return profile, & the like and take professional advice before investing. Opinions expressed are our current opinions as of the date appearing on this material only.

Our Client, PMS, may hold the followed discussed securities, this blog is not an stock investment advise this is just for educational Purpose for more details visit https://turtlewealth.in

InvestingTurtle Wealth

1,00,000% Returns!

Amazon Just Completed its 23 Years of listing, undoubtedly one of the best wealth creation stock by the most popular company, used by millions of population has created 1000 Times returns, and that too in a country like USA.

After reading this I am sure you would be gazing, wish I would have invested in this stock and would have turned my few dollars into millions, sure this is good in dreams, but would it be possible if you were the lucky early investor in amazon?

Most Probable answer is NO, there are certain reasons for it and the main is volatility:

1. The stock fell 15% over three days 107 times.

2. It has lost 6% in a single day 199 times

3. It fell 95% from December 1999 to October 2001. (It took 10 years for amazon to come back to its All-time High which was made in 2000)

Maximum Draw down of Amazon vs Dowjones

In Investing  “Magic is not when you buy or when you sell, the magic is in PIVOT”

RoMe.

Now looking at this data, ask yourself the following questions:

  1. Would you be able to handle this type of volatility in the stock?
  2. Would you be able to hold the idea about the company is great but seeing the volatility in price?
  3. If you would have Exited the stock, but still have the guts to buy when it was reversing up in Price, Profits or People?

As it is not easy to build a company like amazon, the same its not easy to hold on shares which creates immense wealth but suffers volatility, because of nature of business!

In India we have certain 1000 times wealth creator stocks like:

  • Infosys, Relaxo Footwear, Balkrishna Industry, Bajaj Finance, etc (not an investment advise)

So the whole point is investing is not easy, its not linear, it is going to be a rough journey, if you have a process, you have a probability to create wealth or else you need to depend on the luck factor!

Let us assume from 100 IPO Investors, how many would have holding amazon till today, do reply in the comment section!

Happy Investing!
RoMe!

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InvestingTurtle Wealth

Mother of Black Swan!

In the Financial Markets we are much more aware with the term called “Black Swan” – an unpredictable or unforeseen event, typically one with extreme consequences, I have read almost all the Black Swans that has happened from the Tulipomania from 1600 till date, but what happened recently it has never happened in the History of Financial Markets.

The market does excesses, and all the previous Black Swan was the result of Excess Greed, Leverage and lack of Discipline, but this one is just different and something which was never in control.

So we all have this famous saying how much a stock or commodity can go down? 0 that’s it right? So many of the Retail investors buy penny stock as they think the worst it can do is to 0, nothing more than that, same in Options maximum premium can erode to 0, if 2 months back If i would have told you that a Commodity or a stock that can go below 0, you would have thought I am coming from a different planet all to gather right?

Crude Future Price closes as low as 1 Rs. on 20-04-2020

But that happened and I believe it was the “Mother of Black Swan”, due to privacy issue I am not naming the Client and the real quantity, but this has happened in real, I am sure we will learn the biggest lesson of our life from this blog!

Lets us name the Client Mr Jain, he bought 100 Contracts of Crude oil Futures at an average price of 1000 Rs. i.e. 10000 Crude (100*100) valued to 1 Cr. = Total Value of the Contract, as per our basic common sense the maximum loss of Mr. Jain would be 1 Cr. Only, but this time something happened where the whole Financial Industry was stunned, the exchange gave out the closing of the contract in Negative Value, which is unprecedented, so Mr Jain who had 1 Cr. Of Maximum approach had a loss of 1 Cr. + 2.8 Cr. (2884*10000) = 3.8 Cr., now no exchange nor any broker have a Risk Management of Negative Pricing, the broker would have maximum earned 1 Lac Rs. of Brokerage from the Trade that too Maximum, now it has ended up In a bad debt of 3 Cr., now the fight will go for years!

Most of the Investor/Trader bought Crude Futures on the logic of Catching the Falling knife, crude has decreased so much, and it may not go down more as it is the essential commodity of the world, as it will be a good short term trade for few bucks, also it is lock down so can make few quick money by trading on tho this, as the axiom says “Commodity prices cant go to Zero”, there are various reasons why Crude went in negative territory, but the fact is that buyer lost money that too below the gravity and that sums up for all!

  1. Never say Never, anything and anything is possible in the Financial World!
  2. Risk Management should be the most important virtue in the place of Return Management.
  3. Never hold stock on a  view that it is near to zero, what the maximum loss?
  4. Ask for the Maximum Risk In your portfolio vs. What’re the maximum Returns?
  5. Don’t catch the falling knife, most of the time you will be injured, this time some one was killed!

Regards
RoMe!

Disclaimer: This is just for Education and Knowledge purpose, for knowing more please visit https://turtlewealth.in
InvestingTurtle Wealth

Wimbledon’s Risk Management System

Wimbledon undoubtedly one of the most amazing game to watch for, it is the oldest tennis tournament in the world and the most prestigious, though I have a shallow interest in Tennis its on my bucket list, recently I was going through some of the articles and where my eyes popped up on this story, and I thought it is something I should share with my readers. (FYI (not a investment advise) the towels of Wimbledon is made by our Indian Gujarat Company)

Wimbledon was going to start from June 29 this year, and its one of the game where you need a lot of money to watch, it tickets are from 1000 to 20000 pounds ( 95000 to 19 lac rs.) (depending on the match) and they make a revenue of 250 Million$, but it’s the 1st time after world war II that Wimbledon tournament has called off due to the virus.

But whats Interesting in this? Wimbledon risk and finance subcommittee insisted on a pandemic clause nearly 20 years ago (that’s crazy isn’t it?) so from last 17 years. Wimbledon used to buy nearly 2 Million $ worth Pandemic insurance for last 17 years and paid nearly 34 Million$ as a premium where the possibility of Pandemic in the world was near to 0, still it continued, this time because of the Insurance they took it will receive a whopping claim of 141 Million$ (1 Million $ = 7.5 Cr. Rs.) estimated to cover its losses they have to suffer because of cancellation of tournament, Whooping isn’t it?

But let’s understand the thought process behind it, a committee to come to a point to take insurance before 20 years for a PANDEMIC which is the rarest to happen and for 17 years continuing to pay a big premium of 2 Million$ equals to 34 Million$ which has no return on it, what a risk management system it would have and the perseverance to follow it, for nearly 2 Decades, is just commendable, today we all would be feeling wow 141 Million $, its so great, but it has also taken the pain of paying 34 Million $ in premium for last 17 years, where the whole world would have thought they are doing the stupid thing and wasting 2 Million $ a year and making the insurance company richer.

When it comes to our Wealth Management Division, and we consult our client for the Security Basket – Most of them require High Life insurance as they are the single bread earner or you need a pump in your health insurance, may be you need a better business insurance etc. we have got feedback from intelligent people that it’s a waste of money and nothing happens, also when we research a company we check do they have adequate insurance for something uneven happens to the factory or to the facility, we have also seen families to stop Health Insurance just because they have paid premium for 10 years and never used the insurance service not only individuals but most of the companies in India don’t have adequate Risk Management Systems because we never think and sit on the uneven risk that we can get in our life, business or profession, we just go with the flow, trust on god and our luck, but it’s a serious need of the hour for all of us to sit and think what are the risk ahead in life, business, health etc and to plan like Wimbledon team, maybe for certain years we have to pay that heavy premium that can be painful, but something irrational like this happens it may save us from the biggest financial blunder.

The same happens to us at Turtle Wealth after this fall in stock markets and seeing great companies which were great just 15 days back fall 40 – 50% in just a fortnight gave us a serious thought about the risk management system we should create in our portfolio, as it is told “we make the smartest decisions in bad times, and stupid moves in good times”, we created so superior risk management system for our PMS that PMS in adverse situation can’t go below 18% of the invested amount, that would be one of the biggest USP of our fund.

Wimbledon Pandemic insurance is one of the best stories we need to ask our-self that are we managing the unseen risk in our life or not?

Regards
RoMe.