IPOs create a lot of excitement amongst investors. Business newspapers & T.V channels make it a point to tell you how "advisable" it is to subscribe to this new offering. So let's find out the hard facts behind these IPOs
There are certain characteristics that are common across all fundamentally good business, one such characteristic is 'pricing power'
Pricing power is an economic term referring to the effect that a change in a firm's product price has on the quantity demanded of that product. Pricing power ties in with the "Price Elasticity of Demand." - Investopedia
Mahindra holidays is a "Timeshare" holiday company that operates under the "Club Mahindra" Brand, the company has 50 Resorts with 4 star facilities. Basically, the company sells holiday packages for a duration of 25 years under which you are entitled to stay at any of these resorts for 7 days per year, for the next 25 years. The membership fee (currently in the range of 3-18 lacs, depending on the plan you choose) is paid upfront by the customer. Apart from the membership fee, an yearly maintenance fee is also charged from the customers (currently in the range of 7-15K per year)
Here is a detail of the variants of membership -
It's common to come across tips on "Invesitng like Warren Buffett", but those are incomplete without you actually adopting the values and ethics that he follows. It's sure to help you in leading a happier and more meaningful life.
Buffet is full of wisdom, not just on investing, he is a terrific life coach is well. Let’s get intellectually richer by reading some of his best advice to humanity. Remember! Being a good human is a precondition to becoming a good investor.
What is beginner's luck ?
Wikipedia defines it as -
“Beginner's luck refers to the supposed phenomenon of novices experiencing disproportionate frequency of success or succeeding against an expert in a given activity.
The industrial behemoth has been the darling of the market in the ‘80s and ‘90s, but has disappointed its investors in the last decade. The share price has hardly doubled from its 2007 levels, offering a CAGR of paltry 7% to the investors. On 31st March 2007, the share price was Rs 730, and on 23rd june, 2017, the share price is 1432 with a minuscule dividend yield. During the same period, Sensex has given a return of 9.1%. So, Reliance has even under-performed the index by a good 200 basis points. The fact that the dividend yield has been meager as well, sums up that reliance industry has only caused disappointment to the investors in the last decade.
Let us analyze why this has been the case -
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