Blogs

The strategic importance of holding cash and equivalents

Solidarity is a multi-family investment office. We are often asked (by clients with high ability and willingness to take risk) why we recommend they should hold at least 10 -15% of their Investible Assets in Bonds/Liquid funds and not be fully invested in Equities; especially if clients don’t need the capital for at least 3 years.

Is This 2008 Once Again?

Global markets have started the year with perhaps the worst performance in over two decades. The sell-off has prompted commentary in the media “hinting of parallels with the 2008 like crisis”

Measuring fund manager performance

Different managers follow different styles and approaches. By implication, their portfolios carry different levels of risk. The common wisdom at present is to compare manager performance using the “Sharpe Ratio” which compares the return generated per unit of risk taken.

The fallacy of “Growth now, Profits later” approach to building a business

Many venture founders are taking the “growth now and profits later” approach to building their business. I believe many of such ventures will fail as at some point the cash required from investors to fund such growth will not be available.

5 reasons your venture has not got funding

As the Chief Investment Officer of a Family Investment Office, I get the privilege to interact with many entrepreneurs seeking funding from our clients

I have met at least 40 teams over the last one year and our clients are lead investors in 5 very exciting companies.

Investment strategy at the current juncture

A simplistic view taken by many analysts at present is that the Nifty is trading near its 10-year average valuation (see chart below) and hence, one should still be fully invested.

Will the Fed raise rates and the implications for Indian Markets?

Heavyweights have contrary opinions on what the Fed should do – IMF and World Bank (against) vs the BIS (for); so clearly the decision is not an easy one.

The three questions clients should ask Investment Advisors

Appropriate Asset Allocation is the principal determinant of long term investment returns. We hence inquire about the client’s existing Asset Allocation as a first step in our engagement process.

Using the impatience of others to your advantage

Threat of a poor monsoon, and fear of reduces MSPs for crops to control inflation seems to have got Dalal street in a tizzy with many brokerages recommending investors stay off Rural plays.

The importance of cash generation over growth

We often get queried by prospective clients why Cash Generation is a “Gate” in our stock selection and why we emphasize Cash Generation over Growth. After all, Flip Kart is being valued at many Billions of dollars because of growth prospects and burns boat loads of cash.