2009 – a fantastic year comes to a close!

Another year comes to a close! First, let me wish you all a fantastic New Year ahead! May all your wishes and dreams turn true!!!

To me, 2009 turned out to be one of my best years so far! Many firsts, many challenges overcome and goals reached, an addition of a cutie-pie in my family (baby girl) and much more!

The most important thing was the birth of my daughter! She was born on 21-Nov-2009. She has changed me forever. My world is now filled with fairy tales! Here is a pic of her.

Financially too, the year has been great. I reached my personal networth goal for 2009 in July itself, aided hugely by the stock market surge. I managed to better my own goal by 33%… inspite of more than expected spending. My yearly savings figure for 2009 stood at 51.6%.

If you kept adding to your folio during the downturn without listening to naysayers, you made a killing. The Nifty in 1 year went from 2959 to 5201, a rise of almost 76%. If you picked your stocks well, you even made 3-5 baggers. My biggest gainers were Yes bank, BEL, LMW, GDL, etc all of which had a high weightage in my folio in addition to Nifty bees and Junior nifty bees. Ever since the Nifty hit P/E of 18+, I had been a seller. In Sept, Nifty P/E hit 22 and I sold almost 40% of my index holdings. However, I am holding onto my individual picks except Yes bank which I had sold during the year.

I had also topped up on term insurance coverage for self and spouse from Aegon Religare. Also invested a bit of money in Aegon Religare Invest Maximizer as I really liked the switch options provided by ULIPs (they are tax free unlike in the case of MF switching). Also, it is one of the cheapest ULIPs in market today. Post June, I have been putting my money into floating rate funds mostly. I am not finding anything attractive enough. And I dont want to put it into the index unless P/E drops below 18. My regular contributions towards PPF, EPF (voluntary), MF’s, etc have continued too.

Professionally, 2009 was a dull year. I was working on things I was not really enjoying doing. And I was free most of the time, and you know what happens to an idle brain. It rots!! But all that is set to change. I am changing project starting Jan 4. Am looking forward to it. (In hindsight, having been free has really helped me get into a lot of extra-curricular activities that I really enjoyed. Also, this phase, I believe has helped mould me into a much better person)

2009 was a fantastic year for extra-curricular activities. Few being cycling, traveling a ton, going on bird watching trips, driving to exotic locales, photographing fantastic landscapes, meeting different people, etc.

A few things that I did in 2009 on my hobby front

1. Purchased D90 Nikon DSLR and added 3 lenses to my kit. 50mm prime, 18-70 and the 70-300VR, all Nikkor lenses.
2. Purchased a Trek 4300 cycle and a ton of accessories.
3. Cycled in Coorg, Ooty and Agumbe in addition to places around Bangalore
4. Birding in Masinagudi, Coonoor, Ooty, Mysore, etc in addition to places around Bangalore like Kanakpura, Ragihalli, Devarabetta, Valley school, GKVK, Jakkur, Manchinebele, Komaghatta, etc.
5. Photography trips to places like Sigandoor, Keladi, Ikkeri, Belur, Halebid, Koodali, Ooty, Bokapuram, Coonoor, Kotagiri, Shimoga, Gopalaswamy betta, etc in addition to places around Bangalore
6. Developed interest in the heritage of our country. Want to explore more forts, temples and ancient buildings in S.India
7. Researched so much about Nilgiris that I can write a book myself. Discovered a few old British trails, alternative routes via forests to places like Doddabetta, Kalhatty falls, etc. Read a ton on Nilgiris. Went on birding trips to almost every corner in and around Ooty. Tried to find out the present day locations of 200 year old paintings. Spoke to tribals. What not. And, also purchased the domain www.neilgherries.com (Old British name for Nilgiris), but havent had the time to set it up.
8. Attended Kalyan Varma’s photography workshop
9. Watched a lot of plays @ Rangashankara and have been bitten by the drama bug ever since.

A few pictures from my portfolio.

A few shots taken during my cycling rides (using compact camera)

Updates

A few updates this week

1. Had a bird photography contest in office. I volunteered for activities like collecting snaps, getting it printed on A3, etc. I submitted one of my own. The result of the contest in my view was a cropper – Dr M B Krishna, the judge selected a caged bird pic as one of the winners, which to me was shocking! IMHO, only 1 pic of the top 3 deserved the award. Caged bird pics deserve no place before the bottom. Learnt a lot from this event…like the need to calibrate the monitor. The A3 print of my snap looked slightly different in color from my monitor.
2. Maybe, I should think of an advanced course in post processing.
3. Stock market has moved up nicely. Nifty PE has moved up close to 21. Maybe people should lock in their profits at least a bit by selling atleast a portion of their folios.
4. Had the worst time driving in the last 2 years. A drain got damaged on Bannerghatta road near Oracle / Accenture causing massive disruption of traffic. I took 2 hours to cover 6 Km on June 4th. The worst thing was the way how the cops handled the whole thing. Pathetic.
5. Shocked to know that most of the bullet-proof jackets that our Mumbai cops used were actually nowhere near bullet proof. Another scam cooking?
6. Everywhere I go, people ask me about the impact of recession on software techies. I am getting bored of this question!
7. I dont know why, but this question has appeared so many times in the last few days in my mind. If I weren’t a software guy, what would I have been (or like to be)?

Financial journey since May 2007

Well, I seem to be blogging very little about finance these days. My time is mostly consumed by my new interests.. photography, bird watching and wildlife.

It is a surprise even to me as to how a strongly left-brain oriented person like me has taken to right-brain activities like photography and birding (ok.. they are not entirely right-brain).

But finance has been a favorite topic since a long time. As a kid I used to love monopoly. As a student, I loved math and numbers. Now as a BI (business intelligence) expert, I love charts. I like to ponder over monthly savings ratios, net worth growth rate, expense pie charts, etc. Though I am struggling to balance a few unrelated interests, it is but natural for me to keep returning to my financial interests.

I decided to break the jinx and blog a bit on finance, on my journey since May 2007. (Please read my disclaimer too).

Why May 2007? Because I made a major change in my investment style at that time. I consciously made a decision to go passive, go large cap. Index funds (actually exchange traded funds) were in. Most of my individual stocks were sold. Active stock picking was mostly out except for a few niche holdings. Mutual funds too were reduced to a few concentrated large cap holdings. I chose steady performers (like Franklin India taxshield, HDFC Equity) over star performers. I chose to focus more on my career and kept my finances on auto-run. I opted for SIP’s, made regular purchases of Nifty Bees and slept peacefully most of the time.

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Maximize your PPF interest income!

Did you know?

For your PPF investments, interest is calculated on the lowest balance between the 5th and last day of the month. To maximize the returns, the deposits should be made between 1st and 5th of the month.

3 main steps to create wealth

If creation of wealth could be oversimplified to 3 minimal steps, I would simply say (in order of priority, in my view)

1. Focus on your income. Try to increase it every year.
2. Invest your money using common sense.
3. Focus on reducing expenses.

Well, for these 3 steps there are 1001 things that you can do. A few are listed below.

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Books an investor should read

“Which are the best books that any investor should read?”

Many people have this question.

I have attempted to answer that question in this post. I have read almost all the books listed here. But have included a few which I haven’t read too, because the reviews of those were very good and from very reliable sources. I have indicated the ones I haven’t read yet. Okay, here we go!

Basics
Any investor who has a strong hold on the basics is leaps and bounds ahead of the one who doesn’t. I would say every single book in this basic section is a must!

1. One up on Wall Street by Peter Lynch. An amazingly well written book, one of the best for both the novice and the expert.
2. The Intelligent investor by Benjamin Graham. The bible! Miss this and you can’t be an intelligent investor.
3. Common stocks and uncommon profits by Philip A Fisher. Great book on long term growth and focus oriented investing
4. The essays of Warren Buffett. The master at his very best!
5. The interpretation of financial statements by Benjamin Graham. A simple book on balance sheet basics.
6. Richest man in Babylon by George Clason. A timeless classic on personal finance.

Further reading
Once you have completed the basic books and are thirsty for more, please choose from this list. Read the rest of this entry »