After landing in Chennai, I found Auto most expensive and troublesome here. My office is around 4 kms from home and if I travel by Auto I used to spend Rs 150 daily for to and fro which comes out Rs 3900 per month considering 6 days a week as the case is with me. After bringing in the car, I spend not more than Rs 1200 on diesel and commute more comfortably. So, car is an asset for me saving my money and precious time whose value I have not considered till now. One can argue that I can travel in bus and save more money, I can counter argument with other facts but I would simply state that you can eat idlis in every meal to save money as it is cheapest food in Chennai, why do north Indians need chapatis. One can save money by putting himself to pain but whats the use.
Also car gives me opportunity to spend the weekend the way I want, I can go anywhere which would have been certainly difficult without car. One can assign any value to entertainment which again increases my asset value.
I think without analysing value additions provided by car, or shud I say without assigning numerical financial values to the comforts and value additions of 4-wheeler, one would be wrong to say that car is just a liability.
Actually you are right on a lot of aspects & arguments can go on and on. But again won't a two-wheeler would have solved the same issues & saved some 300K also? I can put those 300K at atleast 10-12% interest. Yes, a four-wheeler gives more comfort & security but at the end of the day its still not an asset.
There has to be some Uncertainity in Mr. Market's mind for cash bargains to be available. Uncertainity is there in MMFSL case also. But in my view there is enough MOS in this case- 1) Comp is not burning cash. 2) Promoters are not doing (& had done) something to hurt minority shareholders.
So, according to me, its a value buy.
Regarding massive dividend payout as you said, I don't see it happening. Why would you raise money & distribute it back as dividends after 9-10 months. They will be investing it in the business. If they do it well, super returns for shareholders. If they fail to do it well, marginal returns for shareholders.
Mr. wannabe super investor, Firstly its a great initiative on your behalf to share about your thoughts about investment via a blog.! i was impressed by your analysis of Triveni Engg Spin off. The Simplicity of analysis makes you believe its simple,doable and doesnt require rocket science or maths.. :) Continue with your efforts, hoping you post more..!
After landing in Chennai, I found Auto most expensive and troublesome here. My office is around 4 kms from home and if I travel by Auto I used to spend Rs 150 daily for to and fro which comes out Rs 3900 per month considering 6 days a week as the case is with me. After bringing in the car, I spend not more than Rs 1200 on diesel and commute more comfortably. So, car is an asset for me saving my money and precious time whose value I have not considered till now. One can argue that I can travel in bus and save more money, I can counter argument with other facts but I would simply state that you can eat idlis in every meal to save money as it is cheapest food in Chennai, why do north Indians need chapatis. One can save money by putting himself to pain but whats the use.
ReplyDeleteAlso car gives me opportunity to spend the weekend the way I want, I can go anywhere which would have been certainly difficult without car. One can assign any value to entertainment which again increases my asset value.
I think without analysing value additions provided by car, or shud I say without assigning numerical financial values to the comforts and value additions of 4-wheeler, one would be wrong to say that car is just a liability.
Actually you are right on a lot of aspects & arguments can go on and on. But again won't a two-wheeler would have solved the same issues & saved some 300K also? I can put those 300K at atleast 10-12% interest.
ReplyDeleteYes, a four-wheeler gives more comfort & security but at the end of the day its still not an asset.
The Moneymatters post is rather simplistic ....
ReplyDeletefirst of all a financial companys greatest asset is its reputation
as of now all mmsl has is the share/warrants premium money you mentioned
no idea how thats going to be put to use so no idea speculating about the businees or growth
no idea who is in charge
no idea if theres going to be a massive dividend payout or the moneys going to sit in some bank and earn interest
at cmp 110 rs odd its at 50 percent discount to cash per share
which id say is fair value until some clarity comes in cause until that happens its just another OPERATOR STOCK
Hi,
ReplyDeleteThere has to be some Uncertainity in Mr. Market's mind for cash bargains to be available. Uncertainity is there in MMFSL case also. But in my view there is enough MOS in this case-
1) Comp is not burning cash.
2) Promoters are not doing (& had done) something to hurt minority shareholders.
So, according to me, its a value buy.
Regarding massive dividend payout as you said, I don't see it happening. Why would you raise money & distribute it back as dividends after 9-10 months. They will be investing it in the business. If they do it well, super returns for shareholders. If they fail to do it well, marginal returns for shareholders.
Mr. wannabe super investor,
ReplyDeleteFirstly its a great initiative on your behalf to share about your thoughts about investment via a blog.!
i was impressed by your analysis of Triveni Engg Spin off. The Simplicity of analysis makes you believe its simple,doable and doesnt require rocket science or maths.. :)
Continue with your efforts, hoping you post more..!
Thanks Mr. Rohan.
ReplyDeleteYou also seems to have just started your blog. Keep it up and best of luck.