The Tortoise Speaks...

A blog which periodically revisits evergreen investment principles!

Fiction Therapy for Investors

There are many benefits of reading fiction.  Most of the productivity blogs / investing blogs I have read don’t offer much advice on how (or even why) to accommodate fiction in our lives. Apart from its entertainment value, fiction can be an effective tool to train our mind.

The future of a company, which we investors imagine today, is based on yesterday’s facts. It is in essence a matter of fiction. That’s what good fiction does. It provides us with a relationship between the facts. The narrative is just for us to absorb the trend a little better.

Read More

Thinking with Books #1

It’s an understatement to say that books have been instrumental in helping me to learn. Non Fiction Books not only provide some structure about the topic for the uninitiated reader but also provide an approach towards the topic.

Read More

Another Rate hike coming soon…

On 6th June 2018, the Monetary Policy Committee (MPC) of RBI increased the repo rate by 25 bps to 6.25% after nearly 4 years. Interestingly, the vote to hike as well as the magnitude of hike was unanimous. In the last MPC meeting, there was only one member of the MPC who had voted FOR the rate hike.

Another Rate hike coming soon…

Despite the RBI projecting a neutral outlook on future inflation, it remains a worrying prospect. Consequently, we have to grapple with the rather uncharacteristic dichotomy between the RBI’s words and its recent action. 

Increased crude (oil) basket prices…and the attendant negative impact on transportation costs are pointing to a rise in expected CPI inflation as suggested by the RBI Governor. 

RBI has already increased the inflation targets for H2 of FY19 from 4.4% to 4.7%. Core CPI inflation (ex-food and fuel prices) has crossed the RBI upper-bound of 6% after a long time, and shows signs of remaining elevated.

Impending US Fed. rate hikes may also put the Indian Rupee under pressure and further exacerbate the inflationary environment. 

Globally as well, growth has picked up – and impending trade wars notwithstanding – could eventually lead to  higher headline inflation and further test RBI’s resolve to maintain inflation within the much-publicised corridor of 4% +/- 2%. 

Lastly, don’t forget 2019 is an ‘Election year’ for India and history has shown that such years usually increase the pressure on the ‘fisc.’ and spur inflation.


So, what should you expect post the latest hike?
  • With 10 year G-sec yield crossing 8% , the cost of funds is set to rise
  • Home loans will become more costlier
  • You will earn more on your fixed deposits and liquid funds
  • With fixed deposit rates becoming more competitive, we could see mutual fund inflows slowing down a bit.
Given this backdrop, I would stick my neck out and predict that the RBI will announce one more rate hike in the next two MPC meetings this calendar year. 

Mistakes were made…

It’s always difficult to deal with mistakes even if they teach us the most about who we are & how we think. While running a diversified portfolio few one-off mistakes do get absorbed in the longer run but the mistakes still hurt.

from The New Yorker Magazine

Read More

Does your Chair have your back?

All of humanity’s problems stem from man’s inability to sit quietly in a room alone.

― Blaise Pascal

I have often marvelled at the simple logic of this statement. As investors we seem to value the importance of not doing anything, from time to time, but sitting in a room is easier said than done especially if the chair is uncomfortable. 

Read More

Page 1 of 9

Powered by PPFAS Mutual Fund