Clicky

badge

Wednesday, July 16, 2008

My new investment strategy!

This one is supposed to be a joke and you’re expected to laugh at the end. Implementation of this strategy at your own risk.

I’ve invested in some 40 odd companies (just a thousand or so each-no big amount, and my portfolio is in deep red now). As the financial year ended recently, few of these companies have sent dividend warrants to their esteemed customers like me. While I am wondering why other companies haven’t sent any dividend, most of them have sent me their annual reports, which are thick and heavy books explaining company's operations, profit and loses, assets and liabilities and so on…

I picked up couple of annual reports and searched for one specific information-“why no dividends have been sent?” Nowhere in that deep ocean of numbers and letters was this basic information to be found. With disappointment I looked at the pile of annual reports…and a damage control idea hit me. Tried to lift all those annual reports together and found the combined weight heavy enough. Next day when I heard old paper wala passing in front of my house, I called him and handed over all these annual reports. He looked at them with contempt and gracefully weighed them in his balance. When he gave me cash in exchange of these ‘old paper’ I realized that I have made more money by selling these annual reports than by means of dividends received.

So here’s my new renewed investment strategy for this financial year-Invest in companies which send big, thick and heavy annual reports. That way you’re returns increase. So along with crucial parameters like PE Ratio, 52 weeks high/low, profits and so on, I request companies to furnish one more parameter- the weight of their annual report. The way market is crashing, you can’t ask for a better strategy than this.

Now don’t laugh. Legend has it that it took a Dhirubai Ambani to realize that the value of silver used to mint the coin was far more than the face value of the coins. He started collecting coins, melt it and sell the silver. Rest is history.

An advice to companies: Why waste 30-40 Rs per copy to print annual reports and another 10-20 Rs on postage? Send pdf copies to those ok with it and share with investors the money saved.


Similar (investment related): My Early investment experiences * Me and SBI

Similar (ideas and advises): Selling cashew nuts on indigo planes

11 comments :

hari said...

Another idea if you're in food business, you can collect all the old paper through these annual reports and use it for wrapping up food for parcel delivery...

Saithilak said...

Ha ha. A new W/E ratio (like P/E) would help us to earn extra money from the investments irrespective of markets in green or red!! Funny though!

Common man might not have access to computer to receive and look at PDF reports. That's how regulators think. Companies need to follow the rules strictly setup by regulators. But the companies can provide reports in PDF formats and mail them to their investors if they think so. It won't cost them much either!

Shrinidhi Hande said...

Hari,

Good idea-I already had plans of selling cashew nut on board Indigo flights remember? May be I can wrap them in these annual reports...

@Sai,

Yes-Many banks now give their account holders of receiving statements exclusively through email. Even if they save 5 Rs per customer per quarter this sums up to few crores every year...

Laddoo said...

If implemented, ur idea wud save the diminishing forest area in the country!
I have another problem with these annual reports - most of them come during the same timeframe and if I don't check my snail mailbox(hardly expect any interesting letter) for a week, it gets clogged with the heavy books :-(

Mohan said...

As expected, i couldn't stop laughing. You make a valid point though - why can't we make the best use of technology and get e-copies instead of paper prints?

Hope these companies realize the importance of hour and act accordingly :)

Shrinidhi Hande said...

@ laddooo

Yes. besides being heavy they consume lots of spaces too...

Mohan,

Let us hope. btb best wishes for your higher studies

Vishwas Prasanna said...

I have seen Maruthi Udyoug doing this. They send PDF docs through email...

Hoping every companies follows this...

UTP said...

HILARIOUS!!! and yet inspiring...heheh...

good one...

Shrinidhi Hande said...

@ Vishwas

Then no use in investing Maruti... (LOL)

@UTP

Thanks.

Anand Gadiyar said...

Paper from annual reports to wrap cashew nuts sold on Indigo flights! Brilliant! Mate, you should go public. I would gladly subscribe to the offer (even if you send us PDF annual reports).

Shrinidhi Hande said...

Thanks Anand...Readers like you boost my confidence to go public.... let me think of a company first...

And thanks for referring it at Indian Investor's blog