WARREN BUFFETT’S LETTER – 1982

WB Letter 1982

Mr.Buffett has mentioned characteristics of cyclical industries-

WB 1982 01

The product which can be differentiated and sell it by the branding of it then the company can able to earn extra from it. But the product where no chance to differentiate product then profitability is the major factor of market forces.

WB 1982 02

WB 1982 03

We cannot predict that when the cycle will going to turn, we cannot predict that when demand will overtake supply and prices of the commodity will start improving or supply increases much compared to demand and prices starts falling.

We should focus when any company is engaged in the corporate acquisition. If any company is issuing shares for the acquiring a company which having lesser intrinsic value then we should keep cautious. Such decision of the management provides us a clue regarding the perspective of the management and weather company is intended to create the wealth of the owners or not.

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While management makes an acquisition at the expensive valuation by issuing their shares than some of the rationale given by management which we should check by putting highest cautions.

WB 1982 04

Mr.Buffett had provided a solution by which management can avoid value destruction for the existing owners of the company.

WB 1982 05

Many a time, management only focuses on the increasing future Earning Per Share (EPS) by sacrificing the strength of the balance sheet. But they forget that if the balance sheet does not remain strong for a longer period of time then business is going to have a tough time into the future.

TATA Steel 01

TATA Steel 02

The criterion which Mr.Buffett focuses while making an investment decision –

WB 1982 06

Warren Buffett’s Letters 1957 – 2012

 

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WARREN BUFFETT’S LETTER – 1980 – 1981

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WB Letter 1980

Mr.Buffett gave his opinion about the repurchase of outstanding shares of the company.

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He had discussed the effect of inflation to his shareholders in a very well manner.

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Buffett focuses on businesses that can enhance the Return on Equity with the rising inflation and without the need of additional capital requirement.

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When there is a temporary trouble to the business; and if the managers have an ability to cure that temporary problem and the business itself can generate good cash; then

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Buffett mentions that we should focus on strong business so that it does not depend on the good management.

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WB Letter 1981

Mr.Buffett has given his view on maximizing economic benefits rather than accounting appearance. And also stated some of the mistakes which the management is making.

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Rather than buying companies which have the management with above-mentioned characteristics, he suggests buying a company which has the following characteristics.

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Few companies are able to enhance their margins though their sales which are not growing at a very high rate and are still sustaining their market share.

price_increases

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In India, there is an air cooler manufacturing company which grew well without major additional capital.

symphony_capex

In the above table; we can see that Sales and Net profit has grown by 30% and 48% CAGR respectively. And if we see cumulative capital expenditure made by the company; then it is just 10% of the cumulative net profit. The company has grown its sales and profitability without the requirement of major additional capital.

symphony_chart

Mr.Buffett gives a good logical perspective that when the company can earn higher Return on equity; then they should invest their earnings into the business itself. And if the company is unable to earn higher Return on equity; then they should distribute earnings to the owners so that the owners can deploy capital in a better way. But we should be aware of companies that are raising capital for the dividend payout.

wb_1981_03

Warren Buffett’s Letters 1957 – 2012

 

WARREN BUFFETT’S LETTER – 1976 – 1979

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WB Letter 1976

Performance of the company has shown significant improvement in the year 1976 and company has been able to achieve 17.30% returns on shareholders’ equity.

Textile operation

Return on sales and Return on capital employed of textile operations was inadequate due to sluggish industry condition. Performance of any company can be measured by looking at the return on sales and return on capital employed and whether the business has a temporary problem or not.

Insurance operation

In the year 1976, insurance underwriting business has shown good performance due to the increase in the premium rates.

WB Letter 1977

People measure higher earnings per share on the basis of the past record-breaking earnings but according to Mr.Buffett, if the company issued 10% additional equity capital and if due to that there is an increase in earnings per share by 5%; then it is not considered a good performance. He mentioned that rather focusing on the higher reported earnings per share, we should focus on the return on equity capital (I.e. RoE).

Textile operation

Textile operations once again were reported as poor earning in the year 1977. Mr.Buffett gave a reason to the shareholders for remaining into the textile business.

WB 1977 01

Insurance operation

Mr.Buffett quoted the shifting of a pendulum from good period to the worst period –

WB 1977 02

He mentioned his investment criteria as –

WB 1977 03

WB Letter 1978

Diversified Retailing Company got merged into the Berkshire Hathway and due to this merger; holding of Berkshire into the Blue Chip Stamps increased to ~58%.

Textile operation

When a product is indifferentiated and business is capital intensive in nature, we earn inadequate return whereas we can earn above-average returns during a tight supply or shortage of product.

WB Letter 1979

Investment into equities shares carried out till 1979 at the lower of aggregate cost or market value. But from the year 1979, the accounting profession has decided to carry out investment at the market value.

Mr.Buffett has mentioned “Return on Capital Employed” as the criteria for measuring managerial performance.

WB 1979 01

A few years ago, Mr.Buffett had decided to purchase a Waumbec Mills in Manchester, the stock was available statistically cheap, well below the working capital of the business and, in effect, got very substantial amounts of machinery and real estate for less than nothing. But this decision resulted into the poor performance and faced too many difficulties to manage the business. Due to this experience, Mr.Buffett communicates an effective point to understand –

WB 1979 02

According to Mr.Buffett, we should focus on the management who utilize retained earnings effectively and will translate a dollar retained by them into a dollar or more of subsequent market value for us.

Mr.Buffett recognized his mistake in buying a bond and he had accepted this in front of his shareholders.

WB 1979 03

If we recognize our mistake and accept it, only then we can learn from it.

Warren Buffett’s Letters 1957 – 2012

 

WARREN BUFFETT’S LETTER – 1971 – 1975

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WB Letter 1971

Mr.Buffett’s objective is the growth of the business by improvising returns on total capital and returns on equity of the business.

Textile Operation

Berkshire’s textile business was facing recession and that dropped the performance of the business. To sustain profitability of the business; management is even trying to reduce costs as well as control inventories.

Insurance Operation

Berkshire started with reinsurance operation and home-state insurance operation, by acquiring home & automobile insurance company.

WB Letter 1972

Berkshire did not issue additional share capital to run the business. Instead, he repurchased his own company’s shares from the public during the recession.

WB 1972 01

WB Letter 1973

Mr.Buffett believes that premium rate will drop in future due to increasing competition in the Insurance business.

The merger of Diversified Retailing Company into Berkshire got approved pertaining to the terms and conditions of issuing shares of Berkshire. Berkshire and Diversified Retailing Company both had shares of Blue Chip Stamps and after the merger of Diversified Retailing Company into Berkshire, the holding of shares of Blue Chip into Berkshire increased.

WB 1973 01

WB Letter 1974

Textile operation

Berkshire, in order to avoid the buffer inventory, started its operations at 1/3rd of its installed capacity.

Insurance operation

Unusual profitability into insurance business increased the competition level into the industry. On account of this competition; the profit level of various companies decreased and the underwriting losses increased on a larger scale. But above all of this, the insurance business kept on growing and earned higher returns on capital employed.

The merger of Diversified Retailing Company into Berkshire was terminated by Board of Directors but Mr.Buffett planned to reopen possibilities of the merger in the future.

WB Letter 1975

Textile operation

During 1975, the textile industry again faced recession and that resulted in the operation losses and reduction of employment by ~53%. Most of the textile producers decreased their production and this resulted into business rebound in the fourth quarter of 1975.

WB 1975 01

We can able to see that we should buy cyclical companies during the worst time in the industry as Mr.Buffett has done.

Iron ore price

Metal company

Metal company 1

From the above, we can analyze that investors who had purchased shares of metal companies which dealt in iron ore during December 2015 where the prices were the lowest in the period of 10 years; have received decent returns.

Insurance operation of the company showed underwriting losses which in turn reduced the fund available to make an investment into the stocks and as a result of this; the investment portfolio reported an unrealized loss.

WB 1975 02

Mr.Buffett says that short-term market price fluctuation is not important; only business performance counts and hence he explains the criteria for the selection of stocks for holding the businesses for a longer period of time.

Warren Buffett’s Letters 1957 – 2012

 

WARREN BUFFETT’S LETTER – 1969 – 1970

WB Letter 1969

Mr.Buffett has made a comment on the fund management business –

WB 1969 01

Mr.Buffett has mentioned that in the year 1967, Associated Cotton Shops, a subsidiary of DRC run by Ben Rosner, and National Indemnity Company, a subsidiary of Berkshire Hathway run by Jack Ringwalt can able to earn about 20% on capital employed. And there are only 37 companies among Fortune 500 which can able to achieve such performance. Achieving a better performance is not possible for each company. Also, Mr.Buffett indicates irrelevant of focusing on market price.

WB 1969 02

Mr.Buffett has made a decision to liquidate partnership due to changing the market environment and increasing the size of the fund manage by the Buffett. Such factors bring down the performance of the partnership and also Mr.Buffett does not able to identify quantitatively cheap investment ideas. He suggested Bill Ruane as a fund manager to the partners who want to give money to manage.

WB 1969 03

WB 1969 04

Diversified Retailing Company owned two businesses – one was Hochschild, Kohn & Company of Baltimore and another one was Associated Retail Stores. The company had sold out entire stake of Hochschild, Kohn & Company of Baltimore to the Supermarkets General Corp. for $5,045,205 of cash plus non-interest bearing SGC notes for $2 million due on date 2-1-70, and $4,540,000 due on date 2-1-71. The present value of these notes approximates $6.0 million so, effectively, DRC received about $11 million on the sale. DRC has tangible net assets of about $11.50 – $12.00 per share, an excellent operating business and substantial funds available for reinvestment in other operating businesses. On an interim basis, such funds will be employed in marketable securities.

Buffett Partnership owns 691441 shares of Berkshire Hathway, the company having an operating businesses includes Textile, Insurance, Illinois National Bank, Trust Company of Rockford Illinois, Sun Newspapers Inc, and Gateway Underwriters.

WB 1969 05

WB 1969 06

Diversified Retailing Company and Berkshire Hathway, both were run by an excellent management and which was one of the reason for Buffett to hold these both companies. Mr.Buffett mentioned that we should not focus on the short-term price action of the securities because we are not holding a piece of paper but we are holding a business. So if businesses will perform well over a period of time then the stock will also perform.

There were a few questions was asked to Buffett by his partners and Buffett has given logical answers to those questions.

WB 1969 07

Above answer shows his genuineness, he is not ready to liquidate a business who has a huge employee strength just because of his own benefits. He decided to keep business working till the time business does not require any additional capital.

WB 1969 08

WB Letter 1970

Mr.Buffett stated his criteria for purchasing bonds.

WB 1969 09

Berkshire Hathway’s textile division experiencing a recession in the textile industry which has the impact of lower profitability. Management has tried to control costs during a recession time so that operation can run more efficiently. Other both major businesses i.e insurance business and banking business of Berkshire performing well.

Warren Buffett’s Letters 1957 – 2012

WARREN BUFFETT’S LETTER – 1966 – 1968

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WB Letter 1966

Mr. Buffett had acquired a controlling stake in Berkshire Hathway in the year 1965. Berkshire was a textile company and Mr. Buffett had started acquiring the stake of Berkshire since 1962 at the price of $7.60 per share. During the year 1965, Berkshire had closed down certain mills and only 2 mills were working as they were profitable and with about 2300 employees. As per the calculations, networking capital alone was worth about $19 per share.

Diversification

Mr. Buffett gave his view on diversification and also gave his opinion on why aren’t all managers generating superior returns.

WB 1966 01

Mr.Buffett says that he diversifies less as compared to what majority of the investment managers does. He can willingly invest upto 40% of the net worth into a single company; where the probability is higher about his facts and reasoning being appropriate in enhancing the value of the investment.

WB 1966 02

Mr. Buffett mentions that we should have a proper diversifying policy rather than behaving illogically as others do by owning one hundred securities into their portfolio. Rather, we should work as per our own view and understanding.

WB 1966 03

During the year 1966, Mr.Buffett had fully acquired Hochschild and Kohn & Co. The quantitative and qualitative aspects of the business were evaluated and weighed against price, both on an absolute basis and relative to other investment opportunities.

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WB Letter 1967

During the year 1967, Mr.Buffett had faced difficulty in identifying new investment ideas. And the reason he felt was as below –

WB 1967 01

Mr. Buffett does not make an investment into the business which is difficult for him to understand (like technology business). He prefers staying away from the stocks which are in fashion into the market as such approaches don’t fit properly with his stock selection policy.

WB 1967 02

Mr. Buffett believes that big money can be made by making investment decisions based on qualitative factors whereas sure money can be made by making investment decisions based on quantitative factors. And hence, on the basis of this; he considers himself as a quantitatively focused investor.

Warren Buffett’s Letters 1957 – 2012

WARREN BUFFETT’S LETTER – 1964 – 1965

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WB Letter 1964

Mr. Buffett had made an investment into the “Texas National Petroleum” where the announcement was made of sell out of oil and gas producing business to Union Oil of California.

WB 1964 01

This kind of situation has a protected downside and we can generate a decent annualized return. Buffett had made a decent annualized return on this workout.

WB 1964 02

We can make a decent return from such situations in India also. Here are some examples which are taken from Prof. Sanjay Bakshi’s note. (http://ppfas.com/media/articles/sanjay-bakshi/special-situations.pdf)

WB 1964 03

Mr. Buffett had sold off Dempster mill and he mentioned that “Our business is making excellent purchases — not making extraordinary sales.” This shows that Buffett has emphasized on the buying decision and if we think wisely then it’s only the buying decision that is in our control; so we should focus on buying a business at proper value hence reducing the additional efforts of selling.

WB Letter 1965

Mr. Buffett demonstrated an outstanding performance in Down Jones and other few investment management companies over a period of time.

WB 1965 01

WB 1965 02

Up to 1964, Mr. Buffett had categorized his investment operations into 3 categories (i.e. General, Workouts, and Controls) but from the year 1965, Mr.Buffett expanded his categories of investment operations into 4 (i.e. General -Private Owner Basis, Generals -Relatively Undervalued, Workouts and Controls).

WB 1965 03

Workouts and Controls remain unchanged from the previous series.

Warren Buffett’s Letters 1957 – 2012

WARREN BUFFETT’S LETTER – 1962 – 1963

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WB Letter 1962

Mr.Buffett has a target to an approximately 0.5% decline for each 1% decline in the market. He has always made an emphasis on the falling less compared to the market. Also, he has never tried to predict the market direction.

WB Letter 1963

Mr. Buffett has mentioned few points which we require to keep in mind –

WB 09

WB 10

WB 11

Mr. Buffett puts emphasis on benefits of compounding and mentions that if we want to enjoy the benefits of compounding then either we have to live long (which is impossible to assume) or compound our money at a higher rate (practical to focus on).

Dempster Mill Manufacturing Company

Mr. Buffett had acquired 73% ownership of the Dempster Mill by August 1961 at an average price of $28.

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Mr. Buffett had valued Dempster by providing an appropriate discount to various assets and he concluded the value of those assets at $35 on the Fiscal year ending 30th November 1961.

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Mr. Buffett has provided a different discount on various assets. The discount applied on various assets is mentioned in the 3rd column and discount adjusted in the value of assets is shown in the 4th column. The total value of assets after discount was $4438000 and total liabilities of the company was $2318000. If he liquidates all the assets after applying discount then he will receive $4438000. Now, if he repays all the outstanding liabilities from adjusted value then the remaining balance with the company would be $2120000 ($4438 – $2318). Per share value of Dempster was $35.25 ($2120/60146 (no. of outstanding shares)).

On 17th April 1962, Mr. Buffett met Mr. Harry Bottle and appointed him as the president on 23rd April 1962 for the better utilization of capital and reduction of overheads. Mr. Harry had achieved all goals set by Mr. Buffett and the result achieved is shown below in the form of balance sheet –

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They had to sell off the non-productive assets to reduce the liabilities of the company. Also, Mr. Buffett had started investing the excess cash into the marketable securities in which he is an expert. Once again, he gave an appropriate discount to various assets & after deducting the liabilities and adding fund (which he got through shares) and resulted at the value of $3185000 (3471000 – 346000 + 60000). We can see that value of the company had been increased from $2120000 in the year 1961 to $3185000 in the year 1962. Mr. Buffett’s and Mr. Harry’s decision of capital allocation resulted in the enhancement of the value of the Dempster. And the value of the company grew in the year 1963 as compared to in 1962.

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Making a controlling stake becomes difficult for us as retail investors. So that we should try identifying companies which are involved in the restructuring decision and also correcting their capital allocation decisions. There is an Indian listed company which has gone through the process of restructuring in the year 2007-08. The company has been experiencing a tough time due to some inappropriate capital allocation decision and hence the management decided to correct their mistakes.

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S 02

Symphony

Price of the company was Rs.4.28 in Sept’08 and the current price (as on 5th February 2018) of the company is Rs.1775. We can see in the financial highlights that the company has sold off nonproductive assets and paid off liabilities which enhances the value of the company.

Mr. Buffett’s investment philosophy says –

WB 15

In the above example of the Indian company, sales growth has contributed multifold returns, but even if their sales did not show growth then their investors won’t lose their capital.

Warren Buffett’s Letters 1957 – 2012

WARREN BUFFETT’S LETTER – 1960 – 1961

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WB Letter 1960

In 1959 letter, Mr. Buffett had made an investment of 35% of net assets in the company named Sanborn Map Co.

WB 02

Maps are immensely useful to the fire insurance companies. Business is operated in a monopolistic manner and without the need for strong sales efforts. Earlier, the insurance companies had feared for the profit of Sanborn Map and hence they placed a number of prominent insurance men to Sanborn’s Board Of Directors to act as a watch-dog.

In 1959, the ratio of PAT reduced to $100000 as compared to $500000 as in the year 1930. The company began to make investment portfolios since they did not need any further capital to run the business. Over a period of time, their investment was accumulated to $2.5 million; of which roughly half was in bond and half in stocks. These investment portfolios worked well but the map business lost its shine.

In the year 1938, the stock was traded at $110 but the value reduced to $45 in the year 1958; whereas their investment per share value increased from $20 to $65. Hence, their stock is available for negative $20 against the investment portfolio.

The company had sales volume of $2 million per year and they owned $7 million worth of marketable securities. Their income from investment portfolio was substantial enough to take care of their company’s finance. Regular dividends were paid to all the stockholders but there was a decrease seen in the dividend payout for a constant of 5 times in a period of 8 years. As against this; there was no reduction in the salary of the directors.

Board of directors held a minimal position in the Sanborn shares. Buffett proposed to separate the investment portfolio business from the map business. Hence, after the death of the president of Sanborn; his part of shares (around 15000) were bought by Warren Buffett and another 24000 from the open market. Apart from this; there were 2 large stockholders who held 10000 and 8000 shares respectively. They were unhappy with the current situation of the company and they desired to accept the proposed idea of Buffett of separating the business.

Mr. Buffett wanted to work on re-establishment of earning power of the map business. In the same instance, they got an opportunity of converting their physical goods to electronic goods which will multiply their profit for the map business.

WB 03

Indian company example – Before 2006, the company was involved in the manufacturing of scooters. But the company discontinued to manufacture in 2006 and became an investment company with the profit that they had made from the sales. At the end of FY2013, the market value of investment portfolio of the company was worth Rs.2034 crore; whereas stock was traded at the market capitalization of Rs.440 crore (stock price of Rs382). Currently, the company is trading at the market capitalization of Rs.3172 crore (stock price of Rs.2775). The company is also paying out healthy dividends.

MScooter

MScooter 01

Mr.Buffett also mentioned that no one should jump to conclusions by reviewing one-year performance. One needs to at least measure five years of performance in both strong and weak markets.

WB Letter 1961

Mr. Buffett had identified few mutual funds and done a comparative performance of mutual funds with the market and with his partnership.

WB 04

We can see that Mr. Buffett has outperformed in mutual funds with a heavy margin.

Mr. Buffett used 3 methods of operations as below –

1) Generals

WB 05

The general situation works with the market situation. The investment outperforms in the bull phase and declines sharply in the bear phase. These investments work well in a longer period of time.

2) Work-outs

WB 06

The work-out situation provides stable and safer earnings and due to that Mr.Buffett use borrowed money to take an advantage of work-out situations. In the bear phase; we get better results and in the bullish phase; we get bad performance.

3) Control

WB 07 (1)

During 1961, Mr. Buffett owned around 70% stake of the Dempster Mill, which was a fall into a control situation category. Initially, Dempster Mill was started as a value investment (General) category but as time passed, this investment came under control situation when an additional stake was purchased by Mr. Buffett.

WB 08

The detailed discussion of Dempster Mill investment will be done in the later series of Warren Buffett’s letter.

Few people who want to invest conservatively, have bought government bonds and few others bought blue-chip securities regardless of Price to Earning ratio, dividend yield, etc. with a belief of getting benefits by investing in the bonds.

WB 1961 09

Mr. Buffett has always emphasized on better performance during a bear market and getting the similar return in a bull market.

Warren Buffett’s Letters 1957 – 2012

Learning Investment Lessons from movie Chal Man Jeetva Jaiye

Jainam Share Consultants had organized a movie day on 6th January 2018 and the name of the movie was “Chal Man Jeetva Jaiye”. I am really thankful to Jainam Family for giving me the chance to watch a worthy movie. I am grateful to the entire cast & crew of the movie for the wonderful performance and script.

I am really grateful to Riddhi who helped me with editing and very effective ideas.

I always believe that we can learn many concepts from our surrounding environment. Similarly, this movie has some of the amazing concepts that I have learned and you can also which can be beneficial to our investment journey and as well as to our life.

  • Decide our process to get success in our life

Extract from the movie – The movie began where it was shown that a father is pressurizing his son, Dev, a lot for achieving victory. Dev, unknowingly started following his father’s dreams but he did not know how to get a victory.

Co-relation in real life – A similar situation happens with all of us when it comes to our investments. Investors’ starts investing in multi-bagger stocks whereas they don’t even have enough knowledge about the company. We need to gather knowledge first and then decide whether the company is worth investing. If we don’t do a thorough study about the company, then there are chances that we might lose our capital rather than achieving reasonable returns.

  • Pressure and stress can affect our decision-making ability

Extract from the movie – Dev was pressurized by his father to achieve victory and as a result, he lost his focus from all aspects and started losing in all the fields. He was often scolded and tortured by his father for not being able to earn medals and certificates.  Dev had always been forced upon the dreams that his father had for him. Dev was never given a chance to explore about his interests and that affected his decision making power.

Dev’s uncle, Vasant, had incurred a major loss in the family business and was highly stressed about it. He got pressurized by thinking about the materialistic and luxurious life of the family that he wanted to maintain and that led him in making a wrong decision. He chooses an unethical way: of leaving the country and doing fraud with the lives of the people by taking away all their money that they had invested in their company. He thinks of this way as ethical because Mr. Ajay Walia (whose company got bankrupt and he lost everything) had also done the same. Looking at someone else do it; made him think of the wrong way as the right way and he forgets about the moral values and ethics that he had learnt from his parents of not doing fraud or cheat with the lives of the people.

Co-relation in real life – Likewise, while there is a mad bull run in the market, when we see our fellow investors making money, we feel stressed and that pressure leads us to unethical thinking. We lose the capability of spotting the good investment companies; thus leading us to losses. Sometimes, such situations encourage us to compromise with our ethics & values for making an investment decision; hence forcing us to make faulty decisions. Rather than getting jealous of others making money, if we focus on our decisions and stick to our ethics; then there will be ample of opportunities coming up within our competence area that will lead us to good returns.

  • Remaining emotionally stable also during the worst period of our life

Extract from the movie – Viren, who is playing a character of Vasant’s son, saw his father being stressed and hence taking wrong decisions. So he keeps himself calm and stays emotionally stable and decides that he won’t let his father take the wrong decision. Vasant asks his family to support him and the whole family does that except Viren and Dev. Although knowing that this is the crucial time for the entire family and they will have to face the whole family; both the brothers decide to stick to the ethical and the correct path. The family often scolded them, tried to emotionally break them and also tried to prove them wrong but these brothers keeps fighting for what’s right and not bothering that it was their family on the other end.

Co-relation in real life – Market often shows us a challenging period during our investment journey but we need to remain emotionally stable and keep ourselves away from emotional diseases such as ego, envy, greed, fear etc. All such emotions influence our decision and lead us to get deviate from our process. Please refer to the article for further details of how does our emotion influence our investment decision BIBLIOPHILE: THE MOST IMPORTANT THING BY HOWARD MARKS “COMBATING NEGATIVE INFLUENCES”

  • Importance of different viewpoints

Extract from the movie – Vasant and Viren both have different perceptions of the same situation. Viren was enforcing for a different viewpoint which led the entire family re-think about their decision and yes they finally accepted the viewpoint that Viren and Dev has been explaining since the beginning, as it was a better and an ethical way of dealing with the problems. We should accept the viewpoint of the other and try to empathize from their angle. There is a possibility that we might get a new perspective to see a problem and that can be more useful to our decision making.

Co-relation in real life – When it comes to our investment journey; we face the same situation. There are ample of people who will give you too many companies to make investments in, as per their knowledge and their research. But it’s up to us whether to believe all of them or to believe some of them. People have different mindsets and there will be a situation where 1 person days good about the company whereas the other says bad. In such a situation; we get to know a different viewpoint and a different perspective from various people we trust on. But we should at times believe on people and re-think couple of times before investing as it is a matter of our earned money through hard work.

  • Acceptance of our mistake

Extract from the movie – Vasant accepted his mistake of taking a wrong decision due to stress and ego and he decides to change his decision. If he wouldn’t have accepted the viewpoint and changed his decision in time; then that would have led him to lose his brand value, his goodwill, his happiness, his inner peace, the trust that others had in him, his relationships, etc.

Co-relation in real life – We often make mistakes during our investment journey but we need to realize it at the earliest and accept our wrong decision by not getting influenced of other factors. We should think of recovering our losses and increasing our profits rather than feeling guilty on our wrong decision.

  • Have faith in yourself

Extract from the movie – Vasant in his past had grown the business and created a brand value. He had never lost his money. But when he faced such a situation; he had lost faith in his own self and he thought that he doesn’t have the courage to rebuild the empire. But Viren always showed trust in his father’s ability and he kept on saying that he knows that his father has the ability to build an empire again.

Co-relation in real life – During a sluggish market scenario, there are times that even our best investment cannot generate good money for us. But we have to have patience and trust on our decisions that sooner or later we will earn and gain good returns.

  • We are losers just because of ourselves and not because of others

Extract from the movie – Dev was unable to express his thoughts in front of his own family. His continuous failure due to his father pressure had restricted him to open up and talk about what he wanted to. When he was asked to faced his complexions and his fear; only then he fought with his own self and was able to realize that he failed because he had created a belief in his mind that he is unable to do anything in his life.He only can able to create an impression in front of his family after getting the realization of his weaknesses. It was then that he realized that it wasn’t his father that was the cause of his failure but it was his inner self that didn’t let him take a leap. But when he overcame his weaknesses; he achieved success.

Co-relation in real life – We also face similar situations during our investment journey. We might have made losses couple of times. But we should face those failures and try learning of overcoming them rather than withdrawing the money. One should think of recovering the losses and switching from the negative balance (loss) to the positive balance (profits). Because if we don’t think positive then those failures might affect our future decision for making an investment.

As it is rightly said “YOU MAY FIND THE WORST ENEMY OR BEST FRIEND IN YOURSELF”

  • Building brand value takes efforts for years but just a few minutes to ruin it

Extract from the movie – Vasant and his brothers had worked really hard for years to create a brand value for their company. But if he would have decided to take a wrong decision of declaring bankruptcy; then that would have ruined the brand image that they had build in for years. People would have cursed them for their decision as they would have cheated them. And this would have created a negative impact for the company and its image.

Co-relation in real life – Similarly, we should always be careful while taking a decision in life and not make any blunders. We should think with a peaceful mind and not atleast when we are stressed. If done so in stress; we can lose the trust that people have in us and we can harm our reputation which we have built with our hard work over the years. Remember, “DON’T LET ONE MISTAKE RUIN A BEAUTIFUL THING”.

g6p0zbo

Kindly watch movie for more insights.