Today in weekly digest  forming habits to excel

First up is Crisil’s first ‘State Of The Nation’ report, It is a comprehensive and extensive analysis of the Indian economy, individual sectors and companies. It helps investors to understand the macro situation about the country. The report has massive coverage of 2481 companies across 70 sectors. I especially liked the way they have conducted vulnerability analysis on companies on the below five factors

1 Demand pressures – Expected revenue growth

2 Liquidity and working capital challenges

3 Extent of indebtedness (total outside liabilities/ tangible net worth)

4 Ability to service debt (interest cover), and

5 Foreign currency volatility

Above is a macro framework which any investor can take away and use to analyze any specific company. Some of the results to take note

Education sector was highest number of companies(73%) which had were not vulnerable any of the above 5 factors followed closely by Healthcare (71%) and Chemicals (65%)

The worst hit sectors – no surprises were infrastructure and real-estate. Download full report to gain complete perspective

 

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“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
― William Durant

Excellence can be achieved by merely inculcating and imbibing good habits, however forming good habits is often difficult and there is a possibility to relapse. Charley Mendoza explains right way to create a habit. He presents a simple four step method

1 The I-Really-Really-Want-it Test

2 Create a Specific Habit with a Specific Routine

3 Bet Against Yourself

4 Avoid multitasking

Read this amazing article if you want to create sustainable good habits and in turn a successful life

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Now, one of modern psychology rule is that it takes 10000 hours to become expert in any area. Few of proponents of this rule are modern influential thinker like Gladwell.  However in his thought provoking article Dr Jeremy Dean challenges that this is not always the case  – practice is important however not all people get good with practice. To quote

“There is no doubt that deliberate practice is important, from both a statistical and a theoretical perspective.

It is just less important than has been argued.

Read the full article here

 

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Have you seen Brad Pitt’s money ball ? If no then go watch it !

Vitali Kalesnik writes about The Moneyball of Quality Investing, The article highlights how quality stock picking can give you superior returns, It also highlights 10 factors which can be financial measure of a quality company

1.   Profitability

2.   Margins

3.   Growth in profitability

4.   Growth in margins

5.   Leverage

6.   Financial constraints and distress

7.   Earnings stability

8.   Net payout/issuance

9.   Growth activities (R&D, advertising expenses, etc.)

10. Accounting quality

The article then goes to present examples from US stock market to prove the point. Read the entire stuff here

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