If you gave me $100 billion and said take away the soft drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done : Warren Buffet

One of the famous quote by Legendary investor and Billionaire Warren Buffet : If you gave me $100 billion and said take away the soft drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done.
Here is info-graphics that shows How Buffet chooses stocks by Using Graham’s and Phil Fisher principles on investing in equity.

Courtesy of: Visual Capitalist

Cheers,
RVD

It’s good to own 10 % of watermelon than 100% of Apple : A Notorious Billionaire

Shark Tank is American reality show where aspiring entrepreneurs from around the world pitch their business models to a panel of investors and persuade them to invest money in their idea. Investor is known as Shark here. Here are some of best quotes from Sharks that we must adhere ,

  1. Follow the green not the dream : Mark Cuban : If your idea / business is profitable by following 1 strategy then you have to stick with it dont lose your focus to start or infuse another strategy. For example in one of the Shark Tank  pitches that business was profitable with food trucks strategy but the owners want to have brick and mortar stores as it was there dream to start with it.
  2. 3C defficiency : Cash , Credit , Customer : Daymond John : Your Business / product should not be having these Cash , Credit and Customers defficiencies . (3C Defficiency)
  3. It’s good to own 10 % of watermelon than 100% of Apple : Mark Cuban : On asking for investment and you really feel that investor will add tremendous value then you have to lose more equity .
  4. What time is selling time , it’ always a selling time : Robert Herjavec : Some enterpreneurs complains due to lack of time , resources available or wrong season these reasons they complain due to less sales /download / of their product.
  5. If your Business / Idea is not profitable or not providing ROI then its a hobby : Kevin O’ Leary : Kevin has a litmus test of startup or business if its not generating any revenue after 3 years then you should decide whether you need to hit refresh . ( Change strategy , target audience or redefin roadmap / vision.)

img src : cnbc

Cheers !

Price is what you pay, value is what you get : Warren Buffet

Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. Warren Buffet is a CEO and revenue of Berkshire Hathaway is $223 billion USD.

Every quarter and year Berkshire Hathaway releases / publishes their annual report to public. Here is a list of all of its annual reports. Buffets talks about its thought about its investing in all of its annual reports , these are some consolidated ones.

  • At Berkshire, we much prefer owning a non-controlling but substantial portion of awonderful company to owning 100% of a so-so business; It’s better to have a partial interest in the Hope diamond than to own all of a rhinestone (an imitation diamond, used in cheap jewellery and to decorate clothes.).
  • Our flexibility in capital allocation – our willingness to invest large sums passively in non-controlled businesses – gives us a significant advantage over companies that limit themselves to acquisitions they can operate.
  • Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.
  • Keeps things simple and dont swing on fences , when promised on quick profits respond with quick no.
  • If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on.
  • Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important.
  • A “flash crash” or some other extreme market fluctuation can’t hurt an investor any more than an erratic and mouthy neighbor can hurt my farm investment.
  • When Charlie and I buy stocks – which we think of as small portions of businesses – our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate.
  • The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that – but should rather be to own a cross-section of businesses that in aggregate are bound to do well.
  • I can’t remember what I paid for that first copy of The Intelligent Investor. Whatever the cost, it would underscore the truth of Ben’s adage: Price is what you pay, value is what you get. Of all the investments I ever made, buying Ben’s book was the best (except for my purchase of two marriage licenses).

Image source : cnbc

Keep Investing , Follow your own instincts before buying stocks / MF’s 😀

How to get a deal from a Shark – Part II

How to get a deal from a Shark – Part II

To be Continued from Part I , If you havent went through PartI here is link. Now lets see these 2 Sharks Daymond John and Lori Greiner how to get a deal from these Sharks. Here are some of my findings ,

3. Daymond John : AKA Fashion guru . Founder, President, and CEO of FUBU . He is fashion guy likes to invest in Clothing and various forms varieties of Mens , womens apparels also in retail products . He has very few investments in software / app etc.

Offers :
He typically offers x amount of $ for 33% minimum , he hardly goes down below 33% equity / stake. If DJ makes an offer first and that you are eager to hear or hearing other Shark’s offer then usually withdraws his offer . He is very flexible in partnering with other Sharks . He has partnership / deal of HSN .

Successful deals on Shark Tank :

  • Bubba’s Q
  • Mission Belt

4. Lori Greiner : AKA Queen of QVC. She is a Inventor, entrepreneur, television personality, author, investor. She holds over 100 U.S patents.  Lori sticks to equity what she offers , because she is know for lightning speed in retail products .   She has very good relationship with some of largest retailers in U.S (Walmart , Target , Bed Bath and Beyond etc.) . She belives is her own strategy to bringing into retailer . Her majority of investment are in mass product which are appeal to larger cosumer rather than small target audience. She has very few investments in Bakery products / cookies / healthy products / software / mobile apps. etc.

Offers:

She takes atleast 15% equity depends of product / Business idea. If your product is not yet make it to retail her first step will be get into retail.

Successful deals on Shark Tank :

  •  Scrub daddy
  • Drop stop

All of these findings / analysis are based on my views might vary from person to person.

Image source : ABC.com

To be continued …..

Cheers,

RVD

How actually the Bitcoin transaction works ?

Bitcoin as of today ,

1 Bitcoin equals 9,27,302.96 INR /  14,373.00 USD

  • Bitcoin is decentralized digital cryptocurrency.
  • Its invented by Satoshi Nakamoto & released in 2009.
  • It works on the Blockchain (Blockchain is nothing but ledger which records and maintains transactions).
  • Bitcoin uses peer-to-peer technology to operate with no central authority or banks.
  • Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.
  • Bitcoin allows exciting uses that could not be covered by any previous payment system.

For more information about Bitcoin click here.

Now lets see below infographic that shows how Bitcoin transaction works ?

Cheers,
RVD

Pitching your idea in front of the investors or VC’s here is checklist you must follow

Before pitching to VC’s or Investor about your Business / Product / Idea, below is the checklist you must follow, here some of the key takeaways of what actually runs in investors mind if they really wants to invest in your idea / business,

Why should investor or VC invest in your Business?

Investor should get convinced on this answer. Here is how it should be: Which problem it’s solving, how investor gets ROI ASAP. Don’t give market stats (They already knows it that’s why they are here).You can tell the sales (if they are really impressive)

How your company valuation works, are you valuating your Business correctly?

If you are asking for $200,000 for 10% of stake (equity) then you Are valuing company at $2 million.  For e.g. you are making $100,000 a year and PAT is $30,000 and you are asking for $200,000 that means asking 6 times more than profit that should not be the case.

Is anything proprietary about your business?

Great innovation / idea doesn’t means it will be huge success it has to be protected.You can protect with a patent or TM (Utility, design depends on your need)

Do you have any debt?

You have lot of debt and you are not returning back investors’ money in desired time alsoBusiness is not profitable yet. It should be debt free.

Do you own 100% of your business or at least 51%?

What happens is entrepreneur has an idea he executes the idea and for next capital he keeps on raising money but his equity keeps getting diluted as raising money. Investor’s at least wants you should be decision maker for that you have to majority of your business.

Is your business profitable?

You are running business for lot of years and you have millions of dollar into advertisement, trade shows in marketing etc. You have to keep eye on margins, slotting fees (It’s a fee that you have to pay for your product in shelf space of retailers like Walmart, Walgreens etc.)

Too early to invest?

You haven’t proven your idea or product successful yet and it’s not making any money. Before pitching to VC or Investor need to have clear idea about it’s a product or company.

Is your roadmap for business clear?  

You should have vision in your mind, VC’s only want return on investment and unless and until you don’t have clear plan about next 3-5 years. They want visionary leader not just a innovator.

Your pitch should be more of ROI (Return on Investments) and about product 

While pitching to VC’s or investor, don’t give market data or statistics (for e.g. if you have coffee product and telling its $20 billion industry). How you going to return money back you should eat, sleep with business work your hard to bring ROI.

You should be clear with your numbers

What’s your PAT, EBITDA? How much you have earned in last 12 months, 1 year. You should be clear with your numbers.

Who all are your competitors?

Is there any similar product available in market, what’s difference between you and them? Is it costlier, healthier, safer or economical etc.?

Does market really needs it?

If your idea is not solving real problem or it’s been already solved. More of like old wine in new bottle. There must be target audience or need of your product.

What is your customer acquisition cost?

Its cost that you spend to acquire a customer. You must know this answer because it tells that you know about market size, target audience..

What will be distribution or promotion strategy?

Strategy should be going to retailer (if product is suitable for retailer) or attending a trade shows or on social media etc., it should not be to a hire a sales guy that’s give bad impression.

How much your spending on your advertising ?

You should allocate some of the capital in profit to this or best way is (go for Kickstarter campaign, Indigogo or attend trade shows etc.) . Social  media is now best tool for advertising , improving SEO etc.

Is your Business / Product names suggests or relates what it does ?

Your product name , Logo i.e Branding plays very crucial part because its directly talks to customers so make it simple , clean and good design.

If everything is going your way (good sales , generating enough cash flow) they why are you here ?

Tricky one to answer , you might need a stratigic partner who will help you in making decisions and phone calls to retailers or big box stores or large co-operations.

And last but not the least , Dont be greedy !

Cheers,

RVD

Habits of Millionaires for Building Wealth

Top 10 Habits of Millionaires for Building Wealth

A millionaire is an individual whose net worth or wealth is equal to or exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account.
Depending on the currency, a certain level of prestige is associated with being a millionaire, which makes that amount of wealth a goal for some and almost unattainable for others.In countries that use the short scale number naming system, a billionaire is someone who has at least a thousand times a million dollars, euros or the currency of the given country.

For more information click here.

Courtesy of: Visual Capitalist

Cheers,
RVD