A slide on personal finance

2. Agenda
0 Insurance
0 Life (Term) Insurance
0 Health Insurance
0 Investments
0 FD
0 Mutual Funds
0Equity
0Debt
0 Stocks

3. Insurance
0 Why Insurance? (Insurance is NOT investment)
0 Who needs Insurance?
0 Term Insurance
0 “Any insurance policy that gives money back is a
BAD policy” – Sarang 
0 Alternative to those famous money-back policies
0 Health Insurance
0 Individual
0 Family Floater

4. Investments – FD
0 Who should NOT invest money in FD?
0 Tax implications
0 How safe is FD?
0 The Greece example!

5. Investments – MF: Debt Funds
0 Why debt funds?
0 Debt Funds vs FD
0 Types of Debt Funds
0 Ultra short term / Short term funds
0 Long Term Funds
0 Gilt funds
0 Tax Advantage (f you hold for more than 1yr)
0 10% Flat tax or 20% after indexation
0 Are Debt funds safe? (compared to FD)

6. Investments – MF: Debt Funds
0 Some good ultra short term/short term debt funds:
0 Birla SL FRF-Short Term Plan(G)
0 DWS Ultra ST(G)
0 Templeton India Ultra Short Bond Fund(G)
0 JM Money Mgr-Super(G)
0 JM Money Mgr-Reg(G)

7. Investments – MF: Equity Funds
0 Why Equity Funds?
0 Types of Equity Mutual Funds
0 Large Cap
0 Mid Cap
0 Small Cap
0 Multi cap
0 Hybrid
0 What is SIP?

8. Investments – MF: Equity Funds
(cont.)
0 How to choose a good mutual fund?
0 Long history
0 Consistency of Fund manager
0 When was the fund manager changed?
0 Type of MF to choose – recommended allocations
0 Core vs Satellite approach in fund selection
0 SIP: Systematic Investment Plan

9. Investments – MF: Equity Funds
(cont.)
0 Some good equity MFs:
0 Large Cap/Large-Mid Cap
0ICICI Pru Focused BlueChip Eq Fund (Growth)
0HDFC Top 200 Fund (Growth)
0 Mid Cap
0IDFC Premier Equity Fund-Reg(Growth)
0HDFC Midcap Opportunities Fund (Growth)

10. Investments: Stocks
0 Number crunching
0 Things to look at to find out good or bad company
0 High Promoter’s stake – Is promoter stake pledged?
0 Debt (Debt/Equity)
0 What is meant by ‘Shareholder Equity’?
0 Long term Revenue growth
0 Long term profit growth
0 Long term Return on Equity (ROE)
0 Long term Return on Capital employed (ROCE)
0 Valuations
0 EPS (Earning Per Share)
0 Price to Earning (P/E)

11. Investments: Stocks (cont.)
0 Beyond Numbers
0 Business
0The sector in which business operates (ex. Real Estate )
0Future Prospects of the sector
0Future Prospects of the company in that sector
0Cyclical sectors
0 Corporate Governance: Integrity and track-record of
Promoters
0 Is company linked to politics/politicians?
0 Valuations

12. Investments: Stocks (cont.)
0 Conviction vs Hope
0 20% return on investment of Rs. 100 is more than 100%
return on investment of Rs 10
0 Prefer Staggered buying – SIP in stocks
0 Do invest in stocks. The outcome is two folds
1. Obvious one is that you gain good returns on your
investment
2. Second one, though not-so-obvious but more important
one, is that your understanding of 'good or bad
business' improves great deal with time!

13. Example Stock: Astral Poly
Technik Ltd (+ve)
0 Looking at numbers
0 Things to look at to find out good or bad company
0 Promoter’s stake: 63.82% (0% pledged)
0 Debt/Equity: 0.26 (Debt: 63Cr vs Cash: 35Cr)
0 Shareholder Equity: Rs 241.85Cr
0 Sales growth: 41%(3yrs),43% (5Yrs),49%(10yrs)
0 Profit growth: 35%(3yrs),30% (5Yrs),41%(10yrs)
0 Return on Equity (ROE): 26%(3yrs),25% (5Yrs),25%(10yrs)
0 Return on Capital employed (ROCE): 33%(3yrs),30% (5Yrs),
29%(10yrs)
0 Valuations
0 EPS (Earning Per Share): Rs 13.99
0 Market Price: Rs 491
0 Price to Earning (P/E): 35 (costly?)

14. Example Stock: Astral Poly Technik Ltd (+ve)

15. Example Stock: Kingfisher
Airlines Ltd. (-ve)
0 Looking at numbers
0 Things to look at to find out good or bad company
0 Promoter’s stake: 30.14% (71.66% pledged)
0 Debt/Equity: -0.64 (-ve) (Debt: 8657Cr vs Cash:182Cr)
0 Shareholder Equity: Rs -13472.92Cr. (-ve)
0 Sales growth: -53%(3yrs),-19% (5Yrs),25%(10yrs)
0 Profit growth: None (3yrs, 5Yrs, 10yrs)
0 Return on Equity (ROE): None (3yrs, 5Yrs, 10yrs)
0 Return on Capital employed (ROCE): None (3yrs, 5Yrs, 10yrs)
0 Valuations
0 EPS (Earning Per Share): –Rs 59.91 (-ve)
0 Market Price: Rs 3.15
0 Price to Earning (P/E): None

16. Example Stock: Kingfisher Airlines Ltd. (-ve)

17. Thank You