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C. DESCRIBE A TIME WHEN YOU
TOOK A GREAT RISK. WHAT WAS
THE OUTCOME?
IE Business School Application ESSAY - C
The Activity


Investing: an investment is a monetary asset
purchased with the idea that the asset will
provide income in the future or appreciate and
be sold at a higher price.
Steps Taken


Devashishdalmiya.blogspot.com
I

started the blog as a showcase for the
investment decisions I take and portray my
investment knowledge and learn further.
 Creation of a model portfolio worth Rs. 5 Million
as a base and to be judged against broader
market indices such as Sensex and Nifty.
 Date of creation: 28th Feb, 2013
Basis of Investing




Moderately aggressive risk profile.
Only investments and no trading.
Being ethical as the world is watching me.
Market Sentiment




28th Feb a day before the financial budget of
India with high expectations towards growth.
With the 3 greats of Indian Financial industry
in power Indians expected better performance
from Financial companies.
Worries:
 Current

Account Deficit
 Dollar vs INR
 Manufacturing Growth (IIP)
Mind Set






My calculations were that Dollar will have
higher demand than Euro because of the Euro
zone crisis which will lead to Dollar
strengthening.
With CAD numbers high, importing would lead
to further issues. Therefore, with stop in gold
import I personally sensed CAD numbers were
in focus.
China was taking over in terms of
manufacturing growth and with Indian inflation
we could not compete with them.
Portfolio Creation
Selection of
Sectors

The overall process in the financial markets is
called Top-Down Approach.
Sectoral Allocation
8%

Company
Selection

2%
15%

5%

7%

Percentage
Allotments
27%
24%

Entry and
Exit Prices
8%

4%

Cement

Pharma

Enginering

Sugar

Metals

IT

Cash

Mining

Banking
Equity Valuation Test


Economic Moat







Financial Strength





Potential Competitive advantage: Net profit Margin.
Pricing Power: Gross Margin.
Capital intensity: Capital expenditure ratio.

Balance sheet strength: Current Ratio. TL to TA.
Retained Earnings: Consistency of reinvestment of retained
earnings.

Management Strength




Cash return on investment capital: Free cash flow by invested
capital.
ROE: NI/stockholders equity.
Business performance: FCF.
Outcome




Today I have earned a few clients through the
blog and I am currently heading a small
company called Dalmiya Advisory.
Portfolio has outperformed the market and has
generated an alpha of 10%.

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C. describe a time when you took a great risk. what was the outcome

  • 1. C. DESCRIBE A TIME WHEN YOU TOOK A GREAT RISK. WHAT WAS THE OUTCOME? IE Business School Application ESSAY - C
  • 2. The Activity  Investing: an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.
  • 3. Steps Taken  Devashishdalmiya.blogspot.com I started the blog as a showcase for the investment decisions I take and portray my investment knowledge and learn further.  Creation of a model portfolio worth Rs. 5 Million as a base and to be judged against broader market indices such as Sensex and Nifty.  Date of creation: 28th Feb, 2013
  • 4. Basis of Investing    Moderately aggressive risk profile. Only investments and no trading. Being ethical as the world is watching me.
  • 5. Market Sentiment   28th Feb a day before the financial budget of India with high expectations towards growth. With the 3 greats of Indian Financial industry in power Indians expected better performance from Financial companies. Worries:  Current Account Deficit  Dollar vs INR  Manufacturing Growth (IIP)
  • 6. Mind Set    My calculations were that Dollar will have higher demand than Euro because of the Euro zone crisis which will lead to Dollar strengthening. With CAD numbers high, importing would lead to further issues. Therefore, with stop in gold import I personally sensed CAD numbers were in focus. China was taking over in terms of manufacturing growth and with Indian inflation we could not compete with them.
  • 7. Portfolio Creation Selection of Sectors The overall process in the financial markets is called Top-Down Approach. Sectoral Allocation 8% Company Selection 2% 15% 5% 7% Percentage Allotments 27% 24% Entry and Exit Prices 8% 4% Cement Pharma Enginering Sugar Metals IT Cash Mining Banking
  • 8. Equity Valuation Test  Economic Moat     Financial Strength    Potential Competitive advantage: Net profit Margin. Pricing Power: Gross Margin. Capital intensity: Capital expenditure ratio. Balance sheet strength: Current Ratio. TL to TA. Retained Earnings: Consistency of reinvestment of retained earnings. Management Strength    Cash return on investment capital: Free cash flow by invested capital. ROE: NI/stockholders equity. Business performance: FCF.
  • 9. Outcome   Today I have earned a few clients through the blog and I am currently heading a small company called Dalmiya Advisory. Portfolio has outperformed the market and has generated an alpha of 10%.