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Showing posts from May, 2020

What is bonus share and how does it affect the company and its shareholders?

A bonus share issue is an offer of free extra shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout. When a company issues bonus shares, the number of shares held by the investor increases in proportion. For example, 1:1 bonus means the number of shares double. 4:5 bonus means for every 5 shares held by an investor, he/she will get 4 shares. The value of investment remains the same even after a bonus share issue. For example, an investor has 50 shares, the company issues 1:1 bonus. Then the shares by the investor would double and become 100. The price of the shares of that company at that time was Rs. 100. So before bonus issue, · No. of shares = 50 · Share price = Rs. 100 · Value of Investment = Rs. 5,000 And after bonus issue, · No. of shares = 1000 · Share price = Rs. 50 · Value of Investment = Rs. 5,000 This is so because when a bonus share is announced the price of the shares of that company gets redu...

Who is Peter Lynch and what is his philosophy in equity market investment? 25 Golden Rules of the most successful Fund Manager.

Peter Lynch (born January 19, 1944) is an American investor, mutual fund manager, and philanthropist. As the manager of the Magellan Fund at Fidelity Investments between 1977 and 1990, Lynch averaged a 29.2% annual return, consistently more than doubling the S&P 500 stock market index and making it the best-performing mutual fund in the world. During his 13 year tenure, assets under management increased from $18 million to $14 billion. He also co-authored a number of books and papers on investing and coined a number of well known mantras of modern individual investing strategies, such as Invest in what you know and ten bagger. Lynch is consistently described as a "legend" by the financial media for his performance record. Base on his career I have compiled his investing rules here. 25 GOLDEN RULES by @Peter Lynch 1: Nobody can predict interest rates, the future direction of the economy or the stock market. Dismiss all such forecasts & concentrate on what's actual...

What is so powerful about Blockchain technology?

There are several intrinsic features of a Blockchain that lend it its power and allows it to record and transfer value over the internet in a peer-to-peer manner: Near real time: It enables near real time settlement of recorded transactions, removing friction, and reducing risk No intermediary: It is based on cryptographic proof, allowing any two parties to transact directly with each other, without the need for a trusted third party. Distributed ledger: The peer-to-peer distributed network records a public history of transactions, making Blockchain distributed and highly available. Irreversibility: It contains certain and verifiable record of every single transaction ever made that cannot be altered without altering the entire chain. This prevents double spending, fraud, abuse, and manipulation of transactions. Censorship resistant: Crypto economics ensures that Blockchain continues pumping out new blocks and that blocks are not being reverted or altered. The Gartner hype cycle p...