Workshops 2019

Dear All

 

Please do make time & attend the annual workshop conducted at our office premises

on March 22nd 2019

Time : 4pm to 5:30 pm

 

All those interested participants for the stock markets are invited

 

Please do walk -in : Sign Up for

Adventure Terrain Ventures

 

Mob: +917619149846

email : contactus@adventureterrainventures.co.in

 

 

 

 

 

 

 

 

Definition of ‘Credit Rating’

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Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity.
Definition: Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. It is a rating given to a particular entity based on the credentials and the extent to which the financial statements of the entity are sound, in terms of borrowing and lending that has been done in the past.

Description: Usually, is in the form of a detailed report based on the financial history of borrowing or lending and credit worthiness of the entity or the person obtained from the statements of its assets and liabilities with an aim to determine their ability to meet the debt obligations. It helps in assessment of the solvency of the particular entity. These ratings based on detailed analysis are published by various credit rating agencies like Standard & Poor’s, Moody’s Investors Service, and ICRA, to name a few.

NSIC – CREDIT RATING

Performance  & Credit Rating Scheme

NSIC – CREDIT RATING

Need of a Performance and Credit Rating Mechanism for SSIs (now Micro and Small Enterprises) was highlighted in Union Budget’04-05. A scheme for SSIs (now Micro and Small Enterprises) has been formulated in consultation with Indian Banks’ Association(IBA) and Rating Agencies. NSIC has been appointed the nodal agency for implementation of this scheme through empanelled agencies.

Benefits of Performance and Credit Rating

  • An independent, trusted third party opinion on capabilities and credit-worthiness of SSIs
  • Availability of credit at attractive interest
  • Recognition in global trade
  • Prompt sanctions of Credit from Banks and Financial Institutions
  • Subsidized rating fee structure for SSIs
  • Facilitate vendors/buyers in capability and capacity assessment of SSIs
  • Enable SSIs to ascertain the strengths and weaknesses of their existing operations and take corrective measures.

Benefits to Banks and Financial Institutions

Availability of an independent evaluation of the strength and weaknesses of an SSI unit seeking credit and thereby enabling banks and financial institutions manage their credit risk

Salient Features

  • A combination of credit and performance factors including operations, finance, business and management risk
  • Uniform Rating Scale for all empanelled rating agencies.
  • SSIs have the liberty to choose among the empanelled Rating Agencies.
  • Turn-Over based Fee structure
  • Partial Reimbursement of Rating Fee through NSIC

Source : http://www.tradingeconomics.com

:  www.nsic.co.in

Understanding the Four Measures of Volatility By Scott Rothbort

Updated from 3/8/2007 at 2:15 p.m. EST

“Volatility” is a term that is increasingly interjected into financial market commentary by the press and professionals. In fact, Bloomberg Radio has a daily “Volatility Report.” While the term is being thrown around with a seemingly high degree of expertise, I find that the concept is not well understood by most commentators and the average investor. This module of TheStreet University will cover the four main types of volatility measures:

◾historical volatility;
◾implied volatility;
◾the volatility index; and
◾intraday volatility.

Type 1: Historical Volatility

Volatility in its most basic form represents daily changes in stock prices. We call this historical volatility (or historic volatility) and it is the starting point for understanding volatility in the greater sense. Historic volatility is the standard deviation of the change in price of a stock or other financial instrument relative to its historic price over a period of time. That sounds quite eloquent but for the average investor who does not command an intimate knowledge of statistics, the definition is most overwhelming.

Think of a Pendulum

To help you visualize the concept of volatility, think of a pendulum like in the picture below. The pendulum is constructed from a steel ball, attached to a rope and then suspended from a ceiling.

http://www.thestreet.com/content/image/38564.include

The pendulum starts at the resting state when our ball is at point 2 (the mean). If you raise the ball to point 1 and let it go, the ball would then swing from point 1 to point 3. Over time that ball will swing back and forth always passing though point 2. If this were a stock, the difference in distance from point 1 to point 2 or from point 2 to point 3 represents the volatility in the movement of the stock price.

So as not to get into any trouble with physicists out there, the formulas for standard deviation and movement of a pendulum are different and I am not equating the two from a statistical perspective. Rather, I am only using the pendulum as a visual aide. Stocks with a swing that is greater from point 1 to point 2 vs. that of another stock will have a higher volatility than the other stock.

Now imagine a wind hitting the metal ball. The force of that wind will increase a stock’s volatility. Market corrections, increases in uncertainty or other causal factors of risk will be the wind that shifts volatility higher. Say that there is no wind, but rather calm over the markets. Since there is no outside force to apply motion to the pendulum, the arc of the movement from point 1 to point 3 will decrease. This is when volatility declines. Some call this complacency, but it is generally viewed as a market with low or declining volatility.

Source : http://www.thestreet.com

Inequality hurts economic growth, finds OECD research

Inequality hurts economic growth, finds OECD research

09/12/2014 – Reducing income inequality would boost economic growth, according to new OECD analysis. This work finds that countries where income inequality is decreasing grow faster than those with rising inequality.

The single biggest impact on growth is the widening gap between the lower middle class and poor households compared to the rest of society. Education is the key: a lack of investment in education by the poor is the main factor behind inequality hurting growth.

“This compelling evidence proves that addressing high and growing inequality is critical to promote strong and sustained growth and needs to be at the centre of the policy debate,” said OECD Secretary-General Angel Gurría. “Countries that promote equal opportunity for all from an early age are those that will grow and prosper.”

Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand over the past two decades up to the Great Recession. In Italy, the United Kingdom and the United States, the cumulative growth rate would have been six to nine percentage points higher had income disparities not widened, but also in Sweden, Finland and Norway, although from low levels. On the other hand, greater equality helped increase GDP per capita in Spain, France and Ireland prior to the crisis.

The paper finds new evidence that the main mechanism through which inequality affects growth is by undermining education opportunities for children from poor socio-economic backgrounds, lowering social mobility and hampering skills development.

People whose parents have low levels of education see their educational outcomes deteriorate as income inequality rises. By contrast, there is little or no effect on people with middle or high levels of parental educational background.

The impact of inequality on growth stems from the gap between the bottom 40 percent with the rest of society, not just the poorest 10 percent. Anti-poverty programmes will not be enough, says the OECD. Cash transfers and increasing access to public services, such as high-quality education, training and healthcare, are an essential social investment to create greater equality of opportunities in the long run.

The paper also finds no evidence that redistributive policies, such as taxes and social benefits, harm economic growth, provided these policies are well designed, targeted and implemented.

The working paper, Trends in income inequality and its impact on economic growth, is part of the OECD’s New Approaches to Economic Challenges Initiative, an Organisation-wide reflection on the roots and lessons to be learned from the global economic crisis, as well as an exercise to review and update its analytical frameworks.

Have You Ever Taken a Chance in Life? by freefincal

I am a fan of actor Kevin Costner. I think he has taken pretty big career risks,pulled off some and failed in some, but has always stuck to his guns, which is admirable. He has even declared that if his stardom vanishes overnight, he can make a decent living with a blue collar job, because he is skilled.

I saw an YouTube interview yesterday in which he mentioned that, his father regretted never having taken a chance in life and having been in the same job all his life. Costner had to reassure him that he had been a good father who provided all he could for his family.

That set me thinking about my own life. Regular readers would be well aware that as an investor, I am pessimistic, cautious, and always keen to contain downside risk. It might surprise them, (as it did me!), that when it came to my career, I had repeatedly taken chances. Some driven by my heart- a refusal to do something that I don’t like, some was driven by my stupid self-belief.

I once gave up a lucrative contract in Germany because I felt home-sick. One part of me said I was committing career suicide (as did my mentors and many of my friends) and one part of me said, I can work in peace only when I happy.

After coming back home, I worked without pay for 4 months, when my employer took pity and created a makeshift position for me.

For the next 6-8 months, I did not look for any other job but put all my cards on a single job which I was desperate to get as it was the only one that appealed to me.

I got the job and completely changed my area of research. This is again considered professional suicide as it will take at least a couple of years to get published.

Though I was doing quite well, nearly two years later, positions for my dream job -one that involved teaching – was open.

There was fierce pressure from my current employer to prevent me from taking the interview. My father was fighting cancer and I was confined to the hospital taking care of him. I prepared for the interview from there.

Things got to such a point that there was the serious danger of losing both jobs – my current one and my dream job. My father urged me to take the chance. He said he believed in me and asked me to go for it.

The gamble paid off. I got the position but I went ahead and committed career suicide once again(!) by choosing to work in another entirely different research area.

While I did quite well on the teaching front, research was riddled with stumbling blocks. Thanks to some hard-working and spirited students, I was able to set up a decent laboratory.

After nearly a decade of doing this, I think I am all set to commit professional suicide once again! (Sorry can’t say more).

As mentioned above, some of the chances that I took was driven by my heart, and some by ridiculous self-belief that I could pull it off. Sometimes it worked and sometimes it did not. In hindsight, considering my current circumstances, I am glad that I took those chances. Well, at least some of them!

Point of this rant

If you had a chance to take up a job that you truly love, will you take a chance and make an all-out effort to grab it? Even if it meant risking a cushy salary and perhaps your career in a particular area? Will you quit your well-paying job to become an entrepreneur?

I would probably vote, yes, but we will have to accept the consequences without too much regret.

Wealth creation or financial security has two components to it: Income and investing.

Investing is independent of how we earn an income. There are those who have taken some big chances with investing. I dont have the stomach for that. Perhaps because I am always doing stupid things to my “career”.

Income is a different ball game. We could earn from a job we truly love (in which case we wont worry about how much we make) or we could earn from a job we truly hate (in which case, all we care about is how much we make).

Sometimes the time window in which we could shift from a job we hate, to a job we love could be quite tight and narrow

Sometimes we will have to take a chance in life to achieve lasting change and happiness. Sometimes we will have to roll the dice and see how it pans out.

The regret of never having taken a chance could be greater than the consequences of having taken one.