Love Dogs Love Animals Love Nature !!

Hi All !!

I hope you are in great health and enjoying a prosperous time.

Hmm... It's tough to get a good job profile these days.... supply overcome demand... As, I am still enjoying my unemployment days... I was browsing through my collection of videos, that were shot exclusively by me during my MBA days. I developed a keen interest in photography and video shooting in course of my just completed MBA. It was a nice relaxing activity against tough MBA schedule. I would like to share an incident and a video (which I consider the best video ever shot by me).

When I was in 2nd semester of MBA, me and my friends used to take a evening walk around our campus. A female dog used to walk along us, right from our Hostel gate to the outskirts of Hostel area. In took no time that we developed an affection for her and starting feeding her with bread, milk etc frequently. By the time, I advanced to 3rd semester, she gave birth to 4 little cute puppies, who in no time became center of attraction of my hostel mates. Me and my friends, specially Dr. Vishav Prakash(having a pet dog in his home), became a bit emotionally attached to those little nature's gifts. Every evening we use to play with them, feed them, do stupid but enjoyable acts etc.

One afternoon, when we were back from our college after attending our MBA classes, we saw one of the puppies was wounded badly around his neck (perhaps injured by some male dog), it was a lethal injury and an urgent action was needed to save his life. My friend Dr. Vishav Prakash being a doctor by profession and owner of a pet dog, wasted no time and brought stuff required for his immediate medication.

Below you can find the video (youtube link) shot by me, in which Dr. Vishav Prakash, his little brother and my another friend Maniram Tanwar dressing that little wounded puppy.

Youtube - Love Animals Love Nature !!

When we were leaving our MBA hostel, after the completion of MBA program, seeing that little puppy in good health and playing with his brothers was an extraordinary feeling and a sense of achievement that indeed is a value addition to my MBA. I wish him all the good health and enjoyable life.

My main motive behind sharing this incident is to spread the message that not only humans but also the animals are children of Nature. Every single soul has his own existence and importance in this world, we need to understand that our superior ability is the gift by nature so that we can help the poorer souls/animals to make this world a Global Home to every single soul/character.

Cheers !!

Original Article : http://adigupta19.qondio.com/love-dogs-love-animals-love-nature

MS Excel's Solver - Really Solves Real World Financial Problems

Greetings !!

Today I'll be throwing light over some important applications of Excel's Solver Tool with respect to real life financial problems. Here, we will see that how this magical tool executes following "Monsters" before they can even make note of that.

*Pls Note: This Intel is devoted to Solver tool only, detailed explanation of various calculations(like NPV etc.) is beyond the scope of this Intel.

Monster 1 - Complex Mathematical Problem.

Suppose, mathematical formula given by

Y = R*(N+R)+N*(1+R/X)*(X+N/X)+(N/X)*(1+R/N)/(N+4)

Subject to constraints :-

X greater than or equal to 5
R = 15
N = (1+R/X) and N smaller than or equal to 1.5

We have to find the value of X for which Y is minimum.

Killing Monster 1 - Refer to Figure 1

Variables Y, X, R, N are entered in cells A1 to A4
Enter formula as shown in the figure in B1 to calculate Y
Enter any arbitrary values in cells B2 & B3
Enter formula =(1+B3/B2) in cell B4

Go To Tools - Solver, It will open solver window as shown, Enter Solver parameters as shown in the figure and click Solve.

We will find that for value X = 30, Y is minimum i.e. 315
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Monster 2 - Cost of Capital (Cost of Debt Borrowing)

Simplest Formula for calculating Pre-Tax Cost of Debt is as Shown in Figure 2, Kd represents the pre-tax cost of Debt Borrowing.

Now I want to know minimum rate of return that Firm must earn from the raised capital through debt/bond whose current value is 1200 Euro, Maturity Value 2000 Euro, Annual Coupon rate is 10% and maturity period is 10 years.

Killing Monster 2 - Refer again to Figure 2

We can see the formula entered in cell B1, Enter solver parameter as shown and click solve.

We will find that, Firm must earn atleast 14% (i.e after-tax cost of debt) to maintain its value.
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Monster 3 - Capital Budgeting (Buy Vs Leasing)

Lessee has 2 Options, either to purchase an equipment or lease it. (Terms of above options are as given in the figure 3). Now it is required for lessor to find the maximum lease rate that will be accepted by Lessee.

Killing Monster 3- Refer to Figure 3

Firstly it is required to calculate the Net present Value (NPV) of cashflows from the two options. Lessee will accept any lease rate which is less than or equal to the rate at which NPV from both the options is equal.

So from figure, by using help of Solver Tool, we can find that Lessee will accept lease rate smaller than or equal to 10%, because at this lease rate, NPV from both options will be equal, so he/she will be interested in opting Lease option, in which he/she has to pay equal or less lease interest payments than 10%.
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List is very long, this can go on and on....

I think these three examples have given a good idea about Excel Solver tool.

See ya.... Don't forget to comment... Cheers !!

Original Article: http://www.qondio.com/ms-excels-solver-really-solves-real-world-financial-problems

Analysis of World Stock Markets

Greetings !!

Hope everybody is fine, and enjoying life at its fullest. As, I am still searching a good job, last week I had full time to spend in analyzing World Stock Markets and their performance over last 10 years. It's an ongoing process but I would like to share some of the findings till now, one can consider it as a detailed excerpt.

Data used : From Jan 01, 2001 to Dec 31, 2011
*For S&P Global 100 and S&P Global 1200, only last 5 years data was available.

Market Indices taken in consider : S&P 500, NASDAQ, DOW JONES, NIKKEI 225, IBOVESPA, RTSI, NIFTY, BSE SENSEX, SHANGHAI, HANG SENG, KOSPI, STRAIT TIMES, DAX, FTSE 100, CAC 40, S&P GLOBAL 100, S&P GLOBAL 1200

Economic Factors considered : GDP Growth Rate, Investment(as %GDP), Gross National Savings (as %GDP), Average Inflation(CPI YOY Basis), Change in Import volume of goods and services, Change in Export volume of goods and services, Unemployment rate, General Government Expenditure(as %GDP), General Government Revenue(as %GDP), General Government Net Lending/Borrowing(as %GDP), Current account balance(as %GDP), Real Interest Rate

Tools Used : Microsoft Excel 2003, SPSS Statistics 17.0

This excerpt be will limited to below attached 10 images/figures.

Figure 1

It depicts absolute 10 year return of Major Stock Markets in the world. Russian RTSI has clearly outperformed other indices while Indian, Brazil & South Korean Indices have managed to give decent return as compared to others over last 10 years. It is interesting to know that US & European Markets have failed to give any significant return during the same period. Clearly Emerging Markets have outperformed others in terms of 10 year return.

Figure 2

It depicts yearly return at a point of time. Russian RTSI, China SHANGHAI, Brazil IBOVESPA & Indian BSE Sensex have been most active indices, both on upside and downside of the return scale. Russian RTSI seen to be most volatile index among all.

Figure 3

This is simple and quite interesting depiction of Return against its Variability/Volatility of major stock indices. SHANGHAI has large difference between its mean & median return over last 10 years while US & European Markets have comparatively less standard deviation(i.e they are comparatively more stable) but they failed to give any significant magnitude of return to investors.

KOSPI, BSE Sensex, Nifty 50, IBOVESPA & RTSI have clearly emerged out as favorite as their mean & median return are almost similar and not very far from the standard deviation line with comparatively decent returns.

Here nature and behavior of S&P Global 100 & S&P Global 1200 indices are not so Global. They still resembles majorly developed markets only, emerging markets seems to have very little space in their global indices composition. That's why I choose not to analysis these so called Global Indices further.

Figure 4

It shows correlation among World Stock Markets. It can easily be seen that all these indices' return are highly & positively correlated with each other. HANGSENG & Strait Times are two mostly correlated indices with rest of the world indices(specially SHANGHAI).

Figure 5a & 5b

These 2D figures shows behavior of US Market Indices and various economic factors/variables over last 10 years. Among all, Unemployment Rate and Government Revenue seems to be two most correlated economic factors with US Market Indices' return.

Figure 6a & 6b

These 2D figures shows behavior of Indian Market Indices and various economic factors/variables over last 10 years. These factors individually are not highly correlated with the Indian Market Indices' return. GDP Growth Rate is most positively correlated factor among all.

Figure 7

It shows the regression equation of US S&P Index Return with respect to various economic factors affecting it. It is interesting to note that out of considered economic factors, Index return is increasing with increase in Unemployment Rate and Average Inflation(CPI). This needs further research.

Figure 8

It shows the regression equation of Indian Nifty 50 Index Return with respect to various economic factors affecting it. It is interesting to note that constant value is negative and Index return decreases with increase in exports. This needs further research.

Not sure, how accurately & rationally I made my effort, but it surely gives a brief insight about World Stock Indices and their respective behavior over last 10 years.

Hoping it was worth to read... Always Love to have comments/corrections/opinions... Have A Great Day... Cheers !!

Original Article : http://www.qondio.com/world-stock-markets-from-my-eyes

How Tax & Inflation eat my Investments' Return

Hi All,

Hmm.. tough time, specially with these monsters called "Tax" and ever rising "Inflation" around. They resemble "Piranhas" in eating up return on my investments. Here, how they are...

Impact of Tax alone

Considering only "Income Tax" for now, suppose I invest $1000 in 1 year Bank Fixed Deposit fetching around 10% nominal interest rate compounded annually and my little income falls into 10% tax slab.

After 1 year, invested $1000 fetching 10% return becomes (1+0.10)*$1000 = $1100,
making my nominal gain $1100-$1000 = $100

But due to tax, Gain after Tax = $100(1-0.10)= $90
i.e my effective return(after tax) will be $90/$1000 = 9%

So, tax eats up my 1% return for the given scenario.


Impact of Inflation alone

Considering same investment of $1000 in 1 year Bank Fixed Deposit fetching around 10% nominal interest rate compounded annually and assuming annual inflation rate of 10%.

After 1 year, invested $1000 fetching 10% return becomes (1+0.10)*$1000 = $1100

But due to inflation, the purchasing power of $1100 after one year is same as purchasing power of $1100/(1+0.10) = $1000 right now. That means, with 10% inflation and 10% return on investment, my effective return is 0%, yes a big "ZERO" or In other words, my purchasing power remains the same.

So, inflation eats up my whole return for the given scenario.


Combined Impact of Tax and Inflation

Considering same example, investing $1000 in 1 year Bank Fixed Deposit fetching around 10% nominal interest rate compounded annually, my little income falls into 10% tax slab and assuming annual inflation rate of 10%.

After 1 year, invested $1000 fetching 10% return becomes (1+0.10)*$1000 = $1100,
making my nominal gain $1100-$1000 = $100

But due to tax, Gain after Tax = $100(1-0.10)= $90, and after-tax inflow will be $1090.

Now, its reduced purchasing power due to inflation is given by $1090/(1+0.10) = $990.91, i.e net return after tax and inflation will ($990.91-$1000)/$1000 = -0.91%

It means, in actual I am losing my money(by 0.91% a year), if I invest in current scenario.

So, Does it mean that I stop investing ???

No, because if I don't invest, then considering 10% inflation rate, my uninvested amount $1000 becomes $1000/(1+0.10) = $909.09 after 1 year and that means, I'll be losing my money/purchasing power by 9% which is 10 times higher than 0.9%.

I should keep on investing and try to invest in an alternative that can fetch higher return to nullify the combined effect of tax and inflation.

It should fetch return higher than {[(1-tax rate)*nominal interest rate]- inflation rate}/(1+inflation rate), in order to have effective gain over an investment.


Be a smart investor rather than being just an investor... Hope it was worth to read...  !!

Original Article : http://www.qondio.com/how-tax-inflation-eat-my-investments-return

Nice vs Nice

If a nice person isn't nice for you... that doesn't mean that u'r not a nice person... may be there are conflict of interests... it's better to stay away from each other rather than justifying an insubstantial relation unnecessarily...

Fake n Lie World all around...

Breaking News.. "US Congress Shocked to find Osama was in Pakistan", "Pakistan dares US", "China Says It's a friend of India", "HM P.Chidambaram asks for 26/11 terrorists", "D Ibrahim not in Pakistan", "Pervez Musharaff shocked to find that Osama was in Pakistan", "PM Manmohan Singh Says.. we will control corruption and inflation"... hahaha... OMG !! comedy all around.. fooling people.. Fake n Lier world all around...

Today's Mantra of Living King Size...

Terrorists like Afzal, Kasab etc. are still alive... millions of tax payers money are being wasted on them and our intelligent govt. asking for more from Pakistan to be handed over... lolzzzZZ... so that more money can be wasted... Scams, Billions of money parked outside India... Politicians, Bureaucrats, Corporates all were sleeping or are part of it... Today's mantra "Make fool of others and live King Size"... !!