What Is The Key Ingredient Of Warren Buffett’s Success?

What Is The Key Ingredient Of Warren Buffett's Success?

Warren Buffett is an American investor, business tycoon, philanthropist, and the chairman and CEO of Berkshire Hathaway. He popularized one of the most favoured market indicators, the Buffett Indicator (BI). But what exactly it is and how does it work? At a time when experts are cautioning investors of a stock market bubble, let’s find out what the indicator says.

Crux of the Matter

What Is Buffett Indicator?
The indicator is called the Buffett indicator (BI) due to its popularization by Warren Buffett. BI is one of the most favoured market indicators. It can indicate whether a particular market is overvalued or undervalued, and can help in forecasting the market

Buffett indicator = Stock Market Capitalization/Gross Domestic Product

Understanding The Terms
Gross Domestic Product is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year.

Stock Market Capitalization
It is the value of all the publicly traded companies calculated by multiplying the total number of shares (of each company) by the current share price (of each company).

How It Came Into Prominence?
The use of the stock market capitalization-to-GDP ratio increased in prominence after Warren Buffett once commented that it was “probably the best single measure of where valuations stand at any given moment.”

Inferring Buffett Indicator
Through the Buffett indicator, if investors find a stock market in an economy undervalued, they should ideally buy stocks in that market by selling stocks owned in an overvalued economy. That way, the valuation will be set right and the investor is likely to profit.

BI Of India
However, determining the valuation of the market depends on the historical average of the Buffet Indicator.

  • For instance, Indian markets have had a BI Ratio of 75% on average and have rarely crossed 100%.
  • The low ratio is attributed to India’s unorganized sector that is unlisted.

Rise In India’s BI Ratio
Because India’s historical average has been between 70 – 80%, a 98% BI Ratio is cautioning investors that the market is overvalued.

The market cap-to-GDP ratio has been volatile as it moved from 79% in FY19 to 56% of FY20 GDP in March 2020 and now stands at 98% of FY21 GDP.

Motilal Oswal Securities

Markets Are High
Recently, the Indian benchmark index SENSEX touched the 50,000 mark for the first time. But the market has been spiralling downwards since then.

Summachar brings you this story in collaboration with Finmedium that can be found on Instagram at @finmedium and on the web here.

  • Buffet founded The Giving Pledge in 2009 with Bill Gates, whereby billionaires pledge to give away at least half of their fortunes. As of August 2020, the pledge has 211 signatories from 23 countries with over $600 Billion in pledges.
  • Value investing is an investment paradigm that involves buying securities that appear underpriced by some form of fundamental analysis. High-profile proponents of value investing, including Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value.
  • According to the Forbes Global 2000 list and formula, Berkshire Hathaway is the eighth largest public company in the world, the tenth-largest conglomerate by revenue and the largest financial services company by revenue in the world.

Quirky Budget Traditions Around The World

Quirky Traditions Around Budget

Spurring the countdown for Budget 2021, Finance Minister, Nirmala Sitharaman on 23rd January 2021, hosted the Halwa Ceremony in the Finance Ministry. In this story, we talk about some unconventional budget traditions followed by the countries during the presentation of the Union Budget.

Crux of the Matter

The Halwa Ceremony

  • The 70-year-old customary Halwa Ceremony is performed at the North Block of Finance Ministry marking the final process of Budget Preparation.
  • It commences the budget lock-in period and its printing process.
  • Although this year it would be delivered paperless owing to Covid 19 restrictions.

The halwa is prepared in a large vessel and served to everyone directly associated with the Budget making process, thus recognising their contribution

What Is So Peculiar About The North Block?
Post the ceremony, in order to prevent the information leak, all the officials and support staff would move to the basement of North Block and remain cut off from their families until the budget is presented.

Quirky Traditions
The ritual of Union Budget presented by the Finance Minister is brought to India by the United Kingdom and is still followed by most of the Commonwealth Nations.

Reciting Poems
In India, for the past 25 years, FMs have followed the unsaid custom of reciting couplets or poems during the Budget presentation with a hope of giving some life to the dry budget numbers.

The Budget Day Shoes

  • In Canada, FMs wear a pair of new shoes while presenting the Budget. 
  • In 2015, a particularly fiscally conservative FM rather detailed the point by wearing New Balance shoes to show how he had balanced the Budget.
  • Other Canadian instances include wearing green shoes for portraying one’s environmental credentials.
  • Children’s shoes to show child-friendly fiscal policies.

Britain’s Bizarre Rituals

  • The financial year (tax year) of UK begins from April 6, unlike all major economies that begin from January 1.
  • The British Chancellor while delivering the Budget may drink alcohol of his own choice – only time when anyone from the House of Commons can do so. 

The Red Suitcase

  • The UK Treasury Chief carries a Red Box/Suitcase containing Budget contents & speech delivered to the Parliament.
  • A lot of  UK ruled colonies continue to follow this tradition to date.

Read about the expectations of different sectors from the budget of 2021 here.

  • Union Budget Mobile app was recently launched by Finance minister Nirmala Sitharaman. The mobile application will allow users — members of the parliament and general public — to access budget documents easily.
  • The military budget or defence budget of India is the portion of the overall budget of the Union budget of India that is allocated for the funding of the Indian Armed Forces. The Indian Army accounts for more than half of the total defence budget of India.
  • Until 2018, as a part of the tradition, Finance ministers carried the budget in a leather briefcase. The tradition was established by the first Finance minister of India, Mr RK Shanmukham Chetty. Nirmala Sitharaman broke this tradition by carrying the budget in a Bahi-Khata.

Knowing Dr. Viswanathan Shanta: Face of Cancer Care

Knowing Dr. Viswanathan Shanta: Face of Cancer Care

Dr Viswanathan Shanta (1927-2021), the Indian oncologist who was best known for her efforts towards making quality and affordable cancer treatment accessible in the nation, passed away earlier this week. Let’s know more about the Padma Bhushan awardee’s life in this piece dedicated to her contributions.

Crux of the Matter

Who Was She?
She was born on 11 March 1927, at Mylapore, Chennai, into a family of Nobel Laureates: C.V. Raman (grand uncle) and S. Chandrasekar (uncle). This was a time when Indian women generally entered the field of obstetrics and gynaecology.

Work In Cancer Institute (WIA)
Also called Adyar Cancer Institute, it is an Indian non-profit cancer treatment and research centre based in Chennai, wherein initially there were 2 doctors, Shanta and Krishnamurthi. She worked there from 1955 to 2021, where she became the director (1980-1997) and chairperson thereafter.

What Is Oncology?

  • Oncology is a branch of medical science, which deals with the prevention, diagnosis, and treatment of cancer.
  • There are 3 major areas of the branch: medical, surgical, and radiation.

Member Of Tamil Nadu State Planning Commission For Health
As a member, she was a strong advocate of early detection of cancer and the need to change public perception of the disease, particularly the extreme fear and hopelessness associated with it.

International Presence
She served as a member of several national and international committees on health and medicine, as the WHO Advisory Committee on Health.

In an era when specialised medical care in India has become highly commercialised, Dr. Shanta strives to ensure that the Institute remains true to its ethos, `Service to all.’ Its services are free or subsidised for some 60% of its 100,000 annual patients […] 87-year-old Shanta still sees patients.

One Of The Award Citations For Her

  • The etymological origin of the word Oncology is the Greek word ‘óngkos’, meaning “burden, volume, mass”, and the Greek word ‘logos’ meaning “study”.
  • The SPIKES protocol is a method used in clinical medicine to break bad news to patients and families. As receiving bad news can cause distress and anxiety, clinicians need to deliver the news carefully. By using the SPIKES method for introducing and communicating information to patients and their families, it can aid in the presentation of the material.
  • Percivall Pott was an English surgeon, one of the founders of orthopaedics, and the first scientist to demonstrate that a cancer may be caused by an environmental carcinogen.

Past Indian Budgets In Numbers

Past Indian Budgets In Numbers

The most anticipated event for the nation and claimed to be the one like never before by the current Finance Minister Nirmala Sitharaman, the Budget of 2021 is going to be a spotlight event, to say the least. Until then, let us have a look at some of our previous Union Budgets via cool and easy-to-understand infographics.

Crux of the Matter

The union budget size has increased at an annual rate of 11.6%, reaching ₹30.42 lakh crores in 2020-21.

But with the increasing size of the budget, a developing nation’s issue, fiscal deficit did not leave India. The revenue deficit was also of a concern.

Now let us look at the trend of budgetary allocations in some key sectors for a developing nation.

But how does this allocation fare with other nations? Let’s find out.

You might also be wondering where does all the money with the government come from? They tax us for sure, but that’s not all. Find it here yourself.

The Indian Railways has been making a peculiar demand to the government since before last budget. Will their thirst be quenched? What is their thirst? Find it all here: Budget 2021: A Beacon Of Hope For Department Of Railways

  • The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8.
  • Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. All that budgets seemed to do was to raise taxes, a presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices. It was Mr Yashwant Sinha, the then Finance Minister of India who changed the ritual by announcing the 1999 Union Budget at 11 am.
  • In 2016, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February, Minister of Finance (India) Arun Jaitley announced that it will now be presented on 1 February. Additionally Rail Budget, presented separately for 92 years, merged with the union budget.

Famous Indian Journalists & Their Connections

Famous Indian Journalists & Their Political Connections

As 2021 gave a rough start to Indian journalists, with prominent names like Arnab, Nidhi, and Ghai being in the limelight for all the wrong reason, let’s take a deeper look at the political connections of some of the most prominent Indian journalists.

Crux of the Matter

Arnab Goswami – Founder of Republic TV

  • Maternal uncle: Siddhartha Bhattacharya – Cabinet Minister in Assam from BJP.
  • Father: Late Colonel Manoranjan Goswami – BJP member also contested 1998 Lok Sabha Polls.

Ravish Kumar – Senior Executive Editor, NDTV India

  • Brother: Brajesh Pandey – Senior leader from Congress.

Radhika Roy And Prannoy Roy – Founders of NDTV

  • Radhika’s sister: Brinda Karat – Communist Party of India-Marxist (CPI-M) leader.
  • Brinda’s husband: Prakash Karat – CPI-M politburo member, former Gen Sec.

Rajdeep Sardesai – Consulting Editor with India Today

  • Wife: Sagarika Ghose – Consulting Editor, The Times Of India.
  • Sagarika’s father: Bhaskar Ghose – Former Director-General of Doordarshan.
  • Sagarika’s aunt: Ruma Pal – Former Judge at the Supreme Court.

Barkha Dutt – Columnist for The Washington Post; renowned for stint with NDTV

  • Involved in ‘Radia tapes’ that reportedly showed collusion between several journalists and the UPA Government.
  • Her previous channel Tiranga TV was backed by Congress leader Kapil Sibal.

Sreenivasan Jain – Managing Editor, NDTV

  • Father: Lakshmi Chand Jain – former Indian High Commissioner to South Africa, a former member of Planning Commission.

Siddharth Varadarajan – Co-founder of The Wire; former Editor at The Hindu

  • Father: Muthusamy Varadarajan – a former member of the Indian High Commission in London (1979-83), former permanent Secretary in the Ministry of Culture, former Civil Servant.

Suhasini Haidar – Diplomatic Affairs Editor and National Editor, The Hindu

  • Father: Subramanian Swamy – Rajya Sabha MP, BJP.

The beginning of 2021 brought problems to some prominent Indian journalists like Arnab Goswami and Nidhi Razdan, due to WhatsApp, Harvard, or even the capital market. Read about it in detail here.

  • Harvard has more alumni, faculty, and researchers who have won Nobel Prizes (161) and Fields Medals (18) than any other university in the world. Students and alumni have also won 10 Academy Awards, 48 Pulitzer Prizes, and 108 Olympic medals (46 gold), and they have founded many notable companies.
  • Arnab Goswami resigned as editor-in-chief of Times Now on 1 November 2016, citing editorial differences, lack of freedom, and newsroom politics. On 16 December, Goswami announced his next venture — a news channel called Republic; the name was later changed to Republic TV.
  • Rajat Sharma has interviewed more than 750 guests on his show Aap Ki Adalat. In 2015, Sharma was awarded with Padma Bhushan for his contributions through Journalism.