Book Review: Coffee Can Investing

Coffee Can Investing: The Low Risk Road to Stupendous Wealth

-by Saurabh Mukherjea, Rakshit Ranjan, Pranab Uniyal

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People focuses too much in building career. As a result they don't have clarity on future financial need and a roadmap to achieve the financial freedom. Most people randomly invest in usual assets: (1) real estate, (2) gold, (3) mutual funds,(4)  fixed deposits and (5) stock markets. The smart ones generally make a handsome 8 to 12 per cent per annual return of investments in their lifetime. 

What if, there was another way, all the time, to get a 20 per cent CAGR?

Bestselling author of Gurus of Chaos and The Unusual Billionaires, Saurabh Mukherjea writes down his secret recipe to generate stupendous wealth.
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It is a introductory book written for the simplest understanding of the Indian market and financial investments. Given how ubiquitously misinformed, ethically challenged and poorly accounted Indian market is, the book does a decent job of providing a big picture. Indians are quite comfortable to invest heavily in real estate and gold due to social pressure and memetic rivalry. The book articulates why its not a wise path and offers more profitable alternatives. For example, gold has given only 2 per cent return per annum on an inflation-adjusted basis during 1990 to 2017. Rs 1 lakh become Rs 11.2 lakh in 2017 if invested in gold. Had the same money been invested in the Sensex for the same period, it would have become a whopping Rs 35 lakh. Indians don't prefer financial assets because of the (a) lack of sound financial advice; (b) lack of trust in financial institutions due to different scams in 90s; and (3) lack of easy access to financial tools without  fraudulent brokers. Now with the change in generation and improvement of technologies, there is no reason for equity not becomes attractive and popular. In this regard the book offers some solid advices backed by numbers and stats on how to build a strong equity portfolio. For new investors takeaway from the book are as follows

1. Stock market is not a place for gambler

2. Buy and hold trusted quality stocks for long time (10 year). This book defines a good company as the one that has consistently grown revenue by 10% and ROCE of 15% atleast in each of the last 10 years.

3. Selling stocks frequently attracts brokerage, tax and other charges, so hold good businesses for long ride.

4. Mutual fund houses purposefully make it difficult for you to take their service

5. Invest in "direct", "growth" mutual funds.

6. Invest in index funds than large cap funds.

7. SEBI, the watchdog is always working to protect investors.

A must read for beginners and even for the seasoned investors.

The book link on Amazon

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Disclaimer: Stocks mentioned (if any) here are not recommendation. We may have already invested in some of the name mentioned here. Read full disclaimer here

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