Rate Of Interest

Hello Everyone,

I trust you are all doing well. It’s been a while since my last blog post, but I’m back with an important topic to discuss today – interest rates and returns.

Interest rates are a fundamental concept in finance, representing the cost borrowers pay to access capital. To illustrate this, imagine a scenario where there are only two lenders in a community and five farmers in need of funds to produce goods for themselves and society. In this situation, the interest rate is determined solely by the discretion of these two lenders. Let’s say they charge rates of 45% and 49%, which are quite high. However, by collaborating or strategizing, they could decide to charge around 48%, which would exert significant financial pressure on the farmers. It’s crucial to grasp that interest rates are influenced by the availability of alternative capital sources. When there are only a few sources, the interest rate tends to align with the lower cost among them.

Beyond the source of capital, the attitude of lenders and their willingness to provide funds play pivotal roles in setting interest rates. If capital is readily available and not in short supply, interest rates remain low unless there’s a significant shift in supply and demand dynamics. Additionally, the lenders’ confidence, conviction, and desire to invest in and consume goods are essential factors. If, for some reason, these factors are disrupted, it can disturb the capital market and lead to fluctuations in interest rates.

The next crucial factor is amount of money in the market, I am going to mix few topics here. Money in the market is used for various of the reasons which comes under.

  1. Transcations motive- Which means money used for personal and business exchanges.
  2. Pre-cautionery Motive- Desire of security for future purposes , like saving for the future.
  3. Speculative motie – As the word says , for speculative reasons.

We can divide all the transactions into the world, economy,city,personal life into these 3 sectors , they indirectly also play with interest rates.

In summary, interest rates are a complex interplay of factors, including the availability of capital sources, lender attitudes, and market conditions. Understanding these dynamics can provide valuable insights into how interest rates are determined and can help individuals and businesses make informed financial decisions

Value Creation

Its been a while since a last wrote a blog on things that matters in the long run.

I have been a big big admirer of business which create value for themselves and by themselves I refer to managers and its stake holders. I was reading Warren Buffett’s early partnership letter last week one thing that just comes out other than his sheer talent and business acumen is that he is very much the same as he admires company to be. what a mean by that , he wanted apart from cigar butt stocks few business which delivers the best value creation through a certain price.

I was reading his letters where he has mentioned quiet a few time that he is happy to close down his partnership if he cannot outperform leading investment firms and Dow Jones YoY basis. He constantly used to compare himself through their returns and through their resources.

Value creation is something which is in the middle of the investment circle for us , I am someone who understand that fully and always always try to see it through real world – business, companies and nations in fact. What really matters is sustained focus and constant improvement as short focus is something which is very very harmful in this kind of business.

I was reading a book yesterday where the author pointed out how important it is to find simple boring companies which are constantly making profit over the years as compared to big conglomerates which have their hands in very pocket. We feel that these giants conglomerates have great asset base and also have enough resources to support their portfolio of companies in any case of calamity. They deliver great value of their portfolio of companies and not to their share holders in the long run. There are some exceptions like Berkshire but you can only have a Warren.

Midway ( 2020 ) ASX

Australia’s largest woodfibre processing unit with over 70,000 hectares under management as per 2019, it is one of the most beautifully made company out there, still is it worth to buy its shares at 0.98$ ?

The company got listed and after that it has showed some remarkable growth in its revenue growth from from 0.51% to 22% at the end of 2019, is sales justifiable for its share price which was 3.8$ upwards in aug 2019, the shares have dropped significantly from 3.8$ afterwards.

Is company a good buy with current price range , the answer is NO , according to our analysis the company have been overvalued since it has been listed, and its not advisable to buy its share for the long run, the main drivers kicking in are Brazilian products where their market share to china is increasing year over year , also its competition with peers and china ban for its exports in USA , which was mentioned in company’s website.

We made an in-depth – analysis various financial instruments, thus for short run it might be profitable for long run there may be few other good alternative.

Investing Basics

There is a saying “Do not work for money let it work for you” by Robert Kiyoski. I cannot emphasis on this line more, we have a responsibility to fulfil our values and to earn enough to provide for our basic well being and to save some money for future use.I once read a quote from some superannuation managing fund , let your money work as hard as you are working , it completely makes sense.

We are suggesting some strategies and ways from where you can develop your plan ,

1. Reflection of your true self – The primary plan should include your own circumstances, responsibilities and your risk appetite. Your financial adviser may be able to help you in this.

2.Knowing your losses – The other focal point will developing a strategy is to know that there is a possibility for risk of capital.

3. Time Allocation – The amount of time you are ready to allocate in finding and exploring different sources. Its very important to understand that patience and consistency are not everybody’s cup of tea.

4.Diversification – The primary reason of diversification is to lower your expected losses if any, and to get a safety cushion around your money, diversification as told by Charlie Munger – Is a fool’s game , thus you should decide it on your own.

5. Rate of return – The other thing to look for while entering a market is its rate of return over the years, and its expected deviation from the figure over the years, the values should be studied carefully.

6.Your mindset – One of the most important thing is your mindset your values around the money, i cannot stress this enough your mindset can play a huge role in your investment decisions , try to go with unbiased mind.

7. Asset Allocation – Once you have given enough attention to points above, the next step is Asset allocation , amount of money you want to invest in different instruments shares , property , fixed interest and cash.

Afterpay ( 2020 )

We saw amazing gains of Afterpay (APT) , rallying through $88.3 from $12.44 in span of just 6 months, what does it really say, the company cannot turn around in such a way so as to get 613.42% jump in their share price, let’s dive into this .

The company APT had a humble beginning starting out from $2 a share to $38 in three years, slowly making progress and putting its foothold in various market across the globe. The company currently is trading at $75.80 , which. according to our studies is 200% overvalued, the company’s P/E ratio is negative, as the company is unprofitable till now.

So what does the stock price , say about the company ?

There is an tendency of humans to become over-optimistic about the future , we in-fact put all in line if we see something worth it, one of the first psychological reason for company’s share to trade so high, the investors are overly bullish about the company. Lets see some fact to get few things straight

1. Work from the competitors – The company is currently positioned as number one company in terms of its market cap and its till year performance , the company has many competitors which are inline to take away the market share from afterpay, it is advisable to wait for the company to get such a foothold in the market ,so that market share remain intact through years, according to us its a new market and many competitors like Zip , Sezzle , Splitit are in line to be the king.

2.Growing segment – The segment of BNPL is growing and is expected to pass 4 million in next three years, the segment is growing and its the right time to put your funds in these stocks to see the magic of growth. According to us, Afterpay is overvalued and it should be ignore till the time it hits around $35-40 range, above anything that is mere speculation and over optimism in the market. As, i have read somewhere , its not who starts his thing first wins, is he who even starting late gives his best, wins it. We are still searching for the other he.

3. Big Banks , steps into interest free cards – As mentioned above the segment is red-hot, the top 3 banks in Australia are stepping into the new challenge seeing the majority shift in buying behaviour and pattern from the consumers. The companies including NAB , CommBank ,Westpac have started their own kinds of interest free credit card , charging some account fee. More details can be found on their respective websites.

Imagine yourself with 5 enemies on a battlefield, fighting for the blood , to win to conquer and to register yourself as the king , how muddy and bad its going to get, the same is this segment its new its valuable and there is no king at the top ,except our provisional King Afterpay, everybody wants their market share, its too early to justify who can be the king of this palace(BNPL).

What we can understand that , its not advisable to put your money in only of the member Afterpay , against its real value , which is around $35-40. The investors should explore other option and see which other companies have what advantage over the others.

Afterpay is overvalued at the current price.

Business VS Real Estate

Hello everybody, people sometimes do ask me which is better real estate or business ,which one should I go for, real estate investment provides diversification , stable market value , long term growth.We have to ask our audience few questions first,

1.What do you think about businesses in general?

2. What do you think about spotting a good, growing, stable business and putting your money into it?

3.Finally, is it your belief that real estate provides store of value or is it the fact?

With that, let’s start our conversation , if we think in a most rational and obvious way and its written there in Wealth of Nations by Adam Smith that, labour is the most important aspect in an human’s life, we can work therefore we can provide ourselves basic human necessities. For example if we work to get the water out from the well, and supposedly get $2 a day with that we go home en route buying ourselves ,food ,some material which will be used as a shelter like a thick quilt or something.We can see that our primary activity is to earn, followed by fulfilling basic necessities and wants.

Businesses and growth in the economy expands the scope of a particular nation , introduces development through parks, houses , fountains and much more. In its very essence , its the growth and development shown by the nation’s businesses that we see a nation building , real estate prices soaring.If we go few hundred years back, the place from where you are reading this article maybe there was nothing, somebody came with an idea to start something to generate few dollars, and houses and civilisation followed.

Thus, if we see in a longer term horizon and a bigger picture businesses and economy growth have always been our primary concern to increase GDP per capita and the growth of the nation. I am in no doubt about ,what is the asset and what its derivative.It is not always that simple, real estate prices , location and population density and many other factors plays a significant role in choosing real estate over businesses(securities). For many people real estate are kind of stable , constant instrument which is guaranteed to provide benefits in the future.

lets answer few questions mentioned above, first we think that businesses are the shoulders on which GDP is carried , we have immense beliefs in the Australian economy and its growth of its businesses.

Secondly, finding a good, growing businesses is not easy, it takes a lot of research, unparalleled analysis and great insights, if you found one go for it, A2 milk company in just 5 years have given investor an return of approx. 3000% , if you invest $10,000 in 2015 by 2020 it will be worth $300,000 , an return of approx. 600% in each year. Thirdly, you know the answer is it just the belief or its proven fact, you know better.

I am a big fan of economy ,businesses ,creativity ,talent , hardwork and grit you see these things in businesses public or private ,small or big everything else are its by-product including real -estate properties. Buy businesses buy Australian businesses and grow your nation.


Sarvashay , is an financial blog website, intended to provide my( Puneet Gurnani) opinions on different companies and on general finance research topics, The information provided on this website is for general purposes only, it should not be consider as a professional advice of any sort, the writer or owner of the blog is no professional. The information should not be seen as any legal, tax, emotional or financial advice. Puneet Gurnani is not a licensed financial advisor, thus is no liable for any loss incurred, whether through use or reliance on the information provided directly or indirectly by use of this website. I can change, update or manage blog at any time, I reserve the rights for that.

Dusk : ASX , 2nd Sept 2022

The Company sells diffusers, oil and other easy to live and peaceful products for its Australian consumers, the consumers tend to enjoy the process and it is one of the kind here in Australia , which has a 6/10 reach , the main benefit it has it is a classy product and people tend to love it. It has 686,000 people who are attached through rewards they get discount if they buy it through rewards. The online sales are increasing and its about 27% of the total sales, this is mainly due to Covid , people like the product.

While Analysing the companies we took quiet a few assumptions, sale growing around 6-7% per year , operating profit margin stays the same despite it imports from China and US, Net profit margin – are sustainable.

The company has been growing its sales from past few years, GP margin quiet sustainable around 60-68% which is comparatively good as it provides buffer for net profit and its valuation.

The company are quiet aggressive in their expansion , opening stores every year which comes to increase of lease liability each year by almost 15%.

The company’s this year 2022 , revenue fell short as its revenue decreased by 7% as compared to 2021 , where it increased from by 47% from 2020-2021.

The company’s after our valuation has a range of around $1.14-1.50 per share which are currently trading around $2.20 a share. The company according to us has a very limited influence in the market.

Its only worth to buy company around $1.00-1.10per share range, as over that its most in the future, and as company recorded revenue loss of 7% , we are not sure about its sustainability.


Last week, I went to a park for a stroll, I met a 13-year-old guy sitting around starring at those beautiful trees and thinking about something. I walked to him said hi, the conversation started we asked each other what we do, what are our goals and blah blah. He told me he likes to invest his spare pocket money. We came to a serious discussion about finance in general and investing.

He said I don’t really understand the notion of financial advice, financial management, and investments. I said even I am learning and figuring out much stuff that is out there, do they really matter, or it’s just for the sake of boredom. We discussed about basics of money, why to save and why to earn more spend less, and so on. At the end he told me I don’t know much about these detailed analyses, for me it’s like if I know something(know the business), I understand something(its revenue streams, its expenses and profit) I am ready to do some study(ask my parents ,see it on the internet) and will put my money into it.

We bought a small coffee shop, I invested my money with my dad, the business is operated by my mother she makes coffee for $0.80 sell it for $4.50.

I think I learnt a lot that time, it’s like its more common sense towards investing, I remember my dad using Gillette when I was little, I knew the company , I might have that time (wish I did it) search the share price, see its profit , one share($7) would be $108 in today’s money. I don’t know why we grow and make our life complicated as in the end its simple stuff we like and use, that really counts. These are words from Charlie Munger – “We have a passion for keeping things simple”.

It’s very important to see a company naked, what in its core it does, how much it earns and how much its psychologically impacting its customers. Investing is process of eliminating necessary EBITDAs, BETAs and much more.

Everything else is a bubble.

Investing Basics ( Starting out in shares )

There are many forms of investment which are available out there, what differentiates between the two are its characteristics and its expected return , majority of us want a return which is at-least satisfactory.

Investing in shares,

The market ,what we know as gives an opportunity to buy or sell shares of a company through different platforms, the basic criteria to invest is to provide funds to the companies which can be used for its growth.Past times has shown that shares have outperformed every single other asset alternatives from cash to property.

Benefits to own a stock ,

1. Income Opportunity and Capital growth – During a long period , if an individual is manage to find correct investment ideas , it can grow its capital to enormous levels with year over year dividend or income growth.

2. Owning a business – If you own a stock , you own a small part of a business , its like owning a business from as low as 0.06$ .

3. Risk Diversification – Instead of buying all property , fixed interest , it gives necessary diversification which helps to spread risk across different platforms.

Is it worth it , i think it is , it is one of the sources where an individual can earn up-to 600-700% times there initial investment.