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Where to invest to maximise your returns? Are large- cap companies the answer, or are mid and small cap companies the potential gold mine? Dinesh Thakkar tries to answer the perennial investor dilemma.
The stock market is synonymous with wealth creation and maximisation. So, for the purposes of this topic, I would like to confine myself to one criteria – market capitalization of the company. Selecting companies based on mcap is not easy: here one has to bear in mind that companies achieve size and scale only over a period of time. Thus, we can conclude that companies of a larger scale have been operating for several years and have weathered rising and falling markets and fluctuating economic cycles. In contrast to this, mid and small-cap companies would have relatively lesser experience.
Apart from this, most large-cap companies have an established track record of earnings because of their loyal base of consumers supporting their products, stronger balance sheets and cash flows and better credit ratings because of their market standing. In most cases, they also have a competitive advantage in the marketplace because of better cost controls, strong marketing capabilities, and so forth. In contrast to this, the non-large-cap companies not only have to compete on a much stronger level to sustain their market position, but they are also subject to higher risks generated by fluctuating industry cycles.
While large-cap companies have several advantages, their smaller or newer peers often have the advantage of greater potential growth prospects, as there is a greater possibility that these companies can double their revenues and profits over the next few years. Finding such companies may require a lot of research, and investing in them may also require insights into the way the company works, its long-term goals, and the mechanics of the stock market. Thus, the determination of one’s risk profile becomes an important element, and you should avoid such involvement if you are not a professional.
To conclude, investing is all about maximizing wealth (the relatively risk-free way) by investing in safe, potentially profitable corporates with a good reputation, a proven track record, and a future that seems assured. India is a land of constant new opportunities which are emerging as a result of the progressive growth of our economy, and the opening up of new avenues of business in the corporate sector. If we indeed have to put value on future opportunities, the sum would run into crores and crores of rupees, but to seize and realize these opportunities, corporates should be able to raise huge capital. They must also be capable of creating the right business model to generate profits from it. Who else than a big corporate house having large scale and size to be able to do this?
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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Bernbach, the greatest guru of advertising, once said, “You can say the right thing about a product and nobody will listen. But you’ve get to say it in such a way that people will feel it in their gut; because if they don’t feel that, nothing will happen.” The battle for market share is really tough, with so many competitors in every product category. The most significant way to win, is to make your mark quickly and indelibly. And the fastest way to ensuring the viewer’s attention towards your product is through the mother of all big fights, namely, comparative advertising. It’s one of the most potent arrows in the strategy quiver of advertising. Hence, only the bravest should use it. And generally, only the bravest do!
women are different from men, and need to be portrayed differently. However, somewhere down the line, some aspects got overlooked, and some overemphasized. Fair or dark, a woman is beautiful. You don’t expect her to look up to Michael Jackson (who changed his skin from black to white) as a role model when it comes to skin colour. Today, women entrepreneurs abound and we need to recognize that. Women have moved ahead and some advertisers like LIC are showing the way. Their radio ads show how everyone insures the life of the male – the head – but forget to insure the life of the woman who is a life-giver herself! Yes, there is a ray of hope. Let it grow stronger.
in the 1960s, a delightful series of tongue-in-cheek ads appeared in the magazine for a cigarette called ‘Virginia Slims’. It showed two sets of images – one of women in the 1900s and the other, juxtaposed next to it, of a happy modern women. The punch line that accompanied all these ads read, “You’ve come a long way, baby.” It helped create an aspirational image, which appealed to women. This was the 60s and the feminism movement was just beginning to take shape. The strategy worked delightfully well for the company Philip Morris, and from 1968 through 1980s, the brand saw its market share grow up from 0.24% to 3.16%. The ads showed how the modern women was more in control of her life and free to make her own choices. However, the question is really important: Is the modern woman really free? Or has she been simply ‘bondaged’ by modern advertising to live in a world of illusionary freedom? Today, the way women are depicted in ads makes one think – are they a happier lot now, with more freedom and financial independence? Or is it just a superficial change on the surface.
today don’t sell products. They sell a life style, an image. The images of women being portrayed in advertisements is scary. It’s sending all the wrong signals – especially to teenagers and young girls, who try to copy the images doled out in generous quantities by advertisers. But the ridicule doesn’t stop ‘fairly’. On another front, all ads showing women put a premium on ‘slimness’. As early as the 1920s, some ads for a cigarette brand ‘Lucky Strike’ ran a punch line, which read – “Reach for a Lucky instead of a sweet.” It tried to associate ‘smoking’ with ‘slim’. That was the start!
what women were confined to years ago, and nothing much has changed since then. Even though today, more women work outside home, earn and control significant amounts of money, and make large important purchases (like automobiles, computers), they are still always shown in advertisements of household products. The woman’s opinion is important only as far as washing machines and microwave ovens are concerned. So the “Whirlpool mom” is a superhit because she stays in the house and the biggest kick she gets in her life is when she can remove the stains from the children’s clothes in a jiffy. And when it comes to cars, the woman is shown scantily clad, lying idly on the roof top, doing nothing much(!), while it’s the man who is the decision maker as car is his symbol of success! And for woman, the symbol is the bunch of spotless white clothes of her family.
