JIWAJI UNIVERSITY GWALIOR

A PROJECT REPORT
ON
“A STUDY OF INVESTMENT STRATEGIES”

SUBMITTED TO
JIWAJI UNIVERSITY GWALIOR
For Partial Fulfillment of 4th Semester
Award of the Degree of Master of Business Administration in Financial

Administration June 2022

Submitted To Submitted By
Mrs. Kratika Pradhan Urvashi Sharma
MBA 4th Sem

SCHOOL OF STUDIES IN POLITICAL SCIENCE AND PUBLIC ADMINISTRATION

JIWAJI UNIVERSITY GWALIOR

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 DECLARATION

I Urvashi Sharma, student of MBA hereby declare that the SIP titled “
Study of investments strategies” is the result of my own internship
work. which is carried out by me during the period from Jan 05, 2022 to
Feb 20, 2022 to Jiwaji University , Gwalior, Madhya Pradesh, in partial
fulfillment of requirement for the award of the degree of Master of
Business Administration has not been previously, formed the basis for
the award of any degree, diploma or other similar title or recognition.

Gwalior URVASHI SHARMA

Date

2
CERTIFICATE BY COMPANY

3
 ACKNOWLEDGEMENT

I extend my deep sense of gratitude and sincere thanks to Mrs. Kratika

Pradhan , Jiwaji university for allowing me to take up this project.

I also express my thanks to my friends and family who have helped me

to carry out this work. I thank my almighty god for his blessing showed
on me during this period.
Under the guidance of Mrs. Neha Sengar, Dept. HR

URVASHI SHARMA

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 TABLE OF CONTENTS

Sr.No. Particulars Page No.

1. Cover Page.................................................1
2. Declaration.................................................2
3. Certificate by Company...............................3
4. Acknowledgement......................................4
5. Table of contents..........................................5
6. Introduction.................................................6-17
7. Review of literature.....................................18-28
8. Objectives....................................................29-30
9. Research Methodology................................31-34
10. Analysis........................................................35-39
11. Description....................................................40-42
12. Conclusion…................................................43-44
13. Refrences…...................................................45-46

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 INTRODUCTION

PARAMOUNT PLASTER PRIVATE LIMITED:

Paramount Plaster Private Limited is a Non-govt company, incorporated

on 12 Jun, 2013. It's a private unlisted company and is classified
as'company limited by shares'.

Company's authorized capital stands at Rs 1.0 lakhs and has 100.0%

paid-up capital which is Rs 1.0 lakhs. Paramount Plaster Private Limited
last annual general meet (AGM) happened on 01 Sep, 2018. The
company last updated its financials on 31 Mar, 2018 as per Ministry of
Corporate Affairs (MCA).

Paramount Plaster Private Limited is majorly in Manufacturing (Metals

& Chemicals, and products thereof) business from last 9 years and
currently, company operations are active. Current board members &
directors are ASHISH KUMAR SAXENA and GEETA SAXENA .

Company is registered in Gwalior (Madhya Pradesh) Registrar Office.

Paramount Plaster Private Limited registered address is 07, KRISHNA
VIHAR, OM PLAZA, 1st FLOOR SACHIN TENDULKAR MARG,
GOVINDPURI GWALIOR Gwalior MP 474011 IN.

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History of Paramount Plaster PVT LTD:
Since inception, Paramount Plaster has emerged as a dynamic company
and is counted among the leading manufacturers, distributors and
suppliers of White Cement Based Wall Putty, Decorative White Cement,
Decorative Cement Paints, Tile Adhesive & Plaster of Paris (POP). With
head office in “Gwalior” Madhya Pradesh, Paramount Plaster
manufactures and markets a range of plaster related products under
various product names and has its countrywide distribution network of
dedicated dealers. All these products are manufactured by the
professionals using advanced technology with high quality raw material
and maintaining quality standards in compliance with established norms
and guidelines.
Quality, quantity, consistency and customer care are the pillars of our
organization.
We excel in providing unparalleled quality of Wall Putty and Decorative
White Cement with extra whiteness, extra lightness, and extra coverage
due to light weight, extra smoothness and extra strength. This is all
packed into moisture-proof, fully sealed and tamper-proof packing.
One of the major qualities of Paramount plaster is that it has a slower
setting time thereby, facilitating the mason to apply the Wall Putty and
Decorative White Cement conveniently and efficiently and also
minimizing wastage.

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TRADEMARK OF COMPANY:
Trademark : ParaPlast care Class : 2

Application Date : 2014-10-01

Status : Formalities Chk Pass

Goods and Services Description : Putty, wall putty, cement

paints, pop, primer, varnishes, all types of paints

Applicant Address : 83, SAKET NAGAR, TANSEN ROAD,

GWALIOR (M.P.)

Trademark : Paramount shine Class : 2

Application Date : 2014-10-01

Status : Formalities Chk Pass

Goods and Services Description : Putty, wall putty, cement

paints, pop, primer, varnishes, all types of paints

Applicant Address : 83, SAKET NAGAR, TANSEN ROAD,

GWALIOR(M.P)

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 Directors of PARAMOUNT PLASTER PRIVATE
LIMITED:

Director Identification NumberNameDesignationDate of Appointment

ASHISH KUMAR SAXENA 12 June 2013

06597494 Director

20 May 2021
09177259 Director

GEETA SAXENA 12 June 2013

06597501 Director

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10
What is Investment strategies?
The term investment strategy refers to a set of principles designed to
help an individual investor achieve their financial and investment goals.
This plan is what guides an investor's decisions based on goals, risk
tolerance, and future needs for capital.1 They can vary from
conservative (where they follow a low-risk strategy where the focus is
on wealth protection) while others are highly aggressive (seeking rapid
growth by focusing on capital appreciation).2

Investors can use their strategies to formulate their own portfolios or do

so through a financial professional. Strategies aren't static, which means
they need to be reviewed periodically as circumstances change.3

Understanding Investment Strategies

Investment strategies are styles of investing that help individuals meet
their short- and long-term goals. Strategies depend on a variety of
factors, including:

 Age
 Goals
 Lifestyles
 Financial situations
 Available capital
 Personal situations (family, living situation)
 Expected returns4

This, of course, isn't an exhaustive list, and may include other details
about the individual. These factors help an investor determine the kind

11
of investments they choose to purchase, including stocks, bonds, money
market funds, real estate, asset allocation, and how much risk they can
tolerate.5

Investment strategies vary greatly. There isn't a one-size-fits-all

approach to investing, which means there isn't one particular plan that
works for everyone. This also means that people need to reevaluate and
realign their strategies as they get older in order to adapt their portfolios
to their situation. Investors can choose from value investing to growth
investing and conservative to more risky approaches.

Special Considerations
Risk is a huge component of an investment strategy. Some individuals
have a high tolerance for risk while other investors are risk-
averse.5 Here are a few common risk-related rules:

 Investors should only risk what they can afford to lose

 Riskier investments carry the potential for higher returns
 Investments that guarantee the preservation of capital also
guarantee a minimal return5

For example, U.S. Treasury bonds, bills, and certificates of

deposit (CDs) are considered safe because they are backed by the credit
of the United States. However, these investments provide a low return
on investment. Once the cost of inflation and taxes have been included
in the return on income equation, there may be little growth in the
investment.

Along with risk, investors should also consider changing their

investment strategies over time.6 For instance, a young investor saving
for retirement may want to alter their investment strategy when they get
older, shifting their choices from riskier investments to safer options.

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Strategies:
 No strategy: Investors who don't have a strategy have been called
Sheep.[2] Arbitrary choices modeled on throwing darts at a page
(referencing earlier decades when stock prices were listed daily in the
newspapers) have been called Blind Folded Monkeys Throwing Darts
[no source]. This famous test had debatable outcomes.[3]
 Active vs Passive: Passive strategies like buy and hold and passive
indexing are often used to minimize transaction costs. Passive
investors don't believe it is possible to time the market. Active
strategies such as momentum trading are an attempt to outperform
benchmark indexes. Active investors believe they have the better than
average skills.
 Momentum Trading: One strategy is to select investments based on
their recent past performance. Stocks that had higher returns for the
recent 3 to 12 months tend to continue to perform better for the next
few months compared to the stocks that had lower returns for the
recent 3 to 12 months. [4] There is evidence both for and against [5][6][7]
this strategy.
 Buy and Hold: This strategy involves buying company shares or
funds and holding them for a long period. It is a long term investment
strategy, based on the concept that in the long run equity markets give
a good rate of return despite periods of volatility or decline. This
viewpoint also holds that market timing, that one can enter the market
on the lows and sell on the highs, does not work for small investors,
so it is better to simply buy and hold.
 Long Short Strategy: A long short strategy consists of selecting a
universe of equities and ranking them according to a combined alpha
factor. Given the rankings we long the top percentile and short the
bottom percentile of securities once every re-balancing period.
 Indexing: Indexing is where an investor buys a small proportion of
all the shares in a market index such as the S&P 500, or more likely,
an index mutual fund or an exchange-traded fund (ETF). This can be

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 either a passive strategy if held for long periods, or an active strategy
if the index is used to enter and exit the market quickly.
 Developed markets vs emerging markets: Many people use
developed stock markets because they are believed to be safer than
emerging markets. When investing globally you have the risk of
changes in currency exchange rates on top of stock market
performance. Other people pick emerging markets believing the
emerging markets have higher potential for GDP growth which in
turn would then affect positively the share prices in those countries.
Emerging stock markets can be less well-regulated than those in the
developed markets increasing risks and have greater political risks
associated. The most common way of investing in global markets is
through funds.
 Pairs Trading: Pairs trade is a trading strategy that consists of
identifying similar pairs of stocks and taking a linear combination of
their price so that the result is a stationary time-series. We can then
compute Altman_Z-score for the stationary signal and trade on the
spread assuming mean reversion: short the top asset and long the
bottom asset.
 Value vs Growth: Value investing strategy looks at the intrinsic
value of a company and value investors seek stocks of companies that
they believed are undervalued. Growth investment strategy looks at
the growth potential of a company and when a company that has
expected earning growth that is higher than companies in the same
industry or the market as a whole, it will attract the growth investors
who are seeking to maximize their capital gain.
 Dividend growth investing: This strategy involves investing in
company shares according to the future dividends forecast to be paid.
Companies that pay consistent and predictable dividends tend to have
less volatile share prices.[8] Well-established dividend-paying
companies will aim to increase their dividend payment each year, and
those who make an increase for 25 consecutive years are referred to
as a dividend aristocrat. Investors who reinvest the dividends are able
to benefit from compounding of their investment over the longer

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 term, whether directly invested or through a Dividend Reinvestment
Plan (DRIP).
 Dollar cost averaging:[9] The dollar cost averaging strategy is aimed
at reducing the risk of incurring substantial losses resulted when the
entire principal sum is invested just before the market falls.
 Contrarian investment:[10] A contrarian investment strategy consists
of selecting good companies in time of down market and buying a lot
of shares of that company in order to make a long-term profit. In time
of economic decline, there are many opportunities to buy good shares
at reasonable prices. But, what makes a company good for
shareholders? A good company is one that focuses on the long term
value, the quality of what it offers or the share price. This company
must have a durable competitive advantage, which means that it has a
market position or branding which either prevents easy access by
competitors or controls a scarce raw material source. Some examples
of companies that response to these criteria are in the field of
insurance, soft drinks, shoes, chocolates, home building, furniture and
many more. We can see that there is nothing “fancy” or special about
these fields of investment: they are commonly used by each and
every one of us. Many variables must be taken into consideration
when making the final decision for the choice of the company. Some
of them are:
o The company must be in a growing industry.
o The company cannot be vulnerable to competition.
o The company must have its earnings on an upward trend.
o The company must have a consistent return on invested capital.
o The company must be flexible to adjust prices for inflation.
 Smaller companies: Historically medium-sized companies have
outperformed large cap companies on the Stock market. Smaller
companies again have had even higher returns. The very best returns
by market cap size historically are from micro-cap companies.
Investors using this strategy buy companies based on their small
market cap size on the stock exchange. One of the greatest investors,
Warren Buffett, made money in small companies early in his career

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 combining it with value investing. He bought small companies with
low P/E ratios and high assets to market cap.

Top investment strategies for beginners:

1. Buy and hold

A buy-and-hold strategy is a classic that’s proven itself over and over.

With this strategy you do exactly what the name suggests: you buy an
investment and then hold it indefinitely. Ideally, you’ll never sell the
investment, but you should look to own it for at least 3 to 5 years.

2. Buy the index

This strategy is all about finding an attractive stock index and then
buying an index fund based on it. Two popular indexes are the Standard
& Poor’s 500 and the Nasdaq Composite. Each has many of the market’s
top stocks, giving you a well-diversified collection of investments, even
if it’s the only investment you own. (This list of best index funds can get
you started.) Rather than trying to beat the market, you simply own the
market through the fund and get its returns.

3. Index and a few

The “index and a few” strategy is a way to use the index fund strategy
and then add a few small positions to the portfolio. For example, you
might have 94 percent of your money in index funds and 3 percent in
each of Apple and Amazon. This is a good way for beginners to keep to
a mostly lower-risk index strategy but add a little exposure to individual
stocks that they like.

4. Income investing

Income investing is owning investments that produce cash payouts,

often dividend stocks and bonds. Part of your return comes in the form

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of hard cash, which you can use for anything you want, or you can
reinvest the payouts into more stocks and bonds. If you own income
stocks, you could also still enjoy the benefits of capital gains in addition
to the cash income. (Here are some top dividend ETFs you may want to
consider.)

5. Dollar-cost averaging

Dollar-cost averaging is the practice of adding money into your

investments at regular intervals. For example, you may determine that
you can invest $500 a month. So each month you put $500 to work,
regardless of what the market is doing. Or maybe you add $125 each
week instead. By regularly purchasing an investment, you’re spreading
out your buy points.

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 REVIEW OF LITERATURE

Responsible Investment, defined as “investing in a manner that takes

into account the impact of investments on wider society and the natural
environment, both today and in the future” (World Economic Forum
MRI, 7) is gaining momentum at least in the academic sphere. Prudently
advancing its agenda requires collaboration of academics, policy
makers, and investors; both critics and proponents. This literature review
is a collection of current academic articles, books, and reports,
representing both qualitative and quantitative in approach centered
around topics related to responsible investment. Key words included that
are considered relevant to responsible investment are Socially
Responsible Investing, Corporate Engagement, Community Investment,
Ethical Investing, Corporate Social Responsibility, GRI, screening, etc
The criteria for selecting literature for inclusion is based on the
relevancy to the following main areas of interest: A historical context of
Responsible Investing, the degree of effectiveness between different
forms of SRI (screening, divestment, active engagement), the
intersection between SRI and RI (whether it exists and how it can be
facilitated through policy), international reporting standards such as the
GRI, differences between progress in environment, social, and
governance issues, and finally, the impact of the current economic crisis
on RI. The literature selected for this review is limited to the US, UK
and Canada.
STRONGLY RECOMMENDED READINGS: (ALPHABETICAL)
1. Asset Management Working Group (AMWG), the United Nations
Environment Programme Finance Initiative and Mercer. (2007)

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“Demystifying Responsible Investment Performance; A Review of
Key Academic and Broker Research on ESG Factors”.

This review of articles produced by AMWG and Mercer has two

aims; first to demystify the performance of responsible investments
and secondly, to encourage more in-depth academic and
practitioner research on ESG factors. The review “features a
diverse set of academic and broker studies that analyses
responsible investment performance at both the company/stock and
fund/portfolio level, including thematic studies which bolster the
materiality of ESG factors. The types of studies selected provide a
useful and representative sample essential not only to demystify
performance, but also to have a good picture of the current state
and direction of ESG research. The academic and broker findings
were linked to achieve a holistic analysis and to set the scene going
forward”. (9) This review also provides a useful section on the
definitions of responsible investment vocabulary in the appendix.
The holistic nature of this article makes it very useful for the
purposes of this literature review. Two types of analysis were
applied in the review of the selected articles; narrative and tabular,
reflecting a combination of quantitative and qualitative
dimensions. Interestingly, “in most cases, quantitative analysis
resulted in an assumed positive influence of ‘good citizenship’ on
the overall economic performance of a company”. (pg 50) “The
studies are noticeably market and investment-oriented to generate
ideas at the thematic and stock level. From this standpoint, there is
not much difference from traditional research. However, the details
reveal that the analysed theme or sector was chosen mainly due to
its environmental character or societal impacts. It is also
noteworthy that ESG criteria (e.g., environmental footprint,

19
 corporate governance) are being combined with traditional
financial criteria (e.g., earnings per share, price-earnings ratio,
return on equity) in order to provide a more holistic and longer-
term assessment of the related stocks”. (50) “In summary, there is
already explicit evidence and acknowledgment of the materiality of
ESG factors and its influence in driving business strategy.
Addressing ESG factors appears to be currently centered on
improving risk management, mainly for large caps. The
opportunity side is largely viewed through a thematic lens, mainly
for small and mid caps, with a primary focus on environmental
aspects, or the E. Meanwhile, it seems that the S and the G are
labeled under compliance check. This is why there is a vital need
for research that aggregates ESG, and links it with compliance, risk
and opportunity. We believe that there will be increasing demand
for this type of research which, in turn, will facilitate the
integration of ESG factors into investment analysis and decision-
making”. (51) Linking this with academic findings, “more research
is needed to examine the link between the different approaches
towards integrating ESG into investment decisions (beyond
screening) and portfolio performance, including the effect of
engagement and integration into stock selection”.(52)

2. Barber, Brad M. (2006) “Monitoring the Monitor: Evaluating

CalPERS' Activism”. Available at SSRN:
http://ssrn.com/abstract=890321. Accessed: Nov. 20, 08.
Abstract: Many public pension funds engage in institutional
activism. These funds use the power of their pooled ownership of
publicly traded stocks to affect changes in the corporations they
own. I review the theory and empirical evidence underlying the
motivation for institutional activism. In theory, the merits of

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institutional activism hinge critically on two agency costs: (1) the
conflicts of interest between corporate managers and shareholders,
and (2) the conflicts of interest between portfolio managers and
investors. This leads to two types of institutional activism:
shareholder activism and social activism. While portfolio managers
can use their position to monitor conflicts that might arise between
managers and shareholders (shareholder activism), they can also
abuse their position by pursuing actions that advance their own
moral values or political interests at the expense of investors
(social activism). Which of these effects dominates the actions of
portfolio managers will determine the value of activism and is an
empirical issue. Perhaps the most high profile activism has been
pursued by CalPERS with their annual focus list. I document that
CalPERS has pursued reforms at focus list firms that would
increase shareholder rights and (imprecisely) estimate the total
wealth creation from this shareholder activism to be $3.1 billion
between 1992 and 2005. Unrelated to the focus list program,
CalPERS has also pursued social activism (e.g., the divestment of
tobacco stocks). In general, I argue that institutional activism
should be limited shareholder activism where there is strong
theoretical and empirical evidence indicating the proposed reforms
will increase shareholder value. At times, institutions will be
forced to take engage in social activism and take positions on
sensitive issues. In these situations, I argue portfolio managers
should pursue the moral values or political interests of their
investors rather than themselves. Keywords: shareholder activism,
CalPERS, corporate governance, socially responsible investing
Barber takes up a significant debate in this piece, which central to
an understanding of the issues is concerning whether activist forms
of SRI overstep boundaries. “Proponents of activism argue that

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institutions are merely providing necessary monitoring of
corporations with poor performance. In contrast, critics view
activism as the actions of meddlesome portfolio managers
spending investors’ money to interfere in corporate policy. Who is
right”? (1) The paper begins with an overview of the theory
driving institutional activism. It then proceeds with consideration
for empirical evidence drawn from CalPERS focus list firms.
Barber also “reviews the nature of reforms pursued at focus list
firms and provides anecdotes regarding other activism pursued by
CalPERS outside of their focus list initiative”. (18) “To answer this
question, I begin from basic economic principles and analyze a
simple framework where a portfolio manager has the unfettered
objective of maximizing the value of an investment portfolio. I
argue that the benefits of institutional activism – narrowly for the
investors at the institution and broadly for society – hinge critically
on the prevalence of two agency costs”. (1) “The first agency cost
is the well known conflicts of interest between shareholders and
corporate managers; corporate managers may pursue projects that
benefit themselves, but not shareholders. The second agency cost,
less widely discussed than the first, is the conflicts of interest
between portfolio managers and investors. Portfolio managers may
pursue investment policies that benefit their own objectives, but
not those of investors”. (1) Findings: “Using simple empirical
methods, I estimate the gains to the high profile activism of
CalPERS focus list firms over the period 1992 to 2005. My short-
run analysis indicates that CalPERS activism yields small, but
positive, market reactions of 23 basis points (bps) on the date focus
list firms are publicly announced”. (2) Barber concludes with a
warning, strongly advising the need for careful use of activist
methods of engagement in SRI. “Institutional activism is a double-

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 edged sword. When prudently applied, shareholder activism can
provide effective monitoring of publicly traded corporations. When
abused, portfolio managers can pursue social activism to advance
their personal agendas at the expense of those whose money they
manage”. (18) The relatively simplistic nature of the empirical
methods used in this paper combined with the important debate
which it engages in makes it an important and useful contribution
to deepening one’s initial understanding of RI.

3. Camejo, Pedro with Geeta Aiyer ... [et al.]. (2002) “The SRI
Advantage : Why Socially Responsible Investing has
Outperformed Financially”. Foreword by Ralph Nader ;
Introduction by Robert A.G. Monks. New Society Publishers,
Altona, Manitoba.
Comprised of a collection of pieces related to SRI, this book offers
an excellent review and analysis of the most pressing issues related
to advancing the agenda. Topics covered include but are not
limited to “the case for SRI outperformance, pension funds and
fiduciary responsibility, discussion on mainstreaming SRI,
international dimensions of SRI and community investing
strategies. “The only element in the corporate universe that can
effectively restrain management in its dealing with government is
the owners”. (xvii) In his introduction, Monks considers
“shareholder involvement as necessary in order to mitigate the
most brutal negation of shareholder values”. (xvii) As a result, the
first five chapters of the book are dedicated to analysis of the
various modes of measuring stock performance over varying
lengths of time. Monks “usefully lays to rest any concern that SRI
induced funds might not perform at least as well as the general
averages over any relevant length of time. (xv) The book includes

23
an “insightful list of the reasons why the finance committees and
boards of directors and trustees of our leading institutions largely
continue to refrain from considering social investing”. (xvii)
Considering whether SRI is a fringe activity, Monks predicts that
over the next decade, “sensitivity to societal and environmental
concerns will be explicitly recognized as adding value to
companies”. (xviii) Also, the possibility of fully legitimate legal
standards raises the hope for a robust conceptual basis for socially
responsible corporations”. (xix) “This book has mapped out the
growth of the civil economy”. (241) We have given scores of
examples of how citizen investors directly and indirectly are
reshaping the corporate agenda. So Important to not view this as a
civil economy utopian, That conclusion would be wrong. A c” a
civil economy mirrors civil society. Civil society is not utopian; it
does not pretend that by giving everyone a vote and freedom of
expression somehow all social debate is automatically resolved.
(242) they identify throughout the book actors who are important,
however the responsibility lies with the citizen investor. “We, the
people are not just the audience. We, the citizen owners, can direct
this drama and decide its outcome”. (242) “ The book concludes by
placing the onus on the reader to advance the SRI agenda, which is
an interesting spin on mainstreaming efforts. Most proponents and
critics get caught up on the difficulties associated with inefficient
and seemingly impossible public policy processes as being the
only legitimate route to expanding. “The money that circulates in
global capital markets is our money. The companies it owns are
our companies. How those companies behave, how the civil
economy develops, is ultimately up to us, the new capitalists”.
(243)

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4. Davis, Stephen, Lukomnik, Jon, and David Pitt-Watson. (2006)
“New Capitalists: How Citizen Investors Are Reshaping the
Corporate Agenda”. Harvard Business School Publishing. Boston,
Massachusetts.

New capitalists are defined by the authors as “the owners of

multinational corporations, who are the tens of millions of working
people who have their pensions and other life savings invested
through funds in shares of the world’s largest companies”. (xi) The
rise of new capitalists places significant power in the hands of
citizens, therefore creating a unique opportunity for change. “The
New Capitalists” is an excellent source of literature related to RI
because it offers a comprehensive historical explanation for the
recent changes in investor behaviour, as well as a direction
forward, which encourages the reader to take advantage of the
opportunities presented to us. “In this book we track the present
awakening of a consciousness of civil ownership, of new
capitalists, that promises to make those traditional power brokers
accountable or kick them out of the way”. (xii) “New capitalists
are beginning to compel radical change across the globe as they
build a civil economy”. (xiii) “This book has two main goals- first
it seeks to expose the mechanisms that have historically driven
corporations and citizens apart, trying to solve the riddle of
missing savings and jobs. Secondly, it identifies a powerful
countervailing phenomenon that is pushing corporate executives,
investors, politicians, activists, and citizens to hone new skills for
reengineered capitalism”. (xi) “What we call the civil economy is
materializing for a simple reason: a population of new capitalists is
seizing influence over the corporate agenda”. (xi) The book leads
its reader through the transformation to this new civil economy,

25
 which supports the argument that socially responsible investment
is not simply a fad, but grounded in historical processes and is now
entrenched in a new order, redefining capitalism. “New capitalists
are just as fiercely bent on scrutiny that ensures that corporate
profits are real, not a result of accounting tricks. Focus is shifting
to sustainable long term corporate performance and away from
firms configured to generate only shore-term highs”. (xvii) “Here
then is our single most important recommendation to individuals in
the civil economy: select funds based on their readiness to pledge
real allegiance to you”. (222) “The reward can be great if progress
continues. To begin with, we can recover that $3 trillion of lost
savings that we identified in the first pages of the book. We can
create millions of jobs. We can rein in unsustainable production,
ensuring companies work for a fusion of profit and social
purpose”. (242) Like the “SRI Advantage” book reviewed here, the
New Capitalists is premised on placing the responsibility with the
individual shareholders to demand better from the companies in
which they invest. The book certainly takes an optimistic tone,
touching on several issues, such as the effectiveness of monitoring,
accounting and reporting standards and the empowerment of
citizens. It also addresses the role that NGOs can potentially play
in the new civil economy, which is something that other literature
reviewed here does not directly consider.

5. Koivulehto, Hanna K. (2007) “Should We Invest in Microcredit?

A Financial Analysis of Microcredit from a USD-Investor's
Perspective”. Paris Finance International Meeting AFFI-
EUROFIDAI Paper. Available at SSRN:
http://ssrn.com/abstract=1071668. Accessed: Nov. 24, 08.

26
Abstract: This study makes an innovative approach towards rating
the profitability of micro-credit. While previous research on
microfinance has been conducted through the analysis of
individual case studies, this study takes a more widespread look at
the financial performance of micro-lending organizations in less
developed financial markets. A sample consisting of 24 micro-
finance institutions (MFIs) operating in different regions
worldwide is observed over a period of up to 9 consecutive years.
The influence of both organization-specific and environmental
factors on the profitability of their loan portfolios is examined.
Furthermore, the capacity of those institutions to generate
sufficient yields on their credit operations in order to attract
rational foreign investors is rated. For this purpose, the realized
credit spreads on MFI-portfolios are compared with spreads
observable for exchange-traded USD-corporate bonds exhibiting
equal levels of risk. The panel design and the investigation of
multiple (partly qualitative) external variables influencing loan
portfolio returns contribute to a comprehensive investigation of
MFIperformance. Indeed, MFI-specific factors are found to be
much more decisive for profitability than any environmental
conditions. Keywords: Microcredit, Microfinance, Investment,
Profitability This paper offers an overview and analysis of
microfinance which leads to some insightful results. The paper
includes a literature review, consideration for the profitability
drivers of microfinance, and a comprehensive quantitative analysis
on microfinance return, risk and other performance measures. The
paper also includes a qualitative analysis which considers the top 5
best and worst performers. It proves to be a very useful paper for
the purposes of this literature review, offering profound insight
into the social dimension of the ESG socially responsible

27
investment initiatives. “The implications of this study contribute to
reducing the information gap perceived by most international
capital markets with respect to MFIs”. (43) Analysing whether the
average profitability is meeting the investors demands, the study
finds “when looking at the full sample of 24 MFIs observed
between 1997 and 2005, the credit operations of these
organizations generated a return that was 7.41 percentage points
lower than a rational investor would have charged. Their yield was
significantly lower than required by USDinvestors at a 95%
significance level. The variance of returns in the sample, however,
was relatively high with a standard deviation of 30.34 percentage
points”. (17) “Qualitative results are similar to

28
 OBJECTIVES

Investment funds has a set of goals that meet the requirements of

investors and commensurate with the acceptable risk levels. The fund’s
manager follows a specific policy and investment strategy to achieve
these goals. That is why the securities that form the assets of these funds
vary according to its goals and objectives. For example: when the
achievement of a steady income is the goal of the fund’s investment, the
fund’s manager sets the policies and investment strategies that will
determine the securities to form the fund’s assets to achieve these goals.
Accordingly, the objectives of investment funds can be generally
classified as the following:

1. Invest to maintain capital.

2. Invest to achieve income.
3. Invest to achieve income and growth.
4. Invest to achieve growth.
5. Invest to achieve high growth.

When it comes to investing, there are four

main investment objectives that cover how you accomplish most
financial goals. While certain products and methods may work for
one objective, they may produce poor results for the others.

Most people have long- and short-term financial planning needs,

and they will likely use more than one of these methods at the
same time. You want to find the right combination of the four
objectives that makes the most sense for you and your goals.

1. Capital Appreciation

Capital appreciation is concerned with long-term growth. This is most

common in retirement plans where investments work for many years
inside a qualified plan, such as a 401(k) or IRA.1 But investing

29
 for capital appreciation is not limited to retirement accounts. This
goal involves holding stocks for many years and letting them grow
within your portfolio. At the same time, you may be reinvesting
dividends to purchase more shares.

2. Current Income
Current income involves investing in stocks that pay a consistent
and high dividend, as well as some top-quality real estate
investment trusts (REITs) and highly-rated bonds. These products
produce regular, current income. If you are focused on making
current income, consider investing in blue-chip stocks, which are
shares in large, prominent corporations that have shown a long
history of growth and consistent dividend payouts.3
These companies have proven they can withstand economic dips
and still prosper, so they're often safe choices.
3. Capital Preservation

Capital preservation is often thought of as being for retired or

nearly retired people who want to make sure they don't outlive
their money. For those people, safety is critical, even if it involves
giving up return potential for security.

The logic for this desire is clear: A retired person who loses money
through unwise investments may not get a chance to replace it.

4. Speculation

The speculator may not be a true investor, but a trader who enjoys
jumping in and out of stocks for capital gain. These people want
quick profits, and they may use advanced trading methods
like shorting stocks, trading on the margin, options, and other
special methods.

30
 RESEARCH METHODOLOGY

The first step in our investment process is to identify businesses that

possess characteristics which foster the creation of value over long
periods of time. We evaluate prospective investments according to a list
of time-tested criteria that, in our minds, describe durable businesses
with attractive growth prospects. These can be grouped into three
categories: financial strength, competitive advantages and superior
management.

Financial Strength
Beginning with the balance sheet, financial strength is very important to
the survival and the earnings power of a business. Because we hold
investments for a long period of time, we must feel confident that the
companies we buy can withstand an industry and/or economic downturn.
During our considerable holding period either may occur, and a strong
balance sheet allows some companies to survive, and even expand, when
others cannot.

Durability of cash flows is another important consideration. We favor

businesses with strong recurring cash flows and attractive growth
potential.

Next, we want to invest in companies that can generate high returns on

capital over a cycle. The reinvestment rate of cash flows will play a
significant role in determining a business’s earnings growth rate and
intrinsic value – and by extension an investor’s return on that business.

Finally, our financial analysis would not be complete without comparing

individual companies against peers on the basis of revenues, margins,
capital structure, and other factors.

Competitive Advantages

31
The next category of business characteristics that we study closely is
competitive advantages, or what Warren Buffett has referred to as the
“moat” around a business. In other words, does the company have
brand? Does it have scale? Does it have distribution? Does the company
have a cost structure advantage? Does it have intellectual property? At
the heart of these questions is the desire to know what allows one
company to generate a superior return on capital compared to its
competitors and how sustainable that advantage is. Through our research
we seek not only to understand a company’s current competitive
advantages but also to assess whether that competitive moat is growing
or shrinking.

Superior Management
Management can make a defining difference in the long-term success of
any business.

We evaluate management based on the following criteria:

First, we need to understand management’s long-range strategic vision

for their company and to gauge if management has the ability – based on
a proven record of execution – to achieve those goals.

Second, we believe that management’s most important day-to-day job is

to allocate capital. We want to understand the thought process behind
decisions such as how much and where to reinvest capital within the
business, how much capital can be returned to shareholders through
dividends or share buybacks and under what circumstances mergers and
acquisitions make sense.

Third, we like to see that the management’s interests are aligned with
those of the shareholders. We look for owner-operators who deal
honestly with shareholders.

Evaluating management is an iterative process that requires a great deal

of time and patience. As such, we typically study companies not for a
matter of days or weeks, but over quarters and years.

32
Beyond financial strength, competitive advantages and company
management, we complete our research by interviewing competitors,
vendors, suppliers, customers, and employees.

How to Value a Business

After determining which businesses are attractive on the basis of

financial strength and qualitative factors, we must also develop an
estimate of true worth for each business. Our purchase price will be an
important component of our investment return.

In our valuation methodology, we depart somewhat from Wall Street by

dispensing with the accounting short¬hand that other managers tend to
favor, such as the price to earnings (P/E) ratio.

There are fundamental problems with the P/E. First, the “P” only
represents the per-share equity of a business, but excludes any debt the
business might require to produce its earnings. It also ignores important
adjustments that a sophisticated investor should make to determine an
appropriate price for a company, such as marking to market certain
balance sheet items carried at cost or taking into account off-balance
sheet liabilities. Enterprise Value, which takes into account all of these
on- and off-balance sheet adjustments is a more conservative and more
accurate figure for determining how much one would theoretically have
to pay to own a business free and clear.

The “E” in the P/E multiple, which represents the per-share net income
of a company, also poses problems. Above all, it is subject to
discretionary accounting choices. We wish to understand the true
earnings power of a business which requires adjusting reported earnings
so as to arrive at a cash-based, not an accounting-based, measure of
earnings which we refer to as “Owner Earnings.”

33
After establishing Enterprise Value and Owner Earnings we can
calculate an “owner earnings yield” which is defined as Owner Earnings
divided by Enterprise Value. This represents our hypothetical first year’s
return on investment based on the current earnings of the business and
the price we would have paid to own the entire company. (For example,
a business trading at 10x owner earnings would translate into an owner
earnings yield of 10%.)

By valuing each prospective business on a yield or “bond equivalent”

basis we are able to compare the relative attractiveness of each
investment against the risk-free rate, which is always the alternative for
investors. A compelling value investment in our view is a business that
can be purchased at a significantly higher owner earnings yield than the
prevailing risk-free rate and which possesses characteristics that foster
the creation of value over the long term such as competitive advantages,
high returns on capital and skilled management. Our ideal investment in
a business is analogous to a hypothetical bond that offers an attractive
current yield followed by a growing, not a fixed, stream of coupons into
the future.

34
 ANALYSIS

Fundamental investing involves analysing the key financial ratios of a

business to determine its financial health and to provide an estimate of
the value of the business.
There is no one 'right' approach; however, it is important that you choose
a strategy that fits your personality, the time you have available and your
risk tolerance. Let’s take a look at four approaches that use fundamental
analysis.
Value investing
The main principle of value investing is to buy quality businesses that
are undervalued. A value investing strategy makes money when the
price of the share rises to its intrinsic value and generally ignores day-to-
day price volatility.
To arrive at an instrinsic value for a business means analysing a
company's financials and this process is entirely subjective. Finding
stocks that are undervalued can take a lot of research and share prices
can often take a long time for their price to rise, so a long-term approach
is essential for value investing.
Value investing isn't just about buying undervalued stocks. It is about
buying quality undervalued stocks, so it's important to know what makes
a stock good quality. Here are a few ratios you could consider:

 Share price no more than two thirds of intrinsic value - pay less
than an asset is worth
 Low price earnings ratio - pay less for more profit
 Price earnings growth ratio less than one - another indicator of a
low valuation
 Low price to book ratio - an estimate of how much would be left
over if the business was liquidated

35
  Current asset ratio against current liability of greater than 2 to 1 -
indicates the company can meet it's short-term obligations
 High dividend yield - useful to compare stocks in the same
industry
 High earnings growth - for price to rise a business must be
growing its earnings

Growth investing
This approach focuses on companies with future growth prospects and
less emphasis on current price value. In fact, growth investors can buy
companies that are trading at high PE ratio, in the belief that values will
grow over time. Growth investors looks for companies that are more
likely to reinvest their profits in acquisitions or expansion rather than use
them to pay dividends to shareholders.
Here are some key ratios to consider for a successful growth investing
strategy:

 Strong historical earnings growth - at least 8% over the past 2

reporting periods.
 Strong forward earnings growth - at least 10% for the next 1 to 2
years.
 Profit margins - is the company efficiently controlling its costs
relative to revenues?
 Return on equity (ROE) - a rising ROE indicates a company is
increasing its ability to generate profits.
 Price performance - how much has the stock price grown in the
past one to 5 years? A rate of 15% per year implies that a stock has
the potential to continue to grow.

Income investing
This strategy focuses on generating cash flow from investment holdings
and either reinvesting the income to grow the portfolio or using it to
fund spending needs in retirement.

36
37
38
 INVESTMENT DONE IN COMPANIES
CABLES LCS 27%
LCS CONTROL UNITS 2%
IMPLEMENTATION 8%
DAYLIGHT SENSORS 2%
PRESENCE SENSORS 15%
CABLING INSTALLATION 27%
MANUAL SWITCHES 15%
CABLES LIGHTING SYSYTEM 2%
LAMPS 5%
LUMINARIES 8%
KUMINARIES INSTALLATION 15%
BALLAST 3%

CABLES LCS
2% LCS CONTROL UNITS
12% IMPLEMENTATION
21%
DAYLIGHT SENSORS
6% PRESENCE SENSORS
CABLING INSTALLATION
4% 2% MANUAL SWITCHES
2% CABLES LIGHTING SYSYTEM
6%
LAMPS
2% LUMINARIES
12%
KUMINARIES INSTALLATION
12% BALLAST

21%

These are material investment done in companies. Differnet material have the different percentage according to their uses in
the companies. We can easily see that CABLES INSTALLATION is taking more higher percentage in the market of
materials.

39
 Examples of the infamous
DOMESTIC EQUITIES 53%
INTERNALTIONAL EQUITIES 23%
DOMESTIC FIXED INCOME 8%
FOREGIN FIXED INCOME 3%
ALTERNATIVES 13%
CASH 1%

Examples of the Infamous

DOMESTIC EQUITIES
13% 1% INTERNALTIONAL EQUITIES
3% DOMESTIC FIXED INCOME
8% FOREGIN FIXED INCOME
52% ALTERNATIVES
CASH
23%

In this we can easily see that company has less cash percentage as compare to other infamous
trading. We can understiood that company belive in online payments and foregin exchange as compare to cash and other
payments mode.

40
 HOME OFFICES 35%
EDUCATIONAL INSTITUTION 30%
LAW ENFORECEMENT 50%
STATE GOVERNMENT 45%

MARKET ANALYSIS

22% HOME OFFICES

28%
EDUCATIONAL INSTITUTION
LAW ENFORECEMENT
STATE GOVERNMENT

19%

31%

41
 DESCRIPTION

Investors can use their strategies to formulate their own portfolios or do

so through a financial professional. Strategies aren't static, which means
they need to be reviewed periodically as circumstances change.3

 An investment strategy is a plan designed to help individual

investors achieve their financial and investment goals.
 Your investment strategy depends on your personal circumstances,
including your age, capital, risk tolerance, and goals.
 Investment strategies range from conservative to highly
aggressive, and include value and growth investing.
 You should reevaluate your investment strategies as your personal
situation changes.

Understanding Investment Strategies

Investment strategies are styles of investing that help individuals meet
their short- and long-term goals. Strategies depend on a variety of
factors, including:

 Age
 Goals
 Lifestyles
 Financial situations
 Available capital
 Personal situations (family, living situation)
 Expected returns4
 Investors should only risk what they can afford to lose
 Riskier investments carry the potential for higher returns
 Investments that guarantee the preservation of capital also
guarantee a minimal return5

42
Example of Investment Strategy
A 25-year-old who starts off their career and begins saving
for retirement may consider riskier investments because they have more
time to invest and are more tolerant to risk They can also afford to lose
some money in the event that the market takes a dive because they still
have time earn more money. This means they can invest in things like
stocks and real estate.

A 45-year-old, on the other hand, doesn't have a lot of time to put

money away for retirement and would be better off with a conservative
plan. They may consider investing in things like bonds, government
securities, and other safe bets.

Meanwhile, someone saving for a vacation or home won't have the

same strategy as someone saving for retirement. They may be better off
putting their money away in a savings account or a CD for short-term
goals like these.

Investment philosophy and process

Common investment strategy classifications
Most investment strategies fit into commonly used classifications. While
these classifications are useful for a quick, broad understanding of an
investment approach, they are only “headlines” that help provide a hint
at the details of the story that are revealed in the investment process.
The most basic level of classifications is that of its asset class, such
as equity, fixed income, or real assets (such as real estate). Further
refinement of the asset class might also be appropriate for some funds.
Most of these refinements are along the lines of the specific
characteristics of the assets. In the equity asset class, securities are
typically categorized by size and style. The size refers to the market
capitalization of the target securities. A small cap strategy would
typically target the smaller stocks in the market, such as those found in
the Russell 2000 Index. Some strategies that target the smallest stocks in
the market are often referred to as micro cap strategies. Likewise, large

43
cap strategies would hold the largest stocks in a specific market,
while mid cap strategies would hold stocks in the middle capitalization
range. We have purposefully not defined the capitalization ranges using
dollar values because the dollar cutoffs of these ranges are ever-
changing. More specifically, the ranges are all relative to the current
market of securities. The style of a stock typically refers to whether the
stock is considered a growth stock or a value stock. Unfortunately, these
two styles lack precise definitions, but are commonly understood to
break down as follows. Value stocks provide relatively high dividends
and low price-to-earnings ratios and/or price-to-book ratios, among other
measures. Growth stocks are those that do not have these features, but
instead whose prices are relatively high compared to their earnings or
book values presumably due to their growth prospects. As with size, the
style classifications are relative to the current universe of stocks, not
absolute.
In the fixed income class, refinements are typically made along the lines
of default risk, issuer, and/or duration or term. For example, bond funds
might fall into the categories of (federal) government or government
agency, municipal, corporate, and/or high yield corporate. These fund
classifications might also have a term or duration modifier, such
as short-term corporate debt or long-term government debt. In short,
many classifications reveal the category off securities held.

44
 CONCLUSION
In this chapter, we have discussed real option concepts and strategic
action framework. The key points are the following:

 It is often difficult, if not impossible, to use the financial

techniques including discounted cash flow, NPV, and economic
value added to justify an investment in certain projects,
“exploratory” or “experimenting” or learning projects in particular.
The “Jin Beans Tonic Elixirs” case nicely illustrates this very
point.
 Firms should keep options open under the conditions of
uncertainty and irreversibility and develop a portfolio of
investment opportunities. Firms can defer “commitment” under
uncertainty and irreversibility. This way of thinking can make a
big difference for firms’ strategy, including portfolio decisions,
mergers and acquisition decisions, governance choice, technology
adoption decisions, and so forth.
 To develop a portfolio of investment opportunities, firms need to
keep monitoring risk, assessing market trends, and trying new
things on a small basis of experimentation.

Investment decisions are never easy. Cash flows, whether they are
positive or negative, are fraught with uncertainty. Selecting the
appropriate discount rate is never easy, but it has a dramatic influence on
the go/no-go decision. Technical analysis using discounted cash flow
techniques does not alleviate the uncertainty and does not permit
hunches and intuition. One student noted that his presentation in another
class was marked down because he had a hunch that a company should
invest in a project, even though the NPV analysis was unfavorable. After

45
discussing the issue for a short time, I let him in on the great secret that
was revealed to me by one of my mentors after I had spent days trying to
justify a modest expenditure using return on investment calculations. He
told me to tinker with the numbers until they fit the desired outcome.
Investment in emerging technologies and a new product line rarely result
in positive NPVs unless the data have been cooked. Real options when
combined with the development of a product and project portfolio can
bring truth, beauty, and enlightenment into the investment process.

Real options concepts can be applied in a variety of ways. Smaller

organizations can focus on learning-about by investing in education,
reading high-tech magazines and trade publications, attending trade
shows, and attending research conferences. Larger organizations can use
real options as the basis for learning-about as well as investing in basic
research and using learning-by-doing strategies to develop prototypes.
The important point is to keep ones options open and to develop a
portfolio of investment opportunities. Important activities included in the
development of the portfolio include monitoring risk and frequent
monitoring and assessment of the product and project portfolio by a
cross-functional team of key personnel who understand and are aligned
with the business mission.

46
 REFRENCES

BOOKS AND MAGAZINES

 Marketing Management- Philip Kotler

 India Today

 In-house journals

 Research Methodology
JOURNALS :

1. Paramount Plasters Pvt Ltd universe

2. Internal reports

3. Presentation material

4. Brochures

WEBSITES:

. 1. www.Paramount Plasters Pvt ltd.com

47
2. www.google.co.in
NEWSPAPERS
 The Times of India

 The Economic Times

 Business Standard

48