Cash Dividend vs Bonus Shares: Why Bonus Isn't Free Money

Every book-closure season, the excitement is the same. "20% bonus announced!" The WhatsApp groups go wild. People rush to buy before the book closure date. Then the price adjusts and they wonder where the gain went.

Let's clear this up properly, because the difference between a cash dividend and a bonus share is one of the most misunderstood things in the Nepali share market.

EPS and P/E Ratio: Handy Numbers, Not Buy Signals

"P/E is only 12, it's cheap!" I see some version of this every week in investor groups. Sometimes it's true. Often it isn't.

EPS and P/E are probably the two most quoted numbers in Nepali share market discussions. They're useful. But they're also easy to misread, and some people use them to make weak shares look like bargains. Here's what they actually mean.

How I Read a Company's Annual Report (Without an Accounting Degree)

Annual reports are long, dense and full of photos of board members cutting ribbons. Most investors never open them. That's a shame, because 30 minutes with one can tell you more than a month of share-market Facebook groups.

Here's how I go through one.

"NEPSE Is Up 40 Points!" What the Index Does and Doesn't Tell You

Every evening the news says something like "NEPSE rose 40 points today." Then you open your portfolio and it's red. What's going on?

What the index is

The NEPSE index is a single number that summarises how listed shares moved overall, calculated with a specific method. Bigger companies count for more. A few large banks and hydropower companies moving a lot can push the whole index up or down.

So the index is a rough picture of the market as a whole. It isn't a picture of your shares.

Placing Buy and Sell Orders in TMS Without Costly Mistakes

Your first order on a broker's TMS can feel nerve-wracking. Lots of numbers changing, a clock running, and a button that spends real money. A few basics make it much less stressful.

What an order really is

When you place a buy order, you're saying, "I'll buy this many shares at this price." Someone has to be willing to sell at that price for it to go through. If no one is, your order just sits there. Placing an order doesn't mean it will execute.

IPOs in Nepal: What I Check Before Hitting "Apply"

In Nepal, applying for IPOs is almost a national hobby. A new issue opens, the family WhatsApp group lights up, and everyone applies for 10 kitta on Mero Share without really knowing what the company does. Some families apply in five or six names.

I get it. It's cheap (Rs 1,000 for 10 kitta at Rs 100 each), it's easy, and for years IPO shares often listed well above Rs 100. Getting an allotment felt like winning a small lottery.

But that habit has taught many people the wrong lesson: that IPOs are free money. They're not. Here's how I think about them.

Demat, Mero Share and Broker Account: Which One Does What?

When I first wanted to buy shares, someone told me, "Just open Demat and Mero Share, and get a broker." I nodded like I understood. I didn't. I thought they were three names for the same thing.

If you're in the same spot, here's the plain version, plus the steps to get set up and the mistakes to avoid.

Risk Tolerance: How Much Loss Can You Really Stomach?

Everyone is a brave investor when the market is going up. In 2021, when NEPSE crossed 3,000, it felt like nobody could lose. Then it fell, and plenty of "long-term investors" sold everything at the bottom.

Risk tolerance is what you find out about yourself when your portfolio is down 30%. It's better to think it through before that happens.

Diversification: Ten Hydropower Shares Isn't a Diversified Portfolio

I once saw someone's Mero Share portfolio with 14 different companies in it. They were proud of how "diversified" it was. Eleven of them were hydropower companies.

That's not diversification. That's one bet split into eleven pieces.

Compound Growth, Explained With Real Rupees (and Its Limits)

Compounding gets talked about like it's magic. There's even a quote, wrongly credited to Einstein, calling it the "eighth wonder of the world". It isn't magic. It's just maths, but it's maths that rewards patience more than almost anything else in personal finance.

In this post I'll show how it works with real rupee numbers, and then I'll be honest about where the neat examples fall apart in real life.