King Tester: The Gold Standard in Portable Brinnel Hardness Tester

Recently I visited a manufacturing company near Delhi producing heavy equipments for oil rigs. A major challenge they face is to measure the hardness of these equipments. As these equipments are heavy and large in size, carrying these to the tester is not an easy task. Also many equipments don't fit well to the space provided by the testers fixed at one location. Similarly holding those equipments properly at the time of test is difficult. All these problems have a solution in the name of King Testers (www.kingtester.com) , the Gold standard in Brinnel Hardness testing. What uniquely distinguishes the King Tester from other Brinnel hardness testers is its portability meaning that you can take the tester to the piece to be tested as opposed to requiring the piece to be tested be brought to the tester.

I would explain in short the metal hardness testing. This is resistance of the material to indentation or dent. Any material can be subjected to a fixed force or load and the measure of the depth of the indentation can be calibrated to find hardness. Harder the material, lower will be the depth of indentation. Out of many hardness testing options, Brinnel testing is very common and is defined in ASTM E10. It is often done at a very high test load (3,000 kgf) which ensures that even metals of very high hardness can be tested with this technique. 

King Tester was founded in 1936 by Andrew King in Narbeth just outside Philadelphia, Pennsylvania to satisfy the need for a portable full load Brinnel tester. Over the past 80 years of business, King Tester has solidified itself as the industry standard by providing the best and most accurate portable full load Brinnel testing equipment around the world. You can send your queries at king@kingtester.com or india@kingtester.com or visitwww.kingtester.com.

Bhubaneswar to Kochi alone by car

After a lot of debate and discussions with a number of guys, I got into come confusion about taking my car from Bhubaneswar to Kochi. Honestly, most of the people discouraged the idea of driving it alone. So the options left were either to hire a driver and then drive or send it by a packer and mover. I checked with Agarwal packers and the quote was 34k, however it could be negotiated down to around 30k. However I wanted to bring some luggage and the packers don’t allow that in the car. So that would bear some additional cost as well. And then I read from the net about the possible other problem with the movers and packers; damage to the car, long delay in delivery, difficulty in reaching out to them in case of any issue etc. So I dropped the idea of sending it by movers and packers.

Getting a reliable driver is always a challenge. So I finally decided to drive it alone with a target to reach within three days and started on October 3, 2014. I checked with google map to get an idea about the route and decided to follow the route Bubaneswar to Visakhapatnam to Vijaywada to Nellore to Naidupet to Turupati to Vellore to Salem to Palaghat to Thrisur to Kochi.

Day 1: Bhubaneswar to Vijaywada

I had a Chevrolet Sail petrol. The vehicle is good with good safety features like ABS, EBD, Airbag etc, so that gave me some confidence. I went to bed a little early and decided to start little late in the morning without any hurry. I was little tense as well. The only comfort for me was my previous experience of making to Bhubaneswar to Chennai. 

I started at around 7.30 in the morning and set a target to reach Visakhapatnam at 1 PM and Vijaywada. I put some food stuff in the car and few bottles of water. The initial couple of hours were little discouraging as I could make hardly 100 km. However after that it was easy and smooth. The border between Orissa and Andhra is seamless and the road is good. However there are certain patches where the skin of the road is taken off and that make the ride little rough. I didn’t try to press the accelerator too much, rather preferred to maintain a speed of around 90 to 100 km/h. I reached Vizag at exactly 1 PM, but it took nearly half an hour to cross the city. Be careful about the buses there, but not a difficult part to drive. After crossing the city, I stopped for lunch and then started within half an hour. I reached Vijaywada at around 6 pm, the distance covered was around 850 km. I then searched for a hotel after crossing that city and got one on the high way. Although little expensive, worth that considering it provides AC room and parking for car. Had a good sleep there after watching some TV and making a few phone calls.

Day 2: Vijaywada to Salem

I followed the same principle of not trying to get up very early. Again started at around 6.30 in the morning. The road from Vijaywada to Chennai is excellent. There I pressed to around 140 km/h for half an hour, but soon realized that it was straining eyes. So preferred to continue at around 100. After driving almost 100 km, I hit bad stretch of road. Lot of repairing work and so diversions at every one km perhaps. That disturbed my schedule a bit. 55 km after leaving Nellore, I reached a small place called Naidupet and from there, I took a diversion to right that goes to Tirupati. A few meters after the diversion, there is another diversion to left that goes to Tirupati. The road is two lane type without any divider. So overtaking was difficult. After reaching Tirupati, there is a bypass that takes you to Chittoor and then to Vellore. Be careful about the diversions, one goes to Bangalore and the other to Chittoor. The city Chottor is a small one, but the traffic is messy. The 3 km stretch will take some time. As I reached there at around noon time, traffic was less. Then Vellore is almost same, but just after the city of Vellore end, there is a right turn that takes you to the Chennai Bangalore highway.  It is probably one of the best highways in India. Then Salem is further 200 km away. This road took me to Krishnagiri and from there, there is a left diversion towards Coimbatore. I reached Salem at around 5 PM, but instead of staying there, I moved towards Coimbatore. Where the city of Salem ends there is a right turn to a road that goes to Coimbatore. After driving for around 30 km on this Salem Coimbatore road, I found Saravana Bhavan. Decided to have some food there and night halt as well. This Saravana Bhavan offers good AC rooms and also secured place for car parking. Now from this place, Kochi is around 350 km away. So I was little relaxed and confident.

Day 3: Salem to Kochi

Saravana Bhavan offers complimentary good breakfast. I had that and then was on the road at around 8. I was driving towards Coimbatore and at a point almost 40km before Coimbatore, I noticed a signboard indicating Pallaghat. So I stopped there to check, and someone told me that that road is extremely bad and should be avoided. So drove towards Coimbatore and just a few km before reaching Coimbatore, there is a left diversion that goes to Pallaghat. Immediately after taking the diversion I hot a toll gate and after crossing that gate, I probably had to show that toll receipt at 4 or 5 places. Then the challenge comes, gradually the road condition deteriorates. Almost 30 km before Pallaghat, real bad stretch starts. It is a National highway and work is going on. So I hope the road will be good after some time. But right now it is pathetic. There is a particular stretch of around 10km that probably took an hour. Be careful of the buses, Lorries and also cars. The whole 50 km stretch to reach Thrisur is extremely bad. But once I reached Thrisur, then it is again a good four lane road and I reached Kochi at around 1 PM. So finally on the third day I reached Kochi, drove it all alone and without anyone giving me any company. The odometer showed 1,902 km and petrol consumed was 108 litre and total toll gate charges Rs. 1,560/-

So my experience says that with proper rest and planning, it is not at all difficult. The vehicles now a days are reliable with lot of safety features, tubeless tyres plus good roads with toll gates, all these make it safe and easy. 

3-D Printing, the new buzz

Almost a decade and a half back, internet was the buzz word in the market. The kind of value the internet stocks then created for investors in so little time was completely unheard of in the stock market history. So also the kind of value erosion that happened subsequently was again something that can be compared to a Tsunami wave.

Although not in that scale, the current technology buzz word is 3-D printing. The leaders in the industry, Stratasys Ltd. and 3D Systems Corporation have a combined market cap of close to $9.50 Billion. When we check the financials, the combined revenue of both the companies in 2012 was only $714 million and profit of around $100 million. So the combined market cap of the two companies stands at 13 times the annual revenue and 95 times the profit. Are these stocks expensive and following the internet stocks trend during the dot com boom? Although the answer to this question may not be very straight forward, one point is very clear. Just like the way internet changed the way we communicate or share information, 3-D printing will change the way we manufacture things.

So what is 3-D printing? It is a process of manufacturing a three dimensional object of virtually any shape from a digital model. The digital model can be highly complex and be made using software like CAD/CAM or simply by scanning an existing object. Just like a normal printer prints a picture on a sheet of paper when we give a print command to the computer, here the 3-D printer will make a 3-dimensional object exactly as we find it on our computer screen.  

The 3-D printers use an additive process of manufacturing against a subtractive process being used by traditional manufacturing process. In case of traditional process, certain material is removed from a block of material in form of cutting or drilling to arrive at the desired shape. 3-D printers use very thin layers of material and keep on adding them to reach the desired figure.  Different types of methods are used in this additive process. Some methods melt or soften the material to make the layers, some use material I liquid form and cure it or some use thin layer as input material and then cut the layers to shape and then add those layers.

If assembly line technique of mass production gives us the advantages of lowering the cost and time of production, 3-D printers gives us the flexibility of producing any object of any shape and that too in our living room on our desktop.

Although 3-D printing processes were invented in late 1970s, the printers were originally large in shape, expensive and have limitations in terms of what they could produce. However over the last decade, we have been witnessing tremendous improvement in the technology and also drop in prices of 3-D printers. Fast prototyping, easy and quick manufacturing option, and easy customization are the three most advantages of 3-D printing.

With such advantages of 3-D printers, they have applications both for commercial as well as domestic use. If we think of its applications, probably it has no limit. Virtually each industry has its use, Construction, Medical equipments, Automotive, Aerospace, Dental, Jewelry, Education, Consumer Products, and so on. It will transform the way individuals or organizations work. 

As per Wohler’s report, 3-D printer market will grow from a little over $2 billion in 2012 to around $11 billion in 2020, i.e. a CAGR of 23%. Looking at this opportunity more and more players are entering this field. That will result in further improvement in technology and drop in prices. If both Stratasys and 3D Systems grow at this rate for next seven years, the combined revenue will reach close to $4 billion in 2020. If we assume a net income margin of close to 20%, the present market cap still looks little on the higher side.

So it seems the 3-D printing has enormous potential and it is certainly going to change the way we have lived our lives or the way we have manufactured different products. Although the technology at present has limitations, especially in terms of what it can produce, the future certainly looks promising. But the stocks don’t seem cheap anymore. Apart from Stratasys and 3D Systems, ExOne is the other major player in this hot field.  

Valuing a stock: Accuracy or Consistency?

Now a days you switch on to any TV business channel and you will see the channels flashing target prices for a few stocks. And sometimes it becomes eyecatching to see the target price of a stock is close to two times the current price or even more. So how accurate are these forecasts and above all, is there any tool that can value a stock so accurately? As investors, we should always know that if the exact price of a stock can be calculated, then that will kill the very existence of the stock market.

Since the inception of stock market, hundreds of people have tried to devise certain mathematical models to value a stock. The most popular of those is the Discounted Cash Flow method. This is nothing but forecasting the future cash flow per share and discounting all such future cash flow by a certain factor. For example if we forecast Stock-A to have a cash flow of $1 every year and we want to discount it by a factor 0.1, then the value of Stock-A is $10. The discount factor is generally decided by the risk associated with the stock. Although the calculation looks too simple, there are major issues involved in such type of calculation.

The first issue is forecasting the future cash flow. As we all know future is full of uncertainties, so nobody can forecast the future with accuracy. Then the other major issue is finding out the discount factor. Although tools like CAPM are popular, but I believe these tools are more useful for academic purpose rather than investment purpose. From our example of Stock-A, we can see that by changing the discount factor to 0.08 and future cash flow to $1.2 every year, the stock price will become $15, that is a 50% increase. And forecasts in both the scenarios can be sounded logical and honestly speaking very hard to say which one will be more accurate.

Again as investors, we have to accept the fact that if my valuation model gives a value that is two times the current market price, then that says that the whole bunch of investors are wrong, except me. So in my opinion, we should not subscribe to such views as target price provided by certain research houses involes many assumptions and perceptions.

Then the next question, are we saying that all these models are useless. Absolutely not. I would say that to be successful, more than accuracy, consistency is the crux. If we are consistent in our assumptions when we try to forecast the future cash flows as well as discount factor, then we will get a relative picture of the stocks. Doing that exercise we can identify those stock that are the cheapest among all in a particular sector and thus help us to pick up the right stocks.

Dollar cost averaging

The spectacular economic growth that India witnessed over the last few years has generated tremendous interest in stock markets from the Indian middle class. A significant portion of the salaried people are now switching their interest from traditional forms of investment like Fixed Deposit, Gold, House etc to equities. However as this trend is new, there remains a lot of myth on this issue of investing in equity. A major concern is the idea that stock market can give high return in quick time. This idea leads to speculation among people who are exposed to stock market for barely a few months. And the end result is always disastrous. I have seen people losing money at a rate much higher than the rate at which the market falls. That creates such a big panic that people exit from the stocks, taking a huge loss on their investment. So the first experience of stock market turns out to be an ugly one. Even more disastrous is people exiting from those stocks and then buying some other stocks when the market again starts picking up. A few cautious approaches will help in preventing such things happen again and again. One such approach is dollar cost averaging. This is nothing but investing in stocks regularly and at a rate which automatically takes care of the high or low valuation of market. Decide on the ratio of your investment in fixed investment and equity. Assume it to be 50:50. Maintain this ratio throughout. When the market goes up your investment in equity will go up tilting the balance in favour of equity. To make it 50:50, automatically you have to invest less in equity and more in fixed ones. And similarly when the market goes down, you have to invest higher in equities. Such approach for a long period, I consider this to be more that 8 years, will help the return from stock market to be really good. Another important issue is the selection of stock should be proper. This can be done by selecting big liquid stocks, investing in around 10 stocks covering different sectors and avoiding penny stocks. For example one can start with 50 stocks of Nifty, select the leader from each sector, and then leave a few from some sectors where there involes a lot of uncertainty.