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INVESTMENT JOURNEY

Explore the initial years of investment awakening through the role of investment books like Lynch's. Discover the advantages of being a doctor in investing, vicarious learning, and constant learning methods. Learn the art of investment - why, when, how, and what to invest. Understand the advantages of direct investments versus mutual funds, setting up a company, and early-phase buying strategies. Uncover the essential elements of stock selection, portfolio allocation, and values of sitting tight versus occasional churn. Dive into stock selection techniques, criteria for selection, and when to buy and sell. Master portfolio allocation, common pitfalls, and investing dos and don'ts for a successful investment journey.

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INVESTMENT JOURNEY

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  1. INVESTMENT JOURNEY • INITIAL YEARS • AWAKENING – ROLE OF A BOOK –LYNCH • REFINEMENT – MORE BOOKS • GROWTH AS INVESTOR – VALUEPICKR • ADVANTAGES OF BEING A DOCTOR • VICARIOUS LEARNING • CONSTANT LEARNING FROM BOOKS AND OTHERS

  2. ART OF INVESTMENT • WHY • WHEN • HOW • WHAT • HOW MUCH • TEMPERAMENT

  3. WHY TO INVEST • BEATING INFLATION • COMPOUNDING, PLANNING RETIREMENT • EASY LIQUIDITY • MAKE YOUR MONEY WORK FOR YOU • ADVANTAGES OF DIRECT INVESTMENT VS MF • SETTING UP A CO TAKES A LOT OF TIME. BUYING IN EARLY PHASE HELPS IN PARTICIPATING IN CO’S GROWTH

  4. WHEN TO INVEST • IMPOSSIBLE TO TIME THE MARKETS • 80% OF STOCK’S MOVE HAPPENS IN 20% TIME • PETER LYNCH SAYS, • MORE MONEY IS LOST IN WAITING FOR CORRECTION THAN IN CORRECTION ITSELF • TIME IN MARKETS RATHER THAN TIMING • TELLTALE SIGNS OF BUBBLE

  5. HOW MUCH TO INVEST • ALWAYS INVEST MONEY SURPLUS TO URGENT NEEDS • DOCTORS HAVING GOOD CASH FLOWS CAN AFFORD TO HAVE HIGHER PERCENTAGE OF EQUITY • INVEST AN AMOUNT THAT WILL LET YOU SLEEP IN PEACE.

  6. ART OF INVESTMENT • BASICALLY CONSISTS OF • STOCK SELECTION • PORTFOLIO ALLOCATION • SITTING TIGHT • OCASSIONAL CHURN

  7. STOCK SELECTION • SOURCES OF STOCK IDEAS • BUY WHAT YOU SEE OR USE • RESEARCH REPORTS • EXPERT RECOMMENDATIONS • IDEAS FROM INVESTOR FRIENDS, FORUMS • ABOVE ARE ONLY STARTING POINTS • KNOW WHY YOU SHOULD BUY A COMPANY. • INVESTMENT THESIS – 7 MINUTE DRILL

  8. CRITERIA FOR SELECTION • HONEST AND CAPABLE MANAGEMENT • UNDERSTANDABLE AND PREDICTABLE BUSINESS • POTENTIAL FOR GROWTH • GOOD BALANCE SHEET • OPPORTUNITY SIZE VERSUS MARKET CAP • LESS PRONE TO DISRUPTION

  9. STOCK SELECTION • STOCK PRICES ARE SLAVE TO EARNINGS • STOCK MARKETS LOVE GROWTH STORIES • PERCEPTION VERSUS REALITY MISMATCH • GOOD COMPANIES IN TRANSIENT TROUBLES • BUYING WHEN BLOOD ON STREETS – KEEPING A BUYLIST HELPS

  10. STOCK SELECTION • DOING BASIC RESEARCH • SCREENER.IN • VALUEPICKR • ANNUAL REPORTS • RESEARCH REPORTS • RESEARCHBYTES

  11. STOCK SELECTION • IMPORTANT PARAMETERS • SALES GROWTH • PROFIT GROWTH • TAXES PAID, INTEREST PAID • BALANCE SHEET, DIVIDENDS • PROMOTER INTEGRITY, PLEDGING • VALUATIONS

  12. MULTIBAGGERS –FERTILE GROUND • CONSISTENT GROWTH • CHANGE IN MANAGEMENT/PROMOTERS • DEMERGERS • HIDDEN ASSETS • INDUSTRY TAILWINDS • BALANCE SHEET CLEANUPS, PROMOTER BUYING • HIVE OFF OF LOSS MAKING BUSINESS • CYCLICAL LOWS • SUPPLY SIDE SHRINKAGE • EXPANSIONS AND LOW CAPACITY UTILISATION

  13. WHEN TO SELL • RIDING WINNERS, SELLING LOSERS. MOST INVESTORS DO OPPOSITE • CASH NEEDED FOR PERSONAL USE • EXCESSIVE OVERVALUATION, FROTH • BETTER OPTION • INVESTMENT THESIS NOT PLAYING OUT • MARKET EXHUBERANCE

  14. PORTFOLIO ALLOCATION • MOST OF TIMES MORE IMP THAN STOCK SELECTION FOR SUPERIOR RETURNS • HIGH CONVICTION + GOOD FUTURE POTENTIAL+ATTRACTIVE VALUATION • COMPOUNDING MACHINES • HDFC BANK, ASIAN PAINTS, GRUH FINANCE, ITC, PAGE INDS,

  15. CIRCLE OF COMPETENCE • BUY WHAT YOU KNOW • DOCTORS PREFER SOFTWARE COMPANIES AND SOFTWARE GUY PREFERS PHARMA COMPANIES • APPLYING ONE’S DOMAIN KNOWLEDGE TO INVESTING • COMMONSENSE APPROACH

  16. PAST MULTIBAGGERS • AJANTA PHARMA – STRONG GROWTH LEADING UP TO 2010 AND CONTINUING • LARGELY NEGLECTED BY MARKETS • STOCK WENT UP MORE THAN 60 TIMES • LIMITED VARIABLES, CONSISTENT GROWTH

  17. MAYUR UNIQUOTERS • COMPANY MAKES SYNTHETIC LEATHER • CAME TO NOTICE BECAUSE OF PROMOTER BUYING IN 2009-2010 • CONSISTENT GROWTH • HIGH DIVIDEND PAYOUT • CALIBRATED EXPANSIONS • STOCK UP MORE THAN 50 TIMES SINCE 2009

  18. AVANTI FEEDS • MAKES SHRIMP FEEDS • CHANGE IN VARIETY OF SHRIMPS CHANGED INDUSTRY LANDSCAPE • GREAT MANAGEMENT • MARKET DOMINANCE • UP 6 TIMES IN 2 YEARS

  19. CANFIN HOMES • COMPANY WAS INTO HOUSING FINANCE • QUOTING AT AROUND 130 AGAINST BOOK VALUE OF 180 WITH NIL NET NPA • COMPANY WAS GROWING AT A FAST CLIP IN ITS LENDING BUSINESS. • FROM 2013 TO 2016 IT WENT UP 12 TIMESAND SUBSEQUENTLY ALSO WENT UP 2.5 TIMES.

  20. WATCHLIST – NOT RECOS • BAJAJ FINANCE • HDFC BANK • PIRAMAL ENTERPRISES • CCL PRODUCTS • AARTI INDS • BATA • THOMAS COOK • GMM PFAUDLER • PIDILITE

  21. DOS AND DONTS • DON’T ACT ON TIPS • DON’T FOLLOW ANYONE BLINDLY • DON’T OVERPAY • DON’T INVEST WITHOUT A THESIS • DON’T INDULGE IN FUTURES/OPTIONS • DON’T BUY COMPANIES WITH VERY HIGH DEBT

  22. TEMPERAMENT • HAVING THE RIGHT MINDSET IS MOST IMPORTANT FOR INVESTMENT SUCCESS. • ONE MUST HAVE THE TEMPERAMENT TO WEATHER MARKET CORRECTIONS AND STAY CALM. • IT IS IMPORTANT NOT TO BE SCARED OUT OF OUR INVESTMENTS WHICH MAY GO DOWN DURING MARKET MELTDOWNS. • DURING JOURNEY OF ANY MULTIBAGGER THERE WILL BE MANY DRAWDOWNS.

  23. INVESTMENT BOOKS • ONE UP ON WALL STREET – PETER LYNCH • FIVE RULES FOR SUCCESSFUL INVESTING- PAT DORSEY • DHANDHO INVESTOR – MOHNISH PABRAI • COMMON STOCKS AND UNCOMMON PROFITS –PHIL FISHER • MANY OTHERS

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