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INVESTMENT JOURNEY

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

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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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