Check Out The Portfolio & Investment Strategy Of Akash Prakash’s Amansa Capital

Saurabh Mukherjea’s debut book “The Gurus Of Chaos” is a treasure trove of information relating to the techniques followed by ace fund managers while deploying large amounts of capital. For the first time, you will learn about the mistakes committed by these ace investors and what they learnt from it.

Akash Prakash, founder & CEO of Amansa Capital, has also candidly admitted to the mistakes he made while being fund manager of Morgan Stanley Mutual Fund. However, he has learnt from his mistakes and now has a fail-proof method to finding winning stocks as you can see from Amansa’s latest portfolio.

Akash Prakash’s advice to us on how to find winning stocks can be summarized in a few points:

(i) Make sure the management has a good track record of capital allocation. Smart managements know how to create and take advantages of opportunities and overcome adversities. They can create a lot of wealth for you;

(ii) Select companies that have immense opportunity to grow, with good management team and corporate governance;

(iii) Buy high quality companies and hold them for as long as you can. There are a limited number of companies where all the factors of huge business opportunity and capable management can be found. Such companies should form a core part of the holding;

(iv) Pay attention to valuations. Generally speaking, buy stocks quoting at reasonable valuations of 10-12 times earnings and not more than 15-20 times earnings;

(v) The fact that a top-quality stock is looking expensive in the short-term is no reason to sell it. E.g. Eicher Motors is looking expensive but if the commercial vehicle market (Volvo) recovers, Eicher’s earnings will explode and its valuations will become reasonable;

(vi) Don’t sell a winning stock unless it reaches ‘absurd’ valuations or if the business fundamentals have changed adversely;

(vii) Don’t hold on to your losing stocks in the hope that someday the tide will turn. If you have lost confidence in the stock, book your loss and get out. Practice the credo of “Water the flowers and cut the weeds”;

(viiii) Avoid sectors with government interference;

(ix) Avoid concept stocks or momentum stocks trading at high P/E (e.g. Jubilant Foodworks). The expectations are high and there is no margin for error.