Created a bias sanitization checklist using chatgpt Charlie Munger’s talk on human misjudgment and Robert Cialdini’s book Influence this is what I got.

1. Awareness of Decision-Making Process:

   • Have I clearly outlined the steps in my decision-making process?
   • Am I consciously reflecting on each stage to ensure objectivity?

2. Emotional Check:

   • Have I assessed my emotional state and its potential impact on decision-making?
   • Am I making decisions under stress, fear, or other emotional influences?

3. Information Gathering:

   • Have I sought information from diverse and reliable sources?
   • Am I actively avoiding information that confirms pre-existing beliefs?

4. Time Perspective:

   • Have I considered both short-term and long-term consequences of the decision?
   • Am I avoiding impulsive decisions without sufficient future-oriented thinking?

5. Framing and Language:

   • Have I examined how the decision is framed and the language used to describe it?
   • Could a different framing or language influence my perception of the decision?

6. Anchoring:

   • Am I being unduly influenced by an initial piece of information or an anchor?
   • Have I critically assessed whether the anchor is relevant and justified?

7. Cultural and Societal Influences:

   • Have I considered how cultural and societal norms might be affecting my decision?
   • Am I making decisions that align with personal values rather than succumbing to societal pressure?

8. Power Dynamics:

   • Have I analyzed the power dynamics involved in the decision-making process?
   • Am I aware of any potential biases introduced by hierarchical structures or authority figures?

9. Group Dynamics:

   • If in a group decision, have I ensured that groupthink and conformity are minimized?
   • Have I encouraged diverse perspectives and dissenting opinions?

10. Reflection on Past Decisions:

    • Have I learned from past decision-making experiences and any associated biases?
    • Am I applying lessons from previous mistakes to enhance the current decision-making process?

11. Alternative Scenarios:

    • Have I considered alternative scenarios and potential outcomes?
    • Am I open to adjusting my decision based on changing circumstances or new information?

12. Ethical Considerations:

    • Have I thoroughly examined the ethical implications of the decision?
    • Is the decision aligned with ethical standards and principles?

13. Feedback Seeking:

    • Have I actively sought feedback from others to challenge my perspectives?
    • Am I open to constructive criticism and differing viewpoints?

14. Decision Reversibility:

    • Have I considered the reversibility of the decision?
    • Can the decision be easily adjusted or reversed if necessary?

15. Systematic Review:

    • Have I systematically reviewed all aspects of the decision-making process?
    • Is there a structured framework in place to evaluate the decision comprehensively?

16. Lollapalooza Effect:

    • Have I examined the decision for a potential convergence of multiple biases leading to an exaggerated impact?
    • Is there a combination of psychological tendencies that might be influencing the decision?

17. Incentive-Caused Bias:

    • Have I considered how personal incentives might be affecting my judgment?
    • Am I making decisions based on the best interest of the situation rather than personal gain?

18. Contrast Misreaction:

    • Have I evaluated the decision in absolute terms rather than comparing it to other unrelated situations?
    • Is my judgment influenced by recent events or extreme comparisons?

19. Learning from Multiple Disciplines:

    • Have I sought insights from various disciplines to broaden my perspective?
    • Is my decision-making process informed by a multidisciplinary approach?

By fintech, I meant only originator and not having balance sheet of its own. if you still think that it is not top 5, can you also give me few name which are in top5? just wanted it for my reference. Happy to be proven wrong!

Paytm is posing as a payments player and pushing income from lending as their major revenue going forward. It is in lending yet it does not do the underwriting or is taking the responsibility of default. It is an originator rather than a lender and income is bound to be limited. They are definitely not the largest in Fintechs in personal loan (not even in top 5) and to clarify to a previous post they cannot use customer deposit to lend forward.

ECL of 5% is not top notch. Major part of the lending was Postpaid loans and that will vanish from next quarter. With not being in the good books of the regulators, will push away the lending partners. Anyway they will be pushed to a corner and find difficult to lend, but they have already stopped lending for two weeks and that will stretch further. Any discontinuity in lending is only going to push the NPAs even higher irrespective of what kind of customers they have lent to. It is quite surprising that the lender partners have not yet started feeling the impact of this massive tremor and some are even 10% up today.

Would point out the cryptocurrency situation back in 2017-18. When the regulator was not happy with the growth they killed it by directing banks to not partner with the crypto platforms and we all know what has happened after that. Here the regulator not approving the payments bank passes the signal to the lender partners of their view and that is going to deter any lender from associating. UPI services will be routed most probably with ICICI and that will continue. The services that have been stopped (deposit, fast tag, UPI etc) will in some way find a revival. However, the services that the regulator has not touched (lending) directly is going to suffer the most. Lets see if they are able to salvage through any partnerships.

As pointed out earlier it is going to hit lower circuit for few sessions. Revision of lower circuit may halt the slide for sometime, but market will definitely read between the lines. Salvaging the company is going to be a mammoth task and would require a lot of help from partners and regulator. The help from regulator is definitely not coming and they have given their opinion to the lenders through their notice to PPBL.

Turnaround stories still happen in the investing world but it requires a sincere, hard working and clean management. For now will just say falling knives are not supposed to be caught, it only cuts your hands. Rest, happy to be proven wrong solely for the sake of the huge workforce employed by Paytm.

Available Finance: A Detailed Overview

Available Finance is a financial services company based in India, operating under the flagship of the Agarwal Group. Founded in 1993, it offers various financial products and services to individuals and businesses. Here’s a breakdown of the company:

Company Overview:

• Founded: 1993
• Headquarters: Indore, Madhya Pradesh, India
• Parent organization: Agarwal Group
• Subsidiary: Available Finance Ltd (Asset Management Arm)
• Services: Money lending, share trading, investment opportunities

Key Information:

Available Finance holds 33% in Agarwal Coal Corporation Ltd and 40% Agarwal Fuel Corporation Ltd.

Agarwal Coal Corporation India is one of the largest importers of coal in India. They import high quality coal from Indonesia and South Africa. The company is part of the Agarwal Group, a business conglomerate with a diverse portfolio that includes sectors like coal & iron ore trade, finance, logistics, renewable energy, education, publication, manufacturing, and more.

Latest Care Report for Agarwal Coal Corporation Ltd : https://www.careratings.com/upload/CompanyFiles/PR/08032023061610_Agarwal_Coal_Corporation_Private_Limited.pdf

Agarwal Fuel Corporation Ltd (AFCPL) is a private company incorporated in 1980 and based in Indore, Madhya Pradesh, India. It is part of the Agarwal Group, a diversified business conglomerate with interests in coal trading, transport, education, financing, construction, cold storage, warehousing, and wind power generation.

Latest Care Report : https://www.careratings.com/upload/CompanyFiles/PR/08032023061624_Agarwal_Fuel_Corporation_Private_Limited.pdf

Investment Thesis

Available Finance presents a potential value play based on its discounted share price compared to the estimated value of its subsidiary holdings.

Key Points:

• Subsidiary valuations:
  • Agarwal Coal Corporation earns ~600 Cr annually and could be valued at ~12,000 Cr based on a 20x multiple (similar to peers like Anmol India).
  • Agarwal Fuel Corporation earns ~70 Cr annually and could be valued at ~1400 Cr with a 20x multiple.
• Available Finance holdings:
  • Owns 33% of Agarwal Coal Corporation, implying a potential value of ~4000 Cr.
  • Owns 40% of Agarwal Fuel Corporation, implying a potential value of ~560 Cr.
• Combined potential value: ~4560 Cr.
• Discounted trading: Available Finance currently trades at ~230 Cr, representing a significant discount (75% from book value and 95% from potential holding value).
• Holding company discount: While holding companies often trade at a discount, the current level seems substantial.

Notes

Promoter recently bought 5% stake from open market.

Risk

As neither holding company is publicly traded, timely access to business updates may be limited.

Disc. Invested.