Mine is the same as yours @visuarchie sir. Thank you!
Posts in category Value Pickr
The Anti-Portfolio (19-05-2024)
Hi @HarshVijay frankly I don’t have much idea. Had looked at it due to recent IPO earlier but gave up since had just picked up Shilchar in the transformers domain. It’s looking more diversified than Shilchar but I would be little wary of marketing terms used like solar and wind transformers as if they are somehow speciality types. Ignoring any more details and what looks like increase in gross block. At the end of the day capital goods are very cyclical afterall so bit risky.
DISCLAIMER : this is not investment advice, I am not a sebi registered investment advisor, please do your due diligence before investing.
Sahil’s Portfolio (19-05-2024)
My latest thoughts on investing
- Truth seeking -Parallels between Investing & Entrepreneurship: Both are highly truth seeking activities. An entrepreneur has to understand the different ways in which his customers needs can be met, different shortcomings in his services/products, competition & their ability to meet those needs. An investor has to do the same. Every Management will throw numbers. Every business will claim to be a monopoly (Peter thiel’s Competition is for loosers: https://www.youtube.com/watch?v=3Fx5Q8xGU8k). Your job as an investor is to discern the truth. This needs 2 key functions: (i) High data & evidence gathering. Scuttlebutt. Talking to users/clients physically, digitally, on google maps, on amazon, on LinkedIn, on Twitter, anywhere everywhere. Talking to distributors, dealers, suppliers, competitors. (ii) Forward modelling of the world. An investor’s edge or alpha is their ability to discern the truth ahead of the markets. This requires deeper work/data gathering for sure, but it also needs deeper thinking. Asking the ‘why’ question until you reach axioms or theorems which are widely accepted. Until you reach laws of physics, or laws of chemistry, or laws of human behavior (sociology, psychology). This is why a deeper understanding of how the human mind works (both individually & in groups) is undeniably at the heart of equity investing. Why is it that typically listed companies with frugal resources can outcompete their richer unlisted VC & PE funded peers? (Say in the Flex working space). Or Why is it that some entrepreneurs in Edtech with humble backgrounds are far better capital allocators than others who come from abundance & PE money? Understanding the causal chain of events helps in building efficacious high probability forward models of the world. WHat is likely to happen is tied at the hip to what has already happened. Gangaji can only flow from Haridwar TO Kolkata not othe way around. A very important trait to have for good forward modelling of the world is ability to stay curious, hold firm beliefs backed by data but willingness to change them when presented with the contra evidence of higher efficacy.
- Aatmanirbhar Investor - The Independence of thought : Its a funny profession. At the same time, it is very lonely & very social. Ive covered the social aspects in last point. Its lonely, because your only allegiance is to an efficacious causal forward model of the world (what causes what) based on highest amount of unbiased data gathering. 99% of the crowd follows price momentum which is inherently consensus of the crowd. Nothing wrong with that. But you, as an investor focussed on XIRR will need to evaluate the forward risk/reward based on dynamic ever changing current causal factors like competitive intensity, demand-supply mismatch, government policies, valuations. Paradoxically you will need the self-confidence to say I am right ahead of the markets but also the humility to know when you have gone wrong. Although other investors & sources of knowledge can be inputs to my model, the decision to invest has to be my own. This, is the heart of the loneliness. There is primal creature comfort in being a part of a crowd. Being lonely is upsetting, Because we are a social species. But both the journey of a successful enterpreneur & successful investor are lonely ones to undertake. Find your social creature comfort in family, not in being part of a herd which runs after 1 NBFC & discards every other.
- Alpha = Hard work + Ability to reason early in the Causal chain of the world: (i) Hard work is self explanatory. IN every profession there is a Gaussian curve of effort people will put into their profession. You must aim to be in the top 1% of hard workers. The benefits for such extra-ordinary hard work are mediocre at best in most professions but it is exponential in Investing. A lazy investor might study 10 businesses in depth in a year, a mediocre investor might study 20, a hard working investor might study 50. Investing outcomes follow the power law. 80-20 rule. Your 80% of return will be made in 20% of stocks you study. THis distribution naturally lends itself to white swan events. You want to study 50 or 100 or 500 so that you can find those few which create most wealth for you. In the last year 20 businesses were 10-bagger. How many did you own? how many did you identify? How many did you find but not study? How many did you own? How many did you allocate heavily to? That will define your portfolio level outcomes. (ii) : There are laws for the human world just as there are laws for the natural world (physics). Just consider 1 causal chain: Politics => Policies => Government frameworks, schemes, incentives => Entrepreneurs with core capabilities + ambition making solid proposals based on concrete MOUs & hiring => Capex / Factory/Machinery ordering => Machinery delivery, installation, stabilization => ramp up capacity utilization & revenue recognition => operating leverage & disproportional profit growth => Consistent growth in profits for X years (execution track record). thanks to the superb government we have, we have continous new sources of alpha getting created. An investor’s ability to decipher the probability of success at each step along the causal chain & thus the joint probability of success critically determines their alpha. You can buy a 600 cr Semiconductor company with 0 revenue or you can wait for the Execution track record & buy it at 16000 cr. The edge lies in these probability models. We develop good probability models by watching evolution of similar industries, same industry in other countries, we develop it by deciphering different participants incentives, Why do people do what they do? In fact, when i talk to managements my primary motivation is to get data & information for sure but it is to understand their motivations, their intents, their incentives, their purpose. A person with better causal chain probability models will avoid more duds, & catch more multibaggers early in the journey. The future is predictable (up to an extent), it is caused by the history & present. It is far more predictable than what we would like to believe. If you carefully think about it, this is the reason why investing even works. Why companies do not randomly wither away into nothingness in a few short years or months. The causal nature of the universe we live in gives birth to competencies, moats, competitive advantages, right to win. Build better forward probability models of the world, folks. That is the edge. Btw you actually read through the whole post, can i request you to comment “This was helpful” just as a social experiment for how many people actually read the whole thing.
- Respect data; not dogma - We are in a truly golden age of value creation. Government policies are giving birth to huge vat vrikshs of massive profit pools literally in a span of months. If anyone hasnt, i highly recommend you to watch this video & figure out what are the Vat Vriksh of new profit pools getting created https://www.youtube.com/watch?v=zUVnJVmmYMo. In such a scenario of very high churn in economy, high economic growth rate, it is highly irrational to practice a dogma like buy & hold. A profit pool like Solar module & EPC which practially did not exist 5 years ago might be 10,000-50,000 cr large today. It happened overnight due to government policies. Your ability to participate in this will critically decide your alpha. But, market will always overshoot. It will always overvalue. Good executors will always be priced to perfection & beyond. Is that a problem? not for the public market investors. This is because new profit pools are continuously getting created. Nal se jal, ujwala, Power sector reforms, Huge infra creation , Airports, Railways, Highways, New education policy, Wind power, solar power, nuclear power, Geospatial mapping policy, Semiconductor policy, Green hydrogen policy, Extended Producer responsibility (recycling) policy, EV policy, electronics & component manufacturing policy, Ecommerce policy, quick commerce policy, data center policy. a new policy is born almost every quarter if not every month. There are new areas of alphas waiting to be discovered. You can discover them. They can create wealth for you. But this can only happen if you have a fluid mindset. This can only happen if you are willing to reject popular dogma shoved into your face & respect facts, data, causal reasoning, first principles thinking. I still think 90% people will prefer momentum than thinking. This is not only okay, it is healthy. After all the deep thinkers need someone to sell their overvalued equity to
Corporate Fraud/Misdemeanor – Public Domain – India lessons (19-05-2024)
Add brightcom to it as well in this types of modus operandi. As mentioned, there were PW issued to many shady entities and sales rose and story of adtech, quantum and other rosy things were told to retailers and they bought in a whale in the form of SS!
Mudit’s Portfolio (Stage Analysis + Relative Strength) (19-05-2024)
@KishoreVignesh
Actually I dont compare my returns from direct stocks with mutual funds. That wont be fair.
Right now to get new watch list of stocks, what I am following is Relative outperformance on trendlyne on weekly , monthly and quarterly basis. This will also give you an idea, about which sectors are becoming hot currently, so u can watch more stocks from same sectors. Once you get these names, see their chart, basic fundamentals , VCP for entry… This much currently I am following and trying to fine tune this process. If any member want to direct me in some more fine nuances, pls do it…I very much require it.
Mudit’s Portfolio (Stage Analysis + Relative Strength) (19-05-2024)
@KS16
Frankly speaking, from last 20 years of experience in mutual funds industry as ARN holder and Mutual Fund Distributor, I can tell you that, no AMC has a magic wand and everything boils down to 14-15% over a very long period. No matter how many times you jump from one AMC to another and one scheme to another, you wont be doing anything better. Funds which are today in top quartile will go in 2nd or 3rd or 4th quartile in next 2-3 years. So no need of any deep research into all this. If you expect retuns around 14-15% , and also want to preserve your capital by not taking very high and idiosyncratic risks that we retailers tend to do…better shortlist top 4-5 AMCs in country and invest in their main stream funds. They will not take too much risk but will not give more than 15% returns, and since its the prestige issue( atleast I tend to think so) they will try to give 1-2% extra than Index funds to justify their expense ratio.
If you want more returns than that, then you have to.invest in direct stocks and do all those things, that we all do on Valuepickr…sepearating wheat from chaff. Hopefully we dont accumulate too much Chaff.
Sterling & Wilson Solar Ltd. – Will the Sun Keep Shining? (19-05-2024)
Also this doesn’t include Reliance or Nigeria orders. If those come it would change these numbers.
Mudit’s Portfolio (Stage Analysis + Relative Strength) (19-05-2024)
@RohitNarayanam I agree with you. When stock price runs very fast, there is a large gap between 30 week EMA and current price, sometimes more than 25% , as you have observed.
Earlier I used to think, that profit belongs to market and initial Investment is mine. So If my profit erodes by lets say 25% , I should not become uncomfortable, but if my purchase price erodes by 25% , I should become sad, BUT thats a wrong preception. Profit too belong to me very much. Everyday Market value of my Portfolio is my Everyday Purchase price .So I have to protect my profit just like I would protect my own investment.
So as You have said, if I wait for 30 week EMA , for sell trigger then I would be losing 25% of current value, which should not be tolerable. Some of my VP friends have suggested me, not to keep 30 week EMA as threshold, but to lower it, may be 30 days EMA breach should trigger selling of half of my position. I would very much like to request your opinion on this too. Sometimes my entry has been very late. Instead of VCP or nearby, i have bought very faar from 30 week EMA too. In that also ,i am currently under work-in-process selling mechanism. As far as Polycab and KEI together amounting to 32%, that was , as I mentioned earlier, due to twofold reasons : Due to transfer of funds from direct stocks to mutual funds portfolio and also they have doubled from my purchase price. As retail investors, we have this luxury of putting high amount in particular sectors or companies, which public fund managers dont have. We can exploit this in our favour. But we need to be on our toes, and first to sell, when tide turns.
Ujjivan Financial – Small Finance Bank (19-05-2024)
one query regarding dividend declared by USFB. are shareholders of UFS eligible to receive dividend considering merger process is ongoing?