Big decision for me today.
I’ve completely exited Cupid @ 14x from the Average Cost and almost 18x from the Lowest Cost.
The primary reason is the Valuation. Even if the Revenue triples in 5 years as targeted and you apply a high growth rate post that (Say 20% for 20 years), the company would still be Overvalued. The Valuations could still support a very Bullish case, but I’m not comfortable with that.
Lessons I gleaned during this journey:
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“Promoter Risk” is overrated (Unless in cases of fraud). At the best, it could be a Minor Risk. Of course a passionate and driven Promoter is excellent. But if the Business Fundamentals are strong, even a decent successor will be able to run it effectively. So, Fundamentals before anything else.
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There will be thousands of naysayers for any given investment. It’s your job to monitor and justify the investment to yourself. Conviction is your rock. Conviction comes from cold, hard, self-introspected facts and not opinions. Opinions, especially from experts, do matter. But you’ve to verify them yourself against data once to build up Conviction.
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Finally, an often repeated one — the patience to hold is one of the paramount virtues in investing. It’s as important as buying at the right price. If you’ve done all the work, then holding is the final lap. Do it well.
My sincere thanks to Mr. Garg and all the very best to Mr. Halwasiya for the future.
Note: I might consider entering again after seeing more proof of execution. At a much, much lower Price though for sure.
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