Yes I have read the book. Here is another view.
Problem with researching beyond discovered names is the quality of disclosures and corporate governance. You are relying on the information provided by the company. During bull market every company will have good orders, strong balance sheet, appealing narrative etc. And it all sounds very convincing.
But no amount of research will protect us against dishonest promoters. Rising tide lifts all the boats and when the tide reverses, lots of companies and their investors are found swimming without clothes. Just do a research and find out how many of so called undiscovered trades have made wealth for their investors in the long run. Yes, one could always find a Titan or Tata Motors in the heap of rubbish, but that requires a certain kind of courage and luck that not everyone will have.
Star investors like Kedia have kind of access and inside information that we’ll never have. They are sought after by promoters, of the small companies, who are willing to do deals with them to just get them to enter the stocks and move prices. So contrary to what we think, star investors don’t spend time researching companies; they do deals.
Plus we will never be able to buy the stock at the price star investors (by the time news is out, stock would have run 2-3x) and exit the stock at the price they do.
To quote another genius, Charlie Munger, it’s always better to buy wonderful businesses (strong franchises) at fair prices than buying fair businesses (so called undiscovered trades) at wonderful prices. HDFC, TCS, Infy etc have been in the mutual fund’s kitty for last 20 years and yet they have compounded wealth for their investors over the years. Big and smart money will always go into quality stocks.
Just a perspective. Eventually everyone is right or wrong in the stock market depending on what year and month we are in.
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