Investment Journey Rohit - PowerPoint Presentation

Slide1

Investment Journey

Rohit

Ojha

VP

Chintan

Baithak

2016

How it started

Heard about stocks from my father in 2008 when I was in college. Heard discussions with cousins who said “Maine bola

tha

bech

do”. Father held L&T,

UltraTech

, Reliance,

tata

steel

etc

since 90s.

Started seriously reading in 2010. Stumbled upon TED and read all the

funda

threads.

Started investing only in 2012 after getting a good understanding about basic aspects

Phase 1: 2012-2014

Invested in midcaps based on return ratios. Avoided big mistakes. Lucky start !

Found VP and cloned seniors.

At the same time subscribed to an advisory

service. But was learning all the time.

Got success in

Mayur

,

Dhanuka

, Poly

Medicure

,

Kaveri

, PI, Alembic,

Shilpa

. Big winners- Ajanta, Avanti,

Page

,

Repco

,

Gruh

Big

learnings

Need to work with smaller companies to make big money. PE re-rating

Need to bet big. Increased equity allocation in 2014

Portfolio

construction

Pay

for

quality and average up

Phase 2: 2015-16

Realized that I had luckily made money earlier

but didn’t appreciate how good

some of these businesses were,

even though they were so well discussed…PI Industries,

Shilpa

, Alembic

Pharma

.

Blown away by

Pharma

Basics presentation by

Ananth

Shenoy

and by discussion on Alembic and

Shilpa

Started

to understand more about

great

businesses and management

Aspiration

U

nderstand a range of businesses across sectors.

Less

reliance on fellow investors- Independent thinking.

Understand different styles of investing- Arbitrage, contra.

Compound

at more than 30%

CAGR.

Plan to go full time but still far away from ready

Personality traits

Risk

mitigator

Invested most of the savings from salary so risk aversion was high

A

lways invested in quality businesses and managed to avoid big losses except once in Hawkins.

Exit on first signs of red

flags

eg

Kaveri

Avoid companies giving aggressive guidance

eg

Kellton

Tech

Comfort zone

Had been a cloner in well discussed businesses. Always followed the lead to build my conviction. Not done a PhD in any business yet, but slowly improving.

Have

invested in consumer and

pharma

businesses only

No contra bets… yet

Portfolio setup

Earlier 8-10 stock portfolio with minimum 5% allocation. Recently pushed to 12 for few small caps with very small allocation.

Long term (5 year view):

70%

in 5-6 businesses

Opportunistic bets (1-2 year view):

20%

in 3-4 businesses

Experimenting with

s

mallcaps

: 10%

Never

able to hold

cash. Need to work on this

10% of portfolio is leveraged

Excited by/Must haves/Ignorables

Excited by

Businesses moving up in value chain

Large

capex

completed/planned

Management that constantly strives to make the moat stronger. Capital allocation skills of management

eg

. Ajay

Piramal

IP driven businesses-

Pharma

, some niche manufacturers

Must haves

Growing Mid/small caps with large

and growing opportunity

size

Low debt or strong trend of debt reduction, High

RoE

, ROCE

At least 15% growth in

worst case scenario.

Ignorables

Promoter selling/pledging in small amounts as long as business is delivering

Buy/Sell decision

Buy decision

Long term bets- Visibility of >20% CAGR in 2-3

yrs

or a hockey stick moment within next 5 yrs. New idea has to be better than existing ones

O

pportunistic bets- Combination of techno

funda

Average up if company keeps delivering and valuations sane

Now

sell when

valuations are very high and growth starts to slow down.

Eg

Page at 14000, Hawkins at 2500 (in this case growth never happened),

Gruh

at 260

there is a better opportunity at that price

eg

shift from Ajanta at 1400 to Alembic at 600, Page to

Syngene

Management

makes a bad move

eg

Kaveri

diworseification

Don’t look too much into nifty levels

Process

R

ead

concalls

, whenever available.

More importance than annual

reports. Try to attend

concalls

of all holdings. Find it difficult to get a high confidence without

concalls

.

Less number driven. Understand how management has strategically built a strong business over last 3-5 years

Studying competition gives good insights

Read research reports to understand consensus views/estimates

Maintain decision log with reasons to buy/sell

Natural Skills

Excited by understanding

the Industry/Business

issues/challenges and competition mapping

Never done a Management

Q&A

but very interested in starting with

Syngene

.

Bad at balance sheet analysis