F ar Goa July 2018 deepakvenkatesh Disclaimer Content provided in this presentation is only the personal views of the presenter No affiliation to any organization be considered A Little Background ID: 1028684
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1. 7 Lessons Learnt So FarGoaJuly 2018@deepakvenkateshDisclaimer: Content provided in this presentation is only the personal views of the presenter. No affiliation to any organization be considered.
2. A Little BackgroundUnfortunately at present its is for:Suppressing Gambling Urges& to not hurt my portfolio with unnecessary tinkering
3. Governing Philosophy: It’s a Risky Business after allThis is how Risk is written in Chinese. It’s better to be out of the market and hope you were in that to be in the market and wish you were out- Don’t recall who said thisOnly Rule: Capital Protection > Capital AppreciationCurrent Phase of Investing Journey: Capital Creation but not at the cost of increased risk of potential lossSecond syllable Ji means a point from where things can change from
4. Lesson 1: My Heisenberg’s Investment Uncertainty Principle The principle states that the position and the velocity of an object cannot both be measured exactly, at the same time, even in theory. The very concepts of exact position and exact velocity together, in fact, have no meaning in nature.- BritannicaThe principle states that the quality and the value of a business cannot both be determined simultaneously, at the same time, even in theory. The very concepts of quality and value together, in fact, have no meaning in nature.- Twisted Investment Uncertainty Principle What I understandWhat I can followWhat I can foresee!No compromises on:DebtCFOTop Line Core Business GrowthROICI wish I knew:Management IntentionMoats BetterWhen I am biasedTo be more patient
5. Lesson 1: Case – Oriental Carbon & Chemicals Ltd.‘Further, high technology barrier coupled with exhaustive approval processes of tyre manufacturers acts as a deterrent for entry of new manufacturers.’- 2018 AR- 2017 AR- 2016 ARManagement has estimated for multiple years that growth in industry is ~3-4%But good quality IS demand has grown approx. 1.5-2.0x its statementCompaniesCompositionClassificationsEastmanOCCLPolymeric SulphurRhombic SulphurNaphthenicPolymeric BinderSilicaEastman: Regions available Regular Oil Treated (OT)OT 10OT 1081-914-78-1200Europe, Middle East & Africa, North America Regular Oil Treated (OT)No ProductOT 2070-774-718-2200Regular Oil Treated (OT)OT 33OT 3365-694-731-3500Asia Pacific, Europe, Middle East & Africa, Latin America, North America Special GradeNo Product9090-982-10000OT High Stability (HS)OT 10 HSOT 10 HS81-914-78-1200Probably globalOT High Stability (HS)OT 20 HSOT 20 HS70-774-718-2200Probably globalOT High Stability (HS)No ProductOT 33 HS65-694-731-3500Special OT with BinderOT 20 HDOT 20 HD72-774-619-221-20Asia Pacific, Europe, Middle East & Africa, Latin America, North AmericaSpecial OT with SilicaNo ProductOT 25 AS65-694-723.5-26.506.5-9.5Special OT with SilicaOT 33 ASNo Product~330Europe, Middle East & Africa
6. Gmax = RLesson 2: What I know I can’t DoFind multibaggers at nascent stage - I don’t aim to be a ‘great’ stock picker eitherIgnore the non ignorableManagement calming investors on stock priceCompany underplaying an issueConsistent low PE/valuation given by Mr. MarketLimited market/growth potential no matter how attractive the business………VIMP1st Feb ~25%1st Jun ~100%
7. Lesson 3: What I should DoBe CognizantBe HumbleBe Rational अगर गणित पढ़ना है तो कैलकुलेशन से नहीं डरना है- My math teacher
8. Lesson 4: How Long is Long?
9. Lesson 5: Dynamic Capital Allocation50%EquityDebtValuation7%ReturnsDecember 2017January 2018IncomeDebtEquityRisk Free Rate?IncomeEquityDebtLow ValuationsHigh Valuations
10. Lesson 6: Startup Investing - Asymmetric Payoffs
11. Lesson 7: Trading Options - Wait for opportune but definitive moments
12. Closing ThoughtsGet Lucky
13. Thank you….and questions please