Dream Phase (2006-2009). Managed to capture both upside 2006-2007…and downside 2008. Made . good amount of money then. …. Couldn’t differentiate between greed and confidence…... Mistaking Luck with Skill. ID: 616343
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Presentations text content in Investment Journey
Slide1
Investment Journey
Slide2
Dream Phase (2006-2009)
Managed to capture both upside 2006-2007…and downside 2008Made good amount of money then…Couldn’t differentiate between greed and confidence…..
Mistaking Luck with Skill
Slide3
Tough Phase (2010-2013)
Losses started with big levered bet on single stock (which had client concentration risk)Options bet goes sour with lack of volatility…Losses accumulate….Fear was now dominating as an emotion…Repayment of the losses was tough….Timely help….and time for reflection…
Losses and repaying the same
Slide4
Reflection and Learning
Trading is difficult because it constantly seek you to work against basic human nature….Investment is far more forgiving and kind
Trading
was
not worth for the kind of risk and stress taken…
In context of Investments
...it wasn’t time-bound and
relatively peaceful…Even
during tough period 2011-2013….there were several stocks which did well…
Slide5
Investment Journey Begins….(2013…)
Personality Traits High Focus on Risk Concentrated Bets. Top 4-5 stocks would account for 60-70% of PF. So far haven’t held more than 15 stocks at any given point in time. Typically look for very high Risk-Reward (3-1) - We tend to under-estimate risk and over-estimate returns. Risk profile has to be really convincing to go outside above. Don’t mind taking big bets on high conviction. Love market as there are no set rules to make money – Non – Linear correlation between Stock price and Underlying business makes it extremely interesting.
Lucky to start at the right time….2013 end
Slide6
Most Excited By
Growth CompaniesClean balance sheet with growth visibility, while downside protection from historical numbers/data. Basically Ideas with optionality. Capex undertaken without diluting balance sheet quality. Add to that incremental growth without stretching WC cycle. (Lactose India, Dai-Ichi Karkaria Ltd, Dynemic Products, Innovative Tech Pack)
Love identifying not so known names, though holding them could be emotionally uncomfortable
Slide7
Most Excited By…
Stressed Assets
Market pricing in worst, while getting clarity on delta in terms of improving leverage, profitability, improving WC, ramp up in capacity utilization ,etc (
Steelcast
, IMFA,
Kamat
Hotels, Sugar Stocks)
Sheer Undervaluation
Getting rough sense on asset value. However management quality becomes key for it to become
monetizable
. (
Pudumjee
Pulp)
Slide8
Ignorables/Not Ignorables
Ignorables
Stretching Balance Sheet for Asset Building (
Steelcast
,
Stylam
)
Steelcast
– Cyclical upturn will take care of leverage.
Stylam
– Strong sector tailwind takes care of relatively higher debt
Diworsification
If not material &/or acknowledged by management.
Stylam
(BPO Venture)
Management Meeting
Non
Ignorables
Frequent
Dillutions
Stretched Working Capital
Growth Without
Cashflow
Generation
Slide9
Mistakes
Omission
Binny
Ltd – Avoided purely on related party transaction, missing big gap between asset value and market cap.
Commission
Gujarat NRE Coke – Tried playing like IMFA ignoring key variables like owned mines, low promoter holding (largely pledged), promoters checkered past, etc
Learning – Greed overtook rationality given the way IMFA moved post my selling (sold @ 2x…went 5x).
Slide10
When to Sell
Realize that very small number of small/micro caps will go beyond Rs 5bn market cap sustainably. Hence, start booking partly once known variable in terms of growth, expected valuation starts getting priced in.
Sell in staggered manner. Allow part of the holding to ride the growth momentum. Haven’t spend enough time in investing to experience riding big compounders.
Have mostly repented selling…Since markets have been way too kind to small/micro caps.
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DownloadNote - The PPT/PDF document "Investment Journey" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentations text content in Investment Journey
Investment Journey
Slide2Dream Phase (2006-2009)
Managed to capture both upside 2006-2007…and downside 2008Made good amount of money then…Couldn’t differentiate between greed and confidence…..
Mistaking Luck with Skill
Slide3Tough Phase (2010-2013)
Losses started with big levered bet on single stock (which had client concentration risk)Options bet goes sour with lack of volatility…Losses accumulate….Fear was now dominating as an emotion…Repayment of the losses was tough….Timely help….and time for reflection…
Losses and repaying the same
Slide4Reflection and Learning
Trading is difficult because it constantly seek you to work against basic human nature….Investment is far more forgiving and kind
Trading
was
not worth for the kind of risk and stress taken…
In context of Investments
...it wasn’t time-bound and
relatively peaceful…Even
during tough period 2011-2013….there were several stocks which did well…
Slide5Investment Journey Begins….(2013…)
Personality Traits High Focus on Risk Concentrated Bets. Top 4-5 stocks would account for 60-70% of PF. So far haven’t held more than 15 stocks at any given point in time. Typically look for very high Risk-Reward (3-1) - We tend to under-estimate risk and over-estimate returns. Risk profile has to be really convincing to go outside above. Don’t mind taking big bets on high conviction. Love market as there are no set rules to make money – Non – Linear correlation between Stock price and Underlying business makes it extremely interesting.
Lucky to start at the right time….2013 end
Slide6Most Excited By
Growth CompaniesClean balance sheet with growth visibility, while downside protection from historical numbers/data. Basically Ideas with optionality. Capex undertaken without diluting balance sheet quality. Add to that incremental growth without stretching WC cycle. (Lactose India, Dai-Ichi Karkaria Ltd, Dynemic Products, Innovative Tech Pack)
Love identifying not so known names, though holding them could be emotionally uncomfortable
Slide7Most Excited By…
Stressed Assets
Market pricing in worst, while getting clarity on delta in terms of improving leverage, profitability, improving WC, ramp up in capacity utilization ,etc (
Steelcast
, IMFA,
Kamat
Hotels, Sugar Stocks)
Sheer Undervaluation
Getting rough sense on asset value. However management quality becomes key for it to become
monetizable
. (
Pudumjee
Pulp)
Slide8Ignorables/Not Ignorables
Ignorables
Stretching Balance Sheet for Asset Building (
Steelcast
,
Stylam
)
Steelcast
– Cyclical upturn will take care of leverage.
Stylam
– Strong sector tailwind takes care of relatively higher debt
Diworsification
If not material &/or acknowledged by management.
Stylam
(BPO Venture)
Management Meeting
Non
Ignorables
Frequent
Dillutions
Stretched Working Capital
Growth Without
Cashflow
Generation
Slide9Mistakes
Omission
Binny
Ltd – Avoided purely on related party transaction, missing big gap between asset value and market cap.
Commission
Gujarat NRE Coke – Tried playing like IMFA ignoring key variables like owned mines, low promoter holding (largely pledged), promoters checkered past, etc
Learning – Greed overtook rationality given the way IMFA moved post my selling (sold @ 2x…went 5x).
Slide10When to Sell
Realize that very small number of small/micro caps will go beyond Rs 5bn market cap sustainably. Hence, start booking partly once known variable in terms of growth, expected valuation starts getting priced in.
Sell in staggered manner. Allow part of the holding to ride the growth momentum. Haven’t spend enough time in investing to experience riding big compounders.
Have mostly repented selling…Since markets have been way too kind to small/micro caps.
Slide11Thanks…