Investment Journey PowerPoint Presentation
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: 616343Embed code:
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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 SkillSlide3
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 sameSlide4
Reflection and Learning
Trading is difficult because it constantly seek you to work against basic human nature….Investment is far more forgiving and kind
not worth for the kind of risk and stress taken…
In context of Investments
...it wasn’t time-bound and
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 endSlide6
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
Most Excited By…
Market pricing in worst, while getting clarity on delta in terms of improving leverage, profitability, improving WC, ramp up in capacity utilization ,etc (
Hotels, Sugar Stocks)
Getting rough sense on asset value. However management quality becomes key for it to become
Stretching Balance Sheet for Asset Building (
– Cyclical upturn will take care of leverage.
– Strong sector tailwind takes care of relatively higher debt
If not material &/or acknowledged by management.
Stretched Working Capital
Ltd – Avoided purely on related party transaction, missing big gap between asset value and market cap.
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).
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.Slide11