2017 May

Why we bought Garware-Wall Ropes?

Posted by | Business Models, Investing Framework, Scuttlebutt, Stocks | One Comment

“Invest in businesses that buy commodities and sell brands” is a powerful idea for long-term investing propagated by Warren Buffet. This lends business the ability to pass on higher raw material cost without losing unit volumes and retain some benefits in times of softer raw material prices. (a.k.a. pricing power)
As per Prof. Sanjay Bakshi, an attractive hunting ground for mis-priced companies is often where Mr. Market is valuing some businesses as commodity, perhaps because they belong to sectors which are labeled “commodity” for example textiles, whereas in reality some of these might have carved out a niche for themselves enjoying a strong pricing power (think Ambika Cotton)
In 2015 we got lucky when we spotted both these elements to be present in a business called ‘Garware-Wall Ropes’, a Pune based technical textile giant.

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Is Real Estate Turning Around?

Posted by | Food for thought, Indian Markets, Industries | One Comment

If past history was all that is needed to play the game of money, the richest people would be librarians. — Warren Buffet

What happens to a sector after a prolonged slowdown? – Mean Reversion?
What happens to a sector when Government channelizes its resources behind it? – Grows Fast?
What happens to a sector when there is a huge pent-up demand? – Tailwind?
And what happens when all three coincide?
Government seems to be seriously working towards achieving its stated goal of ‘Housing For All’ by 2022 which would require 20 mn new houses. Credit Linked Subsidy Scheme (CLSS) is a material development in that direction. Under this scheme, interest subsidy of 4 per cent on housing loans up to Rs 9 lakh for those who have

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