Investing wisdom

Am I Ready?

Posted by | Food for thought, Investing wisdom | No Comments

There is clearly a wild rush towards equity, some are doing this out of FOMO (Fear Of Missing Out), whereas some are left with no other choice given relative unattractiveness of hitherto popular asset classes of Bank Deposits, Real Estate and Gold. The magnitude of this irrational exuberance can be gauged by reading chats in  some whatsapp groups, comments on investing blogs or discussion forums like MMB (one such snapshot shared at the end of this short post).
Stalwart Advisors doesn’t have a sales team (& hence no sales target or incentive to mis-sell). Rather we have transparently put all the information on our website and let investors decide for themselves. If prospects contact us over email or telephone, we also ask lot of questions to gauge whether they are ready or not, and accordingly counsel them.
Yet, there

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[Video] Individual Investor’s Real Edge – TIA 28th Jan 2017

Posted by | Investing Framework, Investing wisdom, Investment Gurus, Investor Meetup | No Comments

Presentation made by Jatin Khemani, Founder & CEO, Stalwart Advisors at Bullet Proof Investing Seminar organised by Tamil Nadu Investors Association on 28th January 2017 at ITC Fortune, Chennai.
Notes on Presentation:
00:00    Introduction
00:38    Are large caps safe and easy to decipher?
07:35    How did Warren Buffet and other veterans start investing?
12:20    Why prefer smaller companies?
13:45    What goes into making of a 100-Bagger?
15:20    Case Study – Hero Honda – A 100-bagger for Ramdeo ji
16:25    Industries with High Potential
17:57    Case Study – Titan – A 100-bagger for Rakesh ji
19:58    Structural Theme: Unorganised to Organised
21:40    Sources of Information
23:00    How many companies in India do quarterly conference calls?
27:00    Scuttlebutt & Common

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3-wave framework & its implications on growth potential

Posted by | Food for thought, Investing wisdom, Stocks | 3 Comments

In the long run if there is one key variable that determines the return we make on any stock, it is the earnings growth of that company. Earnings can grow through growth in sales, sales-mix change and profit margin expansion. However, it is the first variable; sales, that is most important in the long run as the other two for practical reasons cannot improve forever.
So to determine sales growth potential for a prospective investment, it is crucial to understand the drivers of sales growth and the tailwinds of the industry, if any.
This post is an attempt to put a framework to understand how categories move; a category is a sub-segment within an industry; for example electric two-wheeler is a category within the larger personal mobility industry. One can

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Significance of Management Quality in Long Term Investing

Posted by | Investing wisdom, Stocks | No Comments

What would you do if I give you the following information about a listed B2C company:

The brands of the company are jointly owned with promoter’s private entity.
The most premium brand owned by this company which brings a third of the revenue and bulk of the profitability, is under litigation, filed by company’s closest competitor and market leader, which claims that it registered it first.
The founding brother-duo are getting old (now in late 60’s) and its time for their next generation to take-over, we have no clue how competent they are and how well they gel with each other.

No matter how amazing the prospects of this company seem to be, would you be able to bet big on this opportunity? Take a while before you

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Obsession with P/e Multiple

Posted by | Food for thought, Investing wisdom | 12 Comments

Maruti says we are a country obsessed with mileage; see its famous NASA ad ‘Kitna Deti Hai’

Indians are known to be very smart consumers; always looking for value-for-money offerings. Fortunately or unfortunately, that should make us very good ‘Value Investors’ as defined by Ben Graham.
However, how do we know if a stock is a bargain or not? By default P/e ratio has become that barometer on which majority is trying to answer this critical question. You mention a stock and the first question would be ‘Boss iska P/e kitna hai?’ (How much is its P/e?)

P/e which is price-to-earnings ratio is the most commonly used valuation ratio to make sense of how expensive or cheap a stock is. The reason for its popularity is its simplicity;

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