..was reading a book titled India’s Money Monarchs - Conversations with leading investors by - Chetan Parikh, Navin & Utpal of capitalideasonline.com.
I cannot thank enough, my friend Chaitanya (KPMG) who showed it to me, and his better-half Neha (Deloitte) who gave it to him.. I found the book to be immensely insightful!
Chetan, Navin & Utpal have asked some of the best questions one can think of, and the answers given by the stalwarts are even more amazing..!! (they’ve interviewed some greatest minds on Dalal Street like..
Ramdeo Agarwal
Samir Arora
Rakesh Jhunjhunwala
Chandrakant Sampat
Manish Chokhani
Sanjoy Bhattacharya
Nilesh Shah
Parag Parikh
Prashant Jain
Bharat Shah
I guess it was great fortune to get an opportunity to understand the thought process that goes into these super-great investors !!
A summary of who said what…
RAMDEO AGARWAL
$ The beauty of brokerage business is that you receive your money every settlement
$ I used to sleep reading balance sheets in my apartment in 1980 but I never made any money for the first 15 years
$ The idea could come from a newspaper, or a journal or any media. Basically, I am not averse to exploring any idea !
$ Don’t focus on EPS, focus on RONW
Whole market knows about companies with high ROE. Opportunity lies in identifying companies which have low ROE but because of inherent strength, competitive advantage, ROE can go up substantially.
$ Look at company’s Source of Profit, USP and its sustainability & scalability
$ Profits stability and management quality earns high p/e
$ Sustainable ROE (minus payout) will determine the rate of growth of co.
$ To maintain healthy cash flows in a rapid growth company is Impossible
$ Keep interacting with management regularly
$ Have FOCUS when investing
I trimmed my holding from 225 to 20-25 companies that I can track
Remember that all the stocks in your portfolio will never be at peak. Have patience
$ Bottom-up investing is good but in risk management, top-down helps you a lot. So when software is in euphoria, trim your positions in software counters.
$ Companies that borrow heavily are under tremendous pressure from financial institutions and cannot act as they would ideally want to
$ 10% deviation in estimated and actual results is not a bad management but if MD says results will be out April 15 and no results even by April 25, that’s bad.
CHANDRAKANT SAMPAT
$ The media has all focus on what’s gonna happen in the next one hour or one week.
Focus on business cycles and macro theme changes.
Business cycles are contracting – Railroad – 55 yrs, Elec, Chemica
50 yrs, Petrochem – 40 yrs
$ There is a shift from manufacturing to services. You cannot survive as a manufacturing company. You must become a knowledge company based on good distribution.
$ GDP growth is most important. Over the long run only GDP growth can improve the capital market.
Capital markets are a place for capital allocation not for making momentum gains
$ Cisco and Microsoft had combined market cap of 1 trillion dollars in Feb ’00. And p/e expected a 10 yr CAGR of 50%.
All asset bubble end up with debt problems because majority are leveraged when the market is at the top.
$ Five attributes of good companies:
Management quality
High asset turnover and unallocable capital
competitive advantage period
RONW
Knowing your risk and price to pay for the risk
$ If productivity is there, profits will follow.
But if profits there today but no productivity, that’s a temporary phenomenon.
SAMIR ARORA
$ It’s easy to identify a cheap stock. One needs to identify why it will not be cheap going forward.
$ Markets have a long memory. Past mess is a long run stigma
$ We have seen p/e rerating by a getting good directors
But money is made by not just investing in good management but management that wants to be great.
When Infy fell 60% other small-caps in the sector fell 80%. So selling Infy for high valuations makes sense if u not investing in same sector.
SANJOY BHATTACHARYA
> There is too much plagiarism in the area of valuation. People spend too much time preparing financial models and spreadsheets
The most important valuation tool is not DCF, not PEG not EV/EBIDTA not PSR, but Common Sense.
Just relate earning growth to price you are paying for a business.
If you don’t understand the business and are not having enough depth, then no valuation tool is going to work for you
Everyone is looking at facts and public data in the same manner. And if you look at the same facts in the same manner, then you cannot beat the market.
Market can never beat market !
By reading a lot and speaking to people who have great depth in particular area helps streamline your thought process.
my routine in CRISIL was to read balance sheets and meet managements. Speaking to them firsthand was the greatest education
> Risk is going what you don’t know
> It pays most to identify a theme before most others, not any other
> When you sell, leave a lot on table for the next guy
> The only good book I read on the Art of Selling is When to Sell by Justin Mamis
Judgement under Uncertainty is best book you can get on Behavorial Finance
SUKUMAR RAJAH (Franklin Templeton)
$ It is the quality of the lower level people, their feeling that they are an integral part of the company, they are also shareowners and they will gain substaintially from the quality of products that they deliver
$ Narayana Murthy once said, “..the Ships are in safe harbour but that’s not where they belong”
Chetan, Navin & Utpal have asked some of the best questions one can think of, and the answers given by the stalwarts are even more amazing..!! (they’ve interviewed some greatest minds on Dalal Street like..
Ramdeo Agarwal
Samir Arora
Rakesh Jhunjhunwala
Chandrakant Sampat
Manish Chokhani
Sanjoy Bhattacharya
Nilesh Shah
Parag Parikh
Prashant Jain
Bharat Shah
I guess it was great fortune to get an opportunity to understand the thought process that goes into these super-great investors !!
A summary of who said what…
RAMDEO AGARWAL
$ The beauty of brokerage business is that you receive your money every settlement
$ I used to sleep reading balance sheets in my apartment in 1980 but I never made any money for the first 15 years
$ The idea could come from a newspaper, or a journal or any media. Basically, I am not averse to exploring any idea !
$ Don’t focus on EPS, focus on RONW
Whole market knows about companies with high ROE. Opportunity lies in identifying companies which have low ROE but because of inherent strength, competitive advantage, ROE can go up substantially.
$ Look at company’s Source of Profit, USP and its sustainability & scalability
$ Profits stability and management quality earns high p/e
$ Sustainable ROE (minus payout) will determine the rate of growth of co.
$ To maintain healthy cash flows in a rapid growth company is Impossible
$ Keep interacting with management regularly
$ Have FOCUS when investing
I trimmed my holding from 225 to 20-25 companies that I can track
Remember that all the stocks in your portfolio will never be at peak. Have patience
$ Bottom-up investing is good but in risk management, top-down helps you a lot. So when software is in euphoria, trim your positions in software counters.
$ Companies that borrow heavily are under tremendous pressure from financial institutions and cannot act as they would ideally want to
$ 10% deviation in estimated and actual results is not a bad management but if MD says results will be out April 15 and no results even by April 25, that’s bad.
CHANDRAKANT SAMPAT
$ The media has all focus on what’s gonna happen in the next one hour or one week.
Focus on business cycles and macro theme changes.
Business cycles are contracting – Railroad – 55 yrs, Elec, Chemica
50 yrs, Petrochem – 40 yrs
$ There is a shift from manufacturing to services. You cannot survive as a manufacturing company. You must become a knowledge company based on good distribution.
$ GDP growth is most important. Over the long run only GDP growth can improve the capital market.
Capital markets are a place for capital allocation not for making momentum gains
$ Cisco and Microsoft had combined market cap of 1 trillion dollars in Feb ’00. And p/e expected a 10 yr CAGR of 50%.
All asset bubble end up with debt problems because majority are leveraged when the market is at the top.
$ Five attributes of good companies:
Management quality
High asset turnover and unallocable capital
competitive advantage period
RONW
Knowing your risk and price to pay for the risk
$ If productivity is there, profits will follow.
But if profits there today but no productivity, that’s a temporary phenomenon.
SAMIR ARORA
$ It’s easy to identify a cheap stock. One needs to identify why it will not be cheap going forward.
$ Markets have a long memory. Past mess is a long run stigma
$ We have seen p/e rerating by a getting good directors
But money is made by not just investing in good management but management that wants to be great.
When Infy fell 60% other small-caps in the sector fell 80%. So selling Infy for high valuations makes sense if u not investing in same sector.
SANJOY BHATTACHARYA
> There is too much plagiarism in the area of valuation. People spend too much time preparing financial models and spreadsheets
The most important valuation tool is not DCF, not PEG not EV/EBIDTA not PSR, but Common Sense.
Just relate earning growth to price you are paying for a business.
If you don’t understand the business and are not having enough depth, then no valuation tool is going to work for you
Everyone is looking at facts and public data in the same manner. And if you look at the same facts in the same manner, then you cannot beat the market.
Market can never beat market !
By reading a lot and speaking to people who have great depth in particular area helps streamline your thought process.
my routine in CRISIL was to read balance sheets and meet managements. Speaking to them firsthand was the greatest education
> Risk is going what you don’t know
> It pays most to identify a theme before most others, not any other
> When you sell, leave a lot on table for the next guy
> The only good book I read on the Art of Selling is When to Sell by Justin Mamis
Judgement under Uncertainty is best book you can get on Behavorial Finance
SUKUMAR RAJAH (Franklin Templeton)
$ It is the quality of the lower level people, their feeling that they are an integral part of the company, they are also shareowners and they will gain substaintially from the quality of products that they deliver
$ Narayana Murthy once said, “..the Ships are in safe harbour but that’s not where they belong”
3 comments:
If someone wants to buy this book , but not finding it online anywhere , then can someone suggest a way , store or website where I can get this book in stock..??
What quantitative formula or metric does Chandrakant Sampat refer to - when he says 'unallocable capital'?
Any thoughts would be appreciated. Thanks in advance.
Sir i am interested to read this book. Kindly let me know where would i find it
Post a Comment