Is depth of analysis the most important aspect of bottom-up stock investing? Yes, in the initial stages. However, beyond a threshold of skill breadth adds more value to bottom-up investors than striving for more depth. This is a bit counterintuitive since many investing gurus advocate knowing the businesses much better than most other investors. If you…
We are living in entertaining times. A time when a 25-year-old well-read bloke can quote Buffett, Lynch and other gurus on social media and rake up a 50K follower count despite having limited real time investing experience. In the social media driven world perception can trump ground reality for a long time, it has never…
Investing doesn’t just mean equity investing. Many retail investors in India today believe that SIP into equity mutual funds and stocks is all there is to investing other than buying a house when they can. Over the past few years, I have seen many retail investors park all of their monthly savings into equity funds…
Towards the beginning of CY2021, I’d written a note on the 2011-2020 decade titled “the decade that went by” Hardly 17 months have elapsed since then, but the world is starting to look different already. No one knows if the current trend is here for good or will revert to the previous playbook, macro prediction is…
From 2011 till about 2018, I was almost exclusively a small and micro cap investor. To such an extent that the odd 12,000 Cr market company looked like a large cap compared to the rest of my portfolio. This preference of mine was due to the market conditions of the 2011-14 period and the continuation…
Life is like a limit function where one is always tending towards something. In the course of tending towards something, the proactive few often push themselves. A seemingly harmless by-product of this quest is the tendency to strive towards perfection; the aspiration to do everything right to the extent possible and minimize errors & detours…
Continued from Part I A small note on a blind spot I see with Indian investors. We are too inward focused and don’t understand global markets all that well. “Mera Bharat Mahaan” is good at nation building but not necessarily the best approach for portfolio building if you have the ability to invest across geographies. Tech behemoths in…
This can be a detailed content note by itself, but I will keep this post simple enough to focus on a few takeaways that investors can use when they are analyzing a business. Breadth of analysis over time can lead one to some generic rules that work well in most scenarios. While the field of…
Hindsight Bias. A well known, well documented and well understood behavioral bias. Do I have something new to offer here? Yes, personalization. There is a difference between reading about a bias in a book and experiencing it real time. The former is something one can quote in debates to appear smart; the latter teaches you…
Superficial comparisons are very easy to spot, but rarely work well in equity research. Sell side might still get away with it once in a while but not buy side. When Lovable Lingerie came out with an IPO in 2011, it debuted at a 100% premium to its offer price and stayed at that valuation…