How I missed Canfin Homes
There is a beautiful passage in Steven Johnson’s Where Good Ideas come from “Good ideas are like the neo nurture device. They are, inevitably constrained by the parts and skills that surround them. We have a natural tendency to romanticize breakthrough innovations, imagining momentous ideas transcending their surroundings…… We like…
Using secondary Information
Using secondary information is one of the best sources to top up our investment hypothesis, I have previously written on it here & here . One of the best sources of secondary information is research done by others, especially brokerage houses who do a good job and not one's like…
Learn to evaluate management
Evaluating management is one of trickiest part while building an investment case. Especially, when it comes to small caps and mid cap companies run by first or second generation promoters, were much information about them in not available publicly. Also many of retail investors don't have privilege to meet management,…
How to evaluate a CEO’s capital allocation skills
Read below excerpts from Warren Buffet’s share holder letters Over time, the skill with which a company's managers allocate capital has an enormous impact on the enterprise's value. The lack of skill that many CEOs have at capital allocation is no small matter: After ten yearson the job, a CEO…
Why Paying up can cost you – Analysis using payback box
Motilal Oswal wealth studies are great source of learnings for any investor, They adopt a unique approach of taking up a theoretical concept every year and then explain it through numbers. In year 2000, they introduced a concept called payback period, this is what the study said Focus on payback…
True Diversification
Why do we add a new security to our portfolio ? To reduce risk and ensure not all our eggs are in same basket, the underlying thought process is if stock A doesn’t do well at least stock B will provide some returns and compensate for loss if any in…
Why sitting on your ass works in Investing
In my last month’s newsletter, I briefly touched upon deliberating on idea of selling and not holding stocks at over stretched valuation Charlie Munger says , Investing is where you find a few great companies and then sit on your ass Fisher famously stated that the time to sell a…
What is maintenance Capex ?
Let me share the story of Jenny and her lemonade stand If you are unable to read post click this link Link Other good articles on the subject 1 and 2 Images - Google image search
Investing in turnaround situations
For many value investors investing in turnaround situations is a simple ‘No’, they go buy what Warren buffet wrote few years ago Both our operating and investment experience cause us to conclude that “turnarounds” seldom turn, and that the same energies and talent are much better employed in a…
How using earnings power box lets you ask right questions ?
Over my limited experience in equity markets, I have come to conclusion that earnings power box is a powerful tool to analyse authenticity of corporate earnings. While I am not going to repeat much of much I have written earlier, you can go through it here and here One of…