Month: October 2020

The small investor’s edge

Back to my first ever post small is BIG

Over last decade I saw in front of me power of small investors. Small investors are often ahead of institutions

This got me thinking how we can leverage small investor’s power on a modern platform ?

Result – our new facebook group

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ideas on NSE , BSE , ASX , NASDAQ , NYSE, FTSE

 

Looking forward to see you inside … Read the rest

Is it time to buy gold ?

Why this question and why now?

My views on investing in gold have been very clear, I am not a being fan of investing in gold. You can read my previous post here or watch a video I recently did here

But being not a fan is one thing and understanding contradictory view points from experts who sit on the other side of fence is another and as investors when facts change we should change our mind.

Most returns in investing are cyclical as the below picture depicts

image source – Motilal Oswal

Even within an asset class the winners keep changing

Image source – Vanguard Australia

Knowing above information, we know that timing can really improve one’s return. Many market participants would say time in market is more important than timing market. However there are small sub set of investors who have done well using rules to move in and out of asset classes

See below screen grab which shows results of timing and riding up cycles in stocks and gold

image source 

I think you should spend 15 mins to watch this full video from Mike Maloney to appreciate the concept

In what works on wall street Jim … Read the rest

Learnings from BVP memos

A couple of weeks back Bessemer Venture partners (BVP) published their old investment Memos, this gave a rare peek into how VCs think when they are investing in future of technology.

BVP has made some serious returns from companies like Shopify, Twilio who are now public or other technology giants like Linkedin which got acquired

In my past post we discussed how traditional metrics can’t be used to invest in high growth loss making technology start ups.

In this post lets look at some patterns to look for when investing in such companies. All items are in italics below are directly from various Memos

 

1. The bet is on founder/s

One pattern that consistently emerges is that Bessemer’s best investment decisions centered on people. In retrospect, the early products themselves are barely recognizable today. Rather, passionate, analytical and relentless founders zigged and zagged their way to that elusive “product-market fit”, and these memos provide a glimpse of those winning entrepreneurs before they were famous.

Find intelligent, enterprising and ethical founders and once you find them stick to them

 

2. Growth is easiest and early sign

However unlike traditional models of looking at growth in cash, revenues. Look … Read the rest

Balaji Amines – A niche duopoly

When you a see a table like below in an annual report it immediately stands out. In 24 years

  • Sales are up – 100X
  • Profits are up – 155x

All at a decent ROE, no wonder long term shareholders / promoters have clearly acquired transformative wealth

 

Balaji Amines has come on my radar multiple times in last 10 years, however I gave it pass every time as I havent worked much on industry dynamics. But in 2020 while working on Diamines chemical idea I figured out that only Indian competitor creating capacity is Balaji Amines so I had to study them.

NB – I started tracking Diamines chemical idea in score card and we removed as valuations started to become lofty and after digging through I wasn’t able to figure out how will they remove supplier dependency, so we dropped the idea

The Balaji Amines annual report is must read for anyone who is invested in Amines, here are some of the key takeaways that are worth noting

Before take this course on what are amines and come back

Speciality chemicals is a rising tide

Specialty chemical market in India was valued at Rs. 2,357 billion in FY18 and … Read the rest