Authors Fundoo Professor

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Fundoo Professor
Fundoo Professor
@Sanjay__Bakshi
One of the favourite case studies that come up in my BFBV course at MDI is Relaxo. Every year I ask students to study this case which I had done along with @ravirpurohit in 2013 by assigning these

Then I update them on my thinking about this business, management and valuation. This year, I spoke that (which I won't discuss here) and also about some additional lessons. Listing them here:

The importance of distinguishing between things that are under your control and those that you cannot control.

Things you can control include defining what kinds of business you will invest into and which ones you will ignore, how you will make conservative estimates of probable earning power a few years from now and how you will restrain yourself from projecting very high exit multiples.

The one thing over which you have no control is the changes in multiple because that will be decided by the market, which is like a very moody person.
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Fundoo Professor
Fundoo Professor
@Sanjay__Bakshi
This I agree with. While 100 Baggers by @chriswmayer is a fabulous book, there is a need for literature on building the conviction to hold.


And it’s not easy to develop a conviction to hold on to things that should be held. There are these “demons” that will enter the mind of the investor, which will prevent them from holding on to what will turn out to be an outstanding stock.

Demon # 1: The market is too expensive, so I should sell this business. This demon shifts the investor’s focus from the economics of the underlying business to the markets.

Demon # 2: It’s gone up so much, and it can’t go up much more from here. This demon makes the investors anchor to their cost, which is irrelevant.

Demon # 3: Look at the P/ E multiple. It’s too high. Other things are much cheaper. I should switch and lower the P/E of the portfolio. This demon makes one sell an outstanding business and replace it with a mediocre one.
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