No business is bad. It’s all about ethics and intensions. All businesses are difficult to run because we live in a capitalist society.
You know the level of difficulty only once you start a business.
Had an amazing Clubhouse session with Siddhartha Bhaiya @sidd1307 and the @AequitasL team.
Here’s a thread🧵on some interesting points made by him:
Read on👇
No business is bad. It’s all about ethics and intensions. All businesses are difficult to run because we live in a capitalist society.
You know the level of difficulty only once you start a business.
Focus on hard code numbers. Don’t focus on story and narratives. They will come later.
Once the story is all over twitter and media, it's probably the time to sell.
Always remember: The best publicity of a stock is the increase in its own stock price.
Focus more on the downside risk and less on the possible upside. This concept is counterintuitive to many.
Think of how I can reduce the probability of making a loss. If you protect the downside, upside will take care of itself.
The future is uncertain. Our ability to predict the future is extremely low. No one know about how Uber and Zomato would change our lives.
Very important to know what you know and what you don’t know.
The three most important risks are:
~ Valuation risk,
~ Balance Sheet risk, and
~ Liquidity risk of the company.
Beta and other textbook risk measures only make you look intelligent but they don’t actually make you money.
Valuations and Margin of safety are paramount. (Look at net cash, Debt/Equity, PE, Mkt cap/Sales, Long term Ebitda margins)
As a retail investor you don’t have to invest like any mutual fund. All you have to do is to buy 15 - 16 undervalued names.
At peak profitability margins – PE multiples will be at the peak.
At bottom profitability margins – PE multiples will be at the bottom.
Focus more on the industry leader. An industry leader always has it's basics in place.
There can always be exceptions but investing is a game of probabilities and you want to keep them in your favour.
Don’t focus on historical ROCE because it’s already factored in the price.
Instead focus on the future ROCE of the company and from where it will come from.
Equal weightage as we don’t know which ones will outperform. Focus is on selecting undervalued companies and putting close to 6% in each.
Never invests more than 6% in any company but we don’t sell our winners just to rebalance. We let our winners run.
Tries to be close to 100% invested.
99% of the people are not able to time their cash positions and you only realize it after 15 years of experience in the markets.
Favourite multiple: Market cap/Sales.
Favourite screen: When Market cap/sales < 1 and Margins have come down due to cyclicality. Focus on the long term EBITDA margins of the company.
Keep a track on Company announcements and commentary.
In the short run there will be volatility. In the long run markets will go up because of global money printing.
When asked about where we are in the bull run of 2002-2007: "We are in 2004." (With a disclaimer of I can be wrong)
Thanks for reading.
Kindly retweet the first tweet if you think others would benefit from this.
https://t.co/i38ExRkSI0
Join today's Clubhouse session to listen in to our Research and Investment process with @sidd1307 https://t.co/TCcJJWQJoc#aequitas #clubhouse #ValueInvesting #MultiBagger
— Aequitas Investment Consultancy Pvt Ltd (@AequitasL) September 18, 2021
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I'm going to do two history threads on Ethiopia, one on its ancient history, one on its modern story (1800 to today). 🇪🇹
I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):
The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹
Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹
References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹
I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):
The famous \u201cLucy\u201d, an early ancestor of modern humans (Australopithecus) that lived 3.2 million years ago, and was discovered in 1974 in Ethiopia, displayed in the national museum in Addis Ababa \U0001f1ea\U0001f1f9 pic.twitter.com/N3oWqk1SW2
— Patrick Chovanec (@prchovanec) November 9, 2018
The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹
Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹
References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹
MDZS is laden with buddhist references. As a South Asian person, and history buff, it is so interesting to see how Buddhism, which originated from India, migrated, flourished & changed in the context of China. Here's some research (🙏🏼 @starkjeon for CN insight + citations)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
2. Sandu (三 毒), Jiang Cheng’s sword, refers to the three poisons (triviṣa) in Buddhism; desire (kāma-taṇhā), delusion (bhava-taṇhā) and hatred (vibhava-taṇhā).
These 3 poisons represent the roots of craving (tanha) and are the cause of Dukkha (suffering, pain) and thus result in rebirth.
Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
2. Sandu (三 毒), Jiang Cheng’s sword, refers to the three poisons (triviṣa) in Buddhism; desire (kāma-taṇhā), delusion (bhava-taṇhā) and hatred (vibhava-taṇhā).
These 3 poisons represent the roots of craving (tanha) and are the cause of Dukkha (suffering, pain) and thus result in rebirth.
Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)
