Key Learnings from one of the best Investing Letters that I have read this year from @rohitchauhan
Time for a thread with SOIC Key Takeaways 🧵🧵🧵🧵
First Key Learning:
The first is the importance of getting the trend and its timing right. No business does well in isolation, it is a part of a much bigger trend. For eg:In sectors like API/CDMO/Chemicals, many businesses have created wealth. As they are going through tailwinds
Thus,It becomes important to identify long-term trends like manufacturing, Financialization of saving, or Formalization of sector (think PVC/CPVC Pipes) and to be patient. Long-term trends keep offering opportunities. Just think about it- if its truly long term, then the
Opportunity will exist for a long period of time no?
Second Key Learning:
Look at Valuation in a broader context and not in isolation. When a sector catches fancy of the markets, and earnings growth is strong in the entire sector. Most of the time, markets start discounting
the earnings and reward the business with a high multiple. As long as the trend holds and management is executing, one should hold the stock and be tolerant of higher valuations 💯💯💯