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Stocks We’re Watching

This is the fifth post in our quarterly update series for Q3 FY20.

In this post, we’re sharing the latest updates of the stocks from our watchlist. Please don’t treat this as a buy recommendation. We find these businesses interesting and we may build position (or buy more of those that are already in our portfolio) in them in the future. The purpose of this post is to bring clarity to our understanding of the businesses we are tracking.  We make our notes on the quarterly results and conference calls. Putting it up here makes it easier for us to refer them at a future date.

You can see the earlier updates here.

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7 Big Learning from The Intelligent Fanatics of India

Diwali, in India, is a very good occasion to spend some quality time with friends and family and take a break from work. I spent a part of that time with some very old friends of mine.

Friends, whom I haven’t met for a long time.

Books!

Yes, I had been feeling guilty of not reading books for a long time.

Hence, picking up a few books and going through them during the Diwali break of 2019 was a refreshing way to get back among old friends!!.

Intelligent Fanatics of India, co-authored by Rohith Potti and Puja Bhulla, was one such book. Read More

Kya UTI AMC Sahi Hai? Read the offer document carefully

I started working sometime in the year 2005.

When friends or colleagues used to meet, our topics of discussions would invariably include the following:

Entertainment

Mobile Phones

Sports

Occasionally Politics

Investing groups were small and not very popular. They remained within themselves doing the hard work.  They never liked marketing about themselves.

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What Debt means- To Businesses and to Investors who have stock screeners as their primary stock search tool

Ask any successful long term investor about what he/she looks in a business. A majority would list at least half a dozen key characteristics like:

 

I have not come up with something new or unique here.

Instead, in this post, I will just pick one of the above characteristics and go deep.

And I pick Debt for this post.

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Notes on Annual Reports of the Stocks from our Watchlist

We have been reading the latest Annual Reports of the companies we are tracking.

In this post, we’re sharing our notes on  Annual Reports of the stocks from our watchlist. Please don’t treat this as a buy recommendation. We find these businesses interesting and we may build position (or buy more of those that are already in our portfolio) in them in the future. The purpose of this post is to bring clarity in our understanding of the businesses we are tracking. Putting it up here makes it easier for us to refer them at a future date.

 

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Demystifying ROE- A lot to scratch beneath the surface

Return on Equity (ROE) is often hailed as the most important metric in judging the efficiency of a business. It is indeed an important metric. Legendary investors around the world have repeatedly highlighted ROE and its importance in investment decisions. One of the world’s most famous investors, Warren Buffett, has time and again expounded on the importance of ROE.

But the matter of fact is that very few new investors have a thorough understanding of ROE and its composition. So, the purpose of this piece of writing is to provide clarity on the concept of ROE and to lay down a practical framework as to how one should use the same to gain insights into the working of a business or an industry.

Simply put, ROE is a measure of profitability that calculates how many rupees of profit a company generates with each rupee of shareholders’ equity.

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EXCITING NEWS FOR FREE, IN EXCHANGE FOR YOUR ATTENTION

I was researching a company as a potential investment opportunity in the Indian stock market.

I started reading about the history of the company. 

Clicked on a youtube link on its website.

It was a short five-minute video. Very useful.

Then something interesting happened.

On the right side of the youtube page, I was prompted for a video.

It was Yuval Noah Harari. A renowned historian and author.

And also one of my all-time favorites. I was hooked.

I specifically liked this part in the video:

I will address the fake news question, not because it is the easiest to solve, but also because it is the most relevant to what you are doing in Google. And I would say that the current incarnation of the fake news problem has a lot to do with the model of the news and information market. We have constructed a model which basically says, EXCITING NEWS FOR FREE, IN EXCHANGE FOR YOUR ATTENTION.

I was blown away by this last phrase.

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8 Big Learning from the Second Decade of Warren Buffett’s Investments

In one of our previous posts, we had written about this project of dividing all the letters of Warren Buffett into six parts representing six decades of Buffett’s investment journey. We also wrote about our learnings from the letters of Warren Buffett in the first decade (1957-1966).

This post is on our learnings from his letters in the second decade (1967-1976). For our readers’ convenience, just like the last time, we’ve put together an illustrated version of the letters. Please click here to download it.

Here are the eight big learnings from the second decade of Warren Buffett’s investment journey.

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Survive to Thrive

Famous investment columnist and author, Morgan Housel makes a striking point in one of his writings:

The single most important variable for how you’ll do as an investor is how long you can stay invested. I’m always astounded when I think about compound interest and the power that it has for investing. Time is massively powerful.

If I had to simplify it in one sentence, I would say:

“If you can survive for a long time, compound interest will take care of you.”

Or to put it more briefly: “Survive to Thrive”

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