A few weeks ago, Howard Marks came out with his brilliant Memo Titled "It's Not Easy".
In that Memo, he argued that it's not Easy to make super-normal returns from your investments.
You need second level thinking, probabilistic mind-set, understand risk, contrarian thinking & many such things to be a super-investor.
For full Memo- See here.
If I look back at my near 5 year investing experience, I don't agree with him. It was so easy to get super-normal returns from equities for the last 5 years. There were so many Near No-Brainer ideas available which had-
1) A Great Past - in terms of growth- both high growth as well as consistent growth, Low debt levels, high ROCE, Dividends, Promoter walking the talk etc
2) Great Outlook- Businesses were looking scalable, had decent opportunity size, were small compared to opportunity size, strong tail-winds to future growth.
3) Great Price- Yet these emerging moats were available at such a low valuation that market was assuming zero future growth for them.
You could buy Buffett kinda businesses at Graham's Prices!!
And there were not just a few of them but were plenty of them to choose from. Some names that come to my mind- Mayur, Cera, RS Soft, PI, Repco, Canfin, Ajanta, Amara Raja, Fluidomat, Kaveri, VMart, Symphony, Relaxo.
IT WAS EASY!!! REALLY EASY!!
Fast Forward to Nov 2015, The Bull Market-
Now with Bull market in full swing, you (this applies to Me, atleast) will very very rarely find a PERFECT THREE COMBO- Great Past, Great Outlook, Great Price.
We need to leave at least one of the three aspects- Either Past won't be great & we have to assume last 1/2 quarter to be the new norm going forward, Or (Near Term) Outlook won't be great, Or you will have to pay a high price for the business.
Some examples from my track-list-
Past Issues- Jubiliant Life, Indo Count, Cupid, Capital First, Intellect.
Outlook Not Great- Eclerx, Tata Motors, Accelya, Mayur, Dhanuka Agri.
Valuations Not Great- Ajanta, Canfin, PI, Repco, Cera.
NOW IT'S NOT EASY !!!!
At-least, I am not finding it Easy.
PS- If you have a Perfect Three Combo in any one stock in your portfolio & are finding it easy, please message me.
In that Memo, he argued that it's not Easy to make super-normal returns from your investments.
You need second level thinking, probabilistic mind-set, understand risk, contrarian thinking & many such things to be a super-investor.
For full Memo- See here.
If I look back at my near 5 year investing experience, I don't agree with him. It was so easy to get super-normal returns from equities for the last 5 years. There were so many Near No-Brainer ideas available which had-
1) A Great Past - in terms of growth- both high growth as well as consistent growth, Low debt levels, high ROCE, Dividends, Promoter walking the talk etc
2) Great Outlook- Businesses were looking scalable, had decent opportunity size, were small compared to opportunity size, strong tail-winds to future growth.
3) Great Price- Yet these emerging moats were available at such a low valuation that market was assuming zero future growth for them.
You could buy Buffett kinda businesses at Graham's Prices!!
And there were not just a few of them but were plenty of them to choose from. Some names that come to my mind- Mayur, Cera, RS Soft, PI, Repco, Canfin, Ajanta, Amara Raja, Fluidomat, Kaveri, VMart, Symphony, Relaxo.
IT WAS EASY!!! REALLY EASY!!
Fast Forward to Nov 2015, The Bull Market-
Now with Bull market in full swing, you (this applies to Me, atleast) will very very rarely find a PERFECT THREE COMBO- Great Past, Great Outlook, Great Price.
We need to leave at least one of the three aspects- Either Past won't be great & we have to assume last 1/2 quarter to be the new norm going forward, Or (Near Term) Outlook won't be great, Or you will have to pay a high price for the business.
Some examples from my track-list-
Past Issues- Jubiliant Life, Indo Count, Cupid, Capital First, Intellect.
Outlook Not Great- Eclerx, Tata Motors, Accelya, Mayur, Dhanuka Agri.
Valuations Not Great- Ajanta, Canfin, PI, Repco, Cera.
NOW IT'S NOT EASY !!!!
At-least, I am not finding it Easy.
PS- If you have a Perfect Three Combo in any one stock in your portfolio & are finding it easy, please message me.
