Investment Philosophy

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Core Investment Philosophy

Most Important Things We Look For

  • Big wealth is made if you catch the right business cycle & ride the winners. Important to track supply side, more than the demand side.
  • We love businesses which operate on tight working capital which eventually drive ROCE and cash flows in the business. We want to invest in businesses where supply side is very difficult to create or even impossible. Businesses have unique technological, manufacturing excellence which cannot be replicated.
  • We are neither a growth nor value investors but opportunistic investors. We go where the opportunity lies. We love to assess historical data of capital allocation & strategies adopted by the promoters.
  • We don't believe in buy right and sit tight always. We will hold investments till thesis is working, and will be quick to exit if thesis changes at all

Catching The Cycle What Is The Opportunity ?

Why We Sought These Businesses?

Frontloading Capex
Deleveraging
New Product/ Segment/ Management
Improving Capital Allocation

Our Beliefs & Learnings

1

Rejection Is More Important Than Selection.

What not to buy is more important than what to buy in the stock markets. Do less mistakes and wealth will be made automatically.
2

No One Wants To Become Rich Slowly.

Boring is good for investment, may not give you adrenaline rush and quick money.
3

Risk Management > Returns

Risk management via right allocation is more important than picking the right stock, which is generally ignored by lot of retail investors.
4

Research First, Invest Later.

Only research & deep research can help anyone to hold great businesses in the long term. Maintaining discipline in rising markets is the hardest thing.
5

Understanding Business More Important Than Watching Screen

Watching the screen and trying to assess daily moves can be hugely unproductive if you are a long-term investor. Lot of people sell great businesses looking at the screen.
6

Identify Your Core Area Of Expertise.

Don’t try to do all – multitasking does not work in the stock markets. Focus on your personal strength. Either be a good fundamental or technical or algo trader but don’t try to be everything.
7

Never Regret In The Stock Market.

You will not own everything & will never be 100% correct. Mr Prashant Jain invested in 465 stocks – and 1 in 4 resulted in loss. Only 55 stocks accounted for gain of Rs 74,000cr (85% of total).
8

Trading Is Fun But Not For Everyone

Very few have discipline to take losses and cut positions. Speculation requires a human quality of accepting defeat & booking losses sooner than later.
9

One Can Borrow Stock Ideas But Not Conviction

Find your own investment style & stick to it. In early days, we want to do everything & imitate a lot of big investors. Challenge comes when markets fall & that is when own conviction is tested.

Our Beliefs & Learnings

1

Rejection Is More Important Than Selection.

What not to buy is more important than what to buy in the stock markets. Do less mistakes and wealth...

What not to buy is more important than what to buy in the stock markets. Do less mistakes and wealth will be made automatically.
2

No One Wants To Become Rich Slowly.

Boring is good for investment, may not give you adrenaline rush and quick money.

Boring is good for investment, may not give you adrenaline rush and quick money.
3

Risk Management > Returns

Risk management via right allocation is more important than picking the right stock, which is genera...

Risk management via right allocation is more important than picking the right stock, which is generally ignored by lot of retail investors.
4

Research First, Invest Later.

Only research & deep research can help anyone to hold great businesses in the long term. Maintaining...

Only research & deep research can help anyone to hold great businesses in the long term. Maintaining discipline in rising markets is the hardest thing.
5

Understanding Business More Important Than Watching Screen

Watching the screen and trying to assess daily moves can be hugely unproductive if you are a long-te...

Watching the screen and trying to assess daily moves can be hugely unproductive if you are a long-term investor. Lot of people sell great businesses looking at the screen.
6

Identify Your Core Area Of Expertise.

Don’t try to do all – multitasking does not work in the stock markets. Focus on your personal streng...

Don’t try to do all – multitasking does not work in the stock markets. Focus on your personal strength. Either be a good fundamental or technical or algo trader but don’t try to be everything.
7

Never Regret In The Stock Market.

You will not own everything & will never be 100% correct. Mr Prashant Jain invested in 465 stocks –...

You will not own everything & will never be 100% correct. Mr Prashant Jain invested in 465 stocks – and 1 in 4 resulted in loss. Only 55 stocks accounted for gain of Rs 74,000cr (85% of total).
8

Trading Is Fun But Not For Everyone

Very few have discipline to take losses and cut positions. Speculation requires a human quality of a...

Very few have discipline to take losses and cut positions. Speculation requires a human quality of accepting defeat & booking losses sooner than later.
9

One Can Borrow Stock Ideas But Not Conviction

Find your own investment style & stick to it. In early days, we want to do everything & imitate a lo...

Find your own investment style & stick to it. In early days, we want to do everything & imitate a lot of big investors. Challenge comes when markets fall & that is when own conviction is tested.

Our Approach: 3P Investment Philosophy

Promoter

Has passion for its product, focus on the business and conduct the business with unquestionable integrity
Product

Has substantial competitive advantages over others and has the ability to sustain and protect the same over years to come
Price

Its all about good business and paying a lot less for it.

What Do We Avoid?

In Companies

Hot stocks or concept stocks

Businesses that we do not understand

Expensive valuations

Promoters with corporate governance issues

Leveraged companies / promoters

In Investing

Forecasting the markets

Investing on the basis of technical analysis

Churning the portfolio

Following the herd

Risk Management Process

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Important Info

Regulatory Disclosures

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