By Larissa Fernand | 19-06-19 |
Admit it. You would indulge in a discreet guffaw if an asset manager exemplified his fund’s investing style as “relatively prosaic, dull and conservative” and courted “unloved stocks”.
So what would be your reaction if told that that very asset manager delivered a CAGR of 13.7% over 31 years spanning 1964 to 1995, outpacing the S&P 500’s 10.6% return during that time?
That’s John Neff for you. He managed the Windsor Fund run by Wellington Management in 1964. The fund eventually became part of John Bogle’s new Vanguard operation in the early 1970s.
In his book On Investing , he makes this brilliant observation.
"… investment success does not require glamour stocks or bull markets. Judgement and fortitude were our prerequisites. Judgement singles out opportunities, fortitude enables you to live with them while the rest of the world scrambles in another direction. To us, ugly stocks were often beautiful. If Windsor’s portfolio looked good, we weren’t doing our job. "
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Mohnish Pabrai spends a considerable time describing Sunteck Realty and Motherson Sumi. Definitely worth watching.
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This might be the theme going forward
Inusrance Sector: Emerging theme for next decade
Sectoral Outlook on Insurance
Cement prices are down across all regions by 7-11 rs/ bag in an average. Also, monsoon is seasonally weak.
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BIBLIOPHILE: WARREN BUFFETT’S LETTER 1957 – 2017
Summary on Warren Buffett’s Letters with the Indian context.
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Very nice article on the value and growth due to almost zero cost of capital and how this has impacted the theories.
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Unbelievable article! Life for investors in general is going to be extremely tough in the post QE world! As a couple of seasoned investors have put it, the most efficient use of money is likely to be found in ones own business!
https://www.safalniveshak.com/being-average-in-the-age-of-alpha/
A really interesting and soul searching read!
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An informative read charting the course towards bankruptcy of the Monitor Group, co-founded by none other than the storied Michael Porter. If Michael Porter couldn’t apply his widespread tool to save his own co from failure then it says a lot about competitive advantage being a function of more than 5 forces.
The full bankruptcy declaration can be found here
Best
Bheeshma
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Simply fascinating to know yet again that IQ and business success are not correlated beyond a point. Temperament, discipline and more earthy virtues are more valuable than IQ. Even in the business of consulting!
Thanks for sharing.
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New book review
really worth reading
source;
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Weekend Reading (https://blog.intelsense.in/2019/06/weekly-reading-some-interesting-stuff_28.html)
1) One business where Amazon failed
Amazon plans to shutter its four-year-old Amazon Restaurants delivery service in the US this month. Amazon started the food-delivery service as on-demand meals were becoming big business for tech startups, with companies like Postmates, DoorDash, Caviar, and Uber Eats competing to deliver food from restaurants to consumers. Others, like Sprig and Maple, went further, vying to both prepare and deliver freshly cooked meals. In the US, Amazon Restaurants was available for free to customers with a $119-a-year Prime account.
Restaurants aren’t the first delivery-based business to evade Amazon, which is otherwise a master of logistics. The company has famously struggled to make online grocery-delivery work, with Amazon Fresh still a niche player more than 10 years after its launch.
Food delivery is a tough business with complex logistics, labor practices that are often poor, and notoriously thin margins. Many of the hottest delivery companies in Silicon Valley just a few years ago have since gone out of business.
2) A real simple guide to the controversial paper by Arvind Subramanian
This is a very well-articulated, yet simple article on what Arvind Subramanian has talked about in his paper on GDP mis-representation. A must-read.
3) Chennai is facing an unprecedented water crisis; and it can spread to all of India, unless we start acting fast
Rains have become more erratic because of climate change. That, coupled with a delayed arrival of the seasonal monsoon, which usually comes in June, has all but dried up Chennai’s water supply. Government data show that the storage level in the four lakes combined is less than one-hundredth of what it was at this time last year. A severe heat wave gripping most of India, including Chennai, has aggravated conditions.
What’s happening in Chennai could easily happen anywhere across India
Public institutions are suffering. Hospitals and nursing homes are charging more for services to cover the increased cost of water, according to the local press. There are also reports that toilets at schools are dirty due to a lack of water.
One thing that could have possibly averted this acute water shortage? Rainwater harvesting.
In 2002, the government of Tamil Nadu passed legislation that mandated rainwater-harvesting structures on all buildings, including private homes, in the city. The goal: to capture rainwater and store it for later use. It was a revolutionary idea. When the city got hit with heavy monsoon rains a few years later, rainwater harvesting raised the water table enough to last the city until 2016.
4) Understanding the psychological drivers behind the mistake made by Bill Ackman on Herbalife
Although this article does not deal with the psychology, it does provide the narrative of what happened in the Herbalife deal. I was thinking on the errors made by Bill Ackman. Incentive caused bias, endowment bias, commitment and consistency bias scream at me. That is why it is never a good idea to take a public stand on a stock and make its success a matter of one’s own ego.
https://www.gurufocus.com/news/899807
5) JP Morgan’s view on how to navigate a cycle which may be peaking
JP Morgan is not suggesting that US is getting into a recession yet believe that investors should start taking precautions. Moving to higher quality bonds and equities is the first and most important step. Looking at investments from a yield perspective and moderating capital appreciation expectations is the next. The third is to look where the growth is. Trade war, global manufacturing slowdown and liquidity in markets are all marked as risks.
https://privatebank.jpmorgan.com/gl/en/insights/investing/navigating-a-maturing-cycle
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in response to the last point How to navigate to the cycle … I found an interesting article at fidelity regarding the business cycles .
What is business cycle : It reflects the aggregate fluctuations of economic activity, which can be a critical determinant of asset performance over the intermediate term. ( Not my words 
i am not that much intelligent.)though It is copy paste but make sense.
Why market cycle to consider in my opinion and my short experience i am wondering the Nifty moves in narrow range but hurt my portfolio in very strange manner .I think Do i have wrong selection or i have not purchased right or i fail to recognize the some for the key variable in the business to some extent YES but after going through this article i realise it is the business cycle which affect me more so asset allocation decisions according to the probability that assets may outperform or underperform is equally important with the CAPITAL allocation in the equities . It help to mitigate the risk . ( I may be wrong )
where r we as a developing nation in the cycle
Asset class performance patterns
Sector performance rotations within asset classes
in my opinion we are in mid phase … i request the senior to please guide on this ( i may be 1005 wrong)
source: https://www.fidelity.com/viewpoints/investing-ideas/business-cycle-investing
disc : this for educational purposes .If senior VP or moderate think it is offended please delete
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https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ a fascinating in depth look into how discount brokerages work in the US
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By prof Bakshi his tweets complied by morning star on credit rating of bonds https://morningstar.in/posts/53243/bond-analysts-must-keep-eye-stock-market.aspx
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