A letter a day!

Knowledge Series
122

Letter #09 June,2008

1.When investments go from hated and reasonable to despised and cheap something is normally up in the market. In this letter, three sources which define risks have been stated.

1)Market valuing the stock at discount despite of the potential of the stock.

This has been co-related with the illustration of Air Asia which was Asia’s largest low-cost airline and probably the lowest cost airline in the world. Air has cost advantage over its peers as the firm had borrowed heavily from the Southwest Airlines model of operations (a point-to-point network configuration, online ticket sales, no reserved seating, one plane type). It dominated the position in the portfolio of nomad investment partnership. The only issue was that the funding of the planes was not entirely secured, and lenders were twitchy.

“Even so, the firm earns a reasonable spread over the cost of capital on its aircraft, whilst forcing pricing on other airlines which leaves them operating at sub economic returns. This is a powerful combination and implies that the business will win in the marketplace in the end. We have no ego invested our analysis (at least, I don’t think we do: if you want to make rational decisions leave your ego behind), outcomes are leveraged and perfectly reasonable people could come to different conclusions as to the firm’s investment merits. However, we do struggle with the price of the shares in the stock market today, which appears to value the firm at a meaningful discount to the value of the company owned fleet of planes. In short, the market has concluded that Air Asia, despite the potential outlined above, should not exist. This is nonsense; as such a valuation would imply that Southeast Asians, who are some of the most price conscious people on the planet, don’t want cheap airfares!”

2)If the problems are self-inflicted, they are usually within the powers of the firm to fix
Games workshop made tabletop games and soon due to the introduction of online games, its sales fell, and the company suffered a lot. The chairman stated in his speech that they great fat and lazy on the back of easy success. The company strongly believed that it can co-exist with the online games however, the market did not value the same.

3)Dilution risk occurs when company issues equity at less than the firm is worth.
This is co-related with the example of municipal bond insurance association which raised capital twice at the price less than its intrinsic value. The nomad investment partnership fully sold the stake in this company.

“So, however cheap MBIA may appear, the prospect of a future capital raising means that one cannot place a valuation on the business per share without knowing the number of shares outstanding, and we cannot know that until we know the size of the losses and the price of any future capital raising. In this Alice in Wonderland world, the stock’s biggest attraction, its apparent cheapness, becomes the investor’s Achilles heel, and it was for this reason that we sold our MBIA shares. And it is also for this reason that recent purchases by Nomad, which are not enough to recap businesses in their own right, and where there is meaningful dilution risk, have been modest in size.”

2.Duration:

1)The average holding period for US stocks held in Nomad (ex Berkshire Hathway) was 51 days that was 1/25 of the time the partnership expected to hold an investment.

2)The costs of short-termism, such as dilution risk, are borne by investors when management mark the share price to market and issue equity. In other words, it is borne early in Nomad’s expected holding cycle. The gains from short-termism,
such as the ability to purchase shares for meaningfully less than they are worth, will take far longer to materialize.

“The point of equity is that it is the only permanent capital in the balance sheet. It is there to weather storms, such as the current economic backdrop, and provide a stable base, and of course to earn the rewards of enterprise. This basic building block of society is broken when those with their hands on the permanent capital change their minds with their underwear. It is no coincidence perhaps that pass-the-parcel and musical chairs are children’s games.”

3.Momentum Investing

What leads to price increase during momentum investing?

1)Feeling of being left out ( Scarcity/less availability of the stock going forward)

2)Social Proof (once one person had set a high price it was seen by others to endorse the value of the item and they too could pay a higher price knowing they were not alone.)

“We can all do momentum investing, but it is emotional investing and I just don’t think it is that intelligent, or profitable.”

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A letter a day!

Letter#10 Dec’2008

The theme of this letter is focused on crisis management (2008 witnessed financial crisis)

Key learnings:

1.At the time of crisis or otherwise, always think about the price to value ratio.

The nomad partnership has always focused on price to value ratios (market prices in Comparision to business value). Since inception, the price to value ratio of the partnership has been significantly lowered, implying healthy deferred returns to come.

“Whether business values rise faster than share prices, or share prices fall faster than business values, either way the effect is the same: a growing differential between the price of a business in the stock market and its real value. It does indeed “feel different” when performance has been as poor as it was in 2008, but the rational mind will anchor on the notion that today the birds in the bush are very large indeed. It may not feel like it but, in many respects, these are the best of times for an investor, and we shall lay out why in this letter.”

2.How to efficiently use the safety net? (i.e. deployment of additional cash at the time of crisis)

1)Output maximization looks efficient at least in the short term, but that is not the same as being long term optimal. The flaw to putting money to work immediately, for instance, is to presume that all relevant opportunity sets are available immediately.

2)What passes for industry standard best practice today may look short term efficient but, in any lasting sense of the word, and from the perspective of the long-term business owner, it does not really get the job done.

“All this is a far cry from the early years of Rolls-Royce Limited, the manufacturer of motor cars, where Frederick “Henry” Royce made the engineers personally sign the parts they were responsible for making. That way, if any component proved faulty, he knew who was responsible and he made them correct the fault in their own, unpaid time – I paid you to make a working part, not a faulty part, he would argue. And that is how he ended up making the best motorcars in the world. That level of personal accountability has been largely lost inside organizations today and has instead been replaced with “efficiency” to the point of Taleb’s “busy incompetence” and “real world isolation.”

(“When someone says he is busy, he means that he is incompetent”, Nassim Taleb again, “having a stupidly busy schedule isn’t a sign of being important. It means that you have become insulated from the world”.)

3)Nomad partnership also had some slack (i.e additional cash in the system). But they never preferred immediate deployment of the same.

"We do try and run Nomad with some slack in the system. In the June 2007 letter to partners we suggested that one of the benefits of a long holding period was that it allowed time for gentle contemplation, to “retreat and simmer” a little, and we quoted the gardener Charles Jencks: “understanding requires a certain slowing of time. Why else enter a garden?” Notice, “slowing”, it is important. Slack is provided in our company structure: Zak is perfectly capable of running Nomad on his own (someone tell him I do! Zak). This means that straight away we are running at something less than fifty percent capacity utilization on a normal day, and so we can gear up, in effect, when opportunities arise as they have recently. Capacity utilization is also kept low by few investments, held for long periods. "

3.Importance of incentives/discounts at all points of time.

1)As the firm grows in size, scale savings are given back to the customer in the form of lower prices. The customer then reciprocates by purchasing more goods, which provides greater scale for the retailer who passes on the new savings as well. The scale economics shared incentivizes customer reciprocation, and customer reciprocation is a super-factor in business performance.

“Scale economics works well in bad economic times as well as good. On the busiest day in the run up to Christmas this year, order volumes at Amazon were 16% higher than the previous year and note these compares to industry-wide US retail sales which declined nearly ten percent in December, according to the commerce department! And at AirAsia revenues per seat per kilometer flown rose 33%, whilst costs per seat per kilometer flown excluding fuel declined 10% in the latest quarterly period. Our businesses are surging ahead, even if, in some cases, their share prices are half what they were twelve months ago. In the last few months Amazon has been priced in the market as if it would not grow in the future, despite some of the best growth prospects we can imagine.”

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Letter #11 June’2009

1.The letter starts with the discussion of Darwin Charles philosophy.

“Darwin knew he was right, but his findings troubled him personally. He was a Christian, in a Christian society, indeed he had considered. studying theology before setting sail on HMS Beagle, and his new ideas challenged the church, his countrymen and his conscience. At major turning points in society, such as he was suggesting, how many of us, we wonder, would be modest about what we had discovered?”

It is an interesting subconscious psychological tendency that truths are often spoken with a whispered voice whilst shaky suppositions are shouted for all to hear. The philosophy of Nomad also was to keep the volumes as low as possible.

“Amazon and Costco do not advertise (no shouting here); Berkshire Hathaway and Games Workshop do not provide earnings guidance (popular with baying fund managers and stockbrokers); Amazon, Costco, AirAsia, Carpetright, and parts of Berkshire give back margin to the customer, we would argue that is a pretty humble strategy too. In other words, around two thirds of the portfolio is invested in firms that in some major way shun commonplace promotional activity and they are no less successful as a result.”

2.Over diversification

It is just that only few big things in life are knwoable and that’s why Nomad has few investments.

“The church of diversification, in whose pews the professional fund management industry sits, proposes many holdings. They do this not because managers have so many insights, but so few! Diversity, in this context, is seen as insurance against any one idea being wrong. Like Darwin, we find ourselves disagreeing with the theocracy. We would propose that if knowledge is a source of value added, and few things can be known for sure, then it logically follows that owning more stocks does not lower risk but raises it! Real diversification is offered by index funds at a fraction of the price of active management.”

3.If one is to be a successful long-term investor, is to recognize the sources of enduring business success, get in early and own enough to make a difference. Which raises two questions:

1)what are the sources of success?
2)if these are so readily recognized up front why are they not discounted in prices already?

One of the sources of success according to Nick and Zak is scale economies shared. According to them it is the best business model that works in the long run.

  1. Few of the mistakes which investors/fund managers make:
  1. Mis-analysis, or using the wrong mental model: Investors are used to firms which have one good idea, such as a new product, but then struggle to replicate success and end up diluting returns.

“Zak and I call this the Barbie problem, as Mattel has struggled to replicate the economics of its famous doll.”

  1. Structural or behavioral: Active fund managers have to look active. One way to do this is to sell Wal-Mart, which appeared expensive (but actually wasn’t), to buy something that appeared cheaper (but err, also wasn’t); investors are not long-term and did not look further than the next few years or, more recently, few quarters.

“Evidence for this can be gleaned from the average holding periods for shares which stands at just a few months; fund managers wish to keep their jobs and espousing a ten-year view on a firm risks being a hostage to fortune; marketing folks require new stories to tell and new stocks in the portfolio provide new stories; fund managers sell their winners in order to appear diversified in the eyes of their clients.”

3)Odds or incorrectly weighing the bet

“In the words of my first boss, investors tend not to believe in “longevity of compound”. Conventional thinking has it that good things do not last, and indeed, on average that’s right! Empirical Research Partners, an investment research boutique, discovered that the chance of a growth stock keeping its status as a growth stock for five years is one in five, and for ten years just one in ten. On average, companies fail.”

4.Investors see the information (on conference calls they cheer “great quarter”) but, they incorrectly weigh the information.

“It could be argued that lots of things had to go right for Wal-Mart to grow for forty years. That is certainly true but, at its heart, a very few simple things really mattered. In our opinion, the central engine of success at Wal Mart was a thrift orientation fueling growth with the savings shared with the customer. The culture of the firm celebrated this orientation and reinforced the good behavior. This is the deep reality of the business. This should have had the greatest weighting in the minds of long term investors even if other things looked more important at the time. Instead, investors may place too much emphasis on valuation heuristics, or margin trends, or incremental growth rates in revenues or any of the list above, but these items are transitory and anecdotal in nature.”

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A letter a day!

Letter#12 Dec’2009

1.The fund management industry is such that it has to constantly say something new to keep the game going: new funds, new products, new investment stories, new “aligned” performance fees, new firms. Each new thing is in turn supported with lots of marketing, perhaps in an attempt to give the new things extra oomph over the, now demoted, old things.

““Specialization” and “diversification” are at the heart of many marketing claims and sound wholesome and prudent enough, a little like motherhood and apple pie. However, such notions, if run to extremes, can be counter- productive. For example, a widely held view in the noughties mortgage market was that the risk of “specialized” lending to the less credit worthy could be removed through “diversification”. It was all sales talk, but it worked, in part, as the salesmen were able to promote their products as “safe” because specialization and diversification were traits so highly prized by the rube investor. False traits, it turned out, as the products were not diversified, and their complexity made them all but un-analyzable.”

2.The locker room culture: It means an attitude whereby the players just have to win, and they are not too much worried about the means. If the investors is prepared to make a meaningful, long-term investment, they have to break out this get rich quick spell of the salesman.

"Our anti-locker room disposition was echoed by the founder of one of Nomad’s investee firms, who, in a private meeting, put it as follows: “if you want to be successful, and we do, then you have to be willing to be misunderstood, and do things that do not seem sensible to most people”. For example, “if you (employees) come into the office in the morning thinking how you are going to beat number one, two or three in the industry” - how many times have we heard companies articulate that view? - “then, our firm is the wrong place for you. We start with the customer and work backwards.”

3.There are broadly 2 ways to behave as an investor:

1)First, buy something cheap in anticipation of a rise in price, sell at a profit, and repeat.

“Almost everybody does this to some extent. And for some fund managers it requires, depending upon the number of shares in a portfolio and the time they are held, perhaps many hundred decisions a year.”

2)To invest is to buy shares in a great business at a reasonable price and let the business grow.

“This appears to require just one decision (to buy the shares) but, in reality, it requires daily decisions not to sell the shares as well! Almost no one does this, in part because it requires patience - and the locker room set does not do patience - but also because inactivity is the enemy of high fees.”

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A letter a day!

Letter# 13 June’2010

1.Nature of competitive advantages:

Discovery is one of the joys of life and, is one of the real thrills of the investment process. The cumulative learning that results lead to what Berkshire Hathaway Vice-Chairman Charlie Munger calls “worldly wisdom”.

When analyzing a firm, one just knows one is on to a good thing when one learns something new, and the penny finally drops. And many times, more fortunate if that insight can be applied more generally across businesses.

Here they have given an example of Welsh Insurance company. The firm’s products are nothing special, primary auto insurance sold to customers who mainly buy due to the legal requirement. There is little product differentiation across the
industry and the customer purchase decision are usually driven by price.

"It is tempting when analyzing such situations to look for the big thing the firm does right. In effect, one is looking for the smoking gun that explains the firm’s success. A smoking gun may be a vivid image, but the world does not always work like that. I should have known better when I asked what big idea had led to the firm’s success: “No, no, Nick, there is no secret sauce here”, one senior executive explained, “we don’t do one thing brilliantly, we do many, many things slightly better than others”.

2 Framing error: When looking for an explanation to a situation the brain tends to latch on to what can be easily found to “frame” the situation, and if what is easily found is also vivid, then the brain stops looking for another explanation.

“I had gone looking for what I thought ought to be there, a vivid smoking gun such as a brand name, a location, a clever re- insurance contract, or a patent. However, there is no a priori reason why a comparative advantage should be one big thing, any more than many smaller things. Indeed, an interlocking, self-reinforcing network of small actions may be more successful than one big thing.”

3.When investors value a business they have in their minds, consciously or not, a decision tree with the various branches leading to all possible futures and probabilities attached to those branches. The share price can be thought of as an aggregate of the probability weighted value of these branches.

“The problem, as Santa-Fe Institute scientist Ole Peters most recently pointed out (SFI Bulletin 2009, volume 24), is that this is not an accurate representation of what the future will be! The next step for the company will not be to visit all of those branches simultaneously. In reality the firm in question will only visit one of those branches before proceeding to the next and so on. Short-term investors spend their time trying to handicap the odds of each branch.”

“Guessing which-branch-next can be a crowded trade, but it’s fine, as far as it goes. However, it rather misses the big picture, in our opinion. We would propose that some businesses, once they have progressed down the first favorable branch, stand a much greater chance of progressing down the second favorable branch, and then the third, as a virtuous feedback loop builds. The process takes time, but a favorable result at any one stage increases the chances of success further down the line, as it were. Think of it as a business’ culture.”

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A letter a day!

Letter#14 June’2011

Mental shortcuts

1.It is so easy to screen out a good idea because of a bad association. As Charlie Munger quipped at a speech given at the same course a few years earlier “the human mind is a lot like the human egg”: once one sperm has entered then all the other sperm are locked out.

“A market research company we visited recently told us that most car advertising is read after the purchase decision for the car has already been made! And it was read only then to gather information to convince other people the purchase decision was rational (“no, no it wasn’t the car’s sexy shape – this car has twelve airbags and emits 170g of carbon per mile!”) We have all done it. The human mind has these learnt biases, short cuts, fears, habits, and associations and, in the case of the panelist above, they can stop us from making rational decisions.”

2.When investors think about the future of a business, they often have in mind the assumption that growth rates slow with time, as competition ekes away advantages and marketplaces become saturated. Predicted revenue growth rates (used in \valuation models) therefore start high and end low. This is especially true for firms that are quite large already.

“However, if the rate of growth in internet retailing is a product of attitude, rather than assets, then, the fact that a firm is quite large already does not necessarily tell you that its growth rate is set to slow. The widely held presumption that regression to the mean begins the moment the analyst picks up their pen, risks being wrong footed as a result. Two years of forty percent revenue growth, for example, will result in revenues doubling in twenty-four months and regression to the mean-based estimates would be out by almost a factor of two! That did not take long. In other words, although some online retailing firms may be quite large, they may also be quite young. In our opinion, it is this realization that has partially driven the revaluation of internet retailers these last few years.”

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A letter a day!

Letter #15 Dec’2011

1.Recognizing and correctly weighing this information in spite of the latest news flow is a matter of discipline, and it is that discipline that is so richly rewarded in the end.

"The simple deep reality for many of our firms is the virtuous spiral established when companies keep costs down, margins low and in doing so share their growing scale with their customers. In the long run this will be more important in determining the destination for our firms than the distractions of the day. Jeff Bezos, founder of Amazon, made the following point in a recent interview in Wired magazine:

“There are two ways to build a successful company. One is to work very, very hard to convince customers to pay high margins [the Colgate, Nike, Coca-Cola model alluded to above]. The other is to work very, very hard to be able to offer customers low margins [the Wal-Mart, Costco, AirAsia, Amazon, Asos model]. They both work. We’re firmly in the second camp. It’s difficult – you have to eliminate defects and be very efficient. But it’s also a point of view. We’d rather have a very large customer base and low margins than a small customer base and higher margins.”

2.It is not that the garden will always be rosy. There are lots of ways that the companies could drain the moats that surround them.

“One example might be wide-scale credit card fraud following the loss of customer information (perhaps say after a careless employee left a laptop in a taxi). Yikes! If the neglectful firm made light of the situation, pretending it was a small loss and no harm was done, then they had better be telling the truth. Making light of a far more serious situation, perhaps as News International may be finding out today, risks breaking even a long-standing bond of trust. So, in our opinion, it won’t be the on-line fraud, per se, or, heaven forbid, an airplane crash at AirAsia, that could ruin our firms, but a disingenuous response to a problem.”

3.A one penny dividend from a worthless holding means that, in accounting terms, to create money out of nothing!

“Black Arrow was founded and continues to be run by the octogenarian Arnold brothers, who own or control around eighty-eight percent of the shares outstanding. The shares were de-listed from AIM (a UK stock exchange) in February 2010. At the time, book value approximated one pound per share, although the last traded share price was fifty-two pence. There is no market for the shares, and no prospect of a market for the shares as the brothers do not wish to own more (we have tried), and so the investment has been valued at nil in the Partnership (with a paper loss of around one tenth of one percent of net asset value). Zak and I know the business is troubled, but it is also not worth nothing; then again to assign a positive value would be just as arbitrary as we could not give you cash for your shares either - so zero it is. Almost all valuations are wrong, in effect, and in the case of Black Arrow, although de-listed and in poor health, the firm has continued to operate with the resultant one pence dividend. Enjoy it whilst it lasts. We remain hopeful, but not optimistic, that the dividend alchemy will continue.”

4.The trick to being a good investor, over the long-term, is to maintain your long-term oriented discipline.

Bezos again:

“Our first shareholder letter, in 1997, was entitled, “It’s all about the long-term”. If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you are willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow – and we’re very stubborn. We say we are stubborn on the vision and flexible on the details”.

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A letter a day!

Letter#16 Jun’2012

1.In today’s information-soaked world there may be stock market professionals who would argue that constant data collection is the job. Indeed, it could be tempting to conclude that today there is so much data to collect and so much change to observe that we hardly have time to think at all.

“Whilst Zak and I applaud John Kearnon, we try to take Charles Darwin’s approach: de-emphasise the data collection and think. When we study truly great businesses, we find that very often it has been simple human attributes that have led to their success: you feel differently drinking a Coke than a no brand cola or, you may feel differently towards a business that consistently undercuts the competition in price or, a delivery service that literally goes the extra mile and picks up returned items – and the reason you have these feelings, and the stimuli that produce them, have hardly changed in millennia. When we try to understand the factors that made great businesses great, in our opinion, there is lots of time to think.”

2.Comparision of information with food

Information does not always have food-like quality standards. There is little-to-no labelling of information presented on television, so fact and fiction can be deliberately fused and have given rise to “docudramas” and “mocumentaries”.To avoid confusion, one solution may be to label information for its fact content, in the same way we label food for its fat content.

“And what of the implications of over-consuming? Clay Shirky, the writer and internet consultant, claimed that “there is no such animal as information overload, only filter failure” which, using Rangaswami’s analogy, implies we need to think about data diets and information exercise to prevent the buildup of toxins and disease. “When I saw [Morgan Spurlock’s documentary film] ‘Super-Size Me’” joked Rangaswami in a recent speech “I started thinking, now what would happen if an individual had thirty- one days nonstop Fox News?” What, indeed?”

3.Information, like food, has a sell by date, after all, next quarter’s earnings are worthless after next quarter.

“The information that Zak and I weigh most heavily in thinking about a firm is that which has the longest shelf life, with the highest weighting going to information that is almost axiomatic: it is, in our opinion, the most valuable information. No doubt Charles Darwin would agree.”

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A letter a day!

Letter # 17 Dec’2012

1.The decision not to do something is still an active decision.

2.Good things follow when you care about the pennies.

“When we visited Carpetright, a UK carpet retailer, a few years ago we spent the morning with its founder, Lord Harris, discussing his firm and the industry. Lord Harris is a great advocate of watching the pennies. One of his store managers told us that his boss had baulked at the cost of new price tags whenever the shops had a sale. To begin with he made the store managers use both sides of the old price tags, at least this would halve the tag budget, but the real saving came from using the same card with replaceable, reusable numbers. It may seem trivial, but the saving has been in the tens of thousands of pounds.”

Watching the pennies and investing carefully has led to the “aggregation of marginal gains” and financial success, and as such it has much in common with the investments that populate Nomad.

“It has been fun for Zak and me to practice in the real world, what we preach in investing.”

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A letter a day!

Letter# 18 2013
(The last letter)

1.A different take on incentives.

This has been explained by Nick in the context of the management fee charged by them at 6%.They have always believed that the management fee shouldn’t be a profit center.

“The management fee should not be a profit center as we do not create value through managing the Partnership per se (hence our break- even cost reimbursement management fee); the performance fee should respect the notion of the opportunity cost of capital (and long bonds had been six percent or so); and if we owned shares for long periods, then performance fees should be at risk for an extended period too.”

They have also explained a slight uncongenial approach to being paid. In other words, in other words, the normal relationship between price and quality had been inverted by the value one placed on one’s own work.

“In the 1940s the food companies began manufacturing a new product, the powdered cake mixes, which was marketed as a time saving innovation as the mix required only the addition of water before baking. To the marketer’s great surprise - sales were terrible! Something had to be done and so, almost as an experiment, a new product was launched which required the cook to add fresh eggs, milk and sugar and although it took longer to make, paradoxically, sales improved! Anyone who has laboured through assembling Ikea furniture may understand why. To the builder of flat pack furniture or the baker of cakes, the perceived value of the end product is influenced by the input of the consumer’s own efforts. In doing some work themselves the builder, or cook, puts a little bit of meaning, perhaps even a little bit of love, into the product.”

2.The best entrepreneurs we know don’t particularly care about the terms of their compensation packages, and some, such as Jeff Bezos (Amazon) and Warren Buffett (Berkshire Hathaway) have substantially and permanently waived their salaries, bonuses, or option packages.

“When we asked Nick Robertson, the founder of Asos, whose paper net worth has increased hugely since we have known him, whether, now he is a rich man, he has thoughts of leaving, his face lights up with the future possibilities of his firm and says he is having more fun now than ever before. In this aspect of his life, he has moved on from monetary rewards driving his behavior, and we are sure the business will be better for it. The same is probably true for Jim Sinegal before his retirement (Costco), Lord Harris (Carpetright) and some of the other founders of the firms in which Nomad has invested. These people derive meaning from the challenge, identity, creativity, ethos (this list is not exhaustive) of their work, and not from the incentive packages their compensation committees have devised for them. The point is that financial incentives may be necessary, but they may also not be sufficient in themselves to bring out the best in people. In its own little way, this is why Zak and I are quite relaxed about six percent not being six percent. It was an arbitrary number in the first place, and we derive a great deal of value from the meaning of the work we do (challenge, sense of job well done, identity, creativity and so on) not just from the financial rewards (although we will learn to live with those too!). By having an attitude that is somewhat independent of financial rewards, we are sure that Nomad’s performance in the long run will be far better too.”

This ends the Nomad investment partnership letters! 2014 was the year when Nick and Zak had decided to close the subscriptions.

“When we wrote the December 2013 letter, we did not know that it would be our last but, afew months later, the portfolio had been liquidated, funds returned to our partners and on we go. We did not like that final phase one bit: selling stakes built up over years felt wrong, the clients were grace itself but, even so, it is still an awkward conversation to take something away from someone, especially people that you like, and there was the administrative headaches of winding up an operation. Psychologically it all felt wrong.”

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If possible, you can start a series of such investment letters of some Indian Superstar investors like PMS managers, Samit Vartak, Ramdev Agarwal or Marcellus or anyone of your choice. The older the better, to get the idea of Indian markets in Past. If not investment letters then books of some famous Indian investors.

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@aashka_trivedi
Can we have the experiences of investors listed in the book, tabulated for everybody to read on the forum

137

Thanks for sharing this

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