BKasal's Portfolio

I have closed my books for last fiscal FY2017-18 to start new year.
The performance summary:

image

Note:
Biz: Long term
Trade: For trading or Special situation

Do provide a list of the companies to hold, your conviction and other details. No one can provide constructive feedback based on a bunch of numbers.

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The idea is to start new thread is to discuss investment strategies and analysis rather than discussing individual stocks. Which anyway happens in other threads.
I would share my experience for last 13+ years experience in direct Market investment & trade analysis.

The following is brief of categories -

A) Business Owners:
I have limited understanding of industries segments from universe of business domain. My information limited to NBFC, FMCG, Capital Good and Leisure class markets, though I read and explore other business segment…
I look Business as living organism.

B) Trade/Special Situation/Cigar-butt:
This category is more dynamic and need vigilance on Corporate action, Market view and identification of opportunity gap with limited down-side. No insider information though with available factual public information and identification of price-value disparity. The investment timeframe might vary from couple of months to years based on how things get unfold. Never the less say, no assurance of conclusion in favor. The following is typical list -
De/Merger
Rights issue
Open offer
Buybacks
Delisting
Warrants
Special/big dividend payouts
QIPs
Expansions
Commodity/avg Business not valued by Market (cheap)

Dear @bkasal,
Could you please share the objective of initiating this thread? I’ve been meaning to initiate a thread on discussing the strategies of seasoned investors,various investing strategies, and intellectually stimulating discussions. But I didnt know enough to initiate a thread. I’d be happy to participate in discussions on this thread and learn from all.

As I mentioned to present and discuss my 13+ experience and inv/trade strategies. I believe it might help for new comers (3-4yrs) who have seen only bull market…

That would really help. So, will you be posting something or you’ll be responding to questions posted? I’m just trying to understand the approach to this discussion.

Sure. I would be writing about my experience and also sharing comments/views for specific queries.

I’m looking forward to reading your experiences.

Note-1: Risk

  1. Risk is loss of capital in a given timeframe, or permanent loss of capital
  2. Volatility is more bookish definition attempted to assign a number
  3. There could be sub-definitions for a person/profile with return/targets for a given timeframe -
    a. Loss of complete capital or less than price paid
    b. Less return than ‘projected’ to meet derived targets
    c. Risk from opportunity cost (relative terms)
  4. One easiest way to escape is put the capital in market which you don’t need. Whenever you invest in market the money belongs to Market, not necessarily to the company’s current or future Valuation. So, even if company does well, market may not raise valuation in near terms same way because of prevailing market forces.
  5. The above strategy helps to become more disconnect from daily market fluctuations. Also, it would help to behave ‘independently’ and ‘correctly’. If your facts are correct about business model and management, there could be certainly about risk control over the period of time.
  6. Further, it needs business acumen to behave like a ‘Business Person’. This I term as Business income under ‘Biz’ category.
  7. However, it might not be possible to adopt above strategy all the time to allocate all the capital. As individuals, Fund houses and other market participants who have specific targets and need to busy with activities, peer-pressure, regulatory conditions limit to adapt above strategy.
  8. For them all above risk sub-definitions get applied and hence broadens exposure to risk. Hence you might be seen more articles published in media and marketed.
  9. However, it gives more strategic options to bet if a person has appetite for the same. Here, criticality is required for someone to avoid getting over exposed in-terms of capital allocations and burn out. As what matters is how long you could stay-on and played the bets in the Market.
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How does Trading help? Wouldn’t it be peanuts compared to the gains you get via Long term compounding? And don’t you again run the risk of loss of capital, which is sacramental in investing?

Just curious, because I have very little faith that Trading actually has a logic behind it.

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In fact, I suggest investment ‘Biz’ like and where I had multibaggers. Trading might help in some cases with certainty of event to happen as categorized in my earlier post.

 Business:

The fundamental to Market is underline business basics and characteristics –

A) The business has efficiency like a machine to operate and produce output at any given point of time. It is bound by setup made through sourcing of raw material (goods, finance, etc.) processing (machines, business-model/processes, people, etc.), and transaction with customer (distribution, right time, cash receipt, hook-up, etc.). Further, dimensions come from brand, patent, location, asset-uniqueness, nature-of-business, industry dynamics and black-swan event(s).
B) Any investor need to evaluate business which is underline for market pricing. It is that Simple. However, complexity arises from knowing facts about (A), Market movements, and ‘noise’. Which further creates challenges by one’s risk profile, capturing business cycle of the company and vision to look into future to determine value of the business.
C) So, any investment might be good or bad based on price which you paid for it and time horizon for return.

Hence, it is always recommended to understand Self which is critical and hard. The celebrity investors have different set of problems than you. They are good as reference and might help someone investment ideas.

Eg. Mr. Buffett now one of the concern about size of investment rather than rate of return. He might not capture a investment 1 million USD to 10 million over time., as doesn’t make impact on base capital vs. time spent.

Things dont change. Need learning.

  1. Truth prevails - ‘No analyst guarantees any positive outcome.’. However still People obsessed with predictions
  2. ‘Good research’? - How can a long para/document would be called ‘Good-research’. It may be some way presentation of past, however may not be future. [Conclusion].

Source: Saurabh Mukherjea: Ambit Capital CEO Saurabh Mukherjea quits - The Economic Times

Worth to read for some Investor’s behavioral trails -

Getting Started

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Warren commented the same during Berkshire annual meeting in May, which I highlighted in April -