Chandrakant Sampat - Mastermind & Great Human

Investment Learning
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Fellow Members:

I have found it is not the profits we make but the losses we don’t make that might take us further.

I am posting this late in the night to see if this thought process holds any value for the members we have today… since I feel, it is an excellent time to post so it’s not noticed :slight_smile:

Have posted this link before on another thread but thought lets challenge ourselves… First, the thought in the link which I feel which is an eye opener…

http://www.valuewalk.com/chandrakant-sampat/ It took me a few readings to grasp just about 1% of his thinking.

Now after “really” understanding" the question… is there anything that currently fits the bill?

Rest seems like speculation.

Quoting the CS interview "What is Sampat’s secret to good investing? Pat comes with the answer: Invest in a business you understand, the company should have either zero or very little debt, the share should be available at a P/E ratio of 13 to 14 times the current year’s earnings and lastly, it should be available between 3.5% and 4%. “It is that simple!” he says. This is all he does; he says, no more research. Follow these golden rules, and you can be as good as he can, he concluded."

What can our esteemed and cherished members see? Anything? Or simply stay in cash?

Please, at the cost of sounding silly, may I request only the very special businesses to be put forth? With clear reasons?

If they are great but do not meet the masters thought process… please give respect to the master and leave them for other posts? Which are great by the way! And valued by all. Just not here for sanctity, humble request.

If Chandrakant Sampat looks down to see us remembering him, would he approve? And would he approve the logic?

I am hoping that we can impress his soul and his sage words of advise. Then he may still lives with us.

If there is nothing to comment on today or in a year, we can take his advise and simply wait till the right one appears. A purist thought process.

Would love to see the most cherished ideas here tomorrow or in due time, only when they meet CS’s high standards.

It might be 1-2 days or 1-2 years before we can share with him something special we have seen. He may be watching smiling. Especially, if we can stand for each other just like he did for so many with his wisdom and patience before we share here.

Lets try!

Best.

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“Between 3.5 and 4 ?”
What did he mean by these percentages ?

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I think that’s the dividend yield?

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Yes, correct; that is the dividend yield.

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Would Hindustan Zinc fit the requirements?

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@valuestudent

Great that you initiate thread on legendary investor Chandrakantbhai. In era of 1950s-1980s, even getting a book from Western world was taking more than a week, CS put all his efforts on reading and developing his own style suitable to Indian market.

We shall try to compile more material on such legendery investors in India and give them respect about what they have achieved in chellanging circumstances and learn from their investment style.

.

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@akbarkhan Sir, I looked at Hindustan Zinc. It seems the numbers are skewed only because of the extraordinarily high dividend paid a couple of times in the last few years. If we take them out then the dividend yield would fall into the acceptable braket. However, I suspect by then the stock price would also come back into the acceptable bracket. At that time it might be a good stock :slight_smile:
There is no proper thread on Hindustan Zinc with the exception of one which was playing the special situation. Maybe we could rename it to only the company name to continue with the same thread when the time is right.
You thoughts and advise are most welcome.

@dd1474 Thank you Sir. It will be a wonderful Idea to make this compilation. Although we have learnt a lot from the global investors I think we have not paid much attention to the stars from our own universe who took into account only the local factors that matter in India.
For example, I was speaking a while ago to someone who has been investing in the Indian stock markets for around 50 years. I learnt that back then they never used to pick stocks with a PE in mind. They used to pick it with the dividend in mind and they would pay a multiple of the dividend and not a multiple of PE; and this is something that has changed today.

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I have created a new thread on Hindustan Zinc attempting to get key aspect of the business and valuation. Find enclosed link for same. Let me know your view on same.
http://forum.valuepickr.com/t/hindustan-zinc-would-it-galvanize-capital-of-investor/10851?u=dd1474&source_topic_id=10835

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MPS Ltd is one company which falls almost in line with the requirements. I think we already have a thread for MPS here

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@Hocuspocus32 Thanks for the heads up. The MPS thread is very entertaining and knowledgable.

I just checked and Mr. Sampat would disapprove investing in MPS today :). He might have gone with it many years ago when the idea was first floated here on valuepickr (which was superb picking by the way) but would have sold when Mr. Damani sold.

Anything that can be disrupted can make tremendous money for some time but the chances of it doing so for an unblemished human lifetime are very limited.

Thought must go into what business will sustain 20 years from today and will still give a good dividend without fail for 20 years.

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Here I propose a Chandrakant Sampat type of stock. Hindustan Unilever Limited. For discussion on this stock we should use the individual stock page. Again this one does not have a clear page, so I will rename the existing page which has some info on the open offer.

Key to note will be what happens to the stock price when our stock index corrects dramatically in 2008 and it’s other corrections in other times. Watch the chart.

Screen Shot 2017-06-09 at 12.25.27.png1518×978 101 KB

Now, will this company be around in 20-30 years? :slight_smile:

Also, will it pay a dividend which is healthy every year? :slight_smile:

Do I need to monitor the performance of this company every quarter? :slight_smile:

So I hope this sets the trajectory on what are Chandrakant Sampat stocks.

I am also uploading screener data for reference but we can all download it at any time.

Hind. Unilever.xlsm (62.4 KB)

Is it a buy today? I feel the PE multiple clearly shows that now in today’s bull (frothy?) market even this trades at double the multiple of 2008. So maybe a good stock to enter into in a good correction. But possible to take a starter position anytime in even a small correction.

Please lets try to make a collection of these gems.

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While HUL may need a huge crash, Infosys seems to be getting closer to the buying range.

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@akbarkhan Sir. The working logic I am using is: What was, is and will be always needed in India.

The Indian consumer can do with or without Infosys. I know the argument, IT is needed by businesses but just like FMCG’s are by consumers. But that is not true.

You and me have been eating maggi since our childhood, our children (if any) will be eating it, and their children will also eat maggi. Same with our toothpaste and toothbrush and our soaps etc; and most importantly we don’t and will not look at the price of maggi or of coalgate. Whereas the very same people (you and me) would play hardball with an Infosys type of companies at one time or the other.

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Instead of HUL, would you buy and hold ITC for 10 years? The story is the same as HUL was maybe 30 years ago and they do have the cash power to establish themselves.

Question is do you have the patience and conviction to hold for long term? You may have to forego some opportunity cost of getting a multibagger though.

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@Alphin Yes I would :slight_smile: and that would qualify as a Chandrakant Sampat stock.

I am slightly more keen on having a decent dividend and not having to log in more than once a month to buy a little more with new savings in existing holdings rather than to always check the stock prices and quarterly reports.

Basically idea is stories which are not dependent on Donald Trump, Barack Obama, Brexit, Theresa May, France, China, Russia, Germany, Toronto, Hurricane in Florida, NPA Reduction, Cloud Computing, Janet Yellen, Dollar Movement, Rupee Movement and all other such “very important” things that worry investors.

Kitna bagger milega is not so important if I am healthy and able to do a SIP for 20-25 years, is the lines I am thinking on. Jitna bhi bagger milega I should still probably not sell anything except if funds are need for some non stocks reason. An endowment type of portfolio.

I am looking and trying to train my mind for majaa marneka and chill rehneka boss :slight_smile: investments. I am trying for us to study the longest standing survivors in Indian equities for last 30-40 years, not the Jesse Livermore’s who made a lot and then lost a lot (all actually).

Answer to the second question: Sir, I do think so, but I will only know for sure in time.

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Sorry… but not instead of… It would be both. Trying to build a list of 5 to 10.

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@Valuestudent… Long term investment gives good return if you are in well managed companies. But once the market starts rolling down the hill it hits it like a pack of cards and you never know what hit you. It tests your patience in the company and the long term philosophy. You have to be cautious at all stages especially when markets are conquering new heights at this juncture money making is looking the easiest thing to do .Nothing negative on long term fundamentals but never forget the troughs of markets while sitting on top.

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@s11 Thank you for the message. You are absolutely correct. Good business at any price is not worth it. I actually think all good businesses are currently very richly valued and need a strong correction to enter. I am willing to wait patiently for 1 day, 3 years or whatever time it takes and interested in building a collection of good businesses to have a list ready when the time is right.

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Hi @Alphin. For quite some time your sentence above makes me want to revisit and ask you more about ITC. I know only the basics of ITC whereas your remark was quite deep. I don’t know if it helps you to articulate your thoughts on ITC but if it does, would it be possible to help me and any others who may find it useful with the story on ITC. Would greatly appreciate it.
Disc-I have taken a starter position recently in ITC. Many thanks to the GST bump for helping out for me to get into an even better sweet spot :slight_smile:

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To be honest, I do not have any special insight into ITC. but the only fact that makes me believe into ITC story is that they do own shelf space ( and consumer mind space ) in all kinds of stores with biscuits, deodorants and other FMCG goods.

I believe they have a good pipeline to take goods from the farmers/ raw materials and convert into value added goods to be sold to consumers. They also have demonstrated the capability to leverage on this pipeline to launch new products. It fits in the description of stocks that you mentioned in your post of long term wealth creation.

That being said they do have a baggage of tobbaco products and the uncertainties associated with it. You may do your due diligence.

Disc: I am not invested in it at present however had used it earlier as a safe stock which had been taken benefit of during bear market phases and corrections.

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