valid points …
but for retail investors ancillaries business like Seat, Tyre, wheel etc are enough to take advantage of the business cycle in the industry .
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Memo to: Oaktree Clients
From: Howard Marks
Re: Selling Out
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Just wondering…if one changes the period analysed to 3 to 5 years instead of 10 years whether the return on investment for large caps and small/medium caps changes. Some of us have limited time horizons for a variety of reasons
Hi @ ishikaghose
That is the most difficult questions for me to answer and have been struggling for a long time to get it right.
Be wary of benchmarking against returns calculated during the peak / near peak of bull run. All returns look great.
Do not forget that you will be investing today and are unaware of the situation at the time of redemption ( this may be 3 - 5 - 10 years).
However, what i have understood is that as you increase the period of investment, returns tend to move up.
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There is no right answer here. Is the fastest 100m sprint runner faster than the fastest marathon runner? Yes and no.
In the short run (say upto a few years) the market can be so bearish that it makes no sense but you lose out. This gives rise the sayings like “market can be irrational for longer than you can remain solvent”.
The market is supposed to correct beyond this point but no one knows when. On a long enough timeframe it does correct (else capitalism breaks.) so this gives rise to sayings that “in the short run the market is a voting machine, in the long run the market is a weighing machine”
However, there is a third -manifestly more true- saying that “in a long enough timeframe we’re all dead”. Apart from participants dying the market can go to zero, something most participants actually ignore. But also in the last 100 years the entire markets of Germany, Japan, Russia, China have gone down to absolute zero at some point and Austria and a few others went down so much at one point that effectively they went down to zero.
Long story short, this is why markets are “non ergodic” or “path dependent” and should be treated accordingly. Past performance is not an indicator of future returns and you need to make peace with the fact that absolutely anything can happen in the future in any time frame. Or as Nietzsche said - Amor Fati.
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Great piece by SOIC @Worldlywiseinvestors on asking the right questions to understand a business better.
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This article is easy to follow and explains 4 stages of wealth creation namely accumulation, growth, independent and abundant. Another subtle piece of writing which explains the power of compounding
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Great article on the latest developments in the EV sector.
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Period analyzed in this case by author @drvijaymalik is 10 years, that’s his style of analysis. analysis can be for 3 to 5 years.
What matters is, whether you are able to capture future earnings prospects and growth correctly or you are lucky enough. As the price is a slave of future earnings and growth expectations, not just the past performance.
‘Market is a future looking animal’.
Just my thoughts, all the best for your analysis of future earnings and growth. 
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Any one interested in Marcellus new PMS portfolio info, watch this video
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A good overview on speciality chemical sector
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Size is associated with success, success is associated with hubris, and hubris is the beginning of the end of success. Some of the most enduring animals aren’t apex predators, but they’re very good at evasion, camouflage, and armor. They’re paranoid.
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Thats a good area to search for businesses for future investments. So which companies are good at evasion, camouflage and armor in addition to be paranoid? Camouflage I guess means the perception of the big companies to look intentionally look smaller when they are not.
Size is associated with success, success is associated with hubris, and hubris is the beginning of the end of success.
The moat results in the increase in the size of the business. The free cash flows are generated with continuing to succeed. The inefficient use of these free cash flows by de-worsification produces Hubris. The ‘ability’ of the business to consistently produce hubris when their reinvestment actions are not aligned with stakeholders especially the shareholders’ interest, causes the business to stop growing in size.
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In “Zero to One” Peter Thiel says monopoly companies deliberately show themselves as a small player in a very big industry. Google is shown as an example for that.
Armor in addition to be paranoid are the hallmark qualities of companies which are (were) small in size, however have never backed down in face of bullying by a Giant. Marico (Parachute) vs HUL (Nihar) comes to my mind. Such companies tend to be sending a strong message to competitors that a fight is going to be long drawn and energy draining. Such a long fight is more damaging for the giant and distract them from pursuing their bigger picture agenda.
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We are hearing all positives regarding the budget and fund managers are going overboard on Capex recovery etc etc. It also helps to read what’s the opposite views are. Stock prices may move on narrative but beyond a point it needs earnings and real spending by govt/private companies. If u hear Thermax and other cap goods company management they clearly say that private capex has not pickup at all. But many market pundit are saying we are the cusp of private sector capex. It might happen but its better to enter late when there is actual evidence of that happening.
Here Sanjeev Prasad says that budget increase on infra spend is very minuscule as compared to headline number.
Here Sunil Alagh says that Govt has taken crude oil at 70-75$ for all their budget calculations and crude is already at 90$. If crude price continue its upward trend, then all hell will broke loose. No mention of divestment and no mention of inflation either.
Listen to what Neelkanth Mishra views from 9 min onwards.
https://twitter.com/i/broadcasts/1rmGPgDEzkbKN?t=9s
Do you feel more confident of long-term growth after the event? One route to accelerate long-term growth would be through serious structural reform. That has not really been attempted in this Budget. There are no serious far reaching reforms, unlike the last Budget, such as privatisation of public sector banks
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