Hi,
The stock is Tanla. You can read my thoughts on the Tanla thread on VP - Tanla Platforms ~ Leading player in the fast-growing CPaaS market - #198 by nirvana_laha
The general learning for me for both Sequent and Tanla has been to go deep into the business model and strive to understand how the business works. What I learnt was, when stocks have strong tailwinds and the stories around them are bullish (Tanla - Wisely launch & huge CPaaS runway; Sequent - Only Indian USFDA approved animal pharma company, plays in regulated markets, brand is a moat), its easy to keep holding the stocks based on these sentiments and experts’ views, without getting one’s hands dirty by looking under the hood of the business.
The conclusions for me are as follows :
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If you don’t understand the business inside out i.e. you are sort of straying outside your circle of competence, then manage risk with position sizing. I let my position in Tanla become too big and failed to book significant profits when valuations were high. What had become 2x for me, came down to 0.7x.
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In general, one should try to understand the businesses one owns in-depth, not just at a surface level. For e.g. the story around Wisely made me forget/ignore that Tanla still derives about 90%+ revenues from Enterprise SMS business and I did not due any due diligence on competitive dynamics developing there. I am not saying that I would have necessarily been successful in flagging the risk and reducing my position, but I would have been more wary and less complacent). The same story and pattern has played out for several investors in Sequent I believe.
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Learn to be extra careful when a stock keeps falling and enters the 200DMA zone and below. Price action is to be respected because often bearish price action means insiders or institutional investors are acting on information that you may not yet have. So when prices fall consistently, one needs to go back and re-check their thesis thoroughly. If one isn’t sure about what’s wrong, booking some profits and reducing the position proportionately maybe the right thing to do. Of course there are some investors who have high conviction and the power to stay invested in a stock for 10 years, for them such things may not matter. I am not a 10Y horizon investor, my horizon is 3 years for most stocks and 5 years for high conviction ones. So technicals and price action matter for me.
PS: Admins may delete this post if its not relevant to Sequent. Tried sharing my learnings here, part of which came from Sequent.