Greetings in the New Year!!
Its been a long sabbatical . Last I posted was probably in Mar 2018 on NGL Finechem! I regret the prolonged absence - much of it was unavoidable due to (energy sapping) poor personal health issues (compounded also by my own indiscipline) and critical condition of some elders in extended family. The good news is, as we struggled through and came to terms with the loss, the worst is probably over - I have learnt to manage the chronic condition much better, have regained back much on the health front.
Of late my VP friends/colleagues kept urging me, that while fortuitously it was probably the best time to sleep through the carnage of last 1.5 years, its high time I stepped back in the ring; high time we reignited much of the passion we were known for when we started out in 2010; high time we kick-started fresh initiatives to build on an excellent foundation towards extending VP’s sustainability and longevity - the VP Competitive Advantage!!
The keyword being reigniting the “Passion”!! I have no hesitation in owning up that I struggled for answers for much of last couple of months and more, until a simple observation offered me the most profound insight. What worked for us best in 2010 was that we found a way to involve and collate insights/advise from best of investing minds (that we had/could get access to) in a systemic way for influencing and directing our individual and community’s concerted efforts towards getting better at the Investment game.
So then 2020-2029: What’s my Role in Team VP
Don’t have to do much different now!!
Investment Learning Curve
My “role” remains that of the catalyst to attract smarter and smarter folks (skills we admire) around Team VP (get inside their heads, sort of) in a bid to distill and communicate back to the VP Community all that wisdom in crisp and hard-hitting ways (that hopefully doesn’t drown in our information overload age). But, now that us greenhorns have spent a decade ourselves in the market there is phenomenal track record, and diverse skills in Team VP itself , it’s imperative for me to first harness and capture that . Have already started the process, met up some VP and non-VP folks I admire last week and this, in Bangalore. Next week I am in Kolkata, and will catch up with some dudes there!
This may not be top-of-mind off hand for most of us but if you think about it, Team VP’s informal Expert Network - highly skilled domain professionals in every conceivable field/niche - basically our Go-to-Guys - who simplify, help us make sense of complex stuff and provide us huge domain insights (that otherwise we may spend enormous time and effort and still not get to real grip on) is simply huge. It’s such an incredibly rich resource base - something that we simply HAVE TO FORMALISE and leverage towards the community’s advantage. This will need sustained focus and drive (and active collaborators, more on that later) to deliver on, something I am sufficiently charged up to commit devoting significant energy and passion towards - as I can almost envision the grand outcome . Again as I ponder on this, there is no gainsaying within VP itself (~30K user base) every guy/gal is a domain expert in his/her own roji-roti - profession/business/trade!! Besides, there are a few guys within VP (and outside) on my radar who have taken such deep dives within a Sector, that they themselves might soon qualify to be a Sector Expert!
By now, most of you must be coming round to …theek hai baba…yeh sab to theek hain…anytime you showing me the Money?? Where are the real Actionables???
Hmm! A good answer is to redirect your attention that hey let’s concentrate on the process, the results will speak for themselves (like every Team India cricketer we see espousing today, and rightly so). But no, a better answer is that we are again re-dedicating us to being ACCOUNTABLE for all the free “timeless gyan” that we spend much energies on re-packaging and re-emphasising .
VP Public Portfolio
Some of the recent VP members may not know that our singular claim to fame in the first five years (2010-2015) was the hugely successful experiment around maintaining a VP Public Portfolio that we initiated within the first year, and updated regularly every 6 months. We were extremely lucky (business/industry tailwinds and very cheap valuations) and the experiment had a phenomenally successful track record (Mayur, Astral, Ajanta Pharma, PI industries, Poly Medicure, Alembic Pharma, Atul Auto, Canfin Homes, Avanti Feeds are top of the mind recall) - simply amazing to recall that home run stretch - many old-timers within and outside VP inform us whenever we meet, that this singular aspect was hugely impactful in their investment journey (just as it was in ours).
As I ponder about this, one aspect of the investment process diligence is brought home to me very very powerfully. We held ourselves accountable, and we did the due-diligence every 6 months first individually and then among the VP Core group, debated at length and then put up the buy/hold/sell recommendations, even as many of us individually might have had slightly divergent viewpoints on inclusion/exclusion of certain picks and Portfolio composition (without much market cycles experience -not really, we weren’t suave enough then).
Key is we tried to deliver as much of a risk-mitigated call as our collective skills then permitted. And proof of the pudding was in the eating - while our buy calls were always luckily on the money, our exit calls were also equally bang on in avoiding any draw-downs. We might have erred massively in recommending quitting Suprajit Engineering early as also an Astral Poly after 3 years, but we could anticipate business deterioration and correctly called an exit on Gujarat Reclaim and Atul Auto in time after a phenomenal run. There may have been many acts of omission, but perhaps there was hardly a single mis-step or big drawdowns! Yes we were LUCKY, but due credit would also be given to our solid INTENT, and some to adherence to due process (even as they might have been half-baked then).
Long story short, the very fact of being accountable for the VP Public Portfolio forced a certain kind of collective diligence on us and adherence to due process. Unfortunately we had to voluntarily stop the VP Public Portfolio service in 2015 once the SEBI regulations were announced on Buy/Sell/Hold recommendations, as we did not want to run foul on Compliance and endanger the VP Community survival itself based on the strict advise of many of our seniors/well-wishers and Mentors.
As a fallout and a big contributory factor (in hindsight) perhaps, during 2015-16-17 we have seen many cases where after years of tremendous run like in Ajanta Pharma, Alembic, Shilpa Medicare, Kaveri Seed, Kitex, and Avanti where we collectively did not debate/make exit calls (individually we consulted and some made the right smart calls, and some like me stubbornly stayed put in their favourites ) neither did we find a good way to flag it to the community in time to avoid big drawdowns in some, albeit all would have made significant money in these businesses despite drawdowns.
VP Model Public Portfolio 2.0
As we all probably have experienced individually and among investors we know, the runaway hits in 2017 yanked most of us away from due process - it was too easy to make money, anything with a hint of quality/growth were out of reach if you didn’t act in 2weeks ; everyone was probably guilty of diluting our own standards on Valuation/Conviction in small or large degrees. And we have all seen the result of that in 2018 with some pain still continuing for many of us, especially in our favourite small cap space.
So while we cannot continue with buy/sell/hold recommendations like we did in 2010-2015, what we can certainly do is put up a VP Model Public Portfolio that is current and accessible to everyone that we update periodically (as needed) with the same due diligence as before, but without the attendant time-sensitivity of before. We enable the next best option of providing a periodically updated Guideline/Model Portfolio that we will again hold ourselves accountable for. I am convinced this will be both for our own individual good as well as for the VP Community and the larger investment community.
We are ALWAYS willing to put our necks (and some not-deserved reputations) on the line, in order to learn from the mistakes, and steepen the Investment Learning Curve. There is no reason why again we can’t deliver a satisfactory public performance record, as collectively we are supposed to have matured and become more refined investors , even as we will have to depend much more on skills than luck to ensure repeatability of success.
As we embark on a new decade, we rededicate VP to the Goals we started with in 2010 - Democratic (free unfettered access to all), Actionable Insights, Accountable.
By the way, the biggest example and inspiration for democratic access in our Markets today is Ayush Mittal and Pratyush Mittal’s Screener.in - which they keep refining and making it more useful, every year. (Did you know VP was the first in India to debut with a techy power-user kind of screener in 2010, and likes to claim the credit for inspiring Pratyush for his extremely user-friendly version debut).
A big thank you to all of you for making VP what it is today !! Looking forward to see how this resonates with you. Your views and active participation in this re-dedication bid is invited. I will be grateful if all of us remain slightly conscious of not cluttering the thread and try and respond with actionable suggestions around what I like to call the Investor Learning Curve - stuff around what and how we can refine and actively participate on 2.0 Frameworks for Stock Picking, Business Models and Business Quality, Management Quality, Capital Allocation, Portfolio Structure and Management, Expert Network, Scuttlebutt Network, Management Q&As, Stock Stories, most importantly THREAD CLEAN UP, and other aspects in VP that you think needs FIXING, that may be your top of mind, or come to you as you ponder on above.
Thank you for your patience, on what might have been a long read. I hope it proves useful enough to spur energy and passion back into VP discourse, as much as it has energised me.
Before I forget, no amount of gratitude is enough for the selfless work continued dedicatedly by VP stalwarts like Hitesh (hats off to you Sir). Abhishek & Manish Vachhani both deserve special mention on their additional but thankless moderation workload. Ayush, Dheeraj, Kedar (Zygo), Yogesh Sane, Ankit Gupta, Rupesh Tatiya, Sandeep Patel for their consistent dedication as also the newer set of Top Contributors like Rupani Amit, Bharani (Phreak), Rahul, Vivek Mashrani, Kumar Saurabh, Harshit Goyal, Deepak Venkatesh, Narendra - I am hoping to meet up soon with and pick their brains. They all deserve a toast for their exemplary contribution towards making VP what it is today!! As do folks like Dhwanil Desai and Anant Jain who have contributed immensely in the recent past even if not immediately noticeable(?) in the past year (like my absence for past 2 years almost). Another big hurrah for probably the most special contribution - Pratyush Mittal - for brilliantly addressing all the tech requirements for VP Platform single-handedly.
Request VP old-timers and Top Contributors to also put their hands-up here on any aspect from these Actionables mentioned, or something not mentioned that energises them and would like to get their hands dirty with and/or drive the effort. If anything, it will expose commonly desired Actionables to many new members and help energise them into collaboration efforts.