Solid set od nos from AVL Aditya Vision ltd. prospects still look bright.
discl- invested and biased
AVL NOS Q1 FY 24 N PPT.pdf (2.8 MB)
3 Likes
[Prashant Jain on paying the price for conviction | Articles | Morningstar India]e(https://www.morningstar.in/posts/74713/prashant-jain-on-paying-the-price-for-conviction.aspx)
A good one
4 Likes
Hi Vivek,
Maybe a silly question,
I am invested in AVL and wanted your view on their speed of store growth- do you think the speed of store opening is unmanageable? The same management is also opening up stores for Aditya consumer. Is this a risk in a sense that they are spreading themselves too thin?
AGM is there on 17 August . plz raise all your queries there
So far superb execution has been the forte of AVL starting with 1 store in 2000 & 19 stores at time of IPO in 2016.
So far no store has been closed down & no equity dilution other then IPO .
PLz do some scuttlebutt with OEMs like LG Samsung Haier Havells & local Bihari friends to get a better idea.
1 Like
https://www.morningstar.in/posts/74812/nilesh-shah-on-luck-and-good-karma.aspx
You have worked in various AMCs and donned many hats: fund manager, CIO, deputy MD, MD. How have your priorities and loyalties shifted?
I was lucky to get trained at Franklin Templeton where the client or the investor was always first. I started my career teaching the advantages of mutual funds, especially debt funds. So keeping client interest first has always been my motto.
A fund manager wants to outperform peers and the benchmark. A CIO wants to manage risk and generate returns. A CEO wants to ensure that all is observed from a compliance and regulatory point of view. But keeping the client first has always been my priority.
Priority has never changed, tactics have.
As a CEO how do you deal with conflict with your fund management team?
There is conflict of interest in everything.
My boss Uday Kotak told me that life can be divided into four quotients.
- Bhagwan Ram. The objective and the means to achieve it are righteous.
- Krishna. The objective is righteous but the means to achieving it could mean cutting corners.
- Duryodhana. The objective is not righteous but the means to achieve it are righteous.
- Ravana: Neither the objective nor the means to achieve it are righteous.
He told me that he would like me to be in the Ram quotient most of the time. Venturing into the Krishna quotient occasionally is acceptable. But never into the other two. This is how we navigate conflicts. Whenever we face a conflict, which we do on a daily basis, we figure out where we are with this as a framework.
As a CIO you would understand when the market punishes some of the investment bets. Let’s say some of your funds are not performing well. Do you stand by your fund managers or pull them up? How involved do you get?
Any parent will always have greater love for the weakest sibling. A parent wants to take care of the child who is weaker rather than the stronger one. All our funds are like our children. So extra effort goes into an underperforming fund.
There were times when I used to get swayed and copy an index or a successful peer. And compound my error. The market is not kind when you compound your error.
Over time, I learned that you have to stay with your conviction. Because you took a call doesn’t mean that the market will reward you immediately. The market rewards fundamentals over a period of time. So every time you take a bet, you do a careful analysis, weigh the risk and return, and yet can go wrong. When that happens, reassess your position without emotion. If you believe that you are right, double down your position. When you have to double down your loss-making position, it shows your conviction. If you are doing it grudgingly, you are not convinced.
Don’t compound your error. Stay with your conviction. Keep rationally evaluating your risk-return trade-off without emotions.
More often than not, I have seen that if you are fundamentally right, sooner or later the market will reward you. If you are playing momentum, sooner or later the market will punish you.
You have spoken of financial apartheid in the past. Can you explain it?
Financial illiteracy results in financial apartheid.
More than 18 crore individuals trade in cryptos, 99% would have lost money.
More than 7 crore demat accounts. When majority of them trade in F&O, 89% of them lost money last year, as per SEBI’s study.
There are millions of women who do monthly recurring investments with goldsmiths nearby. Many a time they get paid but the goldsmith has been known to run away with their money.
More than 2 crore Indians have lost more than Rs 1.80 lakh crore in ponzi schemes.
This is financial apartheid.
Against that, I have examples of people who were at the bottom of the pyramid and did SIPs of Rs 1,000 and Rs 5,000 and have built reasonable nest eggs.
How do we bring irrational, uneducated, greedy, illiterate people into regular, disciplined, long-term investing – so that their capital is protected and they get financial freedom?
This is where the mutual fund industry works hard. When I see 4 crore investors doing an SIP with us, I do feel happy. But when I look at the potential, there are probably 40 crore investors who need this.
There is no quick fire, instant gratification solution. Regular long-term investment provides financial security and removes financial apartheid.
You once said that you can’t expect rating agencies to treat everyone equally. Also, if a country in the West does money laundering, it is a tax haven. If an Emerging Economy does it, it is a terrorist nation. These are biases. How do you not bring your biases to the table? How do keep them at bay?
First, we must be aware that we do have biases. Self recognition is the most important step. If I say that I have reached nirvana and have no biases, it is a lie.
Once you acknowledge your bias, verify with data. For example, there was a software company which my fund managers thought was not appropriate from a governance point of view. In 2017, it kept going up. We could stick to our conviction and stay out of it completely. But it was important to listen to analysts who were bullish on the company and figure out the holes in their argument.
Be aware of your biases. Verify them with data. If you are right, well and good. If you are wrong, make a u-turn. There is no place for arrogance in the market.
Your first investment was one where you lost money but gained experience; you leveraged and bought into a frenzy. If your daughter was going to make the same mistake, what would be your advice?
My advice to her would be “beta learn from my mistakes. Why should you commit a mistake to learn?” If she still insists, I will ensure that the damage done is the bare minimum and not as high as when I committed that error.
It is important to learn from the mistakes of others, rather than make them yourself. It is inevitable that all of us will make mistakes. Just don’t repeat them. And make mistakes in smaller denominations or quantum so that it doesn’t derail you.
What drives you? You have an impressive stature in financial services. Part-time member of the Economic Advisory Council to the Prime Minister. Are there moments when you allow yourself to enjoy your success? Or are you always thinking of the next mountain to climb?
The answer is yes and no.
My wife was a college professor when we were dating. She used to command a lot of respect.
We used to go for movies and when standing in line to book tickets, students would come and hand over tickets. We used to travel by train or bus. And a student or parent would give her their seat. That time, neither of us had a car. And neither was there any online booking.
I too wanted that respect. In those days fund managers were not respected. No one offered me a cinema ticket or a seat. Today, in the mutual fund industry, I earn reasonable money and I also earn reasonable blessings. This is what drives me. These blessings give me the energy to go to the next height.
In your journey, how has intuition or gut feel or karma or luck played a role?
Luck has played a huge role.
I was a gold medallist chartered accountant. I was about to join a manufacturing company. The general manager recruiting me advised me to try my hand at financial services. That was a lucky break.
I joined ICICI Securities. I later got an offer to join another company at double the salary. I told my boss. He told me to be long-term oriented, not short term, and that my career was better off at ICICI Securities. I was lucky to get that advice.
When I joined Franklin Templeton, I had no idea what a mutual fund was. They taught me. That was a lucky break.
Not many know that in the modern mutual fund industry, the first debt fund default was witnessed by me. It could have ended my career. But Franklin Templeton supported us when they realised that it was not our mistake. That was a lucky break.
So wherever I have reached, it is undoubtedly luck, luck and luck.
Is there good karma? Undoubtedly yes. I have made so many mistakes and some divinity has helped me out of it.
There was a newspaper company in which we had invested and owned a reasonably large stake. We were in love with the company. One day an analyst told us that this newspaper was selling advertising space as expensive as Times of India. Thanks to that information, we were able to get out of that position at a huge profit. Coming out of a mistake with profit is good karma. We respected that analyst, listened to him, and acknowledged that he was kind enough to come to us first rather than other stakeholders.
Do well. Good will happen to you. It is an eternal truth.
Finally, there is passion. We are in a hugely competitive industry. Everyone is hugely talented. Everyone works hard. How do you stay ahead? It has to be passion.
Passion. Purpose. Good karma. Luck. All come together to make a winner.
Larissa Fernand is an investment specialist at Morningstar. You can follow her on Twitter.
Source: https://www.morningstar.in/posts/74812/nilesh-shah-on-luck-and-good-karma.aspx
13 Likes
3 Likes
Good news for HBL Power
2 Likes
A good interview of famous investor Anil Goel
3 Likes
https://twitter.com/akshat96jain/status/1700480053270950394
One more good interview with legendary investor Govind Parekh ji.
1 Like
One more gem of an interaction with venerable S Naren of ICICI.
1 Like
Nice article. Some questions:-
- I agree with Market cycles. Have read Howard Marks. Naren is saying here that we know that now small cap and midcap are overvalued so as per prudent asset allocation theme, we should shift some portion from small and midcap stocks to large cap. But then what about allowing to compound theory?
- I will give some examples like Polycab, Astral, Apl appollo, SRF, Chola, all these stocks are doing very good and they are from midcap category. Their PE has also re-rated . If PE was earlier in twenties , now its in fourties. So is Naren saying that I should transfer allocation from these stocks to large cap stocks like Dmart, Titan or HDFC bank etc?? Since I think all these midcap stories are fast growing and Consistent compounder types in next decade, does it make sense to sell them now due to exuberance and get into Large caps for safety???
5 Likes
He speaks a lot about asset allocation everytime he speaks in TV and that his much spoken about flagship fund Icici balanced advantage fund which has AUM of 50,000 crore with asset allocation being done depending upon valuations,
has done very badly over last 1,3,5 years with returns of 10%, 15%, 11% respectively.
Where as HDFC balanced advantage which was previously managed by Prashant jain ( now he has left HDFC AMC) with AUM of Rs 60,000 crore has given 15 %, 27%, 16% over last 1.3,5 years.
If you see the portfolio , Hdfc balanced advantage fund has mostly select mid and small cap stocks and ICICI balanced advantage has mostly large cap stocks.
4 Likes
So If I understand you correctly, what you are pointing out is, even if he is a respected fund manager, his actual performance has been sub-par and nothing to take seriously. He may be sounding good on paper, but in actuality, if we follow him, we will also get similar low returns like him.
3 Likes
We cannot judge any fund manager by only one fund. Naren is a seasoned fund manager and he manages more than one funds. One of his funds ICICI Pru value discovery has performed really well in whatever timeframe you take.
As far as Prashant Jain is concerned, he was criticized for his take on PSU stocks but the current run proved him right. Each fund and fund manager goes through period of out and under performance. The key is to stick to your style of investing and not change as per market.
5 Likes
Mudit,
Every individual has their own style of investing. One should not blindly follow these fund/portfolio managers and their advise.
Fund managers regularly (relative to retailers like you and me) churn their holdings based on their philosophy/logic/rule/principle. My principle is keep adding on every dip as long as I don’t lose conviction on a particular stock. I will try to hold as long as possible.
Earlier I used to buy and sell frequently based on the market commentators/traders w/o much knowledge. Now I have few companies which were there in my portfolio > 2 years, which I am planning to hold as maximum as possible.
My two cents.
2 Likes
i was referring to a fund with highest AUM of more than 50000 crore for reference for both HDFC AMC and icici AMC. And performance can vary - I agree …but we must appreciate the time horizon of 1,3, 5 even 10 years which takes care of all market cycles- as an investor I am not bothered where he puts money. but if one is consistently deliver returns - that is where as an investor i would invest.
Even if I take 10 years period,
Icici balanced advantage over 10 years compounded just 12% where as HDFC balanced advantage has given 17% over 10 years
I have not come across a single fund where ICICI AMC has given market beating returns consistently over 1,3,5, 10 years …
or am I missing something ?
4 Likes
(2063) IPO Adda | RR Kabel IPO To Open On September 13 | BQ Prime - YouTube
tomorrow listing. cud be a good buy around ipo price or at slight premium imho with 1 to 2 year view.
Good B2C branded play in wires and cables & FMEG sector ,exports & promoter quality. PE around 40 if Q1 FY 24 analysed
Risk Mostly OFS with PE TPG reducing a lot. valns on higher side on fy 23 basis
3 Likes
good interview of RR KABEL on Jagran business
2 Likes