VP CHINTAN BAITHAK GOA 2017: Experience Sharing

2017 TopContributors, Please add your NOTES/Learnings from 2017 Annual meet, here. Please allow for some time for this to get populated.

There were some super presentations (I couldn’t be there, but heard about).
Hope folks will find the time to upload their Notes/Learnings from the Conference



Hi folks

Find attached the presentation i made on my investment journey at the recent VP Annual meet

My biggest learning which i realised as the meet progressed was there is no single way to invest. There were so many investment styles on display and so many different temperaments. However my aha moment came on the first day itself when Mr Vinay Parikh remarked “you need to have a framework & a structure around what you know and follow it in letter & spirit”. It was a simple statement but resonated with me.

Another statement made by @aveekmitra - was let investing not be the only thing driving your life and have many more things to do. That was also inspiring from a senior practitioner like himself.

The amount of deep diving done by @desaidhwanil is something all of us should aspire for. His presentation on the checklist he follows was an eye opener

The irrepressible @hitesh2710 & @manish962 follow their own styles that one can only marvel. Their understanding of techno funda is right up there.

@tirumal - with his humorous quips but very useful advice kept the sessions lively. In one of my discussions with him he remarked - invest where you have an edge. What do you know about the business that others dont know? These are the little insights that take you ahead

@ayushmit - His presentation on incremental learnings was superb. One key takeaway was what makes the business special & unique. I think ayushbhai thinks more like a businessman than an investor. That is the mental switch one needs make. Many thanks to ayushbhai for driving that point powerfully. Much respect for @pratyushmittal for his incredible tool screener.in & his presentation on algorithms to live by.

I will stop now waxing eloquent about the meet & post my notes so that everyone can benefit.

Do let me know your thoughts/views/criticisms on the presentation



I attended the conference for first time and I was utterly overwhelmed on day 0 itself by the diversity, skill set and hard work of the group. I thought I was good tracking 20-25 stories but then there are people who have studied/researched everything and in much greater detail. It dawned on me that time is the only real edge I have in the world of investing.

Now coming to guests, two things that stood out for me from Kenneth Andrade’s talks were ->

  • There is a method to madness in extracting idea from macro trends, in playing cycles and it can be done for handsome rewards
  • Based on his talk and interviews, he still buys undervalued businesses and is unwilling to pay a lot

Other than this, his one-liners stood out for me. Some of them are listed below ->

  • Small caps tend to remain small, very few businesses come out of that
  • When only one company makes money in industry, then industry is at the bottom of the cycle
  • Value does not remain value when growth comes along, when growth does not come in, it is a value trap
  • To track cycles, look at supply and not at demand

Vinay Parikh was present with us for most of the conference and one or two things that stood out for me are ->

  • It is very important to have structure around your investing - why you are buying something, when you will sell, capital allocation etc. Without structure, you will not understand areas of improvement. Having structure will help you manage emotions in both bull and bear cycles. One of his investment criteria is companies with institutionalized decision making process.
  • Another thing was very long holding periods e.g. I think he has been holding Nestle for 15+ years. It has made me think that whether I have such businesses in my portfolio and more importantly temperament to hold these businesses through their struggles and triumphs.

Manoj Dua was another street smart investor who was present with us for the part of the conference. One thing that stood out for me from him was - when the business provides clear visibility of future, the stock price will move first followed by sales and them margin. e.g. Real Estate stocks in last one year. Another important learning I found was that - for some sectors demand will not vanish but will only be deferred. e.g. housing and sugar.

Apart from these, some learning from individual members during numerous discussion were also very rewarding. They are listed below ->

I was privileged to stay with Ayush bhai during the duration of the conference and pick his brains. One of the most important lesson I learned from him was - We all have theories about the company. When that theory is challenged by disconcerting numbers quarter after quarter, it is time to act - both on the upside and downside.

Another thing that impressed me was - how fiercely open minded Ayush bhai is w.r.t. promoters of the company, other investors etc. He is willing to give very long rope to promoters if he believes he has found some insight into business. From big investors to small investors (like me), he is very open to listen for ideas, insights etc.

His presentation on diversified portfolio approach for investing was so persuasive that, almost for a day, I was tempted to switch to diversified approach (I haven’t because I do not have bandwidth to track so many businesses).

I spent a lot of time with Anant bhai at conference and some of the awesome things I learned are as follows ->

His presentation on better banking is one the most impressive presentation I have come across. It has helped me a great deal to better my understanding of financial companies. Some of the points are as below.

  • Banks lending to NBFCs/MFIs is actually stupid, who controls underwriting in these cases?
  • Due to leverage and lending as above, snowballing effect is quite common in financial companies.
  • Market share is a not a good metric at all to look at for financial companies.
  • Banking business models tend to reward short term gain over long term pain. The legacy and reputation of promoters, institutions is an important parameter for banks.

Also he along with @tirumal figured out the end of bull run in pharma one year ahead of everyone else. I found it to be most impressive and his advice on avoiding group think in VP kind of setup is one of the best leanings for me.

I thought that I did a very good job of reading 15-20 books a year for someone with full time day job. And then I came across dada who beat me to it hands down. I would not mention the number of books he reads every year but that number is just mind boggling.

I was sitting with 50% cash prior to VP Goa meet and I was feeling that the current rally was similar to one in 2007. Dada and Anant bhai corrected this conclusion with correct conclusion that current rally is more close to 2004. One of the most important indication of the bubble is the rise in the debt of private companies. Since India is going through deleveraging cycle, we are looking at a correction and not the bursting of the bubble. This discussion has started thought process for me to look for more evidence and possibility of deploying capital with caution.

Although I did not spend a lot of time with Dhwanil bhai, his presentation on art of selling and investment checklist was very good.
I had my own checklist which I felt was pretty decent but Dhwanil bhai’s checklist was much more evolved. His understanding of business quality and business structure is on another plane altogether. Understanding business quality and identifying great businesses has emerged as an area of improvement for me based on his presentations.

It was an absolute privilege to spend time with Hitesh bhai and his concise remarks are a mine of gold.
Few of them are ->

  • Even amidst all this learning, you figure out what works for you and your style and only absorb these bits. (First year ke baad maine style change kiya and fir muze laga ye main kya kar raha hoon?)
  • If a stock does not respond to good news or bad news, it is usually sign of top or bottom in the story.
  • There is life beyond investing and try to enjoy it. (Hitesh bhai is an avid swimmer and it was good to get some swimming tips as well :slight_smile: )

Other than this, clustering presentation from Nirav was very good. I found clustering to be a very powerful idea in all walks of life but especially in investing. Good or bad things tend to happen in clusters for businesses.

Sandeep bhai’s presentation on finding data and connecting dots from various sources was very very good.

Tirumal sir was another concise character and some of his Hyderabadi one liners over breakfast were very impactful.
- Ye kya desk research karate ji, jara ground pe aao ji?
- Kya hota market rally hua to, crash aaya to - invest karo ji, dekho kya hota?
- MFI/NBFC me kuch bhi ho ra, careful raho

His presentation on pharma was one of the very best.

Apart from this, one of the most important change that has happened in my process was to not look at companies in isolation. I was doing that before and I realized it is important to research the width before going deep into one company.
Whenever one is checking capex, look at capex across industry. e.g. It was very clear that everybody in pharma industry was increasing capex. It was sure sign of slowdown to come. Look at profit margins, supply, growth across the industry. Also environmental clearance reports can be a source of great insights.

These are some of the notes. Other than the names above, I learned quite a lot from other participants as well. It was a truly amazing experience.



Hi Rupesh, Excellent summarization, can you please explain a bit on this ‘When only one company makes money in industry, then industry is at the bottom of the cycle’

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@basumallick @rupeshtatiya @ananth It will be good to understand, more on your theories on valuation of the market. Deleveraging of Private Orgs is one Kenneth Andrade also mentioned in some of the interviews. Also understand Market Cap to GDP ration theory does not apply to India since unlike USA , a lot of stuff still remain uncaptured

Mentioning since PE already 25 ,

It means after some supply ( consolidation of the sector ) will come down as almost all industry player are losing money and weak player in that industry are under heavy stress. As supply is going to reduce going forward less competition and Margin will start to improve. As far demand is difficult to judge but supply is definitely going to reduce in thet industry…


VP Goa meet is ocean of knowledge. Despite spending five days, still it was “Ye Dil Mange More”. I gained a lot from interaction with various investment wizards to friends.

The meet began with presenations of Bheeshma, Neerav, Kedar, Rupesh and Yogesh presentation. Each of them presented their investment very well. In fact, Vinay was also appreciated that the limited time they have spent, most of them have very clearly defined framwork for their investment which is quite good. Rupesh special comment that Salary is his top holding could be mantra for many of salaried indivdual who are investing the stock market. Bheeshma view “Time correction is more harmful then price correction”. Neerav give us insight into “high optionality investing”, which give limited downside but disporportionate upside explained very well with example of Greenlam and Styllam industries. Kedar has his unique approach which avoid companies which employ intellectuals with high salary from IIT/IIM and also avoding third generations owned family business. He observed when third generation of family enters business, they have limited appetite for growth which normally not good for small cap investor. Yogesh shall be renamed as "Model"esh. He has clear define parameter based on past experience and paramter which drive his investment and also assist him in sell decision.

Ayush shared one very useful insight to us “Sowing many seeds”. With Agri income is also taxfree and invested in Avanti kind of company, Ayush does brought importance of tax adsjuted return from diversified high growth pool.

Sandeep Kapadia made excellent presentation of applying Global investment models to India. From Credit rating (Moody’s to Crisil), Financial lender (GE Cap to Bajaj Finance in India).

Sandeep Patel shall henceforth be renamed as “Decoder VP”. From a single word in public domain, Sandeep could infer and investigate exact product of the company and likely sales growth of that product (connecting dot from environment ministry to wikipedia to Zuaba Exim data and what not !!!) Excellent work on Transpek and PI Industries.

Kenneth expalined his thought process on cyclical investing. With government focus on doubling agri income, agri input is obvious choice for wealth creation. While it sound simple, the way he explained his investment approach was class apart. He also give us another important insight about checking company peak sale in previous cycle to valuation. When the cycle would turn positive, the company would normally double the previous cycle sales which could give indication for when to exit. In cyclical companies, profit are not constant and in turnaround PE would give misleading results. Hence, Kenneth like Sales to Enterprise value for market. If EV is around 1.5-2 times peak Cyclical sales, it would be strong indication for investment. However, he added one ceveat that the cyclical company shall survive and remain solvent even in worst of time to see another day. KA also shared another insight about importance of player actions in industry determine turn in cycle. Normally, action from suppliers like closure of plant, lower production, expansion, consolidation determine turn in cycle. Demand supply balance is more impacted by supplier actions. Keneth also caution about signficant market share of HDFC Bank (around 50% of total unsecured personal loan if my memory is correct) to investors which are looking at investing in NBFC driven by higher retail loan growth. The share in this market would be difficult to capture from HDFC Bank and other segment would be relatively inferior credit profile.

Keneth also suggested at potential offood processing sector for india where only 5% of food is processed. There could be significant capex in this area. He was not very keen to invest in NBFC (due to valaution), Capex cycle revival (due to lower capacity utilisation of industrial sector).

Vinay explained his journey and thought process. When asked about his comfort in Gillette at very high P/E, and also reverting Asian Paint cash study of Dhwanil , Vinay shared golden words to us" In FMCG company, when penetration of monopoly product like Gillette is in less than 10% in 1990s, applying terminal growth rate of 3-5% after 10 years would always understate valuation of the company. Till growth rate achieve say 50-60%, the sales growth is unlikely to reach in single digit as our excel projection model shows and hence, good quality management with strong brand, penetration in population is equally important to determine sales growth over longer run. Market does take that into consideration and give high PE for such companies. Vinay also differntiate key decision point and what is in investor control. Investor can decide company + purchase price+ position (allocation of capital). Once he has done that, he has no control on outcome of the process. All other factor like sentiment, valaution parameter and liquidity are not in control of investor. Hence, one shall be very careful while investing and critically evaluate all these factors.

There were some good insight from Global pharamceutical sector (Ankit), to ideal Swedish Bank to change in global technology (Anant). Wonderful presenation by Om explaining investment idea of legendary Indian investors; GST talk by Manishbhai, Exploring cyclical investing and future technical changes by Abhishek Basumallick, Neerav presentation of Clustering, Rupesh work on Eros financials fraud, Experienced advise from Aveek and Tirumal, Book review by Pratyush, Sharing update on Various seeds shown by Ayush, Dhwanil framework on check list and back testing compounder performance with example of Asian Paint were added flavour to the food.

Hiteshbhai did wonderful presentation on Technical analysis and finally, 10 minutes of Video of Legend Sir S P Mittal. Personally, to me, while there were many learning points, but investment journey of SP Mittal was most inspiring.

Last but not least, was remembering RD Burman (kind of 1 hour session on 70s-80s songs) started by Abhishek Basumalick, taken forward by Hiteshbhai and supported by all members (including yours failthfully) would always be among the best moments of my life.


Please upload notes, videos, presentations etc.

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Lovely presentation.Lot of nuggets to learn.One is a constant learner in the field of investing.Thanks again.

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This year’s Goa meet was graced by Kenneth Andrade for a day. His session was an eye opener. He has a top down approach and he comes across as a guy who is intensely data driven. His method of arriving at conclusions based on data is something I have never encountered before. I dont know if I would be able to use data to such effect. But one thing that struck me was about his theory about catching cyclicals at the bottom. He mentioned about watching for supply side shrinking, and consolidation in the industry. Most important observation from him was to see the “bottom falling off” where for a quarter or two there is absolute pain and this is usually followed by cyclical bottoms.

Vinay Parikh is an example of how to stick to your own methods in the face of so many different approaches. One key learning from him has been to identify one’s own strength and style and then try to get better at it.

Manoj Dua is a successful practitioner of non consensus small cap investing and I have had first hand experience of having his views esp on the real estate sector some time back in Feb 2017, even before we met at Goa. To practice his kind of investing one needs a very high level of conviction because for long period of time, the stocks you are invested in may not move and that should not create frustration. But when the call goes right, the rewards are immense.

Coming to VP guys, it was great to see all the newcomers this year raising the bar in terms of learning and maturity. Rupesh, Bheeshma, Kedar, Nirav and Yogesh brought fresh perspectives to the meet this year. Each of them acted as a catalyst in energising the other members.

One guy sorely missed was Donald who is always the mainstay in organising the event. In his absence the whole schedule was handled quite wonderfully by Ayush and Dhwanil. They were working with a handicap of uncertainties in terms of confirmation from experts but the whole five days went by without a hitch and especially this year’s meet seemed to be a lot more relaxing and hence there was a lot more learning that was absorbed. After this year’s meet the feedback I could give about the schedule is that we should provide enough time for relaxation and this would in turn enhance the learning experience. Its no use putting in a lot of topics in an effort to cover as many topics as possible. I felt that a lot of learning comes from interacting with other guys outside of the conference hall. I had earlier had reservations about five days being too long but after this meet, I feel atleast 4 or maybe 5 days is the correct way to go.

Besides these points it was great interacting with fellow investors who I have known since a long time. The beauty of this whole group is the cohesiveness and willingness to share information and knowledge without holding back.

I tend to meet guys like Dhwanil, NIrav, Ankit, Manish Vachhani based in Gujarat, and Ayush, Donald quite often but this meet provides interacting with the other guys like Abhishek, Tirumal, Anant Jain, Ananth Shenoy, both Sandeeps, Dheeraj , Om, Aveek etc.

The highlights for me from this year’s meet were Kenneth’s session and Nirav’s presentation on clustering. There will always be some guys like Dhwanil, Ayush, Anant Jain who will continuously surprise each year with their insights.

I would strongly urge guys not present at this year’s meet to contribute meaningfully to the forum and earn their place at next year’s meet. Its always a wonderful experience in terms of learning and camraderie.


@rupeshtatiya Sir, Thanks for sharing your wisdom. I have few doubts with respect to your reply

  1. How one can visualise the present scenario in terms of cycles ? any mental models or book recommendations

  2. Can you please explain Why increase in capital expenditure relates to slow down? doesn’t it mean that their increasing their capacity for future?

Take away from rupesh sir, “It is important to research the width before going deep in to one company” as it means that research the industry first before delving deep in to a company and thing to look while doing so

check list

  1. "Check capex across industry" my understanding from this check is, that is there any future growth due to expansion and how costly is to increase the growth.

  2. See profit margins across industry” my understanding from this check is, this might show how the business share might move across companies in the industry (As low profit margin company will take the large pie)

  3. Supply growth across industry” as this indicates the expansion phase of industry

@rupeshtatiya sir i want to know whether i am getting it right or wrong.

@desaidhwanil sir, from art of valuation (The ART of Valuation) thread i understood that A+,A++ business will be the multibaggers if identified early. But how to find this companies through screener. Your inputs are very valuable and will largely benefit the newbies like me.

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I actually have not played cycles but as Manoj bhai has explained weak companies will start losing money in the down cycle and there would come a phase where only the strongest companies would make some money. There would be some supply side contraction leading to increase in the prices and hence it might signal the cyclical upturn.

I just quickly tried to test this on sugar stocks and look following is the snapshot →

The data is from March’05 to March’16. Just applying the theory, I would say FY15 was the year when bottom fell off and it might have indicated cyclical upturn.

Another thing, Kenneth sir said was that you can stay with market leader while playing cycles.

Disc - No investments in any of the stocks above, this is only for academic exercise. Please do your own due diligence.



Please do not call me sir, I do not deserve it at all.

As mentioned before, I have never played the business cycles and it was one of the presentations done by Kenneth Andrade. I think the biggest clue given is “look at the supply” to figure out cycles. When supply keeps going up, fewer and fewer people will make money. There will be a point when supply will start shrinking and it will reach a bottom.

I did not say increase in capital expenditure relates to slow down. Capital expenditure can be financed by internal accruals, it does not necessarily have to be financed by debt. What I said was, the rise in the debt of private companies and most importantly, the rate of rise debt are an important signals.

When private debt grows very fast as a share of GDP (40%+ in 5 years), it probably indicates overoptimistic mood and increasingly bad lending/borrowing decisions. As everything is eventually cyclical, these bad debt decisions come back to bite and it takes much longer to clean them up. e.g. Around 2005-07, It felt like India was conquering the world, a lot of overseas acquisitions happened etc. Private companies took debt at the rate in excess of 10%. When the crash came, many of the borrowers had no repaying ability and we are struggling with NPA problem to this date.

I found the chapter named “Kiss of Debt” in Ruchir Sharma’s book “Rise and Fall of Nations” very relevant for this.

This comment was particularly for Pharma companies but I feel it might be useful in other areas as well. Around 2014-2015, all the pharma companies were reporting super growth and super margins. And all of them were increasing their capex at faster pace and all of them were targeting complex molecules.

Regarding profit margins, if industry is making very high margins and the nature of business is not B2C (rather it is B2B), market forces will cause that margins to go down. e.g. Buyer side consolidation in pharma companies caused margin suppression.



@rupeshtatiya Your presentation slides?

Here is the Investment Journey presentation I prepared for the Goa meet.

Investment journey- Yogesh Sane.pdf (644.7 KB)


As alluded to earlier, there are many different styles and perspectives. @Yogesh_s approach is rooted in the model he has developed. I was following very closely what he was saying and one of the key inputs in his model is ROE. Another thing that he mentioned that stuck with me was that the long term growth rate of a company cannot be more than the GDP growth rate.

He also brings a unique perspective because he has experience in the US markets as well as Indian markets and he is of the opinion both markets are different and one cannot blindly replicate valuation methods. That is also something that i remember.

Perhaps @Yogesh_s you could start a thread explaining the nuts and bolts of your model. I for one would certainly be interested in knowing more!



My heartfelt thanks and gratitude to all for sharing your ideas and thoughts on varied topics.

Excellent presentation.

Attached are some points that i jotted down. Many of them have been covered already in various posts and some may be new.

VP conf Jun-July 2017.docx (20.0 KB)



Is it possible to upload presentation by Kenneth sir or can someone explain in details what he presented and key takeaways from his presentation.