ValuePickr Forum


My investment journey & philosophy

Kedar B - Investment Journey & Philosophy.pdf (103.3 KB)

Iterative and evolving, hope to build in enough flexibility to be able to navigate market cycles over a period of time.

Feedback welcome - no one here can be as brutal as the markets anyway :slight_smile:


Simply great learring. The best I have come across on VP.

Lot of learning from you presentation. Thanks.

Can you please elaborate more on below with example of a stock you applied it to?

• Am very comfortable investing in stories where I may not have all the answers but am able to recognize favourable possibilities

APL Apollo Tubes - Check my thought process at APL Apollo Tubes

Garware Wall Ropes - Thought process articulated at Garware Wallropes


One of the personality traits of Kedar that I admire the most is how he has managed to not make any errors of commission (buying the wrong stock). so whatever he did end up buying, he was able to allocate a large % of portfolio and they all turned out to be multi-baggers. That’s something very unique, something we should aim for.


Also uploading my presentation on incremental learnings. This was only half done when the meet happened, hence did not present this there.

However have worked on this after coming back since I saw value in taking this through to completion. This obviously needs to be seen in combination with my investment journey, nevertheless I think some of the learnings can apply to others as well

Kedar B - Incremental Learnings.pdf (64.0 KB)


Hi , I am a new joiner and a novice to be honest, had gone through the pdf’s can you explain me what is DCF or a handy link on this topic would be helpful.

If possible can you explain how does this approach help in valuating a stock.

You will need to understand some concepts before you get to doing a discounted cash flow valuation of a business -

Risk free rate & Equity risk premium that one needs to use
Historical beta (capital asset pricing model) of the stock and whether this will be a realistic estimate going forward
Use these to evaluate cost of capital for the particular business
Model for how one expects the balance sheet, P&L of the business will change over the evaluation period
What kind of operating cash flow will this result in? How much investment into fixed assets will the business need to keep the growth going?
Then you end with estimates for the Free Cash Flow (amount of cash that owners can take out of the business without impacting the growth trajectory)
Estimate series of FCF (to the enterprise) over the evaluation period and discount this back to the current period using the discounting rate (cost of capital for the business) - this gives the enterprise value of the business. What remains after adjusting for the net debt is the intrinsic value of the company, this you compare to the market cap and see how attractive the current price is

In short, a lot of reading and thinking to be done before one gets to applying this to an investment idea. This is what I did -

  1. Get comfortable with financial statements, unless this part is up to the mark do not attempt a DCF
  2. Read up basic sources on CAPM and DCF on investopedia and get comfortable with the concepts over a period of 1-2 months
  3. Once the business analysis part of your research is done you will need to be able to translate your views into the business into how the financial statements will change over the evaluation period. This assumes basic excel skills as well
  4. Then read resources written by Michael Mauboussin on how one can connect his views on the business to what inputs to present to the DCF. His papers on forecasting, DCF, expectations based investing and moat are must reads to be able to apply a theoretical concept like DCF well to practical scenarios
  5. Then one needs loads of practice to be able to evaluate to what extent can one rely on the DCF model to take investment decisions. At this step I came to the conclusion that a reverse DCF mindset was way better than a theoretical DCF approach
  6. Based on your experience you then debate what other frameworks will one need in combination with this to take investment decisions

Long story short, unless one is willing to put in serious effort over a 12-18 month period (assuming other skills are decent enough) to get past all these steps he/she is better off using heuristics rather doing a half hearted attempt at valuation. The thing with any model is that the quality of thought process behind the inputs is what separates a decent model from a very bad one.IMO one is better off with no model than a bad model

For a comprehensive set of technical resources on DCF and other modelling, Yogesh Sane ( is the best guy to comment


Thanks Kedar, looks like I need to get my hands dirty to start on the journey of value picking, thanks for the details provided (they were bouncers for me) but will put in effort to take them down the line :slight_smile:

Great presentation Kedar. A lot of food for thought.

How was the PF performing in this down turn, any new ideas or additions u r exploring or just accumulating existing ones only.

Please update if u can share.

Always a pleasure reading u r posts.

Let me say that 2018 has been a great leveller. PF has taken a beating since I’ve been overweight on small caps, I still continue to hold the names and do not see why I should drastically change my approach going forward.

Over the past 12 months I’ve added Apollo Pipes and Mirza International, both of them are meaningful positions but aren’t yet large positions. I’ve also added incremental capital to the high conviction bets in my existing PF where I think the stock price has corrected much more than warranted.

In this correction I am broad basing my coverage on sectors and looking at some I haven’t looked at all these days - Pharma & Financialization. I also plan to start managing external capital soon - hence will have to become market cap agnostic (to some extent) going forward. Lot of work to do irrespective of what the market does over the next 12 - 18 months.