ValuePickr Forum

VP Stock Story 2.0: Kickstarting individual(s) ownership of compact Updated Briefs on our favourite Businesses

Back after a small gap.
Quickly realised from discussions with committed VP old-(&new)-timers that probably the fastest, and the most impactful work that we can do at re-invigorating quality work at VP would be get started back with Stock Stories.

Not everyone would be aware that at one time (way back in the past:)) we used to maintain updated briefs (Stock Stories, on valuepickr.com home page you will need to scroll down to access) on a set of some 25 of our favourite businesses. And most of them have gone on to be wealth-creators, at some or other point of time, in the last decade.

Why we started and persisted with Stock Stories:

  1. As Ayush first very discerningly pointed out to me sometime in 2009, Donald there is no place/site in our markets, where we can go and understand a business reasonably well in under 30 mins. All we would see at various sites are numbers, ratios, and they might mean something to a savvy investor, but again that would hardly equip him to understand the business, industry, competitive forces at play, barriers to entry, and so on.
  2. While explaining/taking feedback on our favourite story to/from someone, we could get away with (literally) anything while speaking; but the written brief forced a certain diligence on us; we had to be really convinced and think twice thrice before we put forward a bullish or a bearish viewpoint, and had to back that up with data; This obviously meant the rigour that went in was of a higher order and we had to double-check on our facts before putting up for public consumption
  3. The Structured Template (Check out this PI Industries story as an example) - Background, Main Products/Segments, Main Markets/Customers, Bullish viewpoints, Bearish viewpoints, Interesting viewpoints, Barriers to Entry - ensured that any sufficiently-interested reader could actually come to speed on the strengths (weaknesses) of the business in under 30 mins!
  4. The compact brief - also ensured - we could communicate crisply and draw in valuable insights and value-adds from gurus and domain experts, which added immensely on the analysis part; similarly these helped us draw valuable comments and insights on business models, business quality vulnerabilities, and the like from investment Gurus we chanced upon or had access to, and helped refine our investment perspective/thesis.
  5. While everyone in VP (and the larger investment community) benefited, those who were deeply involved in the stock stories benefited the most - we worked the hardest at our story, we engaged the contrary view with gusto and became somewhat better educated on what could kill our best ideas, because we took RESPONSIBILITY - that while we will never be experts on the business/domain but we would make sure that we caught hold of the best in the business/domain and incorporated their insights as much as we could, and kept the Stock Story UPDATED.

And then for a while (2015, onwards) moneymaking in our markets became too easy :slight_smile:, and we lost track of the basics, ha ha. Then again hard reality hit us in 2018-2019. Meanwhile emphasis on technicals, and momentum, and algos have shifted to a different gear today. I am all for new learnings (especially if it can help structure and maintain my portfolio better), and there are undeniable aspects probably therein that I am told, every market participant should learn a bit about and have a healthy respect for (obvious say, from the way our @hitesh2710 Hitesh Patel keeps amazing us with absolute simplicity). But I can see some of us are again getting corrupted to thinking that there are free lunches, available. There aren’t!! Not on a sustainable basis, anyway :wink:

Our returns will normalise to the mean pretty soon, unless some of us (those naturally inclined on upping the Investor Learning Curve) get cracking on deep dives, and the art of capturing that crisply back for our own, and the communities benefit. We take up the responsibility to create/update the story on our favourite business and keep it updated on a event-basis, and/or regular periodic updates. And then engage others deeply interested in the business for more collaborative scuttlebutts, invite contrarian views, invite industry and domain experts to participate, and so on.

Am convinced, as we energise just 10-15 of us to take this up earnestly, this will create a momentum and snowball effect of its own, and engage many many folks to attempt a story on their own - even passionate newcomers. when we started in 2010, most of us writing the stock stories were investing greenhorns - even as we might have some penchant for structured thinking.

For those who might be thinking - how does this practically work? Well as mentioned before we have another part to VP site (which was dormant for last few years). our very own @pratyushmittal had beautifully enabled a simple CREATE-EDIT-PUBLISH workflow underlying this structured part - Stock Stories, Management Q&As (next on 2.0 Agenda), and the like (You will need to scroll down on the home page to reach these).

I am proposing that some maybe 30 of us are given CREATE permissions (any passionate hard worker as demonstrated in VP threads, with preferably slightly analytical bent of mind is welcome). Maybe some 10 guys/gals (more structured thinkers, better english :slight_smile:) re given EDIT permissions, and probably 2-3 guys/gals given PUBLISH permissions. This will ensure better collaborative efforts among participating seniors, and hopefully among passionate juniors and more seniors, too.

I can foresee some hands going up on improvements needed - after all if its VP Stock Story 2.0, what changes are we bringing in? I can think of a few - e.g we might have to ensure additional 4-5 new placeholders to the existing template - where we add a para or two on
a. Business Model - strengths/differentiated-ness, or otherwise
b. Valuation Model - some businesses like D’Mart deserve(?) elevated range
c. Current Market Trends - periodic scuttlebutt and/or from published figures
d. Corporate Governance Scan - debatable actions (if any) from publicly available records
e. Forensic Scan/Red Flags - Comments from VP Forensic experts @dd1474, @ashwinidamani, any more in-house experts here?
[Have been told to expect a VP Forensics Accounting 2.0 Framework initiation, with live practicals, soon]

Views invited on any more must-have placeholders in the stock story template that can help refine investment analysis.

The beauty of forcing a collaborative structured template on us, is that some pieces like business model and valuation models will naturally get collaboratively filled-in/refined by more senior investors after talking with the stock story creator/owner, but a passionate new learner is exposed to this right from the start!

That is probably invaluable!!
And I am excited to see where we can take this effort in the next 6 months by efforts of a committed few, and then how we will enjoy this snowballing into a regular investing activity by most passionate learners!!

Whole-hearted participation is invited; hard work and passion are the qualifying ingredients; refinements are achieved collaboratively, and magic is created :slight_smile: Waiting for a good show of hands!!

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The proof of the pudding is in the eating! right.
So let’s get started on prioritising a few stock story creator/owners, some domain experts who have been seen to add tremendous value to ongoing discussions, and some of their favourite businesses!

While some structured minds are keen to launch an across the board exercise (which is probably the thing to do, when we have some scale), I am leaning more to first prioritise stock stories for businesses from already demonstrated in-house VP capability/deep-dive, and business model uniqueness/strengths viewpoint, and secondly where there isn’t much fancy currently, are ignored for whatever reasons, from a more practical perspective.

Some top of mind recalls (some I have already spoken to, some aiming to in this week itself and taking the liberty to name without their express consent); NOT to be construed for current investment attractiveness, in any way :wink:; owners and co-owners may NOT be currently invested, but do track; first-named is usually the owner, others named as co-owners (for the CREATE/UPDATE responsibility). By no means, is this a restricted set - names are named just to get the ball rolling with strong intent :slight_smile:; the more show of hands the merrier it is, so feel free to shout and get included. [caveat: demonstrated track of passion/hard work at a VP thread is a pre-requisite]

Ayush - you will have a much bigger set. Requesting you to include a few more of the most promising ones from the much bigger set you/family personally nurturing through the early years.


Then there’s another set which have probably RUN AWAY too far right now (some of us may have remained invested while trimming allocations perhaps) but are probably good to great businesses to track for others not so fortunate (from a medium to longer-term sustainability perspective) and worth nibbling at again when we see corrections and/or some limited reversal to the mean :slight_smile:


Finally there is the PERENNIAL favourite set

There is always a risk in sticking out the neck and naming names :wink:; I am sure I am guilty of many acts of omission (esp as I was sleeping last 1.5 years or so, and haven’t interacted with many new top contributors and other consistent contricutors); Am planning to correct that soon - meeting the bangalore set of new top contributors this saturday, and sure to bring in them and their favourites in.

So hey, please shout out glaring omissions - both businesses and passionate owners (potentially) that I have missed. better still those missed please shout yourself, and get yourself included in what is likely to set a virtuous collaborative effort snowball! Those named (but not yet consulted) will all be consulted for prioritising and allocation/re-allocation of story assignments :slight_smile:, shortly.

As mentioned before, all passionate, demonstrated hardworkers are welcome. No one needs to be a hot shot analyst to qualify for this - strong intent and hard work is often enough for brilliant collaborative effort; we have demonstrated before 10 collaborative minds are better at this game than individual brilliance.

Most of all, its an earnest request for more and more domain experts to step forward, make your presence felt, and give back to this vibrant community.

Top of mind list of Domain Experts - with powerful contributions at VP threads

Come on guys - shout out more domain experts we know and have seen contributing at VP (and not, so we can invite them in). It usually works both ways - they get valuable expertise sharing in their non-core, non-domain areas too :slight_smile:. We understand and respect everyone’s CONSTRAINTS. And we don’t shy away from approaching anyone while respecting their privacy/constraints.

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HI Donald,

I have been a silent reader of the the blog for many years now. Good to see you back with active participation. The blog was missing your action :slightly_smiling_face:

I am happy to start contributing actively in the forum. I am following APL Apollo, Fairchem, RACL Geartech, Alembic Pharma, Bandhan Bank in the first list, and Dmart, Divis, Bajaj Finance, Aarti Indus in the second list. Do let me know how do we take this forward. Cheers

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Hi Donald

Happy to contribute - Thyrocare, Biocon, Natco (medical companies)
I also work in the medical field.

What do we need to do?
Cheers

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Hi Donald - Do you think there might be merit in having a group to analyze global events (e.g. Chinese environmental changes in 2015, EVs, Coronavirus?) which might cause long term structural changes. Given the global economy that we live in, the study may be able to point towards winning sectors. If that seems interesting, I would like to be part of the same.

Also, I would like to be involved in few specialty chemical/ pharma stocks e.g. Aarti Industries

P.S.: Will be on vacation from next week till ~25th of Feb so would not be able to contribute much till then.

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I will be too happy to contribute. I actively track a few stocks: NESCO, Indian Hume Pipes, Balaji Amines.

Regularly attend AGMs/EGMs of Piramal Ent, L&T Fin, Artson Engineering

Holding a few for long with decent results: Mazda Ltd, Bajaj Fin, Bharat Rasayan.

All, except the last two, are decent compounding stories.

Missed PI Ind, Avanti Feeds, Ajanta Pharma etc despite reading regularly on Value Pickr. Made good money and exited Oriental Carbon and BKT.

So, you can say I am still at the bottom of my learning curve.

Shiv Kumar

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@Donald alhuwalia contracts should be excluded as the shady background and high connections of the promotors
sources



there won’t be records past 2012 as the fire broke out or made i don’t know but it is suspicions
source : https://www.deccanherald.com/content/219520/fire-chars-building-indiranagar.html

Do you think Andhra sugar a good candidate in the list ?
My hand are up to work on Mishra Dhatu / Srikalahasti pipes / Ri
regards

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I have experience in implementing engineering software in refineries/petrochemicals/chemicals etc. I have joined VP recently and i am loving to be here. I can contribute in refineries/petrochemicals/chemicals and industrial automation domain.

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@valuequest @stockcollector @bargainhunter @shivkumar @yourraj
@Seeker001 - Good to see your first post! A Warm Welcome to VP Community. Industrial Automation - may be very important to pursue through ABB, Siemens who are extremely focused globally on, and also in India. (Editing the list in Post 2 :slight_smile:). Also, if you attempt a business you like and understand well in Oil & Gas @dhwanil is our resident domain expert (updated list in second post)

Firstly, thank you guys for raising your hands.
It might take some time for the workflows/permissions to get enabled. What we can start doing in the meantime is pick up one top business that we like best/think we know well and start writing the Stock Story for that business. As we start filling the Template up, we will see how much more work we need to put in (to communicate better, what we think we know well - at least that was our experience). And Dnyanesh (Mr D) my first Guru and Mentor would always remind me if we can’t communicate crisply and TRANSFER what we think we know well, then probably we aren’t that clear ourselves. Most simple insights, are the most profound ones transferring conviction

Give it a sincere go - research more read atleast 5 year ARs make notes, competitor ARs and presentations, understand different approaches to the same pie or different pies targeted, do some scuttlebutt among industry folks, call up the company and ask a question to IR, consult research reports/data of earlier vintage, go through VP threads itself in detail.

In short its like doing a mini phd on the business - we might NOT understand everything, but we should be able to flag everything that is known about this business - and then take the help of seniors/domain experts to quiz/understand the implications of business/industry issues found, and so on…not for the faint-hearted, or half-hearted - just requires enough passion and hard work to know everything that is to know about that business we like.

Believe me, if we do a sincere job of that - there are enough people who will come to you unsolicited and educate you - thats how most of us at VP grew. Among the younger crop Ankit Gupta is the best example I can cite - he did a PHD on Alembic Pharma then (on my gentle but repeated prodding…this is a home business for you, apna ilaka hain), and the rest is history. Everyone at VP probably knows Ankit is one of our main go to guys for pharma/agrichem businesses.

That’s how powerful this process is for upping the learning curve in the fastest possible way. Till I did a (faulty) but very detailed phd on Opto Circuits, no senior was taking me seriously :slight_smile:

VP Stock Story 2.0 Template.docx (37.7 KB)

So get cracking. Once you think you have given it a serious go. Refined 2-3 times to the best of your knowledge and (current) ability send a PM to the Story Owner (as outlined in 2nd post) with the filled-up Template. So, if you have taken up Bharat Rasayan, PM your effort to @ankitgupta. If 2-3 diligent guys take up for one stock story, Ankit/story owner’s workload becomes that much more easier to manage. He moves on to a mostly Refinement job. Basically points you to richer data sources, and nudges you to do a more complete job, adds and explains his insights to add, and the like.

Even domain professionals/experts we go to (to demystify complex stuff for us, who might otherwise be new to the investing learning curve) should give this process a serious go - It works both ways beautifully. The simple no-nonsense template forces 360 degrees thinking on us - IF we make sincere repeated attempts.

@yourraj - Andhra Sugars probably remains one of @ayushmits well-tracked businesses on his radar. He is the best judge to comment on its inclusion in a prioritised list.

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Hi donald,

I think it needed your prodding to get others into the action mode.

An interesting segment of the markets seems to be the auto/auto ancillaries segment…

Something interesting is happening in the sector. While the numbers still continue to be disappointing for most auro companies, stock prices of some of the companies seem to be showing a lot of strength.

Markets usually are a few steps ahead of the actual reported numbers and usually, stock prices start moving much before the actual improvement in the numbers comes through.

Some interesting companies in the sector are from the 2 wheeler space. In order of strength these are Bajaj Auro, Tvs motors, eicher and hero motocorp.

Among the auto ancillaries, Minda inds, endurance tech, motherson sumi, varroc inds are the bigger players who show strength in order of ennumeration.

Would urge anyone tracking the sector and the senior contributors to start contributing to the companies in the sector and if not this sector then in the companies enlisted by donald to colloborate in stock story creation.

Personally I am a big fan of this short format stock story but one can write a proper stock story only after doing a deep dive in the company first and then condense all the learnings into a concentrated document taking the shape of a stock story.

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Hi Donald,

Willing to contribute for Alkyl Amines. Have researched the co.

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Great to see Donald back in action. This was waiting for long. As you have covered already Siemens and ABB in Industrial Automation theme, I would like to add Honeywell and 3M India also in the list. Honeywell is global leader in the IOTA and now second expensive stock (next only to MRF) in nominal value term.

We did have small presentation in last chintan meet, where we covered part of this section in Capital goods segment. I see two reasons driving growth in MNC Capital goods provider.

  1. Capacity relocation from China for many of global companies due to current uncertinity in China US trade. Most of MNCs which are till now exclusively sourcing from China would defintely alarmed of risk of concentration. That would mean capacity relocation in Asia. (Like what we have been observing in Speciliaty Chemical). Having said that, whether capacity relocation would happen to India or other countries like Vietnam, Malaysia or Bangladesh is difficult to guess at this point, the Non-Chinese Asian MNC providing capital good/automation service would be biggest beneficiary of these capacity. Indian companies are the largest in operation if we keep China/Japan out in Asia for most of these companies. Hence, I see very strong headwind for these pack (3M/ABB/Hoenywell/Siemens). I would henceforth call these 3ASH being acronym for these companies.
  2. Development of 5th generation mobile is likely to result major change in manufacturing automation. These players are well placed in segments due to lower cost of India aligned with Global technology edge. We need to evaluate players in more details to get better understanding in this subject.

On risk side, except for 3M, ASH have many subsidiaries in India. Hence, strong tailwind may result in superior performance of fully owned subsidiary at cost of Listed entity

Second risk, transfer pricing and royalty related issues with MNCs. In past, Siemens have not treated minority shareholders. (Recollecting vaguely Siemens reported very heavy loss during one of year in 1995-2000, the hive off telecom business citing main contributor to loss. Subsequently, Telecom business did exceptionally well. This is based on my memory and actually situation may be completely different. Will work more on this issue to get more insight).

Disclosure: 3M India and Honeywell are among Core holding of my portfolio and hence my view may be biased.

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Thanks a lot Donald. This is great kick start to start putting Stock Stories structurally and collaborate. On Shivalik Bimetal, do we already have the story template filled or we need to start afresh. This is really going good.

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@Donald, Thanks for kickstarting this stock story thing. My apologies for late response as I was unable to do screen work due to eye infection.

Last time when we took up this excercise, it was immensely useful to the person who did that as it brought a lot of clarity on importatant business variables. I am sure we together can always refine it and take it to next level.

You have mentioned lot of businesses to do the stock story on, however, in the first phase, I will prioritize two businesses which I feel I have tracked for a while and have a resonable understanding about the business dynamics and management.

Hopefully it will be as insightful and exciting journey as it was last time

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Very nice initiative and eagerly waiting for the action. As there are many businesses are already listed here, i would like to add few which i feels should be in list

General insurance ( ICICI Lombard, HDFC ergo may be after few years)
Dixon Tech/ Amber Enterprises
Electrical Consumer Durables (Orient electric, Havells, Bajaj electric, v-guard, whirlpool, etc)

Thanks

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Hi Ram,
My apologies for late reply. Got busy with other projects :slight_smile:

Delighted to see your enthusiastic response. There exists lot of brilliant work done individually by different folks, shared generously at the VP thread too. But at the moment is more like a leap-of-faith call.
What is lacking due diligence is due corroboration of competitive intensity/landscape mapping, initial validation of Mgmt commentary from authentic secondary resources and the ability to get even a starting grip on industry/ technology/ competitive forces to be able to ask the right questions to both Management and Domain experts. This puzzle needs some focused 360 degree effort to crack with the right connects. Your guidance will be invaluable to take this forward. Commitment to doing justice to the Shivalik story by a few committed already-involved players will take us there quicker. I have some ideas.

Will call you to brainstorm after a week. Need to commit dedicated time to another pursuit for next few days. Once again delighted/grateful for your vote of confidence in such initiatives. If we all together do a good job :slight_smile:, we will see another level of collaborative actionables!

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Just a quick update, based on queries from sincere newbies.
Everyone is free to take up any business they like, refer to earlier stock stories to understand the intended depth and breadth, start on the research mode needed, do scuttlebutts as possible, collect data, and start filling up the Stock Story Template (blank with placeholders only) uploaded in earlier post. Once you are satisfied after a few iterations, please feel free to PM someone from the TopContributors whose style may resonate with you to help take your initiative forward. They will surely look at your effort, provide direction, and help you improve on your efforts.

The kick-start menu was to MARKET this important initiative widely. It will also be used to nudge the TopContributors into giving back to the Community from time to time, since most are invested in these :wink:. It’s in their interest and the communities interest that these stand-out Stock Stories are regularly updated and maintained at VP. End of the year, a transparent track record will clearly emerge about higher-order contributions to Community to help us incentivise and use more persuasive means, as needed :slight_smile:.

We think institutionalising this is vital to sustain VP discussion quality in the coming years. If you think so too, then you will know what to do when you start seeing the first few getting published.

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Hi … any update on this thread pls

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Good question!
At least a dozen TopContributors have promised us Stock Stories of their favourite business in New Template. Yet to deliver on that :slight_smile:

As we are all aware, most of our attention is diverted now to protecting our backsides first :wink:; once someone is comfortable in his/her personal situation, only then can we expect speedy progress.

Meanwhile, I am happy to report Voluntary effort is progressing very well. We should have something additionally out from there (another promising business) hopefully this week/definitely the next. And then hopefully it should be a roll-on momentum activity because of the sheer quality of output, attention to detail, 360 degree kind of work, ringing endorsement of the efficacy of the template, and quality of volunteer work, et al, Inshallah! There will be other hungry volunteers eager to contribute and learn at a very fast pace.

Some part of final stock story output is stuck …with my insistence on at least 3-4 different takes on same business (to expose our individual biases) before we create the unified official VP stock story on that business. I have to take a few more interviews to speed that up…I slacked a bit this week, driving other agendas. Will pick up speed soon.

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