Moving away from looking for multibaggers meant One doesn’t try to identify stocks offering rapid PE growth that will be riding on short term EPS growth. 1/5 #MultiBagger#ValueInvesting
The earnings velocity created by shortages, near term biz disruptions & temp dynamics are mostly unsustainable. Convincing the world they are structural is not an honourable deed. Nor reflects decency. Most momentum is surreptitiously built to fool ordinary men. #MultiBagger 2/5
Look at industries where momentum is sought to be built. They will be less understood. Carry huge risks of disease and environmental damage. Non descript promoters. Building momentum is no accident. It is to a design. To fool institutions & retail in one go. 3/5 #MultiBagger
That institutional investors crawl before the manipulators giving them support so that they can also play up their own performance is a perpetual shame. Once momentum is built, nobody wants to sell. At any valuation, they watch. Such performance is ephemeral. #MultiBagger 4/5
Manipulators are in such a hurry. They mop float, leak news, lobby in peer forums and work like robber gangs. Their shamelessness runs rough shod over ordinary laymen. Wake up or it can get worse. #MultiBagger 5/5
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Let me share my learnings at @ithoughtadviser. Firstly, I believe firmly that my primary role as an advisor is managing risk. Not maximising returns. My choice of the MF space was simply because i clearly saw the need existed in 2008. 1/10 #ManagingRisk #ContrarianInvesting
MF's offered ease of scalability, management & ample liquidity. We could buy as much quantity at same valuation. MF's wide product choice outside of diversified & largecap funds favoured advisory alpha generation. 2/10 #ContrarianInvesting #ManagingRisk @ithoughtadviser
Generally, advisors let fund managers decide portfolio composition and risk management. @ithoughtadviser believed it was our responsibility to play a constant role. So, we brought fund research, client risk profiling, market opportunity & #ManagingRisk closer in our work. 3/10
Improving quality of PF is a constant pursuit. Need Zealous effort to keep watch on own line up, order & weights.
As markets rise, the tendency to give this pursuit up takes over. Money comes easy. A loosening tendency evolves. Investing turns lazy. 1/5 #BeatingBenchmarks
Heavy fund inflows make a manager think less about returns and more about deployment. Too much cheese on his plate makes him less hungry.
He no more enjoys investing. Yet, his plate is always full.
He only finds ways to deploy. Returns become secondary. 2/5 #BeatingBenchmarks
For a while, returns happen by themselves even as rampant mirroring of PF's occurs.
So aping in buying gives near term returns too. Slowly, the entire herd move to graze in a small area.
That's when a Lion roars & moves to kill. Everybody freezes wet. 3/5 #BeatingBenchmarks
If you are not looking at stocks moving the benchmark and investing far away from its prime movers, your returns will diverge rather than converge with benchmark returns. Contrarian investing typically works this way. #Benchmarktales
What individual investors do with their money is irrelevant to most others. Especially true of micro caps & small caps.
These companies are very, very risky. Only few turn out to be big winners. Several fall by the wayside.
No matter who owns a stock, the biz must deliver.
The problem with us is we are too willing to invert the decision process by which we choose stocks. We must look at businesses & pick the best.
But, we choose an investor. Then we decide to buy every Biz he buys. We assume he can do no wrong. But the biz can go wrong. 2/n
When the business fails to deliver, it becomes the investor’s failure by extension. This is classic third party management of our decision making responsibilities.
If same people go for a toss, they may well say
Heads, I lost because of you.
Tails, you won because of me. 3/n
#Portfolios carry innate positioning. Corrections are when positioning counts.
#Positioning depend on your style. #Value plays out distinctly. #Momentum has its own stamp. #Thematic plays to its own dynamics. Often, we follow a blend.