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Bullet proof investing seminar takeways

Yesterday I attended a seminar hosted by TIAtitled Bullet Proof Investing. Here


is my take on the event.
Disclaimer : All the below is from my memory and I frankly have a poor one. So t
he numbers, %, stocks and speakers I may have mixed up. Just take the notes for
the essence of the seminar and not for the figures.
Basant Maheswari was as usual at his best. His talk echoed the thoughts of his b
ook. He feels people should not attempt to get 15% or similar % returns because
that will not ensure financial independence. He joked about a parent with 40 kid
s will never get to know any of the kids well. Investors should restrict his num
ber of stocks to 8. He was very forthcoming and said he would not have bought Pa
ntaloon retail if he had all the knowledge he has now. He also emphasized buying
sector leaders.
Next came Anoop Bhaskar of UTI. He also had a great sense of humour.He said he w
ill hold 80+ stocks in his fund and would also have a huge portfolio in his pers
onal account. He feels 1 or 2 of the large basket will be great enough to carry
his portfolio, at the same the large number of stocks will protect the downside.
He made an excellent observation about IPOs being less attractive due to entry
of PE. He quoted the tweet of Marc Andreessen
Microsoft IPO market cap 1986: $500M. Google IPO market cap 2004: $23B. Facebook
IPO market cap 2012: $100B.
He fees PE backed IPOs in India will go the same way, leaving less money on the
table for the retail investors
He showed a 2X2 matrix wherein the 1st quadrant was made up of quality stocks an
d the 4th made of micro and nano caps which he had termed hope less. His study s
howed that during bull mkts the tendency of the 4th quadrant stocks returns were
a little more than Quad 1 but during the bear period the Quad 4 stocks were thr
ashed whereas Quad 1 stocks were more resilient. He said he is only interested i
n the Quad 1 stocks.
Overall his session was very neat. I would have enjoyed it even more if only all
my portfolio stocks were not in Quad 4
After the lunch came Porinju Veliyath. He gave a blockbuster session. He feels t
hat the companies with great management and clean balance sheets covered by anal
ysts will not give great returns going forward. He feels investors should look a
t companies which are undergoing curable issues. He also advised looking at comp
anies which have a change of guard. The old guard giving way to the next generat
ion which have a better perception, education etc could do wonders to the stock.
He said markets ignore penny stocks which are not penny companies.He gave some m
ind boggling examples. He had bought 5% of Shyreyas shipping when the market cap
was around Rs 50 Cr (cmp of Rs 15). Within a year it is around 20X. At the time
he had bought it was a penny stock but not a penny company. It is one of the ma
jor players in marine cargo.
He had bought Kitex when it was around Rs 3. He had bought the company when its
PE was 3. He had known the promoters but the reason he had bought was due to a f
actory visit. It is well known that Kerala used to face severe labour strikes. W
hen he visited the plant there were around 6000 ladies aged around 20 were walki
ng towards the dormitories. They had had a unique solution for the labour proble
m.

He also mentioned about a news article about Walchandnagar. The article said the
company will demerge into 3 companies. The market apparently did not react to t
he news. Then the company hired GK Pillai as the CEO. Porinju read about the CEO
and found he had a great track record and also turned around a sick PSU. Porinj
u bet on the jockey and the news and bought the stock. The new CEO came in CNBC
and informed about the demerger. The stock ran up 80%. The news was the same but
the medium was different. So with eyes and ears wide open we can have great opp
ortunities.
He spoke about Wockhardt in troubled times. The company had some FDA issues and
forex loss of Rs 1200 cr. The stock was beaten down heavily. The market was eval
uating the stock as if the company will have annual forex loss of Rs 1200 cr eve
ry year going fwd. Porinju bought heavily in his PMS and some clients even left
because of that. The stock was then around Rs 150. Then within 4 years it rallie
d to Rs 2000.
He had invested in Geojith which also became a multi baggers. He said mgmt inter
action should be taken with a pinch of select. For example the very able Swelect
promoter does not encourage analyst interaction , all he wants to say is done a
t the AGM. Another promoter whose company did not do well gave analyst meetings
left right and center.
Porinju gave these examples just to illustrate his hits and misses.
The next session was handled by Rajeev Thakkar of PPFAS. He spoke about new age
tech stocks. Again it was a great learning for me. For me value investors and Go
ogle stock would be like chalk and cheese but his slides showed me a perspective
of a true value investor buying GOOGL. On a not so serious note, he mentioned s
ome of the allegations against Google as

Company managed on the whims and fancies of 2 persons

Does not interact very well with analysts

Does not pay dividends

Does acquisitions of companies which are diverse


Then he said this reminds us of somebody else also and showed the next slide wit
h 2 photographs. They were Warren Buffet and Charlie Munger. Wow. 2 more similar
ities, the mgmt takes a $1 pay and sends informative letters to shareholders. It
does not matter whether you think Google is not a value stock or the current ec
om companies in India are too expensive, but you have to respect his super infor
mative perspective.
They key note session was handled by Anand Radhakrishnan SVP of Franklin Templet
on funds. He did justice to the theme of the seminar of Bullet proof investing.
He shared some learning he had with people he worked with. The slides had no bel
ls and whistles but man they were all gems. He also added his own learning. He s
aid luck played a part but we have to work hard to get that luck. He gave an rea
l life example. Some years ago he was in a presentation show by Eicher Motors mg
mt. They spoke mainly about a JV they were going to start with Volvo for manufac
turing engines. On a side note they spoke about a old factory in Chennai which w
as manufacturing Royal Enfield Bullet bikes and that they were going to refurbis
h the factory. So the fund bought the stock for the JV with Volvo. The stock too
of like a rocket but for the bike division. So that was the luck part. He also
mentioned about selling too soon and gave the same example. The fund started sel
ling the stock on the way up. If they had held the entire stock lot , the fund C
AGR annual returns would have been + 2% or 3%. I sincerely hope Mr. Anand shares
the ppt. It was full of gems.
My key takeaways

Surround yourself with smart people. It really opens up the way you can
think. Different people have different perceptions and it can only help us


Every single one of the speakers had a different style and all of them a
re successful. So we need to find a way which is suitable for us and also unders
tand there are numerous ways of attaining wealth.

Learning is the biggest investment we can make.

When we speak with experienced people we learn a lot by their hits and m
isses. So theory meets practicals here. The real life examples given by all the
speakers were valuable.

The speakers speak about their failures as a learning experience and not
as a embarrassment.
Couple of coincidences among the speakers

All were aged 40+ and market experience of 20+.

All of them had a great and superb sense of humour.


Overall I felt the intrinsic value of the seminar today was much much more than
the money I paid for it. But if you had come looking for tips or trends you woul
d have been disappointed.
Last but not the least the seminar was organized in a very very meticulous manne
r. Kudos to the TIA and Shyam Sekar. I think Shyam had a major role in this not
only in logistical matters but also in the selection of topics etc. I seriously
expected only 2 sessions to be interesting but all the 5 were superb. Thanks TIA
and Shyam Sekar.