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Sanjay Kumar Elangovan

@langvalcapital

10 tweets • 2 min read • 02 Dec 2019 08:24

Sector / Theme based investing by analysing the capital cycle

Kenneth Andrade!

28 minutes video but it took me 2 hours to finish it

Coffee Can Investing | Kenneth Andrade on how to spot great companies during a down cycle

In this episode of Coffee Can Investing series, Kenneth Andrade, Founder and Chief
Investment Officer of Old Bridge Capital takes Saurabh Mukherjea through his journey
in the financial markets and his investment style. Follow us: Website:
 https://www.moneycontrol.com/ Facebook:
https://www.facebook.com/moneycontrolFB/…
YouTube

1. One company making most of the money in the sector

2. Fragmented industry, company is consolidating, poor profitability, dropping balance sheet
and higher sales turn over

You have got a company.

Kenneth Andrade!
KENNETH ANDRADE (Part 2) - The Wizards of Dalal Street 2015

Rakesh Damani in conversation with Kenneth Andrade on Wizards of Dalal Street.

The conversation is a journey of Kenneth from reporting on the beat to working...
YouTube
Another masterclass from Kenneth Andrade

"More sales per rupee employed" leading to incremental market share free of cost!

"Accumulating cash and un leveraging in the down cycle" leading to higher sales against the
same enterprise value!
Stock Conversations with Kenneth Andrade

In this interview with Dhirendra Kumar, Kenneth Andrade, Founder and CIO, Old
Bridge Capital, shares his time-tested wisdom on how to benefit from business cycles,
a skill he’s practised successfully. He also shares his insight into the mistakes
 investors often make while picking small-cap stocks. …
YouTube

Notes from Kenneth Andrade Covid 19 interview in @moneycontrolcom

1. Pharma wave. Now everything is going up. Once it dries up, only the leaders will continue
up trend.

2. Rural India. Chipping away quietly. Stable capital cycle. Should be part of portfolio and
not backbone.

3. Private Investment Cycle. 2009 - 2013. Post 2015, returns from new projects < cost of
capital. New cycle will start?

4. Consumer facing stocks (discretionary) - Negative in medium term.

5. Temporary surge in spending post lockdown. Inflation shock. Till supply meets demand.

6. Sectors which saw green shoots before Covid 19:

Chemicals
Pharma
Building Materials
Rural
Few Manufacturing companies

7. Retail Portfolio - Have 1 leader from 10 sectors. Every sector will come back. Infy post
2000. L&T post 2008.

Kenneth's Covid interview

1. Telecom - Deterioration of balance sheet is over. All 3 players will survive in the next 5
years. Choose the one you want to play.
 The ‘Best Is Behind’ For Consumer Discretionary Stocks, Says Kenneth Andrade

“Valuations are nice but they are not going to regain their highs. We’re taking a pause
on that,” says Kenneth Andrade.
Bloomberg Quint

2. Auto
The best is behind us. Might not go back to their previous highs. Will take 1 or 2 years for
growth to come back.

We are in the middle of the downcycle and we are yet to see consolidation or few leaders
gaining market share. Which usually indicates the bottom.

Every interview of his, Kenneth makes me feel that I am groping in the dark in a black swan
event like this and fooling myself by thinking that I am an investor. Clearly, I am not. Yet.

I will continue my Momentum plays & study Auto, Infra companies before the next Capex
cycle.

3. Agri

FY 21 , Agri > Industry or Urban but not big enough to pull India. Disproportionate no of
people for only 15% of GDP. Small part of portfolio.

4. Potential plays -
A) Companies generating cash flows
B) Energy prices have crashed. (I didn't understand this point)

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