Thread by @jaganmsna

I am an attendee of this Seminar and shall tweet my understanding and observations/key highlights in this thread .

https://twitter.com/TIA_Investors/status/1108040958250147842

The thread shall only capture key highlights and what I understood from same. Hence request all to read accordingly and come to conclusions .

First speaker topic is Defensive Investing.

30 yr equity returns :
BSE Sensex :
1989: 680
1999 : 3600
2009: 9000
2019: 38000

Stock Selection,Cash Calls and Market returns define Equity returns

1992-1993 crash , market(Sensex) lost 50%

One way to protect from deep drawdowns : Take some 💰 from multibaggers
Say u get 500% in a stock , book some profits!

Good Stock Selection works well only if u can put meaningful amount of money on them (ALLOCATION MATTERS !!)

Nice quote : Put some of money in equities all time , it works
Put all of money in equities some times it works.
But put all money in equity all time, doesn't work !!

Shows data to back up earlier comment - Returns hugely improve when u r invested in bull markets which are shorter span of overall investing time span !

Key is not to identify bull or near market timing but to act on it !!
- Termed as "Cash Calls"

Stock selection - Difference btw 14% CAGR in 30 years vs 39% CAGR in stock portfolio is humongous !

Last 5 yrs. Index up 12%.
But best 10% stocks went up huge 10x.
Hence importance of Stock Selection !

What works :
Pick business with good economics
Wait for bear markets.
Focus on unpopular industries/sectors
Focusing on under researched stories.

Summarising an important point : Reducing Equity Exposure when markets are hot/stretched helps improve returns !!

Speaker (Rajasekar Iyer) ends with this !

Next speaker Govind Parekh, iconic investor from Chennai

Need to have liquid quality stocks during bear markets was stressed by him

Attend AGMs where possible is his suggestion !

Next speaker is @NileshShah68

@NileshShah68 Gold medallist in CA, 25 years of market experience !!

He begins saying "Equity Market is a battle Field " !!

"Perfect Storm" is how he describes last 15 months of Indian Economy and markets.

He says Fed won't raise rates even in 2020
(My view - Given pathetic situation of US Fiscal deficit, need to look at QE soon ?)

Elections Don't matter in Long term for markets is his view .

Election result day matters for ST market trend ..quotes example of 2004, 2009 and 2014..

Play Contrary to make money (wrt election results) is his suggestion

Stable Guvt , buy Cap Goods, Infra
Coalition Guvt, buy Pharma, IT

Maker driver : Flows, Fundas, Sentiment

@TheEconomist is best contrarian guide to India investing !!
🙂🙂

He says : SBI+ ICICI Bank + Axis Bank collectively make 50000 cr profits in FY 2020 !!
Also huge profit growth from Tata Motors + Pharma in FY20
Also expected profit revival in Voda Idea + Airtel

Point made is all firms mentioned above will push Nifty EPS in FY20
Telecom will return to profitablity

India EPS growth will be better among all EM markets and that should bring back FII flows !

"If u visit India you will believe in God" !

Last 17 Years India imported 427 billion $ of gold !!
Vs 294 billion $ of FDI !!
My thought - India needs a huge appreciation of Gold prices more than any nation ???

India's Rahu Kaalam starts and ends with Oil Price rise and fall !!!

Short Term Pain = Long Term Gain

Ends the talk mentioning that macro level need to avoid self Goals as a nation.

Next speaker is Mrinal Singh, of ICICI Prudential AMC

Style of investing is Value investing

Runs among others a Dividend yield fund.

"Investing is like Boxing ".
It is a game of passion

One of youngest fund managers.

Topic : Does Value investing work in Turbulent times ?

Who is a Long Term Investor ?
Someone with issues/failures in Short Term!!

Value Investor : Someone who believes in Business cycle
Someone obsessed on Margin of Safety !
(My view : Absolutely True)

Value -> Growth ->Quality ->Value and cycle repeats on and on

Have an eye and nose for market narratives

Case Study : AmaraRaja battery
9x in 9 years.
Benefitted from Dieselisation trend in period.
OEM sales not profitable but replacement is
So OEM sales is lead indicator !

Lot of interesting prices (in stocks) happens during turbulent times !

Quotes example of Balkrishna Tyres.
6 PE in 2008-09.
From those levels up 1500% in last 10 yrs vs 107% for S&P 500

Other example- Bharat Forge (2013 good entry)
Persistent Systems

Post Lehman era some stocks were Invested below cash on books !!
Turbulent times only behavioral edge works !!

PSUs have a cycle linked to political cycle

Quotes example of NTPC.
Says it is interesting pick now.
(I concur . It is dirt Cheap)

Stock market is a vehicle to transfer wealth from impatient to patient - Warren Buffett

Concludes saying :
Bullet Proof investing = Value Investing

Next speaker Radhika Gupta of Edelweiss AMC

@iRadhikaGupta now speaking

Box Office Investing is her topic

Most investing need not be about finance !!

No business like show business

Box office biz :
Films have scale
Success function of sentiment
Movie is a gamble
Everyone has gamble.

LT : Everyone has an opinion .

Lessons from Box office
1. 1st week collections don't mean much !!
Flows don't mean success

The year after FIIs pull out record AMT from India market is best year.
PS - 2018 they pulled out record so...

2. Every film has right budget.
Likewise every fund had right size.

3 . Box office has trends ,so is stock market.
Success is any catching trend early.

Catching trend change is key !

4. Superstars don't guarantee success .
Famous personalities don't guarantee success in world of Investing.

5. Niches are risky. Diversify.

Shows data on how sector funds from peak of popularity have given subpar returns

6. Law of gravity in markets

7. Sequels don't do as good as original.
Likewise past performance no guarantee for future

8. Provide value to customer or go obsolete

9. Blockbuster is overhyped .
Stick to basics .

Most popular option is not most profitable !!

10. Even best need advice !

Ends mentioning Issac Newton tryst with South Sea Inc investment.

Next speaker Kenneth Andrade of OldBridge.

Market cycle :
2000, ROE 11%
2007 ROE 22%
We don't invest much when ROE is great !!
Market cycle , invest at low ROE (run against the tide)

We don't invest in Tech, Pharma now

2000-07, wealth creation was great !

Best opportunity is when pessimism peaks

Book to read : Market Cycles
Invest where consolidation is happening.
When ROE is at peak, new entrants try to come in.

Consolidation in construction, infra industries now.

Bubbles - Either anticipate or participate !
2000- IT
2007- Infra/Material
2015- Pharma

Supply easy to forecast, not demand .

2007-11 So much supply shortage seen in Steel, power etc
Today , practically nothing.

Bottom of cycle indicators :
Consolidation
Few players making profit
Largest player ROCE < Cost of Debt.
No finding.
Bottom half of industry is fully leveraged.

Top of cycle indicators :
High valuation, High ROCE
All companies are profitable
Easy access to capital
Sector fragmentation

1999-2005 - HUL had zero topline Growth, valuation correction resulted in massive allocation to materials by funds
Good time to buy consumer Staples like HUL

Kenneth Andrade hints clearly that India Power Sector at bottom of cycle with clear growth prospects (EV etc)
Contrast with richly priced FMCG !!

Ends the call. Says entire infra pack is consolidating.

Post talk interaction : To some questions on EVs, what's is his view , China is pushing big on EVs etc Kenneth simply mentioned India would be different.
His bullishness was on Power Sector only as he saw it at bottom of cycle.

Now for final part of Seminar Panel discussion btw Kalpen Parekh, @shyamsek and Roshi Jain

Jain - Investment more of Art than Science .

True test of investors sticking to conviction is during bad times

Being contrarian at right time is biggest Alpha for an investor - Jain

Rest of discussion is about observations on how investors view markets

With this I conclude my tweeting on Bullet Proof investing Seminar by @TIA_Investors for 2019.
Shall add my observations latter to this thread .