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Fundoo Professor Profile picture
@Sanjay__Bakshi
Oct 14, 2020 • 4 tweets • 1 min read • Read on X
Help needed! Doing a case on how many Indian promoters of listed companies have lost them because of leverage. Wanted a comprehensive list so thought of asking here. Please give name of promoter and company name. We can go back 10 years for this exercise.
Leverage could be at the company level (think Hotel Leelaventures) and/or promoter level.
Thanks everyone. Lots of responses.
As I go through the list (thanks again everyone) I am fascinated to see so many cases where the kids blew up the businesses founded by their parents or grandparents.

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More from @Sanjay__Bakshi

Fundoo Professor Profile picture
Nov 15, 2022
Investing is a probabilistic game. Some bets are going to go bad no matter how good the process, due diligence, etc. But when they go bad it's important to distinguish between bets gone bad because of bad luck or a bad process that needs fixing.
Investor perfectionists tend to feel upset when things don't work out the way they thought. They attribute all bad outcomes to bad processes which they then try to "fix".
Interestingly, successful traders don't think like this at all. They accept that some bets will not work and will produce losses and they internalize this by telling themselves "you win some, you lose some."
Read 13 tweets
Fundoo Professor Profile picture
Sep 6, 2022
Not all AT1 bonds are dangerous if we agree with Ben Graham who wrote about the "theory of buying the highest yielding obligation of a sound company." He wrote:
"If any obligation of an enterprise deserves to qualify as a fixed-value investment, then all its obligations must do so. Stated conversely, if a company's junior bonds are not safe, its first-mortgage bonds are not a desirable fixed-value investment."
"For if the second mortgage is unsafe the company itself is weak, and generally speaking there can be no high-grade obligations of a weak enterprise."
Read 17 tweets
Fundoo Professor Profile picture
Aug 29, 2022
A fantastic application of the law of unintended consequences. @promila_agarwal
Also an example of one of the iron laws of economics: you can either control the price of something or its supply. But you cannot control both.
Important to make a distinction between price and supply controls by private parties and those by governments. After all cartels exist. And business models like Ferrari and LVMH control supply so they can charge high prices.
Read 8 tweets
Fundoo Professor Profile picture
Aug 3, 2022
This, according to Graham, is the right answer. Congratulations Falak, you would have got a pat on the back from Graham.
Weighted average misleads because of outliers. You can eliminate outliers by using MEDIAN. That's 14%. See below.
But Graham said, to use MODAL value. Mode is the most common outcome, which, in this case, is 18%.
Read 8 tweets
Fundoo Professor Profile picture
Jul 15, 2022
The EBIT margin fell. First conclusion: This is bad news. Let’s park it. And look for alternate explanations.
Alternate explanation (AE) #1 It did not fall on a per unit basis. There was input price inflation which was easily passed on to customers. So per unit margin is unchanged but revenue rose more than EBIT in INR terms for margin as percent of revenue fell. Not bad news.
AE#2: There was a change in product mix. A lower margin product became a big hit with customers. So consolidated margins fell. Not bad news at all.
Read 9 tweets
Fundoo Professor Profile picture
Jul 13, 2022
Never study an automobile company without also studying the finance subsidiaries (or associates) which help create demand from customers who can’t (or won’t) pay the full price upfront.
There are many ways in which the finance company can make the auto company’s P&L and balance sheet look pristine. One way is that all the loans (including bad ones) given to customers for creating the demand reside on the finance company’s balance sheet.
The finance company can charge an effective rate of interest that’s very low, and also not take much interest in doing proper credit checks on the customer.
Read 16 tweets

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