More from @b50

Anupam Gupta

@b50

30 Nov 20

What portfolio gives you sound 'sleep at night'? A portfolio that consists of great companies. How do you define great? Great financial performance because stock prices follow profits and cashflows.

What is great financial performance? India's nominal GDP growth is around 12% (7% real + 5% inflation) so a great company should be able to deliver around 10% growth *every year*. And...

...a great company should be able to recover its cost of capital. Capital is very expensive in India. Taking 10yr G-Sec rate of 7% + equity risk premium of 8% (5% global + 3% for India), you have CoC of 15%, year after year.

Read 14 tweets

Anupam Gupta

@b50

6 Oct 20

I get the outrage against WhiteHat Jr but sorry guys. Society (us!) says:
IIT-IIM = success
Foreign education = success
Startups = success
Coding = success
Which parent doesn't want his/her kid to be successful?

Have you even seen the tons and tons of money that startups attract? And coding is critical in startups. Which parent doesn't want his/her kid to be successful?

Have you seen the huge amounts of success that Indian techies have in the US? Which parent doesn't want his/her kid to be successful?

Read 6 tweets

Anupam Gupta

@b50

28 Sep 20

Liquidity, return of capital, return on capital are the three basic things that drive any investment decision. Hear me out.

Liquidity is access to your money when you want it 24x7. Examples: an FD is extremely liquid, a liquid fund takes one day, PPF is locked in, an investment in your friend's startup is locked in.

We underestimate liquidity; liquidity is critical to price discovery. Reliance's price is more reliable and therefore less prone to manipulation than, say, a smallcap stock with low float.

Read 14 tweets

Anupam Gupta

@b50

16 Sep 20

Ok a quick thread on equity research since so many people have jumped into equities.

Good news? equity research today is more freely and more widely available than ever before. Bad news? most of it is mediocre. There's a reason why they're free.

There are plenty of blogs too that do a pretty good job of writing about stocks and markets and stuff. But they're a) not updated frequently b) full of intrusive ads c) not always high quality.

Read 11 tweets