Even for a small cap investor a large % of his PF should be optimized for "Capacity to suffer & durability" rather than for pure upside.
In country like India, if one stays invested long enough the demographics & its upwardly mobile percapita income will take care of the upside.
In country like India, if one stays invested long enough the demographics & its upwardly mobile percapita income will take care of the upside.
This calls for a supply side excellence which creates a capacity of suffer through difficult periods or actually demonstrates antifragility and thrives under stress through the strength of its reputation and balance sheet by acquiring assets in distress.
A classic ex of this is APL apollo, over the last decade where most metal convertors have struggled, APL has demonstrated anti fragility thrived by using its superior balance sheet to acquire assets from companies that were in distress like the plant bought from Shankara.
This antifragility born out of its supply side excellence allowed a tiny sapling at the beginning of tje last decade to transform into a tree laden with fruits for its patient shareholders.
This essentially drives at the point of moat investing.
Its to invest in companies that prioritize deepening its moat over making a quick chunky buck over a cycle.
About investing in promoters who create assets for the long term sometimes even beyond their own lifetime as well.
Its to invest in companies that prioritize deepening its moat over making a quick chunky buck over a cycle.
About investing in promoters who create assets for the long term sometimes even beyond their own lifetime as well.
As an investor, one can only benefit from the labour and brilliance of a enterprenuer like this, when one invests with an owners mentality, to take pride in creation of a business behemoth and to ignore the vissitudes of Mr. Market that it displays from time to time.
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