Watched this recent interview of @SamitVartak sir with @PMS_AIF_World. Brilliant interview. Always learn so much from Samit sirs public sharing. My key takeaways:
https://twitter.com/sahil_vi/status/1409357921008324613
1. When Samit sir was in US, he spent a lot of time advising manufacturing businesses on how to have a good operating structure limit costs and maximize profits. So his edge is business understanding.
My thoughts:
This is one of the key things I've learned from Samit sir and other fellow investors, it is most important to understand the business and focus on compouding that knowledge by incrementally understanding more businesses rather than get bogged down by valuations.
This is one of the key things I've learned from Samit sir and other fellow investors, it is most important to understand the business and focus on compouding that knowledge by incrementally understanding more businesses rather than get bogged down by valuations.
Instead of thinking: this 60 pe stock looks too expensive, thinking should be: why is this stock at 60 pe. What does that say about the owners expectations of the business and are those expectations justified?
2. Long term wealth compounding can only happen when earnings compound. This is why sageone looks for companies which can double their earnings in 3-4 years. Valuation rerating of beaten down stocks is more like trading. Can't compound wealth.
My thoughts:
This is another thing I've constantly heard Samit sir say over the years and has definitely influenced my own investment style (for the better I hope). Many instances where I replaced companies which might have a pop in valuation but no earnings growth visibility...
This is another thing I've constantly heard Samit sir say over the years and has definitely influenced my own investment style (for the better I hope). Many instances where I replaced companies which might have a pop in valuation but no earnings growth visibility...
With companies which have both (I'm demanding that way, want undervaluation and also strong earnings growth).
3. Sageone has a lowest investment thereshold of 2cr which is above the 50 lakh lowest limit set by sebi because they have observed that when ticket size is reduced, it does not grow aum that much (Pareto principle) but does cause them to spend more time managing investors rather
... than their investments. Also, Samit sir always wants to keep interests aligned between investors and sageone. This is why they stopped taking capital in small and microcap fund because a very large aum becomes harder to deploy.
My thoughts:
Remarkable ethics and something I personally find very admirable.
This also demonstrated to me areas of inefficiencies in the market. Samit sir says if I needed to deploy only my own money i could even deploy it in a 300cr mcap company.
Remarkable ethics and something I personally find very admirable.
This also demonstrated to me areas of inefficiencies in the market. Samit sir says if I needed to deploy only my own money i could even deploy it in a 300cr mcap company.
And therein lies the area of inefficiencies in the market. Even a pms fund can't touch these microcaps which is why I love investing in microcaps. Of course it's a mine field, low liquidity, but to the investor willing to do their research, leave alone 99% of the companies
Which do not meet investment criterion, and only focus on those very limited ideas where all good traits are aligning, the risk reward equation is very favorable.
Do watch the full video which is a must watch imo:
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