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4 Oct, 5 tweets, 1 min read
Read a few media stories on what's happening in spot markets in nat gas that do not mention anything about what's happening in the futures market. For example, see price in April 2022. Image
Whenever shortages appear, the typical manager simply can’t wait to expand capacity and thereby plug the hole through which money is showering upon him." - Buffett
When shortages finally occur in a commodity industry, the rebound to prosperity frequently produces a pervasive enthusiasm for expansion that, within a few years, again creates over-capacity and a new profitless environment. In other words, nothing fails like success. — Buffett
Seems like Futures markets are doing what they are supposed to do - focus on the future.

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More from @Sanjay__Bakshi

Fundoo Professor Profile picture
12 Sep
If you think about it, we successfully multitask a lot of the time. Walking and talking on the phone for example. When we drive we can’t just focus on the steering wheel or the rear view mirror.
Our moms and grandmoms multi tasked seemingly effortlessly. Just think of a typical day in their lives when they were married, had kids, and had a home to run.
I don’t think they would say sorry no tiffin box for you today because I have to run the laundry.
Read 4 tweets
Fundoo Professor Profile picture
27 Jun
This I agree with. While 100 Baggers by @chriswmayer is a fabulous book, there is a need for literature on building the conviction to hold.
And it’s not easy to develop a conviction to hold on to things that should be held. There are these “demons” that will enter the mind of the investor, which will prevent them from holding on to what will turn out to be an outstanding stock.
Demon # 1: The market is too expensive, so I should sell this business. This demon shifts the investor’s focus from the economics of the underlying business to the markets.
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Fundoo Professor Profile picture
16 Jun
Don’t take credit risk. Stick to quality companies. Hmmmm
Are HDFC Bank and Kotak Mahindra Bank quality companies? If so, then did they become so without taking credit risk? Answer: No.
There is risk in everything. If, for example, you refuse to take credit risk while investing in bonds, you will only buy treasuries. But treasury bonds are highly risky in the sense that they almost guarantee a long term mediocre (or even negative) real return after inflation.
Read 13 tweets
Fundoo Professor Profile picture
5 Jun
Technically speaking it’s possible. In a tobacco litigation scenario, if courts decide against the company and award huge damages, then litigants can go after all its assets.
But the taint of tobacco is removed from non tobacco assets if they are separated from the tobacco operations with ITC tobacco having no stake in them.
In the US something analogous happened when tobacco companies massively increased dividend payout ratios thereby protecting payouts to shareholders from litigation awards.
Read 10 tweets
Fundoo Professor Profile picture
23 May
Well, there is lots of disconfirming evidence here - and not just for platform companies but also from other businesses.
Take the examples of Uber and Airbnb for example. When they started out, they not only took on entrenched players (taxi operators and hotels), they also took on regulations.
Indeed, if you read the history of these companies, you will find that they pretty much broke the laws that existed in their early days.
Read 18 tweets
Fundoo Professor Profile picture
18 Dec 20
One of the favourite case studies that come up in my BFBV course at MDI is Relaxo. Every year I ask students to study this case which I had done along with @ravirpurohit in 2013 by assigning these readings:
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fundooprofessor.wordpress.com/2014/03/03/the…
Then I update them on my thinking about this business, management and valuation. This year, I spoke that (which I won't discuss here) and also about some additional lessons. Listing them here:
The importance of distinguishing between things that are under your control and those that you cannot control.
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