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Chandrakant Sampat - Indias first successful value investor.
Mentor of Late Parag Parikh & Radhakishan Damani sir.
I read his story and inspired a lot. Sharing with all of you.
[Thread🧵]
Mentor of Late Parag Parikh & Radhakishan Damani sir.
I read his story and inspired a lot. Sharing with all of you.
[Thread🧵]
Chandrakant ji was born in a Gujrati Family.
They had a family business. But stock market was fascinating him.
He was influenced a lot by an economist Peter Drucker.
They had a family business. But stock market was fascinating him.
He was influenced a lot by an economist Peter Drucker.
He left the family business and entered into stock market in 1955.
Sir used to say,
I got into the market because, it was relatively simple. All you needed was a cheque book and a pen.
Sir used to say,
I got into the market because, it was relatively simple. All you needed was a cheque book and a pen.
He used to invest in high quality businesses, that are simple to understand.
- Low or no debt
- Roce >25
- Generating free cash flow
- P/E less than 15
- Div yield of 3-4%
- Available at 8-10 year low or
- Down atleast 40% from the peak.
- Low or no debt
- Roce >25
- Generating free cash flow
- P/E less than 15
- Div yield of 3-4%
- Available at 8-10 year low or
- Down atleast 40% from the peak.
Sir, always remained focused on quality of the maganement.
He said they should keep innovating the business model to stay in the game.
Outdated technologies & businesses wont survive.
He said they should keep innovating the business model to stay in the game.
Outdated technologies & businesses wont survive.
He used to invest in high free cash flow generating companies with high return on capital employed ( ROCE).
Such businesses are great and dont need additional capital to grow.
Such businesses are great and dont need additional capital to grow.
Whereas the business who doesn't generate enough free cash flow and ROCE is a bad business.
Bad business always need additional capital & then also they dont grow.
Bad business always need additional capital & then also they dont grow.
He keenly observed how companies allocate the capital.
He said, right capital allocation matters a lot in long run.
Sir believed in concentrated portfolio. At a time he used to hold 8-10 companies. He said, over diversification impacts the long term returns.
He said, right capital allocation matters a lot in long run.
Sir believed in concentrated portfolio. At a time he used to hold 8-10 companies. He said, over diversification impacts the long term returns.
He also focused on the longevity of the business.
Sir, liked the companies which consistently paid dividends.
He was a super bull in FMCG companies.
Sir, liked the companies which consistently paid dividends.
He was a super bull in FMCG companies.
1973 was a game changer for him. Gov implemented FERA (Foreign exchange regulations act).
As per the act every foreign company which was operational in India had to list on exchanges & share equity with indian investors.
As per the act every foreign company which was operational in India had to list on exchanges & share equity with indian investors.
MNC companies were available at cheap valuations. He spotted an opportunity.
Sampat ji invested heavily in Mnc companies like Colgate, Gillate, P&G, HUL, Nestle etc.
He held them for very long term.
Sampat ji invested heavily in Mnc companies like Colgate, Gillate, P&G, HUL, Nestle etc.
He held them for very long term.
His buying were such low that, after split and bonus adjusted his buying price became almost negligible.
He made 100-200X in some companies.
He made 100-200X in some companies.
Second incident was when Late Indira Gandhi's death in 1984.
There were riots & fire at different places in the country.
Huge bloodbath in the market. Everyone was in panick but Sampat ji spotted another opportunity.
There were riots & fire at different places in the country.
Huge bloodbath in the market. Everyone was in panick but Sampat ji spotted another opportunity.
He heavily loaded Bosch in the drawdown.
During tough period he guided Rakesh ji, Damani ji, Nimesh ji.
During tough period he guided Rakesh ji, Damani ji, Nimesh ji.
Sampat ji didn't like the Indian education system.
Sir used to say,
Market and our mistakes are the best education. Conventional education just closes the mind.
He believed in self education. He followed Bhagwad Geeta and often quoted shlokas from it.
Sir used to say,
Market and our mistakes are the best education. Conventional education just closes the mind.
He believed in self education. He followed Bhagwad Geeta and often quoted shlokas from it.
Sampat ji always remained away from public and media. He had given just 1 or 2 interview in his entire life.
He practiced simple and frugal life. Even in investing he used to say, keep your expenses low.
He practiced simple and frugal life. Even in investing he used to say, keep your expenses low.
He never used a mobile phone. He had a car but mostly he used to travel by public transportation
Sampat ji prioritised health and fitness. He was a regular jogger. Used to do Yoga and read books.
He followed simple diet and avoided junk food.
Sampat ji prioritised health and fitness. He was a regular jogger. Used to do Yoga and read books.
He followed simple diet and avoided junk food.
In latter part, he remained mostly in cash and cash equivalent.
He feared that rapid changes in technology may affect the Capital market.
He feared that rapid changes in technology may affect the Capital market.
He was also worried about Indian economy and Corporates. He said, promoters should value the investors. He also didn't like the valuation at the end.
Late Parag Parikh & Radhakishan Damani sir used to call him their mentor. Later these investor became highly successful in stock market and guided many other investors.
Sampat ji passed away in 2015 at the age of 86, in Mumbai.
Parag Parkh sir remarked,
Whatever he was, it was because of Sampat ji. He was my inspiration to enter in capital market.
Parag Parkh sir remarked,
Whatever he was, it was because of Sampat ji. He was my inspiration to enter in capital market.
I am really inspired by Sampat jis value investing style, simple living and lifestyle.
I will end the thread with his quote,
"To be a good investor, all one has to do is dream."
Thanks for reading. Do re-post and follow @BaluGorade for more such content.
I will end the thread with his quote,
"To be a good investor, all one has to do is dream."
Thanks for reading. Do re-post and follow @BaluGorade for more such content.
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