I recently shared my review of Symphony limited with subscribers, you can get a copy here

One of the things that stood out was how luck has played a huge part in my returns from this position. See below table

For the last 5 years, Sales and Profits grew at 11-12%, however, I got lucky as the company got re-rated ( rightly) and sold at elevated valuations. I made roughly ~3.5X and with decent allocation, this was the fantastic return for me.

When most of us who have a had a decent run in the last 5-6 years dig deep to understand the source of our returns, The answer would be rerating(luck). The stock market is cyclical as Howard Marks puts it

Cycles will never stop occurring. If there were such a thing as a completely efficient market, and if people really made decisions in a calculating and unemotional manner, perhaps cycles (or at least their extremes) would be banished. But that’ll never be the case.

Now the tide is reversing, So coming to the most important question

Have markets really become a screaming buy?

I don’t think so, however, value lies is an eye of the beholder and trying to bottom fish and perfectly time markets is a skill difficult or even impossible to master.

I did a theoretical exercise

Over last week, I went through all of my last 2-3 years investments where I have completely exited from a position either due to unfavourable valuation/business not performing as per my expectations. Here is a snapshot of 14 businesses where I am out (no position)

Some points learned from this exercise

• None of them is trading at 2013 multiples, they still trade at higher multiples
• Apart from 3 others have grown in size, almost double from their 2013 self

While many businesses from above are 40-50% below 52 weeks highs a lot of them are not available at mouth-watering propositions. However, I certainly think one can keep a buy list ready and start accumulating their favourite companies. My strategy is simple

• Review and update my notes on all of the above companies, I already have a fair idea on business and it will take short time to catch up
• Buy from above list when valuations touch 5 year low and where businesses have made great progress in the last 5 years
• Add to stocks within the portfolio where risk/reward is very favourable

For a long-term investor, interesting times are ahead

PS On Another note, I get keep getting stocks down X% from their 52-week high, that to me is a stupid way to invest ( If you are investing based on Whatsapp in any case you are stupid)