Tag: buffet

Don’t buy and forget

Warren Buffett is one of most misquoted [in terms of context] investment gurus of our times.

What happens when we are given below advise ?

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

or

“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”

We buy businesses and then hold them, thinking that Warren Buffet has recommended to hold our positions for long term. In fact one of most repeated quote I hear is

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

Trust me there are several businesses in India which if invested today and then magically the stocks markets shut down for 5 years, after 5 years you have to search the company and its promoters to get pennies back on the dollar invested.

Another chart that is thrown at me is this

Buffet quote -1

Warren Buffett is holding Coke and American Express for 20+ years.

 

Honestly tell me how many Coke’s like business are their out … Read the rest

Download an ebook on Warren buffett partnership letters

Jim Rohn famously said,

You are the average of the five people you spend the most time with

As a young investor starting out it would serve you well if you can spent time with Warren Buffet (vicariously) by reading his fantastic letters

At Tankrich – We have taken an initiative to share his learnings through our video channel

This week having finished the partnership letters I thought it would be good if I could document those learnings in a single place

After few weeks of editing here is the final copy for you on Learnings from Warren buffett partnership letters

Below is Table of content of this ebook

Download a copy by sharing any of the above social links (I do this so that this reaches maximum people through your social networks)

If you are reading this in your inbox go to this link to download a copy

Building blocks

  1. What should be focus of long term investor
  2. Surest means of profit is value investing
  3. Think long term to evaluate performance
  4. Beating index is very tough
  5. True conservatism
  6. Magic of Compounding
  7. Price is everything aka Margin of Safety
  8. Cigar butt as a group works out to be a good

… Read the rest

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Few takeaways from study of wide moat companies

Wide Moat companies(1)

I started with wide moat ratings of morningstar and selected 10 companies randomly as below

Asian Paints Bajaj Auto Colgate India Dabur Cummins HUL Infosys ITC Nestle Lupin

Then I collected 10 year data on above companies from 2005 to 2014, collecting 10 year data will ensure that you can avoid sampling errors although I want to clearly point that selecting 10 companies and trying to interpret patterns in itself will have sampling errors

If you have gone through our previous posts on competitive analysis , ROE dissection or Earnings framework you know I like to understand a concept through key metrics and examples , I have selected 3 important metrics and plotted on how have they performed for 10 companies in last 10 years

Lets take them one by one

Understand this first  you get rated as improved if a particular company is able to beat its own average over last 10 years in year 2014. So if year 2014 was extremely bad/good year for the company than data interpretation below could be erroneous

Gross Margin – My reason to select – this indicates pricing power

Wide-1

8 out 10 companies were able to improve their gross margins

Cash … Read the rest

How Inflation kills investing returns

Inflation and investing , I often revisit this quote when I am reviewing my portfolio

Inflation is a tax one has to bear irrespective of whether one is investing or not.
The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation or pays no income taxes during years of 5 percent inflation. Either way, she is ‘taxed’ in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120 percent income tax but doesn’t seem to notice that 5 percent inflation is the economic equivalent  ~ Warren Buffet

 

I had an opportunity to visit India after almost a year and I took this opportunity to do a dip stick test on inflation

Cautionary Note : I was in Kolkata for 15 days and my experiences may be totally irrelevant and … Read the rest

Why I bought Symphony at a high PE ?

We recently added Symphony to our model portfolio . Here is my complete analysis and reasoning for adding it to model portfolio

Symphony Limited manufactures and sells consumer durable products in India. It’s name synonymous to Air coolers in India.

Business

Symphony Limited manufactures and sells consumer durable products in India. The company provides domestic, commercial, and industrial air coolers across various models under the Symphony name. It offers desert, tower, room, and personal coolers for residences, shops, showrooms and offices; heavy duty industrial air coolers for factories, offices, schools, malls, assembly halls, warehouses, and metro stations. The company also provides storage and instant water heaters under the Sauna name. Symphony develops its own models, designs and prototypes of air coolers before giving it to OEM’s for large scale manufacturing. In addition, Symphony Limited holds intellectual property comprising 8 patents, 49 designs, 108 trademarks, and 7 copyrights. The company also exports its products to approximately 60 countries. It offers its products through a network of approximately 750 distributors and approximately 15,000 dealers across India.

Positives

–          Well positioned to encash the growth

–          Leading player in the air coolers market

–          Huge product portfolio with innovative products

–          Strong dealer … Read the rest

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