“Simplicity is the ultimate sophistication.” — Leonardo da Vinci
Like many things in life, ‘Investing’ works best when it is kept ‘simple’.
You don’t need a jazzy dashboard or a complex excel model to make wealth over the long run. The wealth generation process is simple and boring. And it is the same for everyone.
This is the 1st post in our quarterly result update series for Q2FY21.
In this post, we’re sharing the latest updates of the stocks from our watchlist. Please don’t treat this as a buy recommendation. We find these businesses interesting and we may build position (or buy more of those that are already in our portfolio) in them in the future. The purpose of this post is to bring clarity to our understanding of the businesses we are tracking. We make our notes on the quarterly results and conference calls. Putting it up here makes it easier for us to refer them at a future date.
You can see the earlier updates here.
A slightly edited version of this post was originally published in Morningstar.
The price to earnings ratio, or P/E ratio, is probably the most commonly used valuation metric in the stock market. It is a mathematical expression calculated by dividing a company’s current market value by the net profits of the current year.
Murphy’s Law says “Anything that can go wrong will go wrong“.
Today, the management of VIP Industries would probably agree to it more than anyone.
We have extensively covered (here and here) the progress of VIP Industries over the last seven quarters.
Recently, COVID-19 has led to many ugly surprises for VIP that no one could have envisaged.
And that reminds me of this quote by Robert Rubin:
Condoms aren’t completely safe. My friend was wearing one and he got hit by a bus.
Risks often play out in the most unanticipated ways.
“I will call you on the weekend.”
“Let’s have lunch sometime.”
“I will follow up tomorrow”.
“I am really busy at the moment but would definitely check the mail in the evening and revert”.
We often make these statements all day long to people around us. Do we really check later if we actually perform those tasks as said?
Let’s be honest. Most often, we don’t.
I was researching a company as a potential investment opportunity in the Indian stock market.
I started reading about the history of the company.
Clicked on a youtube link on its website.
It was a short five-minute video. Very useful.
Then something interesting happened.
On the right side of the youtube page, I was prompted for a video.
It was Yuval Noah Harari. A renowned historian and author.
And also one of my all-time favorites. I was hooked.
I specifically liked this part in the video:
I will address the fake news question, not because it is the easiest to solve, but also because it is the most relevant to what you are doing in Google. And I would say that the current incarnation of the fake news problem has a lot to do with the model of the news and information market. We have constructed a model which basically says, EXCITING NEWS FOR FREE, IN EXCHANGE FOR YOUR ATTENTION.
I was blown away by this last phrase.
Famous investment columnist and author, Morgan Housel makes a striking point in one of his writings:
The single most important variable for how you’ll do as an investor is how long you can stay invested. I’m always astounded when I think about compound interest and the power that it has for investing. Time is massively powerful.
If I had to simplify it in one sentence, I would say:
“If you can survive for a long time, compound interest will take care of you.”
Or to put it more briefly: “Survive to Thrive”
On 18th November 2018, at Synconic Ahmedabad office, Anshul Khare gave a talk on business insights from Amazon.
Here’s the video version of the presentation.
What could be the worst nightmare for the parents of a toddler?
In a small Austrian town in the Alps, a mother and father were strolling in the woods with their three-year-old daughter. The parents lost sight of the girl for a moment and that was all it took. She slipped into an icy fishpond. The parents frantically jumped in after her. But the pond was dark and it took them thirty minutes before they could find her at the pond bottom. Eight minutes later when the rescue team arrived, the girl’s condition wasn’t good. She was unresponsive with no pulse and no sign of breathing. Her pupils were dilated and unreactive to light, indicating cessation of brain function. She was gone.