Slow Compounding

Nestle India Revenue up by 18% Expenses up by 21% Profit up by 19% Company has ventured into Petcare segment through an acquisition.

HDFC Bank: Asset Quality & CASA

HDFC Bank Efficiency Matrices

Dmart Revenue went up by 37% Expenses up by 37% Profit up by 64% Good results. This stock will remain as the best example of best mental block for PE Investors!

HDFC Bank Income increased by 19% Expenses increased by 25% Net Profit increased by 22%

Expectation!

Market Noise One year basis Nifty 50: 3.7% Down Nifty Next 50: 2.6% Down Nifty Bank: 2.2% Up Nifty Midcap 100: 0.4% Down Nifty Smallcap 100: 14% Down Nifty IT: 23% Down Nifty Pharma: 10% Down Nifty Auto: 17% Up Nifty FMCG: 7.6% Up If you feel satisfied or concerned about these types of numbers, you are wasting time in stock market. These statistics are fed to us by media and we get emotionally connected. Ask yourself, have you learned anything new today by checking these numbers that enhances your knowledge? How does it help to make rational investment decisions? Investment is all about process! It is not about getting emotional with ticker symbols. P.S. Today is the first trading of the month. As usual, transactions have been made without having any fear or greed. Kind of automated. Little or no emotions are involved.

Portfolio Update! Alright guys, time for portfolio update....Aug 2022 Friday, 6 PM...stay tuned to watch that premiere!

Inversion "All I need to know where I will die so that I never go there" You must have heard this if you are a fan of Charlie Munger. He tries to know how he can commit mistakes and then strictly force himself not to follow the route. Let's have a thought experiment. When all of us are dreaming to get multibaggers, let's invert the game. Let's say if you want to catch a "multiloser" that will erode at least half of its market cap in next five years, how will you pick? In the comment section, write the company name and if possible, why it will happen. I will start first. Adani enterprises. Reason: PSU banks are famous for reckless lending. If one of the PSU gets hit by bad loan, RBI has to clean up the mess. If the economy doesn't shape up as we are expecting, Adani enterprises may feel the heat of paying interest. No PSU banks will give bulk dose of injection again. And hence, the house of cards may fall apart! (As you observe, lots of Ifs...it doesn't matter if I'm wrong, it won't impact my portfolio as I will never invest a single oenny here)

Difference In our daily life, we confuse lot of synonymous terms. Peace and happiness Wealthy and Rich Simple and easy Sad and Disappointment I have no intention of writing about the difference of all such words except Simple and Easy. What is simple, we assume that it will easy. The truth can be exactly opposite. For example, in investing, the formula for long term wealth creation is simple. Buy great business and hold for really long time. Well, greatness is also very clearly defined. The company that can earn higher Return on Capital Employed (ROCE) and deploy a good portion of earned money back into the business at higher Return on Investment (ROI). And it is not very difficult to spot great business. Then why it is so difficult to create long term wealth? Because of many reasons. 1. Seduction of hidden Multibaggers 2. Reluctancy to Pay higher Price 3. Lack of patience 4. Market tantrums 5. Media Chaos 6. Your colleagues' stock tips 7. No excitement in boring compounding 8. New megatrends coming in every six months 9. Impossible to resist Inactivity 10. Short term underperformance Even after knowing the secret of wealth creation, the retail investors will fall into all these traps. Because secret is known, execution is tough. In investing, you don't need to be smart. As the popular saying goes... A fool with a plan will beat the genius with a master plan P.S. For last one year, slow Compounding portfolio has been underperforming. It is tough to see your portfolio underperforming anytime. It is even more difficult to show it publicly the consistent underperformance. Alpha has gone as low as -10 and after almost 9 months, it is +ve again. One has to undergo this journey. You can see no other portfolio but yours. The idea of our portfolio update is to show you the "simple but not easy" journey that all of us has to walk through...

Portfolio Tracking There are several questions on how you can track your own portfolio. You can simply use valueresearch or Marketsmojo to track your portfolio. But you will not be able to find alpha directly from any of these online tracker. However, you will find Beta from marketsmojo. We have published a video how you can calculate alpha of your portfolio. It's an automated tracker using Google sheet. More translations make the calculation more difficult.

HDFC vs ICICI Bank

Flow of money Step 1: Buy out or make acquisition Step 2: Let the market cap raise Step 3: Sell stakes to listed group entities or Pledge Step 4: Generate Money money by selling Step 5: Repeat Step 1

Watching Paint Dry Investing in equity market looks like complete choas now. Every second, your mobile phone screen is screaming out the change in ticker price. If someone provokes you everyday, eventually you will pay attention and you will try to "SAVE" your portfolio and do "Strategic" move. Unlike other jobs or sports, investing results are not directly proportional to your activities. This is a classic finding that holds true for all long term wealth creation. Sir John Templeton said that the best investor is wrong one third of the time. If you don't consider yourself best, and think yourself above average, you will make mistakes more than one third. So, mistakes will be part of the courses. Intresting part is that, you can still make superb return if you hold on to other other good businesses in portfolio. Among the good businesses, if you trim it prematurely, you will keep churning your portfolio and keep losing the chance of Compounding. Slow Compounding portfolio will certainly have mistakes. And we will have no plan to remove those mistakes. In this process, we will keep compounding with great businesses. Finally, investing is like watching the paint dry. It's a game of small IQ and big times EQ. P.S. Inactivity is good for your portfolio health. Practice it.

Good Report on Motherson Sumi Wiring Harness Small allocation, through demerger, not Direct purchase in other portfolio.

Disclaimer: Not related Investment While searching for file, found an old travel ticket. A long layover in Borispol airport in Ukraine while flying to Delhi. This airport got destroyed by Russian Invasion. A place that I stayed more than 8 hrs. Geopolitical current has got the maximum influence over our life because the world is more hyper-connected. But how do we make investment which negates the impact of Geopolitical scenario? Well, we cannot because no one has seen the future. Investment is always future oriented, and that is the risk an investor has to take!

The Lost Paradise Business without true competitive advantage keeps losing their ground. It is just a matter of time. Just because today, the picture looks rosy doesn't guarantee you to enjoy the luxury in future. We have repeatedly discussed about AMC business having absolutely no competitive advantage. Lot of stories have been narrated. But story feds away with time if it is not true. Real data of market share change in last one year HDFC AMC: 13% to 11% Nippon India AMC: 7%, No change UTI : 4%, no change ABSL AMC: 7 % to 6% SBI AMC: 10 to 12.5% ICICI AMC: 12.5%, slightly reduced P.S. You could simply avoid this story by asking one question. Will you invest in HDFC or any other AMC's equity funds if they consistently underperforms!