Hello Friends, we wish you and your family a very Happy & Prosperous New Year!
2012 has been a good year for our financial markets with the sensex gaining over 25% this year and beating all other asset classes. The best thing was that the mid caps (the area we focus on) outperformed the broader markets and the high quality stocks were the major wealth creators. Those feeling that they might have missed the bus and it is late, have a look at this stat – markets are still 4% lower than they were 5 years back. It may be just a start of a long term bull market.
We went through the timeline and compiled the list of the best articles, learning and experiences of 2012. (They are not in any particular order):
- A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business – Charlie Munger’s interview in 1994; a timeless classic
- The Sanjay Bakshi Way – Prof. Sanjay Bakshi’s interview with Vishal; a wonderful pragmatic investing guide
- Discussion About Value Drivers of a Good Business – Comparing the factors which highlight a good business (discussion on ValuePickr). It helped us form a high conviction on Mayur Uniquoters
- Discussion About Capital Allocation – Another interesting discussion held on ValuePickr about the variables which can help developing allocation framework
New Finance Blogs:
In 2012, we had some very interesting new finance blogs; we would love to congratulate them. We expect to see more new investing blogs in 2013.
- Alpha Ideas – Nitin shares the best of the finance articles, videos and reports – everyday
- Safal Niveshak – Vishal simplifies the teachings of the investing geniuses and makes them understandable in Indian market’s context
- Value Investing by Dhwanil – Discusses value investing stock ideas with a clear thought process
- Safir’s Picks – Safir is an opportunist investor, always with many interesting and winning ideas in his pockets (do follow him on Twitter too)
- UCD Value Investing: Mohnish Pabrai & Guy Spier – Mohnish and Spier talk about cloning and how the great investments are done just by it
- Financial Equivalents of the Optical Illusion – Rajeev Thakkar of PPFAS explains about the illusions of high PE and how a low PE can be equivalent to high PE
- Value Investing in India with Rahul Saraogi – Rahul talks about the opportunities in the mid-cap space in India
- One Idiot – A brilliant movie by Amol Gupte to get started with investing
Best Company Visits:
- Astral Poly Technik – We met with the dealers and plumbers in Ahemdabad to do groundwork and were amazed by their feedback for a strong conviction
- GRP – We were amazed by sincerity and knowledge of the management. Looking forward to attend AGM of 2013 too
- Mayur Uniquoters – The grip and vision of the management on the business helped us in increasing the conviction
Our Best performers during the Year (with percentage change):
- Astral Poly Technik (171%) – The growing brand presence and stock discovery led to high returns
- Atul Auto (142%) – Company went pan-India from its home market of Gujrat
- Liberty Phosphate (134%) – Favorable government policies for SSP sector led to mis-pricing opportunity
- Mayur Uniquoters (130%) – Fantastic financial ratios along with growth led to a good re-rating
- Apcotex (101%) – Earlier part of the Asian Paints group, this company did well on growth and dividends
The close runner-ups were up 100% each: Poly Medicure, Indag and BKT
Market learning of 2012:
Earlier we had a lot of focus on undervaluation while looking at a stock ideas. Now we have also started giving more weightage to the business quality and the scale of opportunity available. The three of the worst performing ideas were: Piccadily Agro, Faccor Alloys & BNK Capital
The common thing among all of them was that though they were good on ratios temporarily, but they had a poor business model or management.
Developing ideas for 2013:
- Lumax Auto Technologies – Debt free auto anciliarry business headed by a woman and strong on fundamentals
- Poddar Pigments – Consistent growth and market leadership
- Caplin Point – Pharma company at a nascent growth stage
- Export to Excel – Screener is the first website in the world to provide such a customization functionality
- Alerts for Screens – We love to set the email alerts for the favorite screens in the Screener to keep an easy track of the latest results
Plans for 2013:
We are expecting the credit rate-cuts in early 2013 and are optimistic about the markets ahead. We plan to create more new tools to make investing happier and easier. We hope to discover more new stocks ideas. And above all, we look forward to your comments and support!
Wish you a very happy and prosperous new year ahead.