2017 - Annual Letter


Self-evaluation and key learnings of 2017

Value Investing Lecture to IIM Lucknow MBA class

Presented practitioner view to students

Annual Letter

Thesis for Investing in J&K Bank

Investment Principles

Pilgrimage to Omaha

Why? What are my goals?

DoorDarshi Value Advisors

"Put Money to Work"

What matters in Investing -Think like an owner

Investing is being a part-owner in a business

"put money to work"

Life-long most of us work to make money. Wouldn't it be nice to have money work for us. 


Having money work for us is one of the most important things we can do. Yet, it's also the most overlooked. Our goal at Doordarshi is to help you towards this quest.


Einstein has said, "Compounding is the eighth wonder of the world." ​We are here to help you experience the 8th wonder.

1. Partnership 

My approach towards my investors is that of a partnership. In the current setup I am the Managing Partner while my investors are the limited partners. However, my key consideration is always to ensure that structure (fees, communication) would be acceptable by me if our roles were to be reversed. This principle borrows heavily from what Warren Buffett has laid out in his Owners Manual – “Though our form is corporate our approach is partnership.” 


2. Long-Term Orientation

In a world where everyone has all the information, we have to stake out our competitive advantage. The key one that we have is long-term orientation. We primarily invest in companies where the thesis may play out over many years. This reduces the competition and allows us to enjoy our returns over the long-term.


We carry the same approach when we work with our investors/partners. We would rather have one investor for ten years rather than twenty investors for one year. This allows us to take long-term view in our relationship with our investors

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3. Invest in our best ideas

We invest majority of the portfolio in the top 5–10 positions. These positions are chosen based on their attractiveness from a future return perspective. In following this approach we subscribe to Charlie Munger’s dictum in spirit, “A well-diversified portfolio needs just four stocks.” Key advantage of this approach is that it allows us to know our top positions better than most people and take advantage of the decent returns that will come from those positions.

 


4. Contrarian Bias

We like to buy good stocks when they sell at a discount. This approach, by definition, forces us to go where the crowd is not going – selling things which are going up and buying things which are falling. We are able to have this contrarian bias because we always keep the forward return in mind whenever we invest in any security i.e. what % return we expect from the security from the day of investing to the day the price will match the value.


However, we are not contrarian for sake of being contrarian. We will sell the stock even if it is falling, if we feel that some new information has changed our thesis.



5. Don't Lose Money

We take seriously the dictum that the art of making money is to not lose money. Warren Buffett has expressed the same through his famous rules on investing. There is the simple maths that if we lose 50% of our portfolio we need to make 100% to get even. The more pernicious impact though, is psychological. We start doubting ourselves a little more; we don’t invest in our best ideas to the extent we should and we start looking for social proof.

To guard ourselves we ask for a high Margin of Safety in our position. This has led us to miss many opportunities. However, we will rather miss opportunities than get into sub-par opportunities which could later turn out to be value traps.


6. Management and Business Quality

Most of the mistakes we have made in our investing journey have been where we misjudged management or business quality of the company. Since many of the Indian businesses are owner operated, quality of the management becomes paramount. However, judging the quality of management is very subjective.


The best we have been able to do is to create mosaic of information about management and use that to reach our decision. We continue to increase the weightage of this element as we consider investing in potential ideas

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7. Continuous Learning

To us Value Investing is more than an investment approach; it is a way of life. This approach requires us to keep learning so that we become a better investor; but more importantly, a better human being. In our experience Value investing draws us towards the “right crowd.” This allows us to learn not just from our investment but also from our investors who are a self-selected group of individuals.

Annual Letter

Happy New Year - 2017

1-pager on the key learning from 2016


What matters in Investing

Factors that drive success

Presentation on our Investment Approach


https://goo.gl/68D8cA

Our Thoughts

Presentation at Asian Investing Summit - CLSE

https://youtu.be/KlGaLF9sZkY

Presentation at Asian Investing Summit 2018


https://youtu.be/DBlxvwDgSbU

What matters in Investing - Filtering out noise

Inversion as a tool is under-appreciated

Key takeaways from Omaha

Learning from the Oracle of investing

What matters in Investing - Having patience

Patience is critical for success