I spent 3 days researching on an idea after it passed several filters including excess of 30% return on equity and a niche business model. The idea was based on a rare commodity, due to lack of sustainable farming practices in India, the production has fallen 95% over past three decades in India. Regulation is decades far in India, even if regulation for sustainable farming were to be passed on 15th of June 2015, i.e. tomorrow, it will be 15 years before India would be back in the game.India’s loss was gain of an Australian listed entity, TFS Corporation which grew from a 20 Million AU$ company in 2004 to 620 Million AU$ company in 2014, 30 times.I feel that the company will grow even larger in the time to come. They … [Read More...]

Munger uses opportunity cost as a very frequently used tool.Munger opines that if you have the opportunity to purchase an investment that is better than 98% of all businesses, then you can use it as a filter to automatically eliminate the other 98%. Ultimately in the long run, investing world is full of toads that do not transform to princes.I wrote in 2013 about Unilever Nepal @ 10,000 NPR / share. The company is growing @ 20%, not less than it grows in any other emerging country.http://multibaggersindia.blogspot.com/2013/09/multi-generational-investing-idea-3.htmlNow, after two years of irrational bull market (not backed by productivity improvement) companies are over priced on every continent.Unilever Nepal (where FII investment is not allowed) is also trading at reasonable … [Read More...]

Having seen a large number of research reports, focusing on next 20-25% only, but on equities that went up several fold, are in stark contrast to how a long term investor should think and a great dis-service to long term investors. I read a statement recently, “Best investing articles are the ones that have nothing to do with investment”. I see this all the time, with investing newsletters venturing into philosophy.The problem I find with this statement is that the person in context has defined himself / herself narrowly as an investor. I have not. As a man shall not live by bread alone but by every word of ….., no investor shall live with stocks or financial analysis alone. It is too drab to focus on … [Read More...]

In a bear market, stocks may seem like mouthful of hot molasses, too sticky to spit out, too hot to swallow.While claims of creating material wealth are true in equity markets, emotional impact on full time dedicated investors is not well studied and reported. It pays to be a bull as markets are mostly up rather than down over long term.To be informed is to be empowered.You should know, if you are not already aware that equity indices may or may not move for 11 years (eg: Sensex) or 16 years( eg: Dow Jones) or even 25 years (eg: Nikkei) except for 1% of stocks (that we may or may not own). Person who has not read history is like a child, doomed to repeat mistakes (of … [Read More...]

What we call Organic Food was called Food by your grandparents. It is a trend that will continue to show up now, in my opinion.A couple of exemplary companies at the moment on my radar that I may miss being on the sidelines due to the Infosys nature of stock (high growth but equally high PE multiple).First is in the United States. Where Food Comes From Inc. It provides Organic Certification, Labelling, Third Party Verification http://wherefoodcomesfrom.com/WFCF is still a small cap at 65 Million USD market cap. The company will be engaged in McDonalds tracking and verification program and has lions share of market.On the face of it quite dear, 6 times revenues and 100 times earnings.Second is an Australian company, just noticed … [Read More...]

MicrocapsI have stopped investing in conventional microcaps and nano caps (1 Million USD to 10 Million USD range) and feel the need to at least bet 7-10% of the funds on an idea. As the future of companies are hard to forecast in that nano cap range, the bet size has to be small as a percentage of portfolio. Nevertheless I am investing in similar companies in 30-50 Million USD market cap range in other countries. Nairobi Securities Exchange (KENYA) currently has only 66 companies listed, going by the news 50 more micro caps should list in the next two years, juices have started secreting in a capitalist’s jaws.http://www.businessdailyafrica.com/Corporate-News/Top-100-finalists-target-NSE-listing-to-boost-capital-/-/539550/2905394/-/13j9o1dz/-/index.htmlMore MoneyI completely understand … [Read More...]

I am not blind to the fact that multi-fold growth per annum is possible in micro caps. I wrote about few opportunities earlier like Millennium Beer, a 2-3 Million USD company at the time (which merged with United Breweries, a 4 Billion USD market cap company) which wiped out the possibility of multibagger gain. (http://multibaggersindia.blogspot.com/2010/11/arbitrage-opportunity-millennium-beer.html)Similar fate has struck another company that I had an eye on, for over three years, ever since it was with BIFR. Amal Ltd, a 4 Million USD market cap company.http://www.amal.co.inhttp://www.bseindia.com/stock-share-price/amal-ltd/amal/506597/The board has decided to merge it with the parent company (Atul Ltd), nearly 800 Million USD market cap, but there is likely … [Read More...]

I had written a blog post five years back (in 2010) on how your family can own 70% of Indian listed and unlisted companies here http://multibaggersindia.blogspot.com/2010/12/how-your-family-can-own-70-of-india.htmlIn the previous article in 2010 I touched on how you could set up a foundation, where nobody could touch the capital, convince your next five generations to continue to compound money on value investing principles and accumulate over 70% of the financial wealth of India.I though it was time to raise the bar 🙂 , being a big fan of DIY, methinks, why depend on your family office / foundation, rather why not do it yourself, and why limit to India, why not the entire planet.IndependenceWhen I started getting greedy for … [Read More...]