How to build the perfect equity portfolio is often the topic of great interest and debate. How can one build a portfolio that will be able to bear (not sail) through the market crashes, seize the opportunities of the bull market and have the flexibility to bet on potential multi-baggers?
How does EVM as a portfolio fit into the big picture? How do financial products like PMS, Mutual Funds, Exchange Traded Funds and others make their way into the portfolio?
How can the investor start managing the investments like a business rather than a "fill it-forget it" approach.
In post 11, we identified the first three avenues of growth for companies: 1) Inflation driven growth 2) Commodity price driven growth 3) Consumption driven growth The above types of growth are more a function of external drivers rather than Company specific achievement. Many a times, the entire sector benefit or suffers due to impact of these three growth factors. Hence I term them as “Market Driven Growth”. The next three growth types/factors are more driven by the Company …
Once the quality of business is established, the second most important criteria to select an investment is its growth history & potential. Growth is critical for sustenance. However, not all growth are good for the business, especially when it comes at the cost of margins. Any analyst report you pick, you will find that future growth assumptions drive the valuation; I do not believe such valuations. DCF valuation mandates forecasting future cash flows. Predictions inherently bring in a lot …
This is the first of three blog posts in which I explain the criteria we look for when considering a company for long term investment: (Do note that for disciplined yearly investments, we follow the Expectations Value Model) 1. Business Quality 2. Business Growth 3. Business Valuation As investors we are always looking for high quality businesses. Though there is no universal definition of what exactly is “high quality” but businesses that generate more …
“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” – Warren Buffett Our favorite holding period is forever.” – Warren Buffett “If the job has been correctly done when a common stock is purchased, the time to sell is almost never.” – Phil Fisher Most successful investor stories revolve around the concept of buying good stocks and holding them forever. Rakesh Jhunjhunwala has been holding Titan for a long time, Warren Buffet hold …
Expectations Investing Value investors are in constant search of securities that appear cheap as compared to their fundamental or intrinsic value. Intrinsic value is the valuation of the underlying business. Intrinsic value can be calculated using multiple methods, but at its crux, it is an attempt to calculate the present value of the (expected) future cash flows from a going concern (accounting term for a company that can continue to operate indefinitely). The sum of these cash flows …