Personal Themes - investing

 Investing is an art which is like shooting in the dark. In olden times when data availability was rare, some would browse through whole lot of data and probably pick up stocks based on Dividends, growth etc. or even rare cases PE, as price was dictated by a few.

Investing today gives  you crazy amount of data and data crunchers and now AI has put in its hat.

Screeners put out what top traders look into before investing and you can get their typ of stocks, be it value investing or momentum investing or a peter lynch portfolio or RJ OR   WB type portfolio. 

But investing should be fun and not like running on a treadmill looking to make more money. It may fail. You need luck to pick up a Titan or Coke or an Amex or even an MRF  type of companies and invest hugely in them to make money. 

This brings us to Conviction or themes that one must have and stick to it unless some major regulatory or market related changes has up ended it. At least you would not regret if one theme fails as other theme could do bette.

My themes are as follows: I may not invest big but at different times try to do a $ cost average.

 

These themes are

a) i feel medical business is going to do well as people eating, working habits are becoming more bench oriented (ordering and watching it on tv. Eating while working etc. etc). Thus my conviction is medical facilities and pharma will do well in future. Add to it corporatitization of hospitals.

b)  The second theme is on Waste management. As we increase the footprint of garbage (be it delivery based packing of goods, food delivery or any purchases), the plastic and wastes are going to pile and you need companies to convert them to useful products.  

c) The third theme is based partly on b. We abuse resources and as flooding in chennai during heavy rains showed, most of the lakes are converted to buildings and with climate change over time many of the coastal cities will be under water. Thus clean water is going to be required in future and such companies

d) As we collect more and more data, the storage is going to increase and so does computing. This requires huge amount of cloud storage and thus the heat generated needs to be cooled. ACs and electrical equipments will be in demand in future.

e) And to run d) we will need a lot of power and power equipments. Thus this is my theme - power (whatever means) generation and transmission.

f) Finally, my last ones will be with lots of Social Media, the need to look good, different is there. Thus fashion and beauty products is also my theme.

 

Of course, you have, Banking and fin. sectors, infra, FMCG, AI replacement, employment agencies theme etc. and other different themes and you have to choose and invest in them slowly and hope one of your themes becomes a multi bagger. 

 The key thing is not to loose your conviction in your themes. There may be bad times or good times for companies, but if your conviction is good on the themes, it will do well in the long run.

Like someone had a conviction in Zomato- a) people want to relax at home and eat and watch movies/programs at home and not be bothered of traffic, parking, weather etc. b) Kirana shops open around 10 AM to 8 PM and then close.So there is an exclusive market for it from  8 PM to next day 10 AM where you can get what you want by ordering in 10 -30 mins. Thus if somebody had conviction in Zomato they would have invested and even though initial loss making to make the model and scale it up may take time.

 

  

Pretty Ironic- Young deaths

 

Isnt it pretty ironic that one hears these days of fit persons suddenly dropping dead. So many cases have happened over the last 2-5 years eg, KK, Raju Shrivastav and many more.

But have you heard any politician dying like this. They live up to an old age and continue to retain their seats by whatever means. One wonders if being a politician makes one live longer despite the immense pressures supposedly there to keep their place. This is one thought I need to inform health influencers', whether they looked at this aspect.

 

Its entirely possible the politicians have access to excellent medical facilities and their problems could be detected earlier. But I do not buy AI argument that they are not popular enough to be listed 

Asset Allocation and Diversification

 With so much of turmoil in the world and climate changes, it is time Asset Allocation and Diversification is revisited.

My Asset allocation constructs is as follows (India focussed)

Asset allocation 

    Mutual fund

     Equity

    Fixed Deposit

    Gold/Silver

    Real Estate

Mutual Fund

    Equity

        Large Cap

        Mid Caps

        Small Caps

        Multi Caps

        Multi Asset

        Index Funds

    Sector

         Banking Sector

          Pharma Sector

          Infra Sector

           IT Sector

    Debt

        Corporate bonds

        Liquid Funds

        Arbitrage Funds

One may want, if required, a global diversification which can be done for Europe, China, US or Emerging markets with dedicated mutual funds (As of 2026 due to govt. regulation, the funds are blocked from investing abroad.

        

    

Working Incidents

 Many of the incidents listed below are hearsay and if you ask me from where i got them, I have no idea. Some may even call it Gossip.

CAVEAT :The below are not specific to any company, but culled over several years in Middle East and are of general nature. I do not have any specific incident that happened to me or the names and could have got from hearsay or observation. These are put as is and no guarantee is provided if it is real or made up. Read for pleasure and if a message is arrived at by the reader, can be used at his discretion. The usual disclosure of these incidents may or may not bear any relation to any person living or dead. 

 

 Incident 1.

 Heard of an owner who had given a max of 10% discount authority to the Sales manager. A friend of the owner wanted  a higher discount and approached him. The owner called the sales manager to his office and started shouting at him how he was giving 10% discount and how he was misusing his authority of giving 5% discount only and he would give only 5% discount even as an owner. The friend sensing his discount of 10% would fall to 5% quickly told the owner that he will go and discuss with the Sales manager and finally left with a 10% discount. Later the owner called the Sales Manager and apologized for the drama as he did not want to give a higher discount than what is there. This is called Skin in the game as the owner is responsible to the shareholders and not running a charity organization.

 Incident 2. 

 An owner working in a 25th floor office called his accountant and told him  to invest 100,000 USD in a company. The accountant said that company was a dud company and not to invest in it. The owner asked him whose money it was and upon being told it was the owners, was told to invest the money.

Six months later, the invested company went bankrupt and so did the 100,000 USD invested. The owner again called the accountant and said, See what has happened, why did you not advise me not to invest. The accountant replied, he had told the owner not to invest, but owner insisted on investing without heeding to his advice and the accountant followed the owners instruction. The owner then said, if i ask you to jump from the 25th floor will you do or you will hesitate and convince me that it cannot be done.You should have done that.

This is the risk of being an accountant- either way you are doomed. 

 Incident 3.

 The owner of a company took some money for his personal use from the cashier, gave some extra discounts, took a car etc.

End of the month the accountant brought him a statement which showed the money he took, the extra discount he gave, price of the car he took etc. giving him a bill of say, 50,000 USD. The owner vetted the statement and immediately took out his personal cheque book and gave the 50,000 USD settling the bill. This raises two important thing - a) he remembered all the events on what he spent and checked it it rather than getting it after a year or two and questioning the accountant - the whys of the spend- b) he is just the MD owner and cannot consider it as his company as there are other shareholders. This distinguishes between running the company and running it as a personal company. The real profitability of the business gets known and not confused with personal drawings. Tomorrow, the other shareholders should not say, you have taken out so much money for personal use and thus the company did not do well. 

Incident 4. 

 The owner because of some personal work done by a laborer, feels he should be rewarded. Instead of giving him some money, he gives him a position in his company. What this does is demotivates a qualified person already in the job. As he does not know the job, he keeps on asking the person how to do and since he is appointed by owner none can refuse. At least if he is good at the job it is fine, but unreasonable demands and benefits obtained from owner because of his closeness could cause the function to be not performed well.

Thus grading, right qualification and education for the jobs are essential to recruit and not just based on some personal work done for the owner. Owner can keep him under his payroll, but not jeopardize the company business.

 Incident 5.

 The company should be run in a professional manner and not be thought of as a honey pot to draw cash. When company makes money, dividends can be given to owners and be used for their personal purchases. Using Company money for personal hobbies can jeopardize the operations of the company and not know the true value of company or their profitability.

 Incident 6.

To ensure the Company business and personal business separate as well as to ensure future distribution does not cause litigation and bad blood, Companies should have a family office which controls what each of the family member takes. A certain profit from the profitable companies can be paid into the Family business for family members to take. This puts the correct perspective on segregating between personal expenses and corporate expense.

 Incident 7

Trust is an important commodity for working in Middle East. If the owners trust you, you can gain a lot and if you lose the trust, it could likely end up in hell. Another thing noticeable is people's ability to escape responsibility by saying or blaming someone else and it is here language helps. If you are a westerner, there could be an added advantage as London, Europe, US are places visited by people in Middle East for their vacation.

 Incident 8

When one person joined a Company in M.E., he was asked what designation he should take. His boss told him you can take any designation, but in this company you have do work from Mudhir Aam (General Manager) to Mandoup (Representative). My english version is you have to do the work from General Manager to Janitor.

Incident 9

One of the oft repeated remarks you hear is Ana Kallam (I have spoken). Thus, there is no official record of the Kallam (spoken). I always insist that they use Kalam (Pen to write/email) than Kallam (spoken). This way even after many years there is a record of what was agreed than being just a verbal assurance (at that time) and then later could be retracted.

 

My Investment Philosophy

 Every investor believes in how the world is going to move and reach a goal in future. Some may get it ight, while some may not.

For what it is worth, my logic of investment is as follows. Follow at your own peril even if you want to.

Stocks My investment philosophy 1) Data centers and AI to be future 2) Cloud computing large 3) 1 & 2 requires huge computing power and thus power is essential 4) Power, power distribution and electrical equipments in demand 5) Solar power key to increased power 6) Infra and pharma will be there for job generation and health 7) Beauty and beauty products and clothes as people want to look good 8) Fintech as ppl shun cash 9) To move all this around logistics & transportation 10) Defence to safeguard above 1) Data centers  HCL LTIM Tanla Route Techno Electric Kaynes 2) Power Tata power NTPC Havells Epac Msumi SWSolar Suzlon CG Elect 3) Infra KNR Kaisen Nerolac Heidengberg 4) Pharma Zydus SRF KIMS Indraprastha  5)  FMCG Emami Nykaa Ambika 6) Fintech Paytm jio Fin Oracle 7)Logistic TCI 8) Defence Bharat Forge 9) Auto IMPL Amarraja 10) Bank HDFC LIC HDFC life HBD ICICI 11) Mkt CAMS BSE/NSE CDSL IGIL Nobody can predict future. My selection is based on a)  likely trends i expetct b) promoter shareholding >50% (skin in the game) c) past sales and pbt record of 15% growth and 20% growth respectively d) PE lower than 25 e) Debt/Equity is <0.5 f) Market Cap of >1000 crores ( large companies only)  Too many data can cause Analysis - Paralysis

 

Mutual Fund My investment Philosophy 1) more debt funds as you age 2) Large cap, multi asset - steady and diversified 3) Mid cap and small cap for alpha 4) Sector - for alpha 5) Index fund - sleepy investing 6) Banking- more funds around more needs 7) Overseas diversification 1) Debt ABSL corp bond Absl money mgr ICICI liquid Icici ultra liquid Hdfc liquid ABSL Floating ABSL life saving Bandhan gilt Axis all season Nippon india AAA PGIM arbitrage DSP Arbitrage DSP Fmaturity ABSL long duration HDFC bal adv fund HDFC corp bond Nippon nivesh lakshaya ICIci Lterm Bond ICICI bal advtg Edel gov. sect ICICI Gilt sbi magnum UTI money mkt 2) Large cap Axis blue chip hdfc top 100 icici multi asset 2a) Hybrid PP Con hybrid Baroda con hybrid HDFC hybrid ICICI eq and debt ICIcI multi asset SBI multicap pp Flexi PP ELSS 3)mid and small DSP ABSL 4) Sector Nippon pharma SBI healthcare Nippon banking 5) Index UTI nifty UTI next nifty SBI Sensex 6) banking Nippon banking 7) Overseas Edelweiss china Edel weiss Europ kotak FoF-US Mosl S&P-US

Movement of investment

 An important classification on how market moves is critical to understand the markets

 

Short Term - Short term volatility of market is due to EVENTS. A war, or famine or some disruption causes the market to dip. Maybe it the right time to buy as things will get to normal later.

 Mid Term - Mid-term volatility of market is due to LIQUIDITY. A hike in int. rates, CRR etc. makes the liquidity suck out of market or infuses funds. Selective buying of stocks affected by this may be a good buy.

Long Term - Long term is defined by VALUATION. If long term investment is to be done valuation is critical to see if the purchase price justifies its valuation. These generally go through up and downs over a period of time and requires non emotional investing of not getting scared and dumping the share when it dips more than you thought it would.

 

Is it a boon or bane to be born poor

 Is it a bane to be born poor. Over the period have seen rich and powerful rapists getting bail and case is twisted or the people bought out to drop the case.At the same time a poor dalit laborer is hung for committing a crime or killed in an encounter.

While I am not an advocate for pardoning or for lower punishment for a criminal, the stark difference in how a rich and a poor is perceived by the courts need to  understood.

A crime is a crime irrespective of who it is and punishment is a necessity, but uniformity provides a comfort to people that justice will be done and not skewed towards rich.

A serious thought is to be put in at the judiciary level. Politicians prefer it that way. A person breaking the hospital or hitting doctors cannot be pardoned for any reason. It is the fault of politicians that govt. hospitals are not funded properly and relatives or known people are put in there. If  all govt. hospitals are a place of excellence, pvt medical hospitals and insurance issues that crop up will not be there.

Time for an independent judiciary and not dependent on govt. for posting.