Link to twitter thread: link
Here are few pointers from the meet:
- During COVID crash Govind Parikh was one of the few people who were calm and kept buying as valuations became attractive.
- He started buying from 10,500 levels till 8,000 levels as the crash had happened due to health crisis and not a financial crisis.
- His thoughts on what to do when the dip keeps dipping?: He recommends holding cash always in your portfolio which acts like a hedge and start deploying it in the times of crisis.
- As the valuation becomes cheap the good companies always bounce back.
- During a fall one should keep re-checking whether their thesis is intact or not.
- Saw 75-80% drawdown in his portfolio due to illiquid stocks during his investment, hence keeping cash always helps.
- Having 10% cash during a crash will give you “Bear Market Buying Power”.
- He gives credit to luck and his guru for his success.
- Recommends to have right gurus early in life as that will protect you from going into wrong path.
- Shares story of his meeting with Kisanbhai R. Choksey who intrigued his interest in stock market by showing him how to read annual report of Bajaj Auto.
- His framework involves looking at businesses with clean management + passionate + shareholder friendly.
- Always being a contrarian is fatal: Don’t be contrarian just because whole market has a same view on something.
- There are few buying and selling zone where you can be contrarian.
- Advice to investors:
- Meeting new people as much as possible
- Visiting a lot of factories
- Don’t be afraid to make mistakes but avoid blunders
- mistake of loss of profit is fine but avoid permanent loss of capital
- Don’t listen to people and jump to conclusion (Avoid authority bias)
- Your work on company should be solid with conviction
- Once you reach a stage of life where you have a good corpus and a settled lifestyle then one should invest only where one will not loose.
- Preservation becomes priority
- Look for 15-20% high probability bets.
- Current Macro Outlook:
- Next 1 year is very uncertain but next 5-10 years will be good years for India as the per capita income rises.
- We will see manufacturing led growth. (Exports will also do good)
- The theme is no longer China + 1, it is not China 0 where companies don’t want factories there as it is difficult to take out money from that country.
- Upcoming election 2024 is the fear which bring uncertainty.
- Europe is having a gas problem where industries are not getting supply of gas due to which they are outsourcing manufacturing to different countries.
- Ex: Timken manufacturing from India.
- Currently the market is not cheap and no way near the buying zone but also not in a selling zone.
- Advise to young investors:
- Don’t go for shortcuts
- Be humble
- Keep learning, there is no end to it.
- Invest with long term view.
- Recommends reading Richer, Wiser, Happier Book by William Green.
- Knowing history is also important
- Have conviction
- Don’t listen to people for making quick money.
- He doesn’t use technicals in his framework.
- But believes fundamental tells you what to buy and technicals tell you how much and when to buy.
- On selling:
- Having a target in mind helps
- When the target in achieved one should reevaluate their thesis and can sell some quality and shift to better names.
- Recommends selling during the good times.
- Good companies take advantage of bad business cycles
- Eg: MM Forging
- Promoter is very passionate who wanted to buy one machine for expansion but instead bought 3 as there was huge discount due to bad market.
- Promoter and his wife stayed in factory for some times during the process of expanding their capacity.
- Allocation:
- Maximum 10%
- First 30 stocks constitute 90% of portfolio
- First 20 stocks constitute 80% of portfolio
- Allocation is based on downside.
- I also had the opportunity to meet Rajiv Khanna and asked a quick question: “What would be your advice to a young investor?”
- He replied:
- Meeting management is not necessary as there is plenty of information out there, he himself doesn’t like to meet management.
- Don’t be afraid to take risk when you are young.
- Don’t listen to anyone and make your own framework which works for you.
- Further, it was a pleasure interacting with Jitender Chawla sir whose guidance is always helpful.
Here are few photos from the event:
