“If I have seen further it is by standing on the shoulders of giants.” ~ Isaac Newton
It goes without saying that if the world was minus Benjamin Graham and Warren Buffett, the idea for Safal Niveshak wouldn’t have existed as well.
Graham and Buffett have put enormous number of ideas into my head, which I have been sharing with you ever since Safal Niveshak was born. Reading their work had made a lot of difference to my life as an investor and human being.
However, there is one more person whom I’ve never mentioned on this platform, but who has been a great influence on the behavioral side of the analyst within me.
That person is Prof. Sanjay Bakshi, one of the best minds in India in the fields of Value Investing and Behavioral Finance, and whom I’ve been reading for the past few years through his lecture notes, presentations, and articles.
Prof. Bakshi teaches MBA students (at MDI Gurgaon) two popular courses: “Behavioral Finance & Business Valuation” and “Financial Shenanigans & Governance”.
He is also the CEO of Tactica Capital Management, a boutique firm engaged in deep value investing.
Given the immense respect I have for Prof. Bakshi, it was a great feeling when he wrote to me recently with his appreciation for Safal Niveshak. In fact, I can easily call it one of the best moments of my life as an investor.
Anyways, after Prof. Bakshi wrote to me, I did not miss a beat before requesting to meet him. 🙂
He’s been highly supportive and has agreed to meet me – and has also agreed for an interview – on 29th July (a day after the “Art of Investing Workshop” in New Delhi).
By the way, if you haven’t already done it, click here to register for the New Delhi Workshop scheduled for 28th July 2012. I’m accepting just 5 more registrations, so you must act fast!
Anyways, I’m going to meet Prof. Bakshi on the 29th, and also pick his brains on the subject of Value Investing.
I need your help!
I need your help in finalizing the questions that I must ask Prof. Bakshi…on your behalf.
I need to finalize a maximum of 10 questions, and thus invite you to send me the ones you would’ve asked Prof. Bakshi had you met him personally.
The questions must be around “stock market investing” in general and “value investing” in particular, like…
- How do I get started as a value investor?
- What are the key habits I must practice to become a value investor?
…but exclude ones like:
- What stock do I buy?
- What do you think about XYZ stock?
You can send me your questions via the Comments section below.
Once I receive your questions (over the next one week), I will consolidate them and finalize the 10 that I will ask Prof. Bakshi in the meeting. So just get going!
This is your golden opportunity to dive into the mind of Prof. Bakshi and pull out some amazing pearls of wisdom on Value Investing.
So I’ll wait for your questions, which you can submit by writing them in the Comments section below.
I am in my early 30s. I feel that value investing requires a great deal of research as well as patience. I find it very difficult to have patience and conviction in what “WE” are doing specially when there is constant noise from friends, brokers, relatives, blogs, columns, tons of website, well-wishers about tips and so called “insider news”.
Hence, my question for him would be, how a regular person “aam aadmi” can keep focus and have patience while going through all turbulence? How difficult were his earlier year in value investing and what we (younger generation) should not miss out on (in terms of qualitative characteristics)?
Great News Vishal…
Questions are
1) How Retail investors can achieve the art of value investing?
for Ex. A person who can invest Rs.5000 per month in Stock Markets
what can be the strategy… (many of the people I know have this issue)
2)People who got good returns from stock markets .. I find majority of them were investors in IPO’s bfore 2000 where the ipo’s were issued at AT PAR. Soem of the bluechips were offered at throw away prices..
What is the scope for retail investors in current scenario to get decent returns?
What are the steps or sequence or tests through which one must take ones analysis for value investing.
This may be asking for too much but often the genius is a genius for he can say in few words what others take chapters.
I would want some sort of a guide (could be a few pages). For example look around you 9for what ?), read a lot (what all ?), look for trends (where ?), watch for disruptive stuff (How ?), then of course the financial analysis et al.
he must be typically dealing with these aspects so a guide from him would be prized.
vishal,
just back from trip. so many posts in between. am yet to catchup from your presentation. anyway,
frankly, have never heard of him, (believe me)…still if he is acceptable to you, my question will be 1. Value investing has any future..?
2. what are the returns when compared with growth & momentum and technical investors.
will add more later …
thanks for giving opportunity to ask questions….!!!!
Dear vishal
In value investing,the word itself is a big question “Value”,what are the parameters for find out the value of a company,apart from moats,one of the major is the “ANNUAL REPORT”.Those who are not into accounting,what should they do to decipher a annual report,lot of annual reports come with good dressing of account,the major points which could effect are given in notes.If we as value investors have a common platform to decipher the annual reports and draw out some guidelines that we should make it a point to note down from the annual report.
what will be the implications of the current fccb+rupee depreciation crisis? are there any opportunities to be taken advantage of?
how do i protect my portfolio against it?
how bad are things really in the indian banking system presently?HOW DOES ONE PROTECT AGAINST THIS?
HOW TO JUDGE PROMOTERS/A CHEKLIST FOR JUDGING PROMOTERS?
how to effectively hedge in india?
any upcoming catalysts for nbfc stocks?
distinguishing between value traps and bargains especially in the asset bargains category.
hope this helps
Hi….Vishal…Good Initiative once again…your meet & interview with Prof. Sanjay Bakshi will certainly add value to this website and motivation to the value investors as the topic will be around “stock market investing” in general and “value investing” in particular. I also want to add few questions as follows :
Q1: How to account the factors (such as market sentiments, economic positions, political uncertainty, interest rates, global market conditions etc) in value investing? Weather these factors should be considered in margin of safety or ignore these factors in value investing?
Q2: How to find value in small caps? Is value investing process or techniques are same for large caps & small caps, as it is easier to find value in large caps compared to small caps?
Thank You
Also some tips on ‘how to understand/ control oneself’ or things to watch out in our behavior when dealing with investments/ finances – the behavioral finance angle. I think this inward looking question and what all questions one should ask oneself to arrive at an answer.
Since the answer to these questions also has to come from you yourself, this is a very tough question. Plus the questions and answers will change with time.
So in terms of behavioral finance some guide book as well.
What are the basics of value investing?
How & when do I get started as a value investor?
What are the key habits I must practice to become a value investor and why?
Regards,
Vidhyashankar
Thanks Vishal, here’re two of my questions…
1. We evaluate a business and find the intrinsic value of its share, and then take a margin of safety, let’s say 50%. Then, the corollary is that we can expect the price to double when markets return to their senses…but there’s no clarity on how irrational markets can get on the bullish side, so the “expectation of returns” is not clear – second, if a business continues to do well, you’d not sell the stock (yes, you can expect the IV itself to grow)…in the gist – should there be any expected returns with value investing or is it just a belief that picking good business at good price will give us good returns over a long period of time…
2. Suppose someone understands value investing and knows how to value a business – now, with so many listed companies, how does he start filtering stocks for a detailed analysis…
Great news, congratulations Vishal. Professor is truly inspiring and I have read about his life also, sometime back, a pure contrarian in how he steered through his life. If you feel it is apt to ask, my question would be.
1. Value Investing is thought to be investing in good businesses through different valuation methods like DCF etc When you talk about Value Investing, what do you mean and how do you do it?
(My reasons for asking this question is that he seems not to trust DCF method, I think he believes we are speculating or atleast making assumptions, so what does he do?)
2. Do you go bey0nd your Circle of competence? Does it exists for you?
(My reason for asking this question is that he talks a lot about the “unknown” and the “unknowable”, the things you do not know and the things that you will not know, it just happens)
3. 10/15 years back, when you finished your school in London, you made the big decision to come back to India with your wife and kid, you believed in India growth story and that you can apply Buffett principles here in India. What are your views on India growth story now?
Please thank him for the Vantage Point article/lecture, it’s a piece of art and a must read for every investor.
Hi Vishal,
Thanks for your continuous efforts in rejuvenating us through Investing journey. And sorry I am bringing my question lately. My question is “Good Company stocks acts too good in good times and may act worst in bad times. So how could Behavioral Finance or advance Investing tips help us to choose good or safe stocks in bad times”. I am aware patience tests us but need sustaining reasons to hold those stocks until good time arrives.
Recently I have attended a behavioral finance one hour session in the company I am working now. That session opened many doors in my logical brain to study more on it. I am sure Warren Buffet of course, is a master of it. But the session sounded like more scaring me. May be I do not understand it well..:) but quite interesting. If opportunity comes please share your knowledge with us.
Thanks a lot ..:)
i always scratch my head more number of times to sell a stock at the best time rather than buying a stock , so if one identifies a value stock n pumped his money into it how can he reap the max benefit of selling it at the right time ( here my intent is timing! not time it may be after year or 10years , no matter) , so i want his views on exit rather thn entry
1. Top failures in investing in his career? What did he learn?
2. Process for value-investing that he follows? Check-list based? Screener based? How does his evaluate it once he sees an interesting scrip?
This question is regarding the efficacy of value investing..
1. Do screen based value investing works in real life? e.g. buying low PE stocks from sensex or nifty? What is the record? OR we need low valuation PLUS other screening parameters like strong balance sheet, ROIC etc.
2. Do quantitative assessment like low PE, low debt ratio (screening) etc enough OR we also need QUALITATIVE assessment (management quality, MOAT etc)? What will happen if one only selects the stocks based on screens?
Great job….Vishal ji,I really appreciate your effort to make investor sensible about their investment and not just treating market as a casino to gain hefty amount in a little time.I would like to share with you some doubts that arises at many instances…
Q.1.If value investing is so necesary,why technical analysis is always in news?
Q.2.Do all the value stocks has a fair chance to make money for us in times to come?
Q.3.If price is belived to reflect all the market sentiment,Does value investing has any meaning?
Q.4.For a layman is it possible to accumulate all the possible financial data & if possible Can he make some sence out of that huge data and parameters?
Q.5.When the Opinions of experts in different media reports varies How could a man come to a certin conclusion about the health of a particular stock.?
Just one question, and may be you can answer that, In Value investing, How can we differentiate between a value buy and a value trap and whats the difference.
‘Tactica Capital Management’ -does not run any Fund /PMF or any such instrument where a common man in India can invest .I think they run this fund for FIIs or may be big investors (I dont know !).
In US people can use the expertise of Charlie M by atleast investing in Berkshire ,its a pity that we Indians having such a Investor among us cannot benefit from him. No doubt his teachings enlighten all but then its very comforting to invest (small portion) into funds where his brains are used.I mean we have people like Prashant Jain, KN Subramaniam who are really experts but in India the MF manager is always trying to beat the benchmark. The value based funds (contrarian) are never Contra funds (quantum is nearest to an excellent contra fund I think !).
If you think I sound (and my info is correct about Tactica) sensible then you can probably hint Prof. Bakshi to think about how a common man can benefit from his expertise in this field then many Indians would really be glad to invest their savings with him (via Fund /PMF or any other instrument).
Hi Vishal,
Please ask Mr. Bakshi,
– What are the important 5 parameters (ROE, Debt/Equity ratio, CAGR growth of Nett profit, Cash flow, Honesty/Quality of management etc.) we should look for a stock when a small investor buys a stock.
Thanks
-Umakant
First of all, you are running a great website/investing guidance business and thanks for this initiative in India’s cacophonic investing markets.
Good that you are meeting the RIGHT PEOPLE, like Prof. Bakshi.
But I also think it will be stupid if you ask questions like
How do I get started as a value investor?
What are the key habits I must practice to become a value investor?
This is because Bakshi himself runs a terrific blog where he posts most of this basic education already, including fairly detailed PPTs from this class.
So, please be prudent with your and his time. I agree that you shouldn’t ask for stock tips. But the real juicy learning from folks like Mr. Bakshi always comes from specific case studies. Ask him to take you through as many real examples as possible, explain his thought process/peel the onion, etc. He has done some of this on his website, but nowhere near enough in my opinion.
Hi Vishal,
Sorry for being so late. It just skipped my mind altogether.
My Questions:-
1. We always talk about biases in a negative way. Don’t these biases sometimes prevent us from doing stupid things? Say, if my regret aversion bias makes me more conservative investor (therby implying I use larges MoS), what’s the harm in it?
2. In today’s information overload and knee jerk reactions to quarterly results and media news, how relevant is “Buy and Hold” Strategy when sometimes stocks show large volatility in terms of yearly Highs/ Lows but poor overall return over even a longer time frame?
3. How can a small retail investor build up a “positive loop” that you talk about to increase his circle of competence, given the time, education or background constraints?
Thank him for all his wonderful posts, his incisive approach and bringing the whole funda of value investing so much closer to home 🙂
In continuation of question 2 above:
Does he follow any specific profit booking strategy or strictly go by valuation principles only? Since He is in a different position altogether (large stakes, direct approach to management etc), what does he suggest for retail investors like us?
Hi Vishal,
Excellent decision of meeting Prof.Bakshi. Most of us only dream that.
I’ve read all the comments above and think all questions are apt.
I’ve read some of Prof.Bakshi’s articles and they are thought-provoking. I think one point none has raised so far is about “Special situations”. Prof.Bakshi has a good track record in Special situations investing and asking him about what should be the methodology (not tips) one must follow to spot and succeed in special situations investing would give us a roadmap.
Secondly, you can discuss about Value Investing Methodology that he follows and ask him whether it’s possible for all of us to follow the methodology. If yes, you can ask the first and last step in this methodology, kind of checklist, this would be I guess excellent value addition for all of us.
Regards,
Avadhut