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kulman
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   Posted: 18/Sep/2007 at 6:53pm |
Basant jee....Points noted.
Here are some queries:
- Going by that list in the article, there are many sector leaders like Nokia, M-Stanley, Oracle, Viacom etc...Yes, sure the pain would be less in leaders comparatively.
- Coming to the title of thread, would you rather say that avoiding "flavour of the season" or rather buying "out of favour" good businesses is the best strategy? That way one could pay less to get more thereby increasing margin of safety.
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Life can only be understood backwards—but it must be lived forwards
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Vivek Sukhani
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Posted: 18/Sep/2007 at 8:16pm |
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A better topic can be 'sometimes buying something which you dont see also pays"-An antithesis to Peter Lynch.
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basant
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Posted: 18/Sep/2007 at 8:41pm |
Originally posted by kulman
Basant jee....Points noted.
Here are some queries:
- Going by that list in the article, there are many sector leaders like Nokia, M-Stanley, Oracle, Viacom etc...Yes, sure the pain would be less in leaders comparatively.
- Coming to the title of thread, would you rather say that avoiding "flavour of the season" or rather buying "out of favour" good businesses is the best strategy? That way one could pay less to get more thereby increasing margin of safety.
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No, the biggest money is made in the flavour of the season also. It is all a question of PE and growth and estimating that growth, giving time to companies, trying to differentiate between their jargon and the reality etc etc.
Contra investing is generally assumed to mean as buying anything that has not gone up which to me is something like buying the dogs of the dow or the laggards.
Now if someone had tried to be smart and bought HUL,HP,BP,ONGC,GAIl as a contra startegy he would have lagged the investor who had bet on LT, ABB, BHEL etc.
Many would say that investing in cap goods is flavour but what if someone had invested in 2005 they were the flavour then also since the rally started in 2003. Personally I feel the best contra strategy is to buy good growth stocks that no one has bought so that when the growth becomes prominent and the bigger boys get in we can get out.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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deepinsight
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Posted: 18/Sep/2007 at 9:32pm |
The main points of learning for me are:
Price Matters: Try not to overpay for growth: if you do – one needs to be extra convinced about the durability of its growth. In the article they talked about p/e of 100. Also your early buying price cannot be an excuse to hold a fundamentally detoriateing expensive story.
Durable growth is rarer than assumed- Monitor consciously the durability of the edge: competition, technology, changes in regulatory environment, macro changes etc. can decrease margins/growth and change one’s investment thesis.
Don’t overpay for leaders: buying highly valued leaders is no defense. All companies mentioned here were leaders in their respective fields. Maybe the lesson is to buy the leaders before they are recognized/highly valued or buy growth at reasonable prices. Also returns may be higher from the unsung heroes who can sustain growth.
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"Investing is simple, but not easy." - Warren Buffet
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Vivek Sukhani
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Posted: 18/Sep/2007 at 11:35pm |
Originally posted by deepinsight
The main points of learning for me are:
Price Matters: Try not to overpay for growth: if you do – one needs to be extra convinced about the durability of its growth. In the article they talked about p/e of 100. Also your early buying price cannot be an excuse to hold a fundamentally detoriateing expensive story.
Durable growth is rarer than assumed- Monitor consciously the durability of the edge: competition, technology, changes in regulatory environment, macro changes etc. can decrease margins/growth and change one’s investment thesis.
Don’t overpay for leaders: buying highly valued leaders is no defense. All companies mentioned here were leaders in their respective fields. Maybe the lesson is to buy the leaders before they are recognized/highly valued or buy growth at reasonable prices. Also returns may be higher from the unsung heroes who can sustain growth.
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Excellent summation deepinsight......never overpay for growth and stuff like that.....which in my parlance is dont be a sky-gazer.....whats the point in having a 1-crore bagger and losing it all by getting out of it and reinvesting in a dud.....ITS YOUR FINAL INVESTMENT AT THE HEIGHT OF THE BULL MARKET THAT WILL DEFINE WHETHER YOU ARE HERE FOR AN INNINGS OR FOR A LONG TERM.......
As far competition goes, I beleive the biggest factor that acts as a barrier to the competition is the size of the company in relation to the market. Service sector companies face difficulty in erecting that barrier, however by branding strength they can do so.
Your 3rd point is most valid........
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kulman
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Posted: 18/Sep/2007 at 12:22pm |
Deepinsight....
Isn't it like that GARP (Growth at Reasonable Price) concept?
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Life can only be understood backwards—but it must be lived forwards
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deepinsight
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Posted: 18/Sep/2007 at 1:04am |
Originally posted by kulman
Deepinsight....
Isn't it like that GARP (Growth at Reasonable Price) concept? |
It is about GARP with a wraper around it.
How to keep a sharp focus on Growth and the underlying fundamentals.
How to recheck our story of assumed growth (it has to endure also economic slow downs)
How to think about stocks whose prices may have run up.
How to not let go our gaurd on the fundamentals even if we have held a multibagger.
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"Investing is simple, but not easy." - Warren Buffet
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kulman
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Posted: 18/Sep/2007 at 1:30am |
It is about GARP with a wraper around it.
How to keep a sharp focus on Growth and the underlying fundamentals.
How to recheck our story of assumed growth (it has to endure also economic slow downs)
How to think about stocks whose prices may have run up.
How to not let go our gaurd on the fundamentals even if we have held a multibagger.
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While thinking about this very seriously.....suddenly I found an answer which was at the bottom of your message: "Investing is simple, but not easy." 
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