We are an Equity fund house. We will not be buying Gold in portfolios. However, I would like to share my understanding of why Gold prices are doing well and why they should continue to do well.
Gold has no attraction to fundamental investors as it generates no cash flow. However, Gold has served as a store of value. Here is the empirical evidence.
Read MoreIn an earlier blog, read here, we discussed the importance of seeking Asymmetric outcomes.
What are conditions under which one could find Asymmetric outcomes? One needs:
We believe Yasho Industries fulfils all these conditions at present.
Read MoreEnclosed note discusses our views on the worsening China macro situation and high interest rates in the US.
Read MoreWe have put together a brief note to explain our perspective on impact to Indian markets if the BJP loses the 2024 election.
Read MoreWe have put together a brief note to discuss our outlook for future returns.
Read MoreA key attribute of our firm’s culture is the focus on writing a detailed investment thesis on every position of interest. Writing clears the cobwebs in our minds and allows us to get more specific feedback from peers we respect. It also reduces the chances of errors.
IndiaMART is a company we have owned since 2020. We enclose a more detailed thesis that explains why we believe this company can provide Asymmetric outcomes this decade and why the trailing PE ratio, often used as a valuation proxy, provides an erroneous representation of IndiaMARTs true value.
Like most valuation-conscious investors at present, we too are grappling to deploy capital at acceptable valuations. In many new accounts opened since January 2023, we continue to hold 20%+ uninvested cash. While we are not accepting capital from new partners at present, if we did, we would be able to deploy only ~40% in Week 1, most of it in Large Caps.
Our uninvested cash prompted a partner to ask us recently whether we are missing “something”. Sentiment for India is very positive. There is a wall of FII money waiting to enter India. SIP flows continue to be strong. Hence can’t valuation multiples continue to climb higher? Is it different this time?
It is not different this time, just the behavioural cycle at play in Small caps and select sectors.
We have put together a brief note to explain our perspective on valuation in Small & Micro Caps
Read MoreThe enclosed blog discusses the power of Asymmetric outcomes, where to look for such returns, what it takes to achieve them, and how we think about what share of the portfolio we allocate to such ideas.
Read MoreWe have put together a brief note explaining optimism around manufacturing companies even though they have structurally lower ROE vs Consumer companies and hardly generate free cash flow at present.
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