We believe Axis is amongst the 4 private Banks in India that has the right to win long term. It offers opportunity for long term compounding but where entry valuations are significantly in favour in a richly valued market.
Enclosed is a brief note to explain our thought process underlying this investment.
Read MoreTechnology buzzwords – “ML. AI. Blockchain. Platforms” are fueling investor delusions. We share 2 articles and also explain why we don’t own any “FinTech” as of now.
Technology buzzwords are fueling investor delusions
Read More“In life, the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.” (Kwame Anthony Appiah http://appiah.net/)
CLSA is a reputed broking house. It published a report 2 days ago recommending investors book profit in India.
We agree with CLSAs that valuations in India, on aggregate, are stretched. In our last letter we mentioned, we were “cautious, but not bearish” and that because we have borrowed returns from the future, we could be in for a period of muted returns.
Read MoreWhile our core approach to investing is to buy “disciplined compounding stories at a fair price”, it is equally true that “at the right price, all assets are AAA” (except where one suspects governance issues).
We will buy companies in “Special Situations” when they trade at a meaningful discount to fair value.
ITC meets our Special Situations criteria.
Enclosed is a brief note to explain our thought process underlying this investment.
We have put together a brief note explaining how we take exit decisions.
Read MoreA question we introspect on significantly is whether the next stage of value migration in Banking will be from Private Banks to Digital players.
Our working hypothesis at present: well-run Banks will grow aggregate profits; however, their valuations will drift downwards as ROEs will decline.
Read MoreSharpe ratio seeks to determine risk-adjusted returns, or “returns per unit of risk”. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted-performance.
Solidarity’s Sharpe ratio since inception is ~2x that of the NIFTY. This implies for the same level of risk, we have delivered twice the return.
Read MoreWe have put together a brief note to discuss the importance of shutting out the noise and our process to do the same.
Read MoreEnclosed note contains our perspective on some commonly asked questions.
Read MoreCommentators are wondering why the Indian stock market is “shockingly resilient” amidst the devastation caused by the Covid second wave. Their premise is that Covid’s second wave is causing significant devastation and death. 2021 GDP growth has been downgraded. Rising raw material prices will erode margins. The virus has spread across the country and will cause massive unemployment. Analysts have started downgrading estimates. Stock price valuations are 2X of China. So why has the market fallen only 5% since February?
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