Why do we not own any Mid Sized Banks

A question that remained unaddressed in the last Q letter to Partners was “Why do we not own any Mid-sized Banks?”

Banks can be attractive businesses to own as they enjoy natural growth tail winds of growth while delivering 15-18% ROE.  However, over the last decade, only 3 Banks (representing < 15% of Industry Assets) have delivered over 15% PAT growth or above 15% ROE consistently.  

Read More

Our perspective on the Bharat Bond ETF

We see two roles for “Debt” in any portfolio

  • Yield – if the regular income is required to fund expenses.
  • Optionality – if a debt instrument is liquid, it not only provides you a coupon, but also serves as a free Call Option to deploy additional capital in Equity markets/other Asset Classes if a very attractive opportunity came by.    Most investors rue having no Cash to deploy during a crisis when Equities are available at very attractive valuations.   Having access to Cash (ability to sell the Bond) + courage (ability to redeploy into Equities) are invaluable during a crisis.    

Read More

Invest in some Gold in your portfolios

The starting point for Investors must always be Asset Allocation.   In some earlier letters, we have written to you recommending you should hold some Gold/Gold Equivalents in one’s portfolio – as Insurance to guard against the “unknown unknowns” of excessive money printing and even as diversification into another Asset Class that is not correlated with Equities.

Read More

INVESTMENT THESIS ON SRF

SRF has 3 business verticals – Fluorine based Chemicals/Refrigerant Gases, High grade Packaging Films and Technical Textiles. Our primary Investment thesis is based on the Fluorine based chemical segment where they have a highly differentiated franchise.

SRF has tail-winds on its own merit but will benefit from “China+1”. They have been investing in Capex aggressively over the last few years & with the agri Cycle poised to turn, the company should witness strong growth over the next few years.

Enclosed is a brief note to explain our thought process underlying this investment.

Read More