“Masterclass with Super-Investors” is the first of a kind of book in itself. The book narrates the investing journey and the success stories of a number of marquee Indian investors who started from nothing to now being multi-millionaires. The book covers the investing stories of investors such as Ramesh Damani, Raamdeo Agarwal, Vijay Kedia, Anil Goel, etc.
I already must have read the book 5 times till now.
Getting to know reclusive Indian investors is in itself a challenge and to know more about their investment journey is much more difficult. I must thank the 2 authors of the book, Vishal Mittal & Saurabh Basrar who runs Altais Investment Advisory, a PMS firm to come up with such a great book.
In the blog, I will just share the key learning from the investment journeys of these investors.
Learning from the book "Masterclass with Super-Investors"
1. Despite all the prevailing problems in any country, countries never go bankrupt. If you are investing in India, you need to be bullish on India. Then only you can hold on to your convictions.
2. When you have a great idea, you need to back up the truck and buy it. It is so difficult to do so because you are scared and there is also self-doubt. Great ideas are very rare and one should not miss it.
3. When the bull market gets over, the leaders of the last bull market are squashed completely.
New markets will have new leaders.
4. Everybody wants to be a great investor. But there is no substitute for getting it right.
5. Typically one gets most excited when the bear market is ending and the new bull market is commencing. That is when people are disbelieving, the bargains are great and it makes more sense to look more during that period.
To make use of this opportunity, one needs to be with cash for a good part of the time. I have not been able to do this in the past but making efforts to try to be in cash when things look pricy.
6. Don’t cut your winners because they have increased more than a certain percentage of the portfolio. Only if you think that the bull market is getting over, then it is better to trim the position, as obviously the bull market leader falls the most.
7. The entry value should be so good that even in a bad case, you don’t lose a lot of capital. Buy cheap.
8. Two possible reasons to sell:
When you think that the bull market is getting over
When valuations become extreme
9. Sometimes because of the returns given by a particular stock, we get attached to. It is very hard to sell them.
One way you can try is to give yourself a time frame such as a month or 2 months where you are going to sell in a disciplined manner.
10. At market cycle extremes, the market gives you the invitation that it is ending or starting and good investors pay a lot of attention to that.
Only at extremes, it is profitable to time the market.
Learning from the book "Masterclass with Super-Investors"
11. Have independent thinking with integrity.
12. Making money is more enjoyable than spending it.
13. When interest rates drop, the interest cost goes down. Profitability increases.
14. One needs to understand the big picture, the business potential and the competence of the management team.
15. When you start a business, you struggle for 5-10 years and then you develop some competitive edge and start picking up. Similar goes the learning with investing.
16. One should look at tailwinds while investing. Without tailwinds, it is very difficult to become very big.
17. Who makes the most money: the one who has vision, courage, and patience. Patience is the most difficult.
18. You should not be hesitant to do things differently.
19. The key to investing in the stock market is to understand the business and more importantly, understand the management. Never invest in a company with poor management.
20. The best word that can help you grow in investing is “Why?”. Why things happen and why it happens that way.
Learning from the book "Masterclass with Super-Investors"
21. Market values stocks on earnings. You should be able to see the reversal of the business cycle– when the earnings come back- you can invest early.
22. Indicators of the bull-market end:
1. Laggard stocks should be running the most
2. A lot of IPOs on the offing
3. Govt also selling
4. Companies raising money
5. Everyone wants to make money from the market
23. It is better to stay from an industry facing problems altogether.
24. A lot of intelligent people get married to a stock. So they reduce their gain and don’t grow fast as they could.
25. Different sectors should be valued differently. A cyclical chemical business should be evaluated in a manner different from an FMCG business.
26. Buying is just 20% of the decision- how long you ride it, what you think is an obscene valuation, hence when you get off the horse- are more important decisions.
27. What the market like: the best is growth with a high ROCE ratio.
28. Extraordinary companies execute extraordinarily:
Much higher growth than expectations
Consistency of performance
29. Promoters selling their stock is not necessarily a negative thing. It should be looked at from an overall perspective. Rakesh Jhunjhunwala bought a lot of stocks from the promoters.
30. There is always part of the market doing better than the market.
Learning from the book "Masterclass with Super-Investors"
31. An indicator to understand business cycle peaking is to see more participants getting into the business, be it in India or from abroad.
32. Always keep an eye out for the next bubble. If you don’t look, then you will participate in it.
33. Fundamentals don’t matter much in a bear market. Everything falls.
Key learning:
Buy cheap, sell high;
Keep an eye for market cycles;
At the height of business cycle peak there would be lot of expansion;
Be in cash when the market reaches the top( It is better to be prudent than to repent)
You can also read summary of other investment books here: Link
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