11/19/2023 0 Comments Vallum that folds well![]() The packaging company is expanding its franchise to newer areas like pesticides, industrial goods including the sensational FMCG launches of Ayurveda guru. The sales will kick off in the US markets once regulatory approval is received. The company has recently received US FDA for API plant and is awaiting the nod for a formulation plant. Our two-year-old investments in oncology focused pharmaceutical companies are progressing well. You will hopefully notice we are transparent and comprehensive in our discussion. Through this letter, we aim to give you the information required to understand this process. If the stock selection process is sound and rational, investment returns will eventually follow. Over the short term, the stock market can be irrational and unpredictable, however, over the long term, the market adequately reflects the intrinsic value of companies. The primary objective of this annual letter is to discuss the results of our portfolio companies and our goal is to explain the long-term investment philosophy behind the selection process for the companies in our portfolio. ![]() With some difficulties, we have overcome confirmation bias and are ready to be investors for one full business cycle. So, a distinction between expectations and fundamentals would be the root or core of the process. We are looking for mispriced companies that meet our checklists. What we’re looking for is not necessarily the best companies. The key thing to differentiate or think about is distinguishing between the fundamentals of the business and the expectations built into the price. We have no threshold of market capitalization before making the investment and fewer is merrier for us. We diversify ourselves in 20-22 opportunities available across sectors, companies, usually an individual opportunity with sales of more than Rs 500 crs p.a. This adequately compensates us for illiquidity, volatility, and concentration risk. Our rationale is simple –these two pools attract fewer investors and equity value is mispriced. Our strategy for stock selection and portfolio construction remains the same – invest in mid-market companies or business turnarounds and make sizable bets. *returns of the model portfolio, return over 1 year are annualized return for the individual investor will differ based on entry horizon and portfolio construction. Our performance is as below: Portfolio Performance The year was marked by the steep decline in oil prices, a downward adjustment in Chinese currency, fed lift off, failed monsoon in India and heavy bulwark by the government to put the economy back on track, but we ended last year on a satisfactory note. In the midst of challenging global economic environment, it was a difficult year for investors.
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