Investment Decisions

Fundoo Professor Sanjay Bakshi is one of the foremost authority in India on value investing. Below are some notes from his podcast with Planet MicroCap podcast. SB's investment style has evolved over a period of time as does everyone's into buying value via good managements and businesses. He likes to invest in businesses where the management has 3 qualities: 1) Operational efficiency-how efficient is a management in conducting its business. This is something that is driven by comparing the performance of a company versus its peers. 2) Capital allocation-this differs from point 1 in that a management may know how to operate efficiently but may not be the best group to know about what to do with the money they make. Should they grow organically/inorganically? Should they buy back or give dividends, etc? 3) Integrity-This is the most important trait since if the management doesn't have this then the business you are buying may be just a value trap where the management ...

So you decided it's time to start investing in stocks. You may have already decided how much you of your money you are going to invest in stocks. Let's find out if you have done your homework right. A lot of financial planners tell you this. What's your age? Subtract it from 100 and whatever you get should be the percentage you invest in stocks and your age is the percentage of your money to invest in safer instruments like debt funds, bonds, bank fixed deposits, etc. I believe this argument makes little sense. Let us consider a few scenarios: 1. An 80 year old woman who has Rs 2 crore as her bank balance. She has no financial liabilities and is self dependent and her children are independent, in no need of support. 2. A 35 years old doctor who has Rs 1 crore bank balance and has a very predictable amount flowing in as monthly income. 3. A 20 years old student who gets Rs 3000 a month as pocket money and saves Rs 1500 each month. The age formula loving financial ad...