Confessions of a Stock Picker

~Written By Priyankar Sarkar

Value investing is a concept which was first coined by the towering intellect Ben Graham. He wore many hats viz, as an economist, investor, author and professor. His concept was fairly simple which states if an investor can buy an asset worth one rupee or less than that, the investor should be happy. If an asset is available at 50 paise to a rupee, the margin of safety is said to be higher compared to an asset selling for 70 paise to a rupee. The greater the margin of safety, the greater the chance of making lucrative returns in the equity markets.

The oracle of Omaha, Mr. Warren E. Buffett is the current mayor of Graham’s school of thought. Mr. Buffett has helped evolve the concept of value over a period of time.The sage of Omaha and his alter ego, Charlie Munger, suggest that we should buy great companies at reasonable prices and hold it till eternity! Other investors such as Philip Fischer, Sir John Templeton, Peter Lynch had different variations of value investing Lynch asks us to diversify whereas Buffett tells us to concentrate. There are different ways to go to heaven, choose the one which best suits you!

Almost all B-schools teach that more the risk, more the return. Value investing is quite the contradictory. It says lesser the risk, more the return since the first aim of a value investor is to cut down risk. Value investing also defies the efficient market hypothesis. Great investors have proved time and again that the financial markets are efficient most of the time but mispricing does exist. Some argue that since data and information are available to us instantly (thanks to the Internet) and hence the markets are always efficient. But who is processing that information? It is the human brain, which is irrational! Human beings “processing information” determine prices. Therefore, stock prices are not always rational. It is our job to figure out the discrepancy between price and intrinsic value. More the discrepancy, more the margin of safety!

However, I feel the concept of value investing has evolved over the years. What value are we referring to? Is it simply buying cheap assets? Is it prospective value, enduring value or is it valued based on history? These are some of the difficult questions which I often ponder on as a student of ‘Graham and Buffettsville’.  The predictability of cash flows in a business also acts as a margin of safety thus providing value. When Dalal Street was in the back waters in the early 1990s, there was a stock which was then recently listed – Container Corporation of India Ltd. It is a PSU (Public Sector Undertaking). Most of the investors did not understand the business model of the company and therefore did not show any interest. There was hardly any liquidity in the market for this particular scrip. However, one of my acquaintances saw this as an opportunity and invested in the company. The rest is history. The stock has multiplied more than 50x over the last decade. This has taught me two lessons: liquidity per se has nothing to do with value and the fact that most of the investing world does not understand a company which I do in itself provides a margin of safety. This has been elucidated by Buffett over the last five decades. He has termed this as “circle of competence” – invest in businesses which you understand.

Experience is the best teacher! I vividly remember having picked a stock named Agro Tech Food Ltd in July 2008. Having discussed this stock with some of my friends (who are also die hard value investors), they were not convinced of this idea and they tried to dissuade me from buying the stock. Since I had conviction, I went ahead and bought the stock. The stock has given me a whooping return of almost 400% since then. It demonstrates that as value investors we may frown at each other’s stock picks but the underlying principal remains the same.  As Rakesh Jhunjhunwala put it very aptly when he said that the two most difficult adjectives in English language are beauty in a girl and value in a stock – it differs from person to person!
To create wealth in the stock market, one needs to be a contrarian. Independent thinking is vital. To quote Buffett “A public opinion is no substitute for thought”. Along with keeping an open and independent mind, I would say let common sense prevail!

About Priyankar Sarkar:

Priyankar Sarkar is a passionate stock picker. He recently completed his MBA from SIBM-Bengaluru. His hobbies include reading, playing squash, chess, cricket, networking and gaining wordly wisdom. A keen follower of Hindustani Classical music. He has been an amateur investor for the last seven years in the Indian Capital Markets. 

@spriyankar

Corruption- What is it?

Written By Siddhaarth Mahan

With election season upon us, all that matters is voting for clean governance. Wish it was that simple. Just a push of a button and whoom, a clean corruption free government.Everyone talks about removing corruption from the country. But the fundamental question is what is corruption? Does anyone really know? According to some Just accepting and offering bribes in a government office is the be all end all of corruption. 

Corruption starts in the mind. Everything else is just an extension from there. Only money exchange illegally is not the only form of corruption. Cheating with people in day to day life, cheating in relationships and above everything cheating with oneself are all part of corruption. Not sticking to resolutions, not exercising, being lazy and etcetra are all prime examples of cheating with oneself.They seem trivial at this stage because there is no limelight to escalate it.But the seeds of corruption are sown right there. Then it grows from there only to 

become big scams and people finally notice them.

Every child today talks about corruption these days.It has slowly enveloped into cynicism leading to an environment which is very detrimental to the country and personal surroundings.We don't want to understand and get to the basics of it all. Labeling everyone corrupt , generalizing the whole crop of politicians as corrupt or blaming everyone around us for the vicious circle of corruption,is only an easy way out.

Whereas one might want to remove only the small part of the corruption that of illegal money exchange. But even that can not take place until the root cause of it is tackled.For that is the solution right in the mind itself. Reiterating it then -'Dishonesty and cheating with oneself is where it all starts, corruption happens in the mind'.

About Siddhaarth Mahan: 

Siddhaarth Mahan is an actor, painter, lover of music, a guitarist and yes, likes to express himself through writings as well. 

OLA!!!!

Hey friends,

I missed being on this space for long. No excuses. But would like to make it up for all the losses and look forward to continuous momentum here. 

One year in MBA has taught me lot of new things, had many new experiences which I shall be sharing in my upcoming posts. But that’s not all. As I was thinking of making a come-back, I thought - why not ask my friends to contribute and share their view points on the topics that interest them. So here’s a new feature of Guest blogging! It’s a best way to get introduced to new ideas; new readers; new communities; make new friends and share your message across.

Hoping, my friends- readers and followers will add value to the discussion on the various topics that will be featured.

"You might not write well everyday.  But you can always edit a bad page, you can't edit a blank page."

~ Jodi Picoult 

Stay Positive. Stay Healthy. Read a lot. Share your Knowledge.

An Outer Journey that leads to an Inner Transformation !!!!

Having been an avid reader of non-fiction categorical books esp. inspirational and motivational books, this book at first didn't seem different to me. Another book to lift my spirits, leaving me charged up in the end. yet, I was wrong, it was indeed different.
Came across this quote in school - "Some books are to be tasted, others to be swallowed, and some few to be chewed and digested: that is, some books are to be read only in parts, others to be read, but not curiously, and some few to be read wholly, and with diligence and attention."
And for me, this book is the one I literally chewed and digested ;) The author,  Robin Sharma, known for his fabulous work in The monk who sold his Ferrari, came up with a beautifully written story of a man named Jonathan Laundry and his journey around the globe to collect Talismans from different people. It's all about finding your authentic self, confronting your deepest and real fear, finding your passion and acknowledging your true love and lastly to be a good human being. I would refrain myself from indulging more information on these talismans, leaving upto you to find out yourself.But this all sounds too familiar, especially for people who are really into inspirational stuff, isn't it? Pick any good motivational book and you'll have dozens of pages filled on each of these topics. Then what is it, that I liked it so much.
 For the first time, I felt connected !! As the story unfolded, I found myself indulged in deep thoughts and self interrogations just like Jonathan. And that is why, it took me longer than the usual to finish the book, absorbing and soaking each and every thought mentioned and every question raised in it. It helped in real sense to peep in myself and look for answers.This book definitely struck a chord with me. Not sure, if it will have the same effect on everyone but you will surely enjoy reading it once.
And For all those who love travelling, there is a bonus for you as the writer gives a vivid description of every place that the lead character visits covering historical facts, marvelous architecture, art and culture.

All in all, a book written in a simple language conveying powerful thoughts. It may not have created as much hype as its prequel but it surely is a delightful read !!!!!

P.S: This is my first Book review (if it sounds like one :P).

When I killed Myself for a Little CREDIT !

 Sometimes we expect too much to happen over a short span of time.  Well, life changes in a matter of few seconds but here I am talking about something else.  I am talking about your work-life, your office – the place you are married to ;)

What do you go through- when you have really put in so much of efforts in your work but you are not given the due recognition? I am quite sure, each one of you reading this post must have faced a similar situation at least once in your life. What are your feelings at that point of time? How do you handle the whole situation? Of course, you don’t end up shooting your boss (though we do dream about it). How do you move on? Do you learn something from all those situations?

Before you dive into your emotional memory zone and start looking for answers, here’s a small sneak peek into how I went about this whole scenario of hard work, luck and much more. Interesting part is, my reaction has changed as many time I have confronted such a situation in my life.

(It includes all my experiences when I thought I deserved much more than I was given. And some part of it is fictional too. So please don’t bother yourself much about thinking when this happened in my life. )

Ever since my birth, my parents always taught me to work hard (and earn brownie points).  Diligently following this piece of advice, I made it a point to put in my cent percent in whatever I do. And gradually, it became my characteristic. But the first time came too early in my life. The first time when I didn't get my desired result. I felt cheated. I thought the whole world was being unfair to me. Poor soul. Angered, I pledged NOT TO WORK HARD.

But as they say, something that runs in your blood is hard to avoid. I had to break my promise. And I thought maybe I just ran out of my luck, good luck. But no, result was no different the second time. Yes, I again met a disappointed result. No one acknowledging my efforts. This time, I promised TO WORK HARDER, HARDER THAN BEFORE, and HARDER THAN EVER.  (A contrast to my first promise)

The third time I faced this situation and I was like, it’s Over. How could I be the victim of this bad luck again and again? Few wise people told me it’s not fate; it’s all about doing Smart Work. Eww.. SMART WORK.  Yes, the work culture had changed. Success’s definition was not defined just by hard work but it was more about smart work. I observed and learned from the people I studied with, worked with. And I was happy, finally, I knew the success formula- HARD WORK + SMART WORK (the deadliest weapon in my hand that could knock down anyone, mind you, anyone!!!!)

Confident that finally I will be on the top, my efforts will pay off, I continued to work. But I was too blinded by my own faith that I overlooked what was happening around me, by the people whom I trusted, whom I worked with. It happened again. I was back to square one. I found myself missing from the achiever’s list. This was the FOURTH TIME.. You must be kidding me. Again all this shit.  It was then; I was introduced to this corporate world.  WELCOME TO THE CORPORATE WORLD, MISS ARUSHI. The place where office politics is a part and parcel of the people’s life. If you don’t know how to play or if you wish to stay away, then bear the brunt of the someone’s game.

(I thought all this happened only in our movies, in reel world. But no, it was a stark reality I had to face) I had to make a decision, whether or not to join this game. To see myself on the top, my vision was blurred by the glittering wild phantasms of fame and recognition at that time. I got into this dirty business. Over the period of time, it just got dirtier and dirtier. I somehow, started losing my interest in work. I was more occupied with the concerns of others rather than the outcome of my result.

 But did it all pay? Yes, it paid-off. I finally got what I always wanted. An award, a recognition, name, fame.. (Of course money followed).

But if today, you ask me- Was it all worth for? I would say – NO.

No, because I had lost the voice of my conscience. I let my values get diluted.

No, no because I was standing all alone. There were people around me who looked at me with same jealousy and envy in their eyes, something that reminded me, of how I felt years back standing at their place. And I knew exactly what’s going to happen to this crowd standing in front of me.  I had just shown them one of the ways to the top- which I now doubted.

I had so many questions in my mind and I still do. I don’t know what I did was right. Being selfish for your own betterment is a right thing to do especially when the world around you is so selfish to you? Is there another way I could have chosen? Should I be practical or should I be virtuous and principled?

This is not the end. My life has just begun. And I have much more to achieve. The question in front of me is – How? Certainly, I know one thing, I cannot do this all again. I cannot but get my hands dirty again. There has to be another way. And I am left to discover it. More potent question is – Do I work to get somebody’s recognition? Or I do work for I love doing it? Do I have to prove myself to this world? What If I chose to silently work and keep living my life? There’s a series of questions coming in my mind. A lot to ponder and act..

But, what about you? Have you been let down by your fate, by your friends, by your circumstances? Have you been in a situation when you thought you were rightfully denied what were yours and only yours? When you had put in efforts to make the presentation and some other colleague took the laurels away from you?  What was your reaction and the course of action? Please, do share your thoughts with me in the comment section.

P.S: It’s just amazing how each experience of your life teaches you something about your own-self, your inner characteristics, your strengths and your weaknesses. They say it correct- Life’s all about the journey, a journey which leads to self-discovery.

Continuing the blessed journey of my life, celebrating each moment !!!!  

Are you Living in Fear? Just like Me..

21 December, 2012. 6:00 A.M.

I got up and looked outside my room window. It was still dark and silent. I had an urge to go on a morning walk but somehow I lacked the courage to step out all alone in that haunting silence of dimly lit street in those wee hours of the day. It was not the chilling cold climate that killed my spirit but the fear.. fear of something strange, fear of anonymous following me, fear - I cannot name it. 

At this present moment All I can say, I am not the only girl living with this fear. There are thousands of other girls living with this fear, lakhs and more, battling with this fear each time they step out of their homes into this world. And not just the girls, but their parents and family members too are caught in its grip.
When Derek O'Brien said in Parliament- "I am a father of 17 year old girl and I am horrified.....", his fear sounded similar to me, for I sensed the same fear in my parent's voice, when each day they called to know my whereabouts whenever I went out with my friends, whenever I was travelling alone be it in auto-rickshaw, local bus, trains..I used to frown at my sister for not allowing me to go out late evening with my friends, for putting so many restrictions, I used to feel choked and miserable for not letting me enjoy my freedom of being away from Home. But now, I think, I would have done the same to my younger sister seeing the situation in Delhi and Gurgaon. Yes, I don't feel safe. No matter, how brave or coward it may sound, but the truth is that-I fight against this fear each day.

And moreover, all these daily headlines and talks about : - "city-unsafe-for-women", "Restrictions-on-women's-dress-code", "a-girl-raped-and-thrown" etc. heightens my fear inside (though it leaves me frothing at the mouth at the same time, ironic !!). What do I do of this unknown, uncalled fear that's silently percolating in my conscience and thoughts through these headlines and news and leaving me hollow ( just like termites do it to wood from inside).How do I reinforce the assertiveness, strength in myself if my mind is again and again reminded of the increasing atrocities on WOMEN around the globe through every channel of information- be it newspaper, news channel, entertainment? How can I refrain from thinking the vulnerabilities I am exposed to?

One suggested, may be by creating a sense of positivism,  realm of safety through the same medium that generates this fear. Yes, through media, through Law, through us. Why not? By changing the tone of information, by formulating stringent laws against such crimes, improving the policing and monitoring, by bringing change in society, by bringing change in education, by changing the ways children are brought up.. Yes, BY CHANGE. But, it's far easier said than done. I am not being pessimist here. I do hope that we finally live in a society that's safe not only for HER but for everyone. And I am ready to do my bit to bring this change. All I am dubious about is the TIME- how long will it take to bring this change in our society.. How Long? How Long do I have to put on this FIGHT for my own Existence of being a Women, for my own Freedom? The question is - HOW LONG? At least, I should get an answer to this one.


P.S:  I am not asking - Why should I- a woman-put a fight at All, I am born equal to any other man on this earth and I am entitled to enjoy all the freedom that a man enjoys by birth. But I am not. For it's seems to me a futile question at the moment. 
All I hope, I soon get a chance to come up with yet another post titled - "Are you living in a safe society? Just like Me.. "

On my route to self-discovery which also encompasses one beautiful aspect- Being a Woman. 

Being the First one, not the Next one

There are some few ads which leave a lasting impression on its viewers. Take the recent hits- 'hum mein hai hero' and ' har ek friend zaroori Hota hai' which became songs of the nation, just because somewhere we could connect to it. Or the most recent Satyamave Jayate's song series, it's all over radio..dil Pe lagti hai toh baat banti hai... So true..

So is this post inspired by the new Classmate ad I watched and straight away left me thinking and questioning my thoughts, our thoughts. Here's a brief description: a boy gave a good speech and someone in audience say- he's gonna be next Obama, teacher praises a young girl by saying - you'll b next Einstein, next tendulkar, next so n so.. None of the child is happy for they want to the first, First saumya gupta, first so n so..not the next one.
This ad and most important, the message shook my whole thought process. Yes, why can't we be the first of its kind? Why do we think and project ourselves to be the next bill gates.. Why we don't connect to our own identity?
Often, we look onto our role models and aspire to be like them. I believe learning from them is not wrong but copying them is not right either. We often miss to give our self touch and end up being either close to our role model or nowhere. And in both manner we are loosers, end up disappointed for we didn't get what we thought of. Loosing our individuality in becoming someone else serves no good. And many of us would agree.
Another aspect which is clearly conveyed in the ad is the thinking, mindset of us, society. We often tag everything. We compare everyone with everyone. Our praise or whatever is always relative and related. Can't we change our thought process? Can't we accept and praise the uniqueness that's in everyone?  Stop confering titles each time ( I won't say everytime, because sometimes, such kind of praise is required for morale boosting) and praise the individual for what he is.
I believe there has to be 180 degree change in our thought process. We should acknowledge our own uniqueness, our individuality, our own identity and should do the same in others case.
I am ready to be the first of my kind. Are you ready too ?

( on my route to self-discovery. Life keep giving me surprises and lessons in unexpected ways.. More to come, more to learn and a lot more to share)