Vishal Khandelwal

Life 2.0: Do You Have a Pink Shirt?

November 30, 2016

In my first year in college, Manish lived just two rooms next to me in the hostel. He was 6 feet 2 inches tall, very friendly and very smart. In the first semester, he scored 98.8 percent and was ranked second in the institute. It wasn’t a small feat considering that the institute was IIT Bombay.

I knew his work ethics and diligence in studies so his academic performance wasn’t a surprise. Getting up at 4 am for studying and attending all the classes regularly came naturally to him. Maybe he made it look that way. But there was one thing very unusual about him. On the day of the exam, he always used to wear his favourite pink shirt. People admired him for his intelligence, hard work, and focus but his superstition about pink shirt just didn’t make sense. It even earned him a nickname – Pinky.

Not to mention, there were few other, less irritating, peculiarities about him. For example, both his table-clock and his watch were set 15-minutes ahead of the actual time. He couldn’t tolerate seeing a footwear upside down. And he never missed his 30-minute afternoon nap, come what may.

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Super Investor: Joel Greenblatt

November 30, 2016

Joel Greenblatt is a very successful value investor and the founder of Gotham Capital. Joel an adjunct professor at the Columbia Business School (Warren Buffett’s alma mater) and author of three investment books namely,You Can Be a Stock Market Genius, The Little Book That Beats the Market and The Big Secret for the Small Investor.

However, the above accolades pale in front of his real accomplishment. His investment firm has averaged a whopping 40% annual return from 1985 to 2016. Just to give you an idea, Rs 100 compounded at the rate of 40% for 20 years turns into Rs 83,600. In the investment world, where 100-baggers are extremely rare events, Greenblatt has turned his investor’s corpus to 800-bagger.

Returns like that don’t come with plain luck. At least not for such a long time. I am sure you are excited to know about the tricks that Joel Greenblatt has up his sleeve that has enabled him to create such an enviable long-term record. You can learn all about his secrets and investing methods in his books but what’s more important to first learn are the basics that underlie his investment process.

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Want to Read More? This content is exclusive for members of Value Investing Almanack. Login to read if you are a member. Else, click here to subscribe.

Benefits to VIA Members

Spotlight: Big ideas from Value Investing and why applying them in your investment decision making will be a great deal
InvestorInsights: Interviews with experienced value investors, learners, and deep thinkers
StockTalk: Thorough analysis of business models of companies (without any recommendations)
Behaviouronomics: Deep analysis of human behaviour and how it impacts investment decision making
BookWorm: Reviews of the best books on Value Investing and related subjects
Free Course – Financial Statement Analysis for Smart People (otherwise priced at Rs 5,900)
Archives: Instant access to our huge archive from the past three years

Become a VIA Member. Click to Subscribe

InvestorInsights: Kuntal Shah

November 20, 2016

Kuntal Shah is one of the founding partners of SageOne Investment Advisors and has an opportunistic inclination towards value-oriented and risk-controlled approach to investments. He has been an extremely successful investor over the past two decades and his success has come from exploiting the inefficiencies inherent in the markets.

Kuntal has in-depth understanding of value investing with focus on risk identification and mitigation, emerging trends and opportunities in key growth sectors in India, taxation and accounting. He also loves to teach on these subjects and in the past has lectured at UTI Institute of Capital Markets, IIM (Ahmedabad), IIT (Mumbai), Symbiosis, FLAME and Chartered Accountants Institute. Kuntal is an Electronics Engineer from Pune University.

Safal Niveshak (SN): Could you tell us a little about your background, and how you got interested in value investing?

Kuntal Shah (KS): I was brought up in a middle-class family in Mumbai. I am an engineer by qualification. Early life was a constant struggle to make ends meet for our family of five siblings given our father’s limited earnings. I was lucky to be brought up in an environment where there was no compromise on education and was fortunate to be inculcated with middle class working ethos, frugality and conservatism of living within one’s means without recourse to borrowing to prepone consumption.

I was always fascinated with the capital markets. Hence, a career in the same seemed like an excellent opportunity to develop a perspective on different businesses and figure out how their fortunes played out in long run and how stock prices got set in the short and long run. The initial phase of your career is spent learning the intricacies but the benefits flow all your life as learning and compounding of capital are both cumulative and a good means to attain financial independence.

BookWorm: Sapiens

November 15, 2016

The traditional way of learning history in the classroom has always focused on memorising the dates and events. Yuval Harari’s book will change that forever. Sapiens provides a sweeping history of human race from 40,000 feet. Harari’s observations and insights aren’t merely interesting but highly provocative because they will challenge your deepest and dearest assumptions about this world.

The gentleman who taught us history course in school had a strong baritone voice which was in stark contrast to his fragile-looking structure. The only reason I remember him even today is because his voice still echoes in my head. The endless lectures where he would dictate the historical events and we would ferociously note down every single word. I am sure he knew his subject well but never bothered to convince us why studying history was important.

It wasn’t until 2015 that I learned the importance of history. And the credit goes to Yuval Noah Harari, who not only made a dry subject very interesting with his unique style of humour and penetrating observation but also because he presents convincing arguments about why one should study history. In his book Sapiens, he writes –

Unlike physics or economics, history is not a means for making predictions. We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable, and that we consequently have many more possibilities before us than we imagine. For example, studying how Europeans came to dominate Africans enables us to realise that there is nothing natural or inevitable about the racial hierarchy, and that the world might well be arranged differently.

Sapiens was the best book that I read in 2015. And I am not alone in declaring it as the most important book that every knowledge seeker should read. Mark Zuckerberg, Barack Obama, and Bill Gates have openly and strongly recommended Yuval’s book.

I guarantee that once you read the book, your worldview about the past, present and future will change dramatically. It’s such a rich book that I had to literally stop at every page and marvel at Harari’s jaw-dropping insights.
[Read more…] about BookWorm: Sapiens

Behaviouronomics: Diderot Effect

November 10, 2016

Obtaining a new possession often creates a spiral of consumption which leads you to acquire more new things. As a result, we end up buying things that our previous selves never needed to feel happy or fulfilled.

The manager of a superstore came to know that one of his salesmen sold stuff worth Rs 1 crore to a customer on a single day. He got curious and called the salesman in his office.

“How on earth did you manage to sell so much to a single customer?” asked the manager.

“Well, sir, the guy wanted to buy a smartphone so I showed a mobile that could function as a TV remote also. He liked the idea but he didn’t have a TV at home so I sold him a wide screen TV also. Then I suggested to him that a TV without home theatre would be useless so he bought that also. Of course, a wide screen TV and home theatre wouldn’t be of much use without an HD cable connection so he took that too. Then I explained to him how cool it would be to connect his TV to his home security system. He agreed and bought our latest state of the art home security system. The security system came with free gift vouchers. To use those vouchers I took him to our furniture store and he picked up a premium TV cabinet. Since his living room wasn’t big enough for the TV cabinet, we went down to our real estate department and he ended up booking a new house.”

“Wait a minute! So, you’re telling me that you sold a house to a guy who just came in to buy a smartphone?” the manager asked.

“No sir, he just came in asking directions to the nearest bus stop. I told him that if he had a good smartphone, he would never have to ask directions again,” explained the salesman. “And he’s going to come back next week when he moves into his new house since a living room with just a TV cabinet will look quite awkward. Isn’t it?”