The One Percent Almanack

Wit and Wisdom on Investing, Business, and Life

Value Investor Interview: Huzaifa Husain

Mr. Huzaifa Husain is the Head of Indian Equities at PineBridge Investments based in Mumbai. Since he joined the asset management company in 2004, Mr. Husain has been a key member of the team advising the PineBridge India Equity Fund (a Dublin domiciled India offshore fund). Prior to this, he was an Equity Analyst at Principal Mutual Fund and SBI Mutual Fund. Mr. Husain received a Post Graduate Diploma in Management (PGDM) from Indian Institute of Management (IIM) Bangalore and a B.Tech from the Institute of Technology (Banaras Hindu University).

In this interview for the Value Investing Almanack, Mr. Husain shared how he found his calling in value investing, and reveals key insights about his investment strategy and the underlying thought process.

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BookWorm: How to Fail at Almost Everything and Still Win Big

Dilbert’s creator tells you that passion is overrated and luck can be manipulated. In his signature style, humourous and incisive, Adams delivers loads of practical ideas to attract the attention of lady fortuna.

If you don’t know who Scott Adams is, odds are high that you would give a pass to a book with such a cheesy and hackneyed title. But if you did that it would be a big mistake. Scott’s book is one of my all-time personal favorites and I can vouch for the tremendous utility of his methods.

For the uninitiated, Scott Adams is the creator of Dilbert, one of the most popular and widely distributed comic strips of the past century. He has been a full-time cartoonist since 1995, after sixteen years as a technology worker for companies like Crocker National Bank and Pacific Bell. Apart from being a cartoonist, he has written many bestselling books and is sought after speaker in corporate circles.

The title of the book is intriguing and Scott claims that he has at least failed in 36 different businesses. But in the process of failing he kept accumulating useful knowledge and skills about business, marketing, product, customers etc.
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Behaviouronomics: Lucretius Problem

History repeats itself but we forget that repeating doesn’t necessarily mean repetition of the same patterns. At the end of the day, what we learn from history is that we don’t learn from history.

It was a Friday on March 11, 2011 when a massive earthquake with an intensity of 9 on Richter scale hit off the coast of Japan at 2:26 pm local time. The epicentre of the quake was 70 kilometre east of the Oshika Peninsula of Tōhoku.

The earthquake triggered powerful tsunami waves that reached heights of up to 40 metres. It took 50 minutes for the largest wave in the tsunami to arrive at the shores of Fukushima. What followed was something totally unimaginable and unexpected for those who take pride in taming the mother nature.

The Fukushima Daiichi nuclear power plant had six separate boiling water reactors, protected by a 10-meter-high seawall to prevent sea waves from entering the plant.

When the tsunami struck the Fukushima coastline, the gigantic waves easily overtopped the plant’s seawall. It took seconds to flood the basements of the turbine buildings and disabling the emergency diesel generators. Soon the backup generator building was also flooded. This resulted in an explosion and leakage of radioactive material to the sea water and created a huge nuclear hazard.

Why would the engineers and designers of Fukushima nuclear power plant build a wall only 10-meter high? What made them believe that the waves can’t breach the 10-meter height? The reason was that the engineers had never seen sea waves as high as 10 meters in that area for the recorded history.
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Spotlight: Investing and The Power of Story

When it comes to investing in stock market, the power of “the story” is very strong. But unlike the fairy tales, most stories here have an ugly ending.

Remember the story of Cinderella? And how she seemed plain and peasantly? With the help of her fairy godmother, Cinderella was able to turn her pumpkin, mice, rat, and lizards into her coach, horses, coachman, and footmen.


You know how that turned out. Cinderella became a princess, even though her step-mother and step-sisters thought she was destined to scrub floors till the end of her days.

I can relate this story of Cinderella to the stock market. To find a stock worth investing in, you’ve got to search for your own Cinderella – a story worth believing in, but which is ignored or looked down upon by most other people.

The problem is, most investors end up stumbling onto story stocks that have ugly endings. A large part of this is because the hottest selling stories in the stock market are often those where the storytellers are looking for bigger fools to offload their own junk before the stories turn sour. And they often manage to find a lot of such believers (often small, gullible investors) for their stories You see, as investors, we all are on the receiving end of sales pitches from brokers, friends, investment advisors, fellow investors, and bloggers in media, stock forums, and social media about stocks that they claim will deliver spectacular returns. These stories not only sound persuasive and reasonable but are also backed up by evidence – anecdotal, in some cases, and statistical, in others – that the strategies work. I am sure you have often read stuff like these in media –

• Small-cap stock backed by famous investors like ABC and XYZ has “tremendous potential”
• 5 multibagger stocks picked by ABC are set to soar
• XYZ multibagger stock is set to multiply 10x in next 3 years
• 5 Indian stocks Warren Buffett would buy and why

These are nothing but stories that are hyped under the pretext of “what has worked in the past will surely work in the future.”
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Super Investor: Bill Miller

Many shall be restored that now are fallen, and many shall fall that now are in honor. ~ Horace

That’s the quote Benjamin Graham chose to open his masterpiece Security Analysis. What could be a better reminder than this to investors about their fallibility?

If you are repeatedly successful, there’s a temptation to believe that you’re no longer subject to human fallibility. But the honest (and harsh) truth is that in a world that is continually changing, every right idea or strategy eventually becomes the wrong one.
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