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Value Investing, the Sanjay Bakshi Way 2.0 – Part 2

Image Source: Outlook India

After talking about the important concept of economic moats in the first part of his interview, in this second and concluding part, Prof. Bakshi talks about his thoughts on valuations, mental models, diversification, checklists, and why you must buy great businesses for the long term.

Safal Niveshak: One of the problems that new or small investors have is that they can’t really get their heads around valuation. It seems so complex. A lot of the terminology is complex, the concepts are, and there is a lot of contrary thinking needed to effectively value businesses.

How can valuations be made easier? How have you made it easier? Or can it not be made easier?

Prof. Bakshi: Vishal, that particular problem is equally applicable to large investors!

Anyway, over the years I have dealt with the problem in many ways. As a disciple of Ben Graham, when working on any business and not necessarily moats, I developed my own ways of thinking about valuation.

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Value Investing, the Sanjay Bakshi Way 2.0 – Part 1

Image Source: Outlook India

After much delay owing to issues in getting mutually convenient dates, I have finally finished my interview of Prof. Sanjay Bakshi. 🙂

Here is the first part of the interview. As you will find below, it’s amazing the way Prof. Bakshi has explained critical concepts in investing in a highly comprehensive yet simplified manner.

Enjoy the wisdom!

Safal Niveshak: Let me start with a question I have been waiting to ask you for some time now. Through a comment on a link I shared on FB and through a few of your posts over the past few months, you have suggested that your investment philosophy has moved further towards high quality businesses, and great managements. Can you please elaborate on the same? What has been this transition all about? And why?

Prof. Bakshi: I started my career as a value investor in 1994. Over the last twenty years, I have practiced most styles of value investing including as Graham-and-Dodd style of investing in statistical bargains, risk arbitrage, activist investing, bankruptcy workouts, and Warren Buffett style of investing in moats. There have been times when I have owned 40 stocks and times when I have owned just 10.

I teach all these value investing styles in my course at MDI. I tell my students that they need to pick a style which suits their personality.

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A Fundoo Professor Called Sanjay Bakshi

In my preparation for the upcoming interview of Prof. Sanjay Bakshi (this Sunday), I was reading through a few of his past articles and lectures, when a thought struck my mind.

A lot of Safal Niveshak tribesmen still do not know much about Prof. Bakshi and his vast investment insights, except for his interview that I carried in 2012.

As such, I have created a special page on the website dedicated to Prof (after due permission from him), who is one of the best minds in India in the fields of Value Investing and Behavioral Finance.

This page is a collection of my best picks from among his vast writings that are available on his blog as well.

Start by reading about Prof. Bakshi’s life story. Then read through some of his best posts (as per me) I have listed on the page.

I’m sure you will benefit a lot from them in your efforts of becoming a sensible, long-term investor.

Reading Prof. Bakshi has been an important step in my work-in-progress of becoming what Charlie Munger calls a ‘learning machine’. I’m sure it won’t be any different for you.

P.S. This page has been created after due permission from Prof. Bakshi.