Safal Niveshak: Can you draw down a series of steps and checklists – the process – you use to identify stocks to buy using the value investing route?
Prof. Bakshi: You need different checklists for different styles of investing.
If you are analysing a bankruptcy situation, the checklist you will use will obviously be different from the one when you are buying into a business on the basis of the skills of one person, like Ajay Piramal.
Buying into Piramal Healthcare was essentially a bet on the man’s ability to allocate capital. So to evaluate how likely he will do that in the future, your checklist must first examine how well he allocated capital in the past and also how did he treat his minority investors in the past.