Archives for October 2018
Amit Mantri is the co-founder of 2Point2 Capital, a SEBI-registered Portfolio Management Service (PMS). Previously, he was a Vice-President at Hornbill Capital, a Mumbai based hedge fund. Prior to Hornbill, he has been part of the private equity investment team at IDFC Alternatives and Zephyr Peacock.
Amit has a Post-Graduate Diploma in Management from IIM Bangalore and B. Tech in Computer Science and Engineering from IIT Kharagpur. He is also a CFA® charter holder.
In this interview, Amit shares his thoughts on investing, his process, and the key lessons he has learned over the years of being an investor.
Life is simple. Why do we make it so hard?
This is what Jon Jandai, a farmer from northeastern Thailand, asked the audience while delivering a TED speech in 2011.
He echoed what Confucius had said 2,500 years earlier, “Life is really simple, but we insist on making it complicated.”
While I recommend you watch Jon’s complete speech, the crux of what he says is that we don’t have to do what society tells us, we can have the life we want, and our choices determine if we get such a life.
Consider wealth creation. Spending less than you earn, i.e., saving money and investing it well over a long period of time is all you need to meet all your financial goals. Simple, right? But the question again is, like Jon asked, why do we make it so hard?
Look at this chart that talks about the three simple steps to get wealthy over time…
Could this get any simpler?
This issue of Outside the Box newsletter is authored by Jatin Khemani. Jatin talks about his equity research process and how he tries to balance the stress part of the equation that it involves. Over to him.
The Low Stress Way to Research Stocks
by Jatin Khemani
Six years ago, Prof. Sanjay Bakshi published a blog post where he suggested looking at returns from a very different perspective – Returns Per Unit of Stress.
One of the key points he made in the post was –
For proprietary investors (and maybe for all investors), stress should figure in one’s investment strategy, much more than it does, perhaps, even more than financial risk, because stress is a killer and high-stress situations – whether they carry high or low investment risk – will always carry a high risk to one’s health. In fact, one can now measure how many years of one’s life is cut short by being exposed to a high-stress life.
In this post, I take that idea further with my own experiences of being a full-time value investor over the better part of this decade.
In his 2010 letter to shareholders, Warren Buffett tells a joke —
Customer: Thanks for putting me in XYZ stock at 5. I hear it’s up to 18.
Broker: Yes, and that’s just the beginning. In fact, the company is doing so well now, that it’s an even better buy at 18 than it was when you made your purchase.
Customer: Damn, I knew I should have waited.
Reading this joke the first time, I laughed at broker’s convoluted argument and the stupidity of the customer. How can a stock be better buy at 18 than it was at 5?
[Read more…] about Exploration Vs Exploitation