Happy to announce the third batch of my most comprehensive classroom course in Value Investing titled – Value Investing Blueprint.

I conduct this course in association with Pune-based FLAME University, under the aegis of its FLAME Investment Lab, which is an initiative that strives to deliver the concepts and decipher the art of value investing to interested students.

This course is held at FLAME’s campus in Pune and is spread over six classes in a three-week window.

Click here to read more and apply if you are interested in joining this course.

Here is the flow of lectures –

Lecture 1 (How compounding works, fundamentals of value investing)

• Being a value investor
• Tenets of Ben Graham, the father of Value Investing
• Evolution of value investing – from Graham to Buffett
• Most important things in investing

Lecture 2 (Creating the mindset of a value investor)

• Psychology of investing – Judgement vs behaviour
• Behavioural biases and how they are an investor’s worst enemy
• Developing multidisciplinary thinking
• How to think about the stock market – Dealing with Mr. Market

Lecture 3 (Business analysis and building your circle of competence)

• Circle of competence – Concept and practice
• Framework to analyze industries
• Analyzing individual businesses – Separating great from gruesome
• Assessing growth, when it adds value and when it hurts
• Competitive moats – Assessment and sustainability
• Identifying moats through key numbers
• Assessing quality of management

Lecture 4 (Financial Statement Analysis)

• Learn the language of business i.e., accounting, how to analyze financial statements, identify connections between them, how to detect financial frauds.Project – Reading annual reports of a business of choice (minimum 7-10 years study) while staying within respective circles of competence. Conducting analysis – quantitative and qualitative – learned so far, and presenting the case. Learning how to analyze business quality and management’s track record of financial performance and capital allocation.
• Stock screening – Concept and practice

Lecture 5 (Valuation)

• “Intrinsic value is fuzzy but very important,” said Warren Buffett. Keeping this in mind, learn how to value businesses using a few simple but very useful valuation models.
• Paying up vs Overpayingg
• Margin of safety – Concept and practice

Lecture 6 (Making Investment Decisions)

• Creating a sound investment philosophy
• Power of checklists
• Investing success – getting rich vs staying rich
• Value of process and discipline
• Dealing with risk and uncertainty
• Concentration vs diversification
• Constructing a portfolio
• Assessing how much is enough

The course is suitable for beginners / individuals who are just starting off their investment journey. It will be a value add:

• If you are looking to build a value investing and stock portfolio creation process and philosophy from scratch.
• If you are willing to learn and understand the practical, time-tested concepts of behavioural finance, business analysis and valuation for personal and/or professional requirements.

The course is not suitable for you if you are looking for concepts and ideas in Technical Analysis, Derivatives, or speculation/stock trading. Also, there won’t be any stock recommendations/tips provided during the course. Applicants should carefully consider these points before applying for the course.

The last date to apply is 21st April 2019 (this Sunday).

Classes will be held on – 9th-10th July, 16th-17th July, and 23rd-24th July.

Accommodation will be provided in a non-AC, single room with double occupancy to all participants at the FLAME campus in Pune on the 9th, 16th & 23rd July 2019.

Click here to read more and apply if you are interested in joining this course.

Thank you for reading!

Value Investing Workshop in Mumbai: Register now for my upcoming Value Investing Workshop in Mumbai on Sunday, 5th May 2019. Few seats remain! Click here to register.

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It was sometime in early 2009 that, as I was running my screeners to find investment-worthy businesses, I came across a Delhi based packaging firm Uflex Ltd.

The company was involved in the flexible packaging business, was doing well in terms of growth, and expanding globally. What’s more, the stock was available at a single-digit P/E.

In all, it sounded like a great investment that was available cheap. Anyways, while I was busy preparing my rosy predictions for the business and the stock, I was warned by an analyst friend about some shady land dealings he had heard of about the company’s promoters. What is more, the promoters had pledged a large amount of their shareholding.

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If you think I am going to talk about some mystical way to increase your luck in stock market, then you’ll be disappointed. Being fortunate in life and in investing is largely about increasing your odds of success. And how do you increase your odds?

“Study the principles of sound investing and work hard to implement those principles,” you might say. But is that sufficient? Studying, reading and working hard are all necessarily conditions for being successful in the stock market, however they are not sufficient. You need one more thing.

Let’s turn to world’s greatest investor to give us some clue. In his 1982 letter to investors, talking about two of his managers Phil Liesche and Ben Rosner, Warren Buffett wrote –

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One of the most important parameters to judge a business’s quality is its ability to generate a return on the money it employs on fixed and working capital. It is also one of the key metrics, which when measured over years, can help you assess a management’s quality.

Return on capital employed or ROCE also indicates a business’s ability to set prices that enables it to earn adequate margins, which when better than competitors also suggests the presence of moat.

Simply defined, ROCE shows how a company uses its capital efficiently by examining the profit it earns in relation to the capital it uses during a given year.

The formula commonly used to calculate ROCE is – Profit before Interest and Tax (PBIT) divided by Capital Employed (Equity and Debt).

[Read more…] about ROCE-Growth Matrix, and Few Potential Wealth Creators