Work in progress
Investing is not about chasing excitement; it’s about embracing patience. Like crafting a ten-year-old whisky, it requires discipline, care, and time to mature. The true reward lies not just in the returns but in the wisdom gained through the journey of learning and growth.
More specifically, a novice will try to get high "r". When you understand, the holy grail is in "n", you are in the game. Now, I have been exploring different ways to maximize "n".
Investing is not about chasing excitement; it’s about embracing patience. Like crafting a ten-year-old whisky, it requires discipline, care, and time to mature. The true reward lies not just in the returns but in the wisdom gained through the journey of learning and growth.
More specifically, a novice will try to get high "r". When you understand, the holy grail is in "n", you are in the game. Now, I have been exploring different ways to maximize "n".
Maximizing "N"
I will share some interesting facts that I explored recently.
I am in my mid-thirties. I came to know that only 7% of the population of my age meet five criteria that ensures that your lifestyle is in right track.
1. Waist size 32' (male)
2. Blood pressure: systolic <120, diastolic < 80
3. Triglycerides <100
4. HDL cholesterol > 40
5. HBA1C <5.2
Unfortunately, I do not meet the last pointer and not part of 7% elite class. These are some simple checks that show if one needs change of course for maximizing physical health.So, this work remains in progress.
Health is just one aspect. There are many other areas we can work on to maximize the runway of compounding.
PS: this post may appear irrelevant to this group. The idea is to compound. Many things that we value, come through compounding. Wealth, health, happiness, reputation and the list goes on...
I will share some interesting facts that I explored recently.
I am in my mid-thirties. I came to know that only 7% of the population of my age meet five criteria that ensures that your lifestyle is in right track.
1. Waist size 32' (male)
2. Blood pressure: systolic <120, diastolic < 80
3. Triglycerides <100
4. HDL cholesterol > 40
5. HBA1C <5.2
Unfortunately, I do not meet the last pointer and not part of 7% elite class. These are some simple checks that show if one needs change of course for maximizing physical health.So, this work remains in progress.
Health is just one aspect. There are many other areas we can work on to maximize the runway of compounding.
PS: this post may appear irrelevant to this group. The idea is to compound. Many things that we value, come through compounding. Wealth, health, happiness, reputation and the list goes on...
Which index has the highest PE ratio now?
Anonymous Quiz
21%
Nifty 50
33%
Nifty Midcap 150
45%
Nifty smallcap 100
A Story of a Transaction
I did bulk buying in smallcap mutual funds in Sep 2022. Level: Nifty Smallcap 100 at 9500. PE: 18.5.
With that, my overall mutual fund holding skewed heavily towards the smallcap. Almost 60%.
I had a plan to sit on it for some time. Within 1.5 years, the Nifty smallcap 100 touched 27 PE with 17000 level. The weightage of my portfolio on Smallcap rose higher with 1.8x jump. I was not feeling comfortable. I sold until my mutual fund portfolio weightage on smallcap reduced to 20%.
Afterthat, the market moved sideways and then kept going high. Nifty Smallcap 100 touched almost 19500 level with PE 34 on Dec 2024.
Did I sell too early?
Not sure.
After a minor correction in the market today, Nifty smallcap 100 is at 15400 level with PE26.5.
Am I happy to see that ? Not sure.
Well, after I sold my Smallcap holding, I didn't sit in cash. I bought the Nifty Bank index. I was feeling comfortable with the transaction. Since then, it is marginally up by 7%.
Was it a good move? Not sure.
But one thing I am sure, I felt comfortable with all these transactions and slept well at night. I typically don't like to check Market movement everyday. Just weekly once is good enough for me. With my temperament, I felt it was comfortable and I did that.
We get too hooked up with return. And there is no higher limit of it.
So, My Transaction was... Giving up the return, in exchange, Embracing my mental peace.
I did bulk buying in smallcap mutual funds in Sep 2022. Level: Nifty Smallcap 100 at 9500. PE: 18.5.
With that, my overall mutual fund holding skewed heavily towards the smallcap. Almost 60%.
I had a plan to sit on it for some time. Within 1.5 years, the Nifty smallcap 100 touched 27 PE with 17000 level. The weightage of my portfolio on Smallcap rose higher with 1.8x jump. I was not feeling comfortable. I sold until my mutual fund portfolio weightage on smallcap reduced to 20%.
Afterthat, the market moved sideways and then kept going high. Nifty Smallcap 100 touched almost 19500 level with PE 34 on Dec 2024.
Did I sell too early?
Not sure.
After a minor correction in the market today, Nifty smallcap 100 is at 15400 level with PE26.5.
Am I happy to see that ? Not sure.
Well, after I sold my Smallcap holding, I didn't sit in cash. I bought the Nifty Bank index. I was feeling comfortable with the transaction. Since then, it is marginally up by 7%.
Was it a good move? Not sure.
But one thing I am sure, I felt comfortable with all these transactions and slept well at night. I typically don't like to check Market movement everyday. Just weekly once is good enough for me. With my temperament, I felt it was comfortable and I did that.
We get too hooked up with return. And there is no higher limit of it.
So, My Transaction was... Giving up the return, in exchange, Embracing my mental peace.
Winter is coming
This phrase echoed throughout Game of Thrones from the very first episode. It was a constant warning — repeated so often that, at times, it felt irritating, almost like background noise. For the first few long seasons, viewers became indifferent to it. And then, when the final seasons arrived, the entire plot revolved around that very winter everyone had learned to ignore.
We are very likely navigating a similar situation. For years — even decades — we've heard warnings about the growing debt in the US economy. Every year, some expert rings the alarm. Yet markets keep going up, and investors have learned to brush off the warnings and carry on — often making handsome returns in the process. Even Ray Dalio has been warning about this for 16 years straight.
At this point, many consider such warnings just noise. This is classic recency bias at work. The assumption is: "It hasn’t happened so far, so it won’t happen anytime soon." Maybe they’re right. Maybe nothing major happens in 1 year, or 5, or 10, or even 20. But it’s impossible to rule out the risk of another significant economic blow-up.
So, what should we do?
Hope for the best. Plan for the worst.
That’s the only rational strategy in a world where winter may still be coming.
This phrase echoed throughout Game of Thrones from the very first episode. It was a constant warning — repeated so often that, at times, it felt irritating, almost like background noise. For the first few long seasons, viewers became indifferent to it. And then, when the final seasons arrived, the entire plot revolved around that very winter everyone had learned to ignore.
We are very likely navigating a similar situation. For years — even decades — we've heard warnings about the growing debt in the US economy. Every year, some expert rings the alarm. Yet markets keep going up, and investors have learned to brush off the warnings and carry on — often making handsome returns in the process. Even Ray Dalio has been warning about this for 16 years straight.
At this point, many consider such warnings just noise. This is classic recency bias at work. The assumption is: "It hasn’t happened so far, so it won’t happen anytime soon." Maybe they’re right. Maybe nothing major happens in 1 year, or 5, or 10, or even 20. But it’s impossible to rule out the risk of another significant economic blow-up.
So, what should we do?
Hope for the best. Plan for the worst.
That’s the only rational strategy in a world where winter may still be coming.
Cycle ⭕
The more you know about the world, more you will know about cycle. Most of the things move in cycles.
I have been studying the Micro finance sector for the last four years. The feature of the cycle is very short. Last cycle, I noticed how it works. Boom and bust.
This time, I have been participating in the cycle.
AU small finance Bank.
First buy : 545.
Second buy: 650
I will share my understanding and observations through subsequent posts.
Not a recommendation. You will never order any meal based on my choice. For your money, never take any recommendations from any random persons.
The more you know about the world, more you will know about cycle. Most of the things move in cycles.
I have been studying the Micro finance sector for the last four years. The feature of the cycle is very short. Last cycle, I noticed how it works. Boom and bust.
This time, I have been participating in the cycle.
AU small finance Bank.
First buy : 545.
Second buy: 650
I will share my understanding and observations through subsequent posts.
Not a recommendation. You will never order any meal based on my choice. For your money, never take any recommendations from any random persons.
Cycle ⭕
MFI space is a heavily regulated space. A slight change in the gear can change the pace of the vehicle.
When RBI comes up with guidelines, it sets the path for growth or de- growth
A favourable condition of this space is higher liquidity in the system, and higher collection efficiency. NPA reduces, credit cost decrease and ROE increases.
The yield of this microfinance is on the higher side. So, the lending agency enjoys a solid profitability during upcycle.
On the down cycle, RBI will tighten the liquidity condition and set a lot of restrictions. Collection efficiency will go down. NPA will shoot up. ROE will hit rock bottom.
I will share various cases for you to track. Follow this post , and refer to the resources. You will learn how the sector changes its color from red to green to red again.
A beautiful but deadly cycle ⭕
MFI space is a heavily regulated space. A slight change in the gear can change the pace of the vehicle.
When RBI comes up with guidelines, it sets the path for growth or de- growth
A favourable condition of this space is higher liquidity in the system, and higher collection efficiency. NPA reduces, credit cost decrease and ROE increases.
The yield of this microfinance is on the higher side. So, the lending agency enjoys a solid profitability during upcycle.
On the down cycle, RBI will tighten the liquidity condition and set a lot of restrictions. Collection efficiency will go down. NPA will shoot up. ROE will hit rock bottom.
I will share various cases for you to track. Follow this post , and refer to the resources. You will learn how the sector changes its color from red to green to red again.
A beautiful but deadly cycle ⭕
Three times , I listened to this podcast till now.
First time , I just listened and couldn't capture much.
Second time onwards, I started collecting gems.
First time , I just listened and couldn't capture much.
Second time onwards, I started collecting gems.
For microfinance lenders, PAR 31-90% is a very crucial indicator to track the cycle.
Higher value indicates the lending space is under stress. When there is a reversal from peak to decline, it gives you early hints that the cycle is turning.
Higher value indicates the lending space is under stress. When there is a reversal from peak to decline, it gives you early hints that the cycle is turning.
Abbott India
I have observed the same thing playing out for this company. PAT growth is higher than Revenue growth.
For example, this quarter, Revenue is up by 8%. Profit went up by 16%. YoY
This is because the operating Profit margin expanded from 30.5% to 32.5%.
Since revenue growth and profit growth numbers are not very attractive, this will not make any headlines.
Hence, this share has not been multi-bagger since I own.
This stock is up by 75% (excluding hefty dividends) since I bought it. It's been more than 4 years. Many of you will start comparing with Nifty , Nifty Pharma and many other indexes and tag it laggard.
Most people miss one very big thing in this whole equation. The risk of FDA flagging and fire are not a concern for this business.
Next year, with good probability, I can say that Profit for this business will grow faster than Revenue growth. And PAT growth is of double digits.
I don't have to check or scroll through posts and be very vigilant about new breaking news. Relaxed compounding.
I have observed the same thing playing out for this company. PAT growth is higher than Revenue growth.
For example, this quarter, Revenue is up by 8%. Profit went up by 16%. YoY
This is because the operating Profit margin expanded from 30.5% to 32.5%.
Since revenue growth and profit growth numbers are not very attractive, this will not make any headlines.
Hence, this share has not been multi-bagger since I own.
This stock is up by 75% (excluding hefty dividends) since I bought it. It's been more than 4 years. Many of you will start comparing with Nifty , Nifty Pharma and many other indexes and tag it laggard.
Most people miss one very big thing in this whole equation. The risk of FDA flagging and fire are not a concern for this business.
Next year, with good probability, I can say that Profit for this business will grow faster than Revenue growth. And PAT growth is of double digits.
I don't have to check or scroll through posts and be very vigilant about new breaking news. Relaxed compounding.
Many of the concerns we had back on 2019, the similar line of concerns follows today also.
It is always great to listen to Rakesh Jhunjhunwala! Sharing an old interview.
It is always great to listen to Rakesh Jhunjhunwala! Sharing an old interview.
Must read
If not for investing, at least for knowledge purpose...
https://blindspotresearch.substack.com/p/who-actually-makes-indias-cancer
If not for investing, at least for knowledge purpose...
https://blindspotresearch.substack.com/p/who-actually-makes-indias-cancer
Substack
who actually makes india's cancer drugs?
only 20% of indian CMOs can make chemo drugs at all. owning that plant turns out to be the easy part.
Hi Everyone !
It's been some time since I have not been posting in this group.
I took some time out of the earlier timeline , and focused on personal life, and built a few good habits. Focus was to sharpen the skill, improve family relationships, enrich knowledge base and work on health.
Probably, I will try to post frequently. At least, I will try to do so.
I will post a series of audio to highlight the process and results. I believe in compounding any good thing for a long time adds tremendous value in life.
I hope my posts will help you to improve your journey in life.
It's been some time since I have not been posting in this group.
I took some time out of the earlier timeline , and focused on personal life, and built a few good habits. Focus was to sharpen the skill, improve family relationships, enrich knowledge base and work on health.
Probably, I will try to post frequently. At least, I will try to do so.
I will post a series of audio to highlight the process and results. I believe in compounding any good thing for a long time adds tremendous value in life.
I hope my posts will help you to improve your journey in life.
"There are people so poor that money is all they have."
— Josh Billings
The whole idea is to become rich 😊
— Josh Billings
The whole idea is to become rich 😊