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- J&K: One terrorist killed as police successfully repulse attack on their picket in Anantnag
- Two-day meeting of BJP National Executive underway in New Delhi
- PM Modi says digitisation of ancient epics can deepen their connect with younger generation
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- Ground Report |Telangana |Karimnagar | Pradhan Mantri kaushal Vikas Yojana
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- India to supply 160 railway passenger coaches to Sri Lanka
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- Heavy downpour continue across nation
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- A 60-year-old woman was killed Saturday, after an elephant attacked her while she was waiting at a bus stop in Nilgiris district, police said.
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- Tibet in Toronto film festival spotlight
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- RBI slaps Rs 1 cr penalty each on three public sector banks
- Nokia's next flagship smartphone "Nokia 9" is being speculated to host a penta-camera setup at the back, according to the leaked images surfacing in the media.
- 15 killed in Afghanistan accident
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- Prime Minister Imran Khan on Friday sought assistance from overseas Pakistanis to help overcome the "biggest issue" of water crisis in the country by donating to the dams fund set up by the Supreme Court.
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Donât let valuation scare you off great companies: Sumeet Nagar - âCommodities and cyclicals are a no, no because they are associated with too much uncertainty.â
- Edited excerpts: Where do you think in your portfolio markets have not recognised the ability of the management or the ability of the business to scale up? Is there any space where you plan to be a patient investor, hoping markets will reward it? Vaibhav Global is one of those companies with a terrific management theme. It was very focussed on creating an opportunity. What they have been able to do is nothing short of phenomenal. To be in that business in the US where there are only a handful of people, maybe four or five people who have been able to create businesses of that size despite huge barriers to entry. It is amazing. People still see that with a lot of scepticism and maybe rightly so. In a couple of times in the past, there have been big runups and decline in the stock but it is the nature of that business, it is a business with high fixed costs and brings in a lot of volatility if your top line cannot grow. But if your top line is growing, it has tremendous operating leverage. Over the last one year, their earnings have more than doubled. Dollar would be benefitting them or rupee� Dollar would benefit them as well but even otherwise they are able to grow their revenues in mid-teens dollar terms. In rupee terms, it is higher than that and just because of the operating leverage your bottom line can grow much faster. So today the markets are not rewarding that and the onus is on the company to keep performing. If they do that for another year, the market will see it very differently. When you look at your investing career, which is one stock you regret selling early and which is one stock which you regret selling late? There were two phenomenal businesses that we bought fairly early -- Page Industry and Bajaj Finance. In both cases, we came back in later but we had got out of them early on valuation concern. But they are phenomenal franchises run by terrific management teams and once we realised that mistake, we got back in. But it was a mistake to get out early.When you find those great businesses with long run growth, where your moat can keep expanding over a period of time, you should hold tight through that high valuation. It will still keep creating value. Even in those businesses, there have been three or four instances where the valuations had become more reasonable and you could add more to those companies. If you find great companies like that, even if you feel that their valuation is high today, you just need to be patient. At some point of time, you will get the right valuation when you can add more. Are commodities and cyclicals an absolute no-no for you? It just does not fit into our philosophy. We try to find businesses where we can say with a lot of confidence that three years or five years from now, this business in terms of its renew, its profit would be better than where it is today. With businesses that have very high cyclicality it is tough to say that. I read somewhere that markets always overestimate the rate of change in the short term and they underestimate in the long term. The rate of change is real and the rate of change is extraordinary. How does one have a three- to five-year view? If you are seeing certain trends and you can see a very strong logic behind those trends. Be it urbanisation or electronic commerce -- there are very strong fundamental factors behind that. In things like that, people underestimate over the long term both how big a change this will turn out to be. In those cases, you are better off to find companies that are benefiting from those trends and which can navigate changes because the rate of change is high as well.Affle is such a company. They started seven or eight years ago when mobile marketing was about SMS and there have seen profound changes in that industry since then. They have been able to navigate through that. If you can find companies like that where you think the strength can be harnessed and which can benefit from and yet navigate the changes that come along, you can do quite well. Howard Marks is of the view that US markets are in a 10-year bull market. This is the longest after World War II. After a 10-year bull market, do you want to take chips off the table or extend your chips? In India also, it has been a good three-four-year of clean bull market whether it is smallcaps, midcaps or largecaps stocks. In India also, if not in the last lap of the bull market, we have way passed the prime age, so to speak. The place where the US and India markets are little bit different is that the US market have had a long run but also this has been one of the more hated bull markets that you have seen. That euphoria was absent and it is even more true in India. So, yes, it has been 10 years but in terms of magnitude we have not seen that level of upside move. But at some point in time, it will turned on for sure and you will see decline in US markets and Indian markets will respond to that as well. And so yes you will have a year or two of downtrend but you will have more opportunities to buy. You are of the view that there are more opportunities in the small and midcap stocks. Just because small and midcap stocks have fallen off the cliff right now, you are not looking at changing your portfolio and you are happy to commit to your existing stocks more and in fact, if at all, you have only bought the decline this year. If you have companies that can compound their earnings at significantly above market average growth which means 20-25% plus year on year and they can do that even through the turmoils in the market or because of the macro situation, I do not think you should worry too much about where the market is heading. Yes, in the short term you will take a hit. If the entire market comes down, your portfolio value will come down as well but eventually if these companies are able to compound their earnings at that high enough rate, markets will reward you for that.
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- Tsunami Mock Exercise in Indian Ocean
- India along with 23 other Indian Ocean Nations, participated in a major Indian ocean-wide tsunami mock exercise (drill) on in September, 2018. The Exercise, known as IOWave18Â was organized by the Intergovernmental Oceanographic Commission (IOC) of UNESCO, which coordinated the setting up of the Indian Ocean Tsunami Warning and Mitigation System (IOTWMS) in the aftermath of […]
- The post...<br/>
- India USA 2+2 Ministerial Dialogue
- Sat, 08 Sep 2018 07:03:20 +0000
- The inaugural India-USA Ministerial 2+2 Dialogue was held in New Delhi. This long-awaited event took place between the senior leadership where Minister of External Affairs Sushma Swaraj and Minister of Defence Nirmala Sitharaman welcomed their US counterparts Secretary of State Michael R. Pompeo and Secretary of Defense James N. Mattis. They welcomed the launch of […]
- The post India USA...<br/>
- 6th International Geriatric Orthopaedic Conference
- Sat, 08 Sep 2018 06:47:05 +0000
- The Union Home Minister Rajnath Singh inaugurated the 6th International Geriatric Orthopaedic Society of India Conference at the All India Institute of Medical Sciences, Delhi. The theme of the conference was âIncreased Longevity with Reduced Fragility and Enhanced Mobilityâ. Geriatrics, or geriatric medicine, is a specialty that focuses on health care of elderly people. It […]
- Thu, 06 Sep 2018 12:42:06 +0000
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- Speaking at the second World Hindu Congress, Mohan Bhagwat said, "We [Hindus] have to come together," noting that all the people need not register under…
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- India agrees to supply 160 railway passenger coaches to Sri Lanka under concessional financing
- The UN postal agency will issue special stamps in New York next month to commemorate the festival of Diwali.
- PM Modi pitches for investments in manufacturing of electric vehicles
- J&K: One terrorist killed as police successfully repulse attack on their picket in Anantnag
- In Jammu & Kashmir, a Lashkar-e-Toiba terrorist was killed when the police successfully repulsed an attack on their picket in Anantnag district last night.
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- Copyright:(C)Sat 08 Sep 2018, 13:51:092018Sat 08 Sep 2018, 13:51:09 Bennett Coleman & Co. Ltd, http://info.indiatimes.com/terms/tou.html
- Kejriwal launches mega tree plantation driveOfficials said around one lakh students and residents are participating in the campaign at 600 locations across the city to fight air pollution.
- Copyright:(C)Sat 08 Sep 2018, 13:42:082018Sat 08 Sep 2018, 13:42:08 Bennett Coleman & Co. Ltd, http://info.indiatimes.com/terms/tou.html
- When you find those great businesses with long run growth, where your moat can keep expanding over a period of time, you should hold tight through that high valuation. They will keep creating value, Sumeet Nagar, MD, Malabar Investments, tells Nikunj Dalmia of ET Now in an exclusive investment. 65717843
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Saturday, September 8, 2018
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