Introduction to July Issue

At the beginning of the month, I got a mail for the renewal of the domain name. The auto generated message carried an import beyond its mandate.

" has expired or is at risk of expiring"

That woke me up from my slumber. A year had gone by. The most eventful year of my life and at the same time unusually quiet! The months when the fruits of your labour start ripening are the laziest. You don't want to do much; you don't have to do much.

The business environment has been quite benign compared to a year ago when most businesses were just coming out of a state of shock. Production, revenues, profits… whichever yardstick you use, we have travelled quite a distance. The economy has been awash with funds and the asset prices have benefited from a double dose of the rising fundamentals and rising optimism.
Even in this time of prosperity, in general, good businesses have done better than average businesses and have been rewarded at a rate better than average. A look at the stocks, that we labeled ‘good businesses' shows this clearly.

Anyone who had been smart enough not to try to pick the bottom would have made better profits that those on display above. For example, the portfolio that I discussed in the article ‘A Prudent Portfolio' has grown from 1 lakh to 4.24 lakh in 1.25 years. Seema, proud owner of these gems has made her debut in the equities with a bang. To bring this into perspective, it has taken me 5 years to grow as much. The Sensex has taken 7 years to reach this level of growth. Even our hugely successful model portfolio LWB Special, created at the bottom of market in Dec 2001 took 3 years to give 300% returns. So I must concede that I don't deserve the credit for entire 324% gain. Some due credit must be given to her luck.

Rather my luck now!
Seema and I tied the knot last year. Among the beautiful gifts life has given me so far, this has been the most profound and most overwhelming. Interestingly, I'm now under oath to ensure prosperity of the household. Luckily the priest didn't put the target on expected returns.

Now coming to the theme of this issue of Unfair Value.A strange phenomenon haunts my portfolio. The stocks where I chose to invest are being selectively targeted for delisting by evil promoters. It began with Sterlite 8 years ago when the promoters tried to steal shares of the remaining shareholders and failed. Then in 2006, the promoters of Eicher Ltd came knocking at my door. They succeeded in convincing everyone but me and delisted the stock. Malco failed at attempts at delisting at Rs 48 in 2005, made a second attempt in 2009 at Rs 115 and succeeded. Novartis succeeded in buying back nearly 76% shares and may make the next move within a few years. Micro Inks succeeded in delisting in 2009. Sulzer made its first attempt in 2007 at Rs 480 and is making the second attempt now when the stock price is Rs 1200. Six companies out of the twenty four I had. One fourth….delisted or on their way to being delisted! Is it random? Am I being paranoid that promoters are after my stocks? Is it that by some indirect way, promoters of the companies in my portfolio share my favorable view of the business?

Whatever be the case, I have to raise my voice against delisting because I consider delisting unfair. I carefully pick my stocks. I invest for a very long term, ideally for life. Delisting is upsetting my garden. "Uproot the Orchids because they have been delisted by God"…My foot!


valueinvestor2010 said...

Kamleshji would love to hear your analysis on the following company
Seamec India
Akzo Nobel India
Goodyear India
Gujarat Reclaim and Rubber.
I am invested in the first two and thinking about the last 2. Thought I can get a smarter second opinion.
Thanks and superb analysis on your site :-)

Charlie said...

Kamlesh good to see a new post on Unfair Value. Thanks for sharing your picks with readers of LWB and unfair value. I used to look forward to your article on Unfair Value and was therefore suprised that you had not posted for quite a few months. I thought you must be quite busy with your primary job as that is where our priority lies, but did not know that you were busy investing time in even more fruitful purpose than stock market. The return on your portfolio has been excellent and I hope that married life rewards you even better. Best of Luck and wishes from all of us LWB members.

Kamlesh Pandey said...

valueinvestor2010, I haven't heard of the companies you have listed here except Goodyear about which I know a little. So I don't have any opinion on these.

Kamlesh Pandey said...

Charlie, Thanks a lot for your best wishes. Family is actually the only 'for life' investment and it's a field that is outside the scope of law of diminishing returns..I can hope to do better than finance.

Vikas said...

Hi Kamlesh,
its really nice to see that you are back.
Your portfolio has given excellent returns. Especially Hawkins Cooker and Venkys.
Unfortunately I came across your blog only in Nov. and missed out on your recommendations as they were already flying by that time.
Anyway now that you are back, can you please give us few still undervalued stocks which may give excellent returns in future(long term)
I am a strict value investor and came across two companies which are a value buy.
1- TFCIL - Tourism Finance Corporation Of India
2 - Bartronics.
Do you think, they can be multi-bagger in few years.
Thanks in advance,

Anonymous said...


Congratulations to you. Hope as you settle down, we get more regular posts from you and the editor.

I know you have great interest in M&M. What are your views on the Ssangyong buy? -AN Blog Search Engine blog catalog EatonWeb Blog Directory Bloggapedia, Blog Directory - Find It! Blog Directory Directory of Investing Blogs Blog Listings Superblog Directory