Comments on Unfair Value: A prudent portfolio

Sorry Dixon. I don't know enough about Page in...

2009-07-30T23:12:03.878-07:00

Sorry Dixon. I don't know enough about Page industries and Kirloskar pneumatic to be able to comment on these.

Kamlesh, Appreciate your sincere rely...

2009-07-30T00:31:52.716-07:00

Kamlesh,
Appreciate your sincere rely.I do agree with you 100% on castrol.However being from Kochi,Kerala,i have not seen the way indraprashta or Guj Gas operates.However i was watching closely Page industries for their asset light model and kirloskar pneumatic.Have you gone through those.Just wanted to know the same

As you would know, I stay away from giving stock t...

2009-07-28T21:16:46.866-07:00

As you would know, I stay away from giving stock tips and only refer to individual stocks for their educational value rather than their profit potential.

If you have lesser constraints, as you have mentioned, you can pick companies with stronger brands even at fair prices and hold term for long. Another interesting area could be the projects with long gestation periods which have potential to give good return on invested capital. Such companies tend to get underpriced during their investment phase and cashflows later on make up for the wait.

Kamlesh, Well framed portfolio- not based...

2009-07-28T03:57:12.159-07:00

Kamlesh,
Well framed portfolio- not based on returns but on pure investment philosophy.
However what you recommend for a person looking for higher returns with longer time horizon.Not worried about capital protection,willing to take risk and could digest most of the industries

You are right about suboptimal use of cash at Venk...

2009-07-20T23:18:28.612-07:00

You are right about suboptimal use of cash at Venky's. It is a cigar butt stock selling below book value and giving good dividend yield. And it's safe. This company isn't going to vanish into thin year like many real estate firms will and it can definitely throw positive surprises.

Professional management is definitely an issue. Smaller companies suffer from lack of depth in management with control passed down the family tree. In long term it only takes on bad apple in family to bring down a business. Part of the reason why I stick to large companies.

Having said that, a portfolio aimed at capital protection and dividend income can include such stocks. In such cases, the key is to keep expectations low and exit when you get good price.

Corelating 2 articles of yours and point of usage ...

2009-07-20T05:12:07.575-07:00

Corelating 2 articles of yours and point of usage of funds. Venky's too is very inefficient in usage of funds given the fact that they have 92+ crores in loans and they have merrily invested 52 crores in multiple mutual funds.

Secondly - should management ageing be a factor to consider while investing? Given the fact in many of the companies line of succession is never well planned as is most of times inherited by their sons and daughters - this is with reference to Venkys again!

Good set of stocks in a portfolio which are famili...

2009-07-20T00:24:10.289-07:00

Good set of stocks in a portfolio which are familiar businesses to a common man.