Summary

• Prioritizing Temperament: Durgesh Bhai emphasizes that temperament is more crucial than knowledge for investment success. He believes conquering greed and fear is essential for making rational decisions.
• Understanding Market Psychology: Durgesh Bhai views markets as a subset of nature, subject to cycles and unpredictable events. He highlights the pendulum effect of market sentiment, which creates opportunities to buy undervalued companies.
• Focus and Scalability: Durgesh Bhai stresses the importance of focus for both companies and individuals. He observes that Indian companies often struggle with scalability and delegation, hindering their growth potential.
• Importance of Management: Durgesh Bhai believes trust and reputation are paramount when assessing management quality. He advises looking for leaders who are passionate, demonstrate integrity, and can effectively delegate.
• Contrarian Investing: Durgesh Bhai's emphasis on independent thinking and understanding market psychology aligns with the strategy of buying companies the market undervalues. He believes significant returns are possible when market perception shifts to recognize a company's true worth.
• Learning from Mistakes and Missed Opportunities: Durgesh Bhai encourages investors to view mistakes and missed opportunities as valuable learning experiences. He acknowledges his own errors, emphasizing that omissions can be more significant than realized losses.
• Predicting rating (valuation) is tougher but important: Most market participants are fixated on earning, whereas the rerating/de-rating of multiple can be swift and can change the entire equation.
• Management strategy: Never try to second judge each and every action of management. Think how much I will lose if management is wrong.
• Ignore macro and political noise: In each phase there were different reasons for rise & fall and hence each phase tested the patience and conviction of the investors
• Return on time invested: What not to study is as important as what to study..

Copy of Presentation given in CFA society on above topic

Lessons-From-History-CFA-Society-Delhi.pdf

Link to the Lecture given in CFA society in Dec 2018

https://www.youtube.com/watch?v=ttHjf9fMTZQ&t=312s

Buy companies/Management which market thinks are bad but you think are good. Maximum money is made when perception changes

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Maximum money is made when perception changes

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Durgesh Bhai's investment philosophy strongly supports the idea of buying companies or managements that the market currently undervalues but that you believe hold strong potential. He emphasizes the importance of independent thinking, understanding market psychology, and having the conviction to go against prevailing narratives to achieve significant returns. Here's how Durgesh Bhai's views connect to this strategy:

• Market Pendulum and Mispricing: Durgesh Bhai highlights the market's tendency to swing between extremes, creating opportunities to buy companies that are unfairly punished due to temporary setbacks or negative narratives. He observes that companies rarely stay in a "fair price" zone for long, implying that mispricings are common.