https://www.linkedin.com/in/svenkatesh (Venkatesh) is an author, speaker, investor and entrepreneur. He has spent 22 years in the Asian markets in senior roles across listed equities (with JP Morgan and Credit Suisse), private equity (with Macquarie and AMP) and corporate strategy (with Masan Group). He is the co-founder of strategy consulting firm Dhyana Partners, and has served as a director on the boards of several companies. He is also the author of suspense thriller, KaalKoot: The Lost Himalayan Secret, which has been a No. 1 bestseller on Amazon.

In the listed equities space, Venkatesh has held several pan-Asia roles, including as head of India equity research at JP Morgan, and sector head for the Asian metals team at Credit Suisse and Deutsche Bank. He led the Credit Suisse Asian metals team to No. 1 position in the Institutional Investor survey in 2002. At Macquarie, he was a senior member of the team investing and managing US$1.2 billion funds in the Indian infrastructure sector, and was a director on the board and an investment committee member for the SBI Macquarie Infrastructure Fund. He led investments in Indian infrastructure assets at AMP Capital, and headed group strategy at Masan, one of Vietnam’s top-three largest private sector companies by market capitalization.

“Within a year both revenues and margins were under severe pressure and there was a fall in earnings. Eventually the stock halved so I lost 50% before I finally sold out last year. (This means) I held it for two years and lost 50%.”

- S.Venkatesh

Worst investment ever Sudden changes turned tables for ‘perfect’ investment In 2016, Venkatesh acquired what he thought would be a good long-term investment – and the company’s profile showed it had good potential based on its statistics and then-current standing. It was a large, generic-pharmaceutical manufacturer, one of the top three in India and 20th in the world. With sales of more $1.5 billion, market cap running into billions of dollars, good return on capital, great management, and an excellent track record, one could easily ask: “What could go wrong?”

“I felt that the company had things going for it: new product launches, and so on … so I dismissed the market concerns.”

- S.Venkatesh

Despite the company’s overall performance in its niche, its fundamentals and sentiment toward it slid unfavorably. Venkatesh said, at that time, the US market was experiencing “huge pricing pressure”: a severe decline in prices and an increase in customer consolidation. In the same year, the US government also implemented stricter rules over imported goods and drug pricing. This led to “stricter inspections and adverse alerts”, which in turn equate to higher import costs, with the product demand remaining constant, if not gradually decreasing due to increased local and/or foreign supply.

Disregarding the red flags, Venkatesh held onto the investment, thinking that the market would eventually make a comeback, that the pricing pressure would stabilize and then return to its historical trend, and that new product launches would aid this recovery. He also thought the regulatory environment was a sentiment issue. This worked for the first few months. However, after a year, the effect of the changes in the US market was drastically felt in revenues, margins, and earnings, and after one more year, the stock’s value was halved.

“Rather than holding it all the way down, it’s better to cut losses and get out of a position that has gone wrong. But by the time I finally did that … I was already down 50%.”

- S.Venkatesh

Some lessons Investing is a lot of hard work Stay on top of your stocks’ fundamentals all the time. Even with the apparently safest company in the world, conditions can change very fast.

Pay attention to margin of safety in valuations Sometimes at the top of a bull market, investors can feel that if the stock is good, they can pay more for it, which might work for