The SOIC Podcast

"The first rule of compounding is to never interrupt it unnecessarily." -Charlie Munger

Dear Tribe Members, I often come across investors who are dedicated towards their financial goals 10-15-20 years out. However, after 2-4-6 years of SIPs demotivate them with the quantum of returns. This leads to many of them discontinuing SIPs and investing their corpus in some other assets or even encourages some of them to take more risks to increase their returns. What we need to understand about compounding is that the fruits of compounding are actually back ended and one needs to show great patience to reap a full bounty and achieve their financial goals or even better than that. In this episode, I will tell you with example about the price of the mistakes one may commit by discontinuing their SIPs.

"There is no such thing as a worry-free investment. The trick is to separate the valid worries from the idle worries, and then check the worries against the facts." –Peter Lynch

The legendary investor Peter Lynch had a peculiar style of investing and one of his favourite category of stocks was Proxies. The whole idea of proxies is so fascinating that the target industry’s direct participant may be a mediocre business whereas the one serving as its proxy may be a terrific business. However, when a business’ fortunes are tied to the fortunes of an industry which has an element of cyclicality built in, it becomes an important factor to keep a close watch on the business trajectory of the whole industry.

The business we will discuss is CAMS–Computer Age Management Services Ltd. We'll take a close look at the Sources of Revenues, Competitive Advantages, Sources of Risk, Thesis-Antithesis and Valuations. There are a few peculiar characteristics in the CAMS business that make it durable as it is functions as a Secretary of Mutual Funds that have been here and will be here for the long haul and some make it fragile as the Growth in the AUM of AMCs will outpace the Growth in the Fees for CAMS. This episode will help get a complete understanding of CAMS’s business model and where it could be headed.

This was a much sought after business analysis from all of you and we really gave it our all to bring you a detailed episode. We hope to keep adding value to your investing journey. 🙏

“Even if you’re correct in your fundamental analysis, investor perception is what creates buy orders and you are going to need big buy orders in your stock to move it up significantly.” -Mark Minervini

There are several ways to Nirvana, we believe one should not confine themselves to a particular way of thinking. If you are following a particular path, you should try to keep refining your trajectory to reach different milestones in your journey. On the way you will encounter thoughts, studies and philosophies that may differ from your original way of thinking. Don’t shy away from embracing a new pattern of thinking and incorporate that into your original process to achieve superior results. This is very similar to Bolt-On acquisitions, the legendary investor Warren Buffett talks about. If you don’t have a particular capability in a business, then you must acquire that particular capability to make your business even more robust.

This is the thought that nudged us to explore the world of Technical Analysis. Though our core mindset will always be of assessing businesses by analysing the fundamentals, we find some very useful tools in technical analysis that can refine our results. We have started a series of Tech-Funda, wherein we will cover some very interesting tools that can immensely help Fundamental or Business Analysts like us. In this episode, we'll discuss Stage Analysis: Technical Analysis Tools for Multibaggers & Exits. This very simple yet powerful tool was first introduced by Stan Weinstein in his books and since then it has helped many budding investors like us.

"If you’re great in this business you’re right six times out of ten. But the times you’re right, it overcomes your mistakes. So you have to find the big winner.” - Peter Lynch  

The famous investor Peter Lynch has had no shame in admitting that he has been right 6 times out of 10 in his choice of stocks. However, when he was right he made the most out of it and his losses were limited by having objectivity and selling right whenever he was wrong. I also follow this philosophy ever since I started investing and building my portfolio to keep a tight focus on the principles according to what I learnt from the market, stayed objective and made decisions to buy and sell as the circumstances changed. I have been getting a lot of queries about my portfolio and the framework I follow to construct it. I will tell you all about it in this episode and hope you will make the most out of my own personal learnings. This episode will take a look at 6 Key Lessons for the Retail Investors which we believe will add immense value to build one’s own portfolio. I’ll start by explaining how one should know themselves and have their objectives clearly defined and in the end I’ll leave you with my framework for allocation. We hope to keep adding value to your investing journey.

“The first rule of compounding is to never interrupt it unnecessarily.” - Charlie Munger  

Big ambitions require extra effort & special celebrations for every milestone. SOIC turned 2 although it feels like we started yesterday, this has been an amazing journey where we covered a lot of ground all because of the love & support of our SOIC Tribe. We wish to intensify the spirit of learning & teaching by 2x on this occasion of our 2nd Anniversary. To make the celebrations sweeter we have a Special & Exclusive Anniversary Special Offer for you in this email. 

This special episode will cover 7 Unheard Stocks which aren't discussed much in the investing circles. These stocks have been selected based on a framework we follow at SOIC. India is a growth market & it'll be an injustice to a portfolio if the growth is missing. All 7 Stocks have been growing at a decent rate & future visibility is also intact. We have covered the overview of the business, past trends & points that make these businesses Interesting. 

As a bonus we have shared a list of some more unheard stocks that have missed the list of 7.  We hope to keep adding value to your investing journey. A Special Occasion needs Special Gestures. As our appreciation to all of you for your love & support, we share an exclusive coupon to get flat ₹2,000 on the SOIC Membership.  Coupon Code: SOIC2 

We are very grateful to all the listeners, learners, followers & tribe members for making this possible.  

Further Unheard Stocks!  1. SRF 2. KEI Industries 3. Varun Beverages 4. ICICI Bank 5. Syngene 6. APL Apollo Tubes 7. Saregama 8. Radico 9. Metro Brands 10. Vedant Fashions 11. PI Industries 12. Gujarat Flurochemicals 13. Trent Limited 14. Craftsman Automation 15. Sundram Fasteners 16. Navin Fluorine 17. Sumitomo 18. CCL Products 19. Polycab 20. LTI 21. Titan

“Always take the high road, it’s far less crowded.”  - Charlie Munger

In the words of Mr. Warren Buffett, "a business is a moving picture and not a static one." We have to bet on the future probabilities in a business and it's important to stay abreast of the developments taking place. A few months ago we analysed Varun Beverages Ltd. in detail. However, this business like any other business, is a moving picture we should keep ourselves updated about. The results this time are really important and could turn out to be a leading indicator of the future course the business might take.

The energy drinks market is growing at blitzscale and Sting, an energy drink from the stable of Pepsi is manufactured, marketed & distributed in India by Varun Beverages, is growing ahead of the industry. In 2017, the sales from this newly launched product was ₹0 and fast forward today its contribution to Varun Beverages sales is ~₹850 Cr. This is a high margin product for the company. Further, there are some very interesting business updates you shouldn’t miss.

We hope you’ll like this brief update on the business & its earnings. 

“Buy companies with strong histories of profitability and with a dominant business franchise.” —Warren Buffett

Focus is the key element in all spheres of life. We can observe that businesses with focused have a greater chance of succeeding than those ones involved in different spheres. This episode will analyse a boring business from a boring industry that has been an immense wealth creator and a 17x multibagger. The name of the business is CCL Products (India) Ltd. (Continental Coffee)

We will discuss a Mental Model, Industry Overview, Company History, Competitive Advantages, Growth Triggers, Thesis-Antithesis and Valuation Hints for you to help in the Homework given. Hope you enjoy the aroma of this coffee episode as much as we enjoyed making it.

We will keep working hard to add value to your investing journey.

Timestamps (you can use the seek bar)

(00:00) Intro: How Coffee Works

(07:22) CCL's Business Model

(19:58 Competitive Advantages

(25:18) Growth Triggers

(33:12) Risk Pointers

(35:58) Valuation Hints

“If you don’t find a way to make money while you sleep, you will work until you die.” - Warren Buffett

SOIC believes that an investor should approach the stock markets with the sole purpose of multiplying their capital. There are several ways to compound wealth in the stock markets and we believe that one should take the road they are most comfortable with, with potholes and sudden twists and turns. We have been receiving requests and it was on our to do list as well to share detailed information on Dividend Investing. However, we never aim to provide you with superficial information and always try to dig deeper to find maximum value possible. It is our constant effort to give you information that no one will share openly.  

For this Diwali Special podcast on Dividend Investing we will cover concepts that No One Will Tell You About Dividend Investing: what Dividends are, Dividend Yield, Dividend Payout Ratio, Companies to avoid, Companies to look at, Pros & Cons and in conclusion our view on Dividend Investing. 

We tried to simplify things to the most basic level and you can use this knowledge attained in your portfolio investments.

“The big money is not in the buying or selling, but in the waiting.” - Charlie Munger

A business is a moving picture and not a static one, it keeps evolving and taking the course required for its growth. We believe in the strategy of keep tracking businesses that seem interesting to us. As nothing is permanent, one needs to keep assessing the new information that crops up. We'll look at an NBFC from the well respected Murugappa Group, Cholamandalam Investment & Finance Company Ltd. There have been many ups and downs through the journey of this NBFC and today it is rated as one of the best, if not the best NBFC in the country. Afterall commanding a Price to Book multiple of over 5x is no mean feat.  

We'll cover the Overview & History of the Murugappa Group, Product Segments of Chola Finance, their Strategy going forward, Valuations, Thesis and Antithesis. It isn’t often that we come across business families of such repute who follow great culture and ethics within the group.

“Over time the skill with which a company's manager allocate capital has an enormous impact on the enterprise value." - Warren Buffett

In the journey of investing and studying various businesses, we come across different business structures. Recently we analysed SRF Ltd. where we saw how a conglomerate used the fungible cash flows to erect other businesses and now we'll analyse another such business which is into Auto Sectors but inside it housed are full fledged segments of auto industries. This business is well known to all of us, Tata Motors Ltd. , and we all must have used their cars at some point or the other and will continue using them in future. TATA is synonymous with trust in India, let’s study in detail how this engineering company transformed into a Multinational Auto Conglomerate.  We'll discuss in detail about the history, business segments, EV trajectory and a very special & important SOTP Analysis (Sum of the Parts). This SOTP Analysis will add immense value to all listeners.