The SOIC Podcast

Market structure in which a business operates plays a vital role in its success and longevity. We often see that businesses that operate in consolidated profit pools or the ones that are pure monopolies command a premium valuation in stock markets. However, we believe that just being a monopoly isn’t enough to guarantee higher returns for a very long period of time. There are various other factors that must align to assure the long term dominance of such businesses. Today we bring you a video where we will cover 9 such businesses that may not be pure play monopolies but the way they have conducted their business in the past has given them an edge above rest.

We will cover following companies Garware Technicals, Evolution Gaming, Balkrishna Industries, Vinati Organics, Titan, Syngene, CDSL , CAMS, and Varun Beverage.

Investing is an Art whether it's investing in Equities or other asset classes like Real Estate. We call it an art for a reason. In Science, there are fixed parameters, once they are met a reaction is bound to happen. However, in Art, many times we need to adjust the whole rules of the game to arrive at our projected point. Here we will answer a very pointed question that keeps propping up in our emails. To answer we took this opportunity to make a video and clear some notions about this much loved topic for larger masses. No asset class is entirely good or bad. Our aim is to make decent to handsome returns on our capital, if this is met, it actually doesn’t matter which asset class was the vehicle for these returns.

This covers key reasons for our viewpoint on this hot question. We will introduce concepts like: how to calculate P/E for any Asset Class and also introduce a new way of investing in Real Estate properties that is gaining popularity among many investors (we are not talking about REITs). To know more about Real Estate investing and learn some simple yet powerful metrics you can use to decide for yourself. 

“Housing really affects all aspects of a person’s life.”

- Anonymous

In today’s era where there is a constant debate going on about whether it makes sense to own a house or it is better to rent one. People are busy making their case strong by making excel sheets of all sorts. However, for some owning a house is not just a financial decision, it is more than a financial investment. Our purpose is not to debate whether one should own a house or rent one, what we are interested in is a bunch of companies catering to the Affordable Housing Sector in our country.

We’ll discuss 3 companies that are growing at 20%+ every year and are servicing the affordable housing market. We will do business analysis, P2P analysis and detailed thesis and antithesis pointers for all the 3 companies. Antithesis is what we give great importance to as this is what saves us when the thesis goes bust. Business Transfer Risk is a major risk in this sector as customers have no loyalty and can easily shift loans to a Bank or other NBFC for lower interest costs. You’ll understand the sector in depth and growth levers that may propel the story further.

“Know what you own, and know why you own it.”—Peter Lynch

Doing fundamental analysis and knowing the language of the business is one of the most important aspects in investing. Most new investors who have an inclination towards fundamentals based investing try and master this. However, we often get asked about what follows next once you're done exploring the world of fundamentals. Many new, young and budding investors who come in our contact have a very basic questions like what to do next? and how to research on their own? once they learn the tools of fundamental investing. We are going to answer this question for you and all by taking you step by step to answer this question. You will get an idea about what type of industries you should study and what are various sources that can be relied upon. We will also guide about the key metrics that need to be tracked.

“Banking is a very good business if you don’t do anything dumb.”—Warren Buffett

In my journey as a teacher, I have encountered people having loads of misconceptions about Bank & NBFC stocks. There are many reasons behind this notion. Some of it can be attributed to the 2 financial crises we have witnessed in the last 2 decades. However, if we try to understand things with an unbiased mind we can soon see how simple the business of banking or lending in general is. Where people go wrong is the way they manage this business as money is the raw material and finished product for this industry. Banks are sort of platforms for accepting and lending money and it involves leverage. Now leverage has a characteristic to amplify the outcomes. Good becomes better to best and bad becomes worse to worst.

We will look at a very interesting and probably the most important lever in banks & NBFCs that can provide us a guiding light on the path ahead. This one concept can help alleviate your fears and lack of understanding about a Bank’s Road to Success in under 10 mins

“Never stop thinking about how to delight your customer. Not to satisfy your customer, but delight your customer.”

- Warren Buffett

We often talk about consistent compounders and coffee can investing. However, there are few companies that can fit the bill. To understand more about such businesses, we need to break the term in 2 parts. Consistency is not something that is to be done, rather it is a practice. When practised regularly it becomes a way of life and this then bears the fruits of Compounding. We bring you one such consistent compounder listed in India, it still has a huge runway for growth ahead of itself. It took close to 25 hours of research to prepare for this mammoth business' analysis, or we can rather call it a deep dive analysis of sorts. As we always want to serve you content we ourselves would like to consume, nothing is left half baked at SOIC.

We will see the magic and strength cash flows can provide a business that has perfected one of its core and how these growing cash flows can propel the business into exploring more and more optionalities. If one more succeeds it can be a huge growth driver for the future. Let’s explore the world of this consumer discretionary giant that is in no mood to stop. 

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.”

—Benjamin Graham

We as students of this market constantly aspire to learn new things that will help us become better investors. In this video, you’ll learn something very new and distinct. We will take a look at P/E—price to earning ratio— and have a very different take on it. Buying the dip or staying away is not an easy choice once one is in the bear markets. Hope we will allay fears and bring a new understanding about how market cycles work and how we can benefit from them.

Intro: Psychology/Earnings

Earnings

Psychology

“Successful investing is about managing risk, not avoiding it.”- Benjamin Graham

Investing is like watching the paint dry and not like racing the cars, that is why it is called an art and not a sport. However, when it comes to investing in cyclical sectors, one can enjoy it as an art as well as a sport. In cricket, we wait for the right ball to hit it out of the park for a SIX. It’s the same with investing in cyclicals: we wait for the right time to make an entry and a time to exit when we see signs of euphoria. Today, we look at a very interesting Auto Ancillary company that is dealing cards differently and if dealt right it could be a 3 aces type situation.

As the words above tell us, managing risk is the essence of investing right. Be prepared with all the thesis and antithesis pointers. Keep a track of the developments and strike the hammer if and when iron is hot. We have covered the whole sector in depth and laid out the map for you to reach the destination or avoid the route if it is too foggy.

This video covers: 

Auto Sector Overview

Reasons for Success

Sterling Tools Analysis

Thesis & Antithesis Pointers 

“Be a continuous learning machine. Knowing what you don’t know is more useful than being brilliant.” - Charlie Munger  

Intro

First Company

Second Company

Conclusion

We keep discussing the importance of saving and investing on our YouTube channel. Today we want to discuss how our habits can have ramifications for our future. Good habits will lead to favorable outcomes and cultivating bad ones will be detrimental. Habits are important at a personal level and even apply at a much wider level too. We’ll look at how bad decisions taken at leadership level can destroy a prosperous nation.

Let’s discuss what went wrong in Sri Lanka that led them to this treacherous situation and take some very important lessons from it.