The blog has a new home
Understanding and Applying Value Investing Principles
by Rohit Chauhan
1y ago
After 14 Years and 600+ posts, I have finally moved this blog to my own site. Feels good to have full control of my content. Hope you will like it. I will be posting to the new blog going forward. If you are interested in getting email updates, i would recommend signing up on the new blog ..read more
Visit website
Email updates from the blog
Understanding and Applying Value Investing Principles
by Rohit Chauhan
1y ago
As you are aware, I have migrated the blog to a new site - https://www.valueinvestorindia.com/ and will be posting on it in the future. If you wish to get direct email updates, I would suggest subscribing on the new site via the menu option shown below. I am not migrating any emails automatically to ensure that only those who are interested in this option, will do so on their own choice   ..read more
Visit website
Building an edge
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
In an earlier note, I wrote about the three factors which contribute to outperformance (doing better than an index). I expanded on the third factor in the most recent update. Sources of outperformance Superior performance versus the indices can usually be broken down into three buckets a.     Informational edge – An investor can outperform the market by having access to superior information such ground level data, ongoing inputs from management etc. b.     Analytical edge – This edge comes from having the same information, but analyzing it in a super ..read more
Visit website
The journey matters
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
Following is from my recent annual update to subscribers The journey matters I wrote about bitcoin in the 2017 update and compared it with small caps and midcaps. Since then bitcoin is down 75%, midcaps are down 16% and small caps are down around 30% on average. A lot of investors believe they have a lot of tolerance for risk. I can tell you from personal experience, that most of us over-estimate our tolerance to risk, me included. There is a lot of difference between intellectually thinking of a 30% loss versus experiencing a real 30% loss in your portfolio. For a check, think of how you ..read more
Visit website
Missing the forest for the trees
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
I wrote the following note to subscribers, in context of a specific position. I have made edits and additions to the original note for this post. ------------------------------------------- I have a different set of expectations from this position. The management of the company is quite conservative (rightfully so) and as a result has always grown at a measured pace without taking on too much debt. As a result, the profit growth has never been too high, but at the same time the company has always been profitable even in the worst of the times. Due to this cautious approach, we cannot expect ..read more
Visit website
Dont worry, there will be pain
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
A comment made to subscribers when adding to the portfolio: I am not calling out the bottom of the market or anything of the sort by making the above transactions. As I have repeated often in the past, no one other than liars and self-delusional people can predict what the market will do in the short term. The best approach always is to look at each individual company closely and evaluate how it will do in the next 3-5 years including under stressful macro conditions. As we add to the model portfolio, a few positions will not work out – that is a given. The key is to ensure that we do well ..read more
Visit website
Blood on the streets
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
I sent out this note to the subscribers over the weekend. Reproduced below with edits I am not going to talk about risk again. I have been speaking about it for the last 12-18 months. The time to prepare for the storm was when the skies were clear. We have a full storm now. We started reducing some of the fully valued positions last year and raised our cash levels to almost 30% of the portfolio. We were at 29.1% of the portfolio in cash at the start of the year. We now have 33.3% of the portfolio in cash as of last week. In effect, we have shuffled between the existing positions, but have n ..read more
Visit website
Evaluating management: Bayesian reasoning and fallacy of obviousness
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
When I invest in companies, I don’t vouch for or give a character certificate to management. I look at the past and current behavior and then try to arrive at a judgement. In majority of the cases, past behavior is a good indicator, but we do get surprises from time to time. If new developments make me change my view, I will not try to defend my past decision which was made on a different set of facts. The key is to rationality is to evaluate new facts appropriately and move on from there. As John Maynard Keynes said a long time ago – when facts change, I change my mind. What do you do sir ..read more
Visit website
Cash and portfolio rotation
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
This short note went out to subscribers recently You may have noticed that we have been churning the portfolio – selling down old positions and replacing them with new ones, but have not utilized the cash. This has been on purpose as I want to dispassionately look at all our positions and exit those where I feel that the overall risk reward equation could improve by replacing it with something else. In some cases, the expected returns of the new position may still be the same, but the company has more avenues of growth and has shown consistent performance in the past. In effect the risk prof ..read more
Visit website
An underappreciated edge
Understanding and Applying Value Investing Principles
by Rohit Chauhan
3y ago
I wrote the following note recently to our subscribers. Hope you find it useful too. -------------------------------------------   I wrote extensively on risk in the last year’s annual update (read here) and highlighted the fact that cash levels in the model portfolio were at an all-time high. (around 30%). The reason for pulling back in, the latter part of 2017, was due to the frenzy and crazy valuations in the market. I was no longer comfortable with the risk reward situation and decided to stick to our process even if it meant that we had to forego easy returns. I think we delivered f ..read more
Visit website

Follow Understanding and Applying Value Investing Principles on FeedSpot

Continue with Google
Continue with Apple
OR