A few points at the start.
I have started sharing snippets of investor presentations that I find interesting on Twitter and LinkedIn. If you are interested, then follow either of the handles. Some very interesting insights are coming out.
“The power of human thought grows exponentially with the number of minds that share that thought.” ― Dan Brown
The anatomy of the self-destroying speculative boom is rather simple. Over a period of time with advancing technology, an increasing national product, and a reliable tendency in the economy to inflation, most common stocks will rise in value. As this happens people are attracted to the market and this causes the stocks to rise more. This further gain attracts yet more people and gradually, perhaps over some years, the purchases of people looking for this increase in value come to determine what stocks are worth. Prospective earnings are still mentioned but as an afterthought — or to show that there is still some tie to reality…
Then, at some stage, the supply of buyers runs out — or dries up. Or there may be public action to dry up the spring. The increase falters. This causes the more knowledgeable or the more nervous to get out. This causes the market to falter more. More decide to get out and the slow upward climb is replaced by a precipitate drop. As I suggested earlier, there usually will be some earlier episodes of nervousness before the climatic fright arrives. The greater the preceding buildup, the more stocks have come to depend on a continuing influx of buyers attracted by the prospect of the capital gains, the more violent will be the eventual collapse.
Be a long-term investor: The great rewards available for long-term investing only exist because it is so difficult to do. Doing very little feels like the easiest task in the world, but the temptation to act is so often overwhelming. Every day brings a new story, a new doubt, a new opportunity. A new reason to be a short-term investor.
Withstand poor performance: Spells of weak performance are inevitable for any strategy, fund or asset class. These are easy to deal with in theory, but the lived experience is an entirely different proposition. The stress, anxiety and doubts that occur during difficult periods will lead us to make poor decisions at just the wrong time.
Avoid dangerous extremes: Most of what we witness in financial markets is just noise, but extremes matter. When performance, sentiment and valuations are at extremes (either positive or negative) the opportunity is for investors to take the other side; unfortunately, the pressure to join the crowd will likely prove irresistible.
This is a masterclass by Kuntal Bhai. A masterclass on a huge range of topics from picking stocks, problems with DCF, macro, currencies et al. No summary does justice to this, so I suggest you actually listen/watch this fully, at 1x speed, without multitasking.
Classifies investors into three types:
Narrative-driven (story-focused).
Numbers-driven (ratios, growth).
Accounting-driven (how numbers are constructed).
Advocates “triangulation”: qualitative narrative, quantitative metrics, and accounting substance must all align; viewing only one is like a blind man touching one part of the elephant.
Example of accounting red flag: a company whose net worth was lower than cumulative funds raised despite reported profits, indicating economic destruction hidden behind reported numbers.
Emphasises understanding economic substance (real business economics) rather than blindly trusting reported figures or screeners.
Critiques traditional DCF:
Many moving parts (growth, margins, reinvestment, discount rates, terminal growth) make it “fiction writing in Excel” despite solid mathematics.22:37
Small changes in assumptions (discount rate move from 1% to 5%, terminal growth 4% vs 6%) lead to huge changes in fair value, like “a small telescope shift showing a different galaxy.”
Prefers reverse DCF (reverse discounted cash flow: backing out implied growth from current price):
Market already provides a collective enterprise value; instead of reinventing fair value, infer what growth and margins are embedded in the price.
Example: if reverse DCF says Nestlé must grow cash flows 20–25% for 15 years, you interrogate whether product portfolio, penetration, and innovation make that plausible.
Benefits of reverse DCF:
Gives a checklist of what to watch (new products, buybacks, capital allocation) and explicit sell triggers if those don’t materialise.
Shifts focus from “What is fair value?” to “What must happen in reality to justify today’s price?”
References key readings:
Stephen Penman’s “Accounting for Value”.
Aswath Damodaran’s “Narrative and Numbers”.
Michael Mauboussin & Alfred Rappaport’s “Expectations Investing”.
Defines the real job of an investor as finding mispriced opportunities where:
Your view of business economics differs from the embedded market expectations.
Strongly rejects “Buy At Any Price (BAAP)”:
Calls it a marketing tool for fund managers struggling to justify portfolios.
Points out that compounding requires price discipline: overpaying for even great businesses (e.g., Nestlé) can lead to decades of poor returns.
Highlights extremes:
At a sufficiently low price, even a poor business can deliver multibagger returns.
At a sufficiently high price, even top-quality franchises can be wealth destroyers in real terms.
India’s structural weaknesses:
Persistent current account deficit; imports (energy, electronics, gold, defence) exceed exports.
Fiscal deficit funded via taxes below spending; significant share of government expenditure is consumption subsidies (fertiliser, LPG) rather than productive capex.
Currency concern:
Rupee depreciation acts like a tax on productivity and wealth; he argues you cannot be a superpower with a structurally weakening currency.
Example: earlier 1 INR bought 2.5 THB; now ~3 INR for 1 THB, implying Thai counterpart needs ~12–14% less effort to match Indian wealth over time.
Disagrees with simplistic “weak currency boost exports” narrative:
Notes that India’s export base is too small relative to imports; falling currency hasn’t meaningfully aided exports compared to nations like China with strong export ecosystems.
Positive view:
Sees government policy as increasingly proactive in manufacturing, renewables, defence; believes India can be a credible manufacturing alternative to China over the coming decade.
Explains foreign investors’ behaviour:
Foreign capital chases returns where valuations, yields and growth are attractive (e.g., past opportunities in France, China with dividend yields above risk-free rates and buybacks).
Current Indian market gaps:
Under-representation in AI, biotech, robotics, cybersecurity and other “new-age” sectors in the listed space, even though startup ecosystems in Bengaluru/Hyderabad/Pune are strong.
Notes structural friction:
India uniquely taxes foreign portfolio investors unlike most countries; derivatives income taxed in country of origin, making Indian derivatives very liquid relative to cash.
Expects:
Rotation of foreign capital driven by momentum and sectoral opportunity, but remains long-term optimistic if reforms and manufacturing/export push continue.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Founder, Intelsense Capital, SEBI Registered RA (Cupressus Enterprises Pvt Ltd - INH000013828)
Cofounder & Fund Manager, Shree Rama Managers PMS (INP300007341)
Registration granted by SEBI and certification from NISM do not guarantee the intermediary's performance or provide any assurance of returns to investors.
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