Our Guiding Philosophy

We at Multi-Act, are staunch advocates of the Austrian Economic approach- with a free market and minimal state intervention- a complete contrast to the Keynesian School of Economics

 

Listening to Numbers

A definitive guide to Quantitative strategies that work

 

Sensex Outlook 2017

We apply our GRAF framework to SENSEX Index to showcase how an Investor could objectively evaluate reward vs risk in the broader market and thus take a more informed asset allocation decision.

 

Investment Insights

Explore our resource center to learn what our experts have to say about Moats, Quality of Earnings, Value Investing, Portfolio Management, Capital Preservation and risk-adjusted returns

 

PMS Newsletter – March'2017

Read our newsletter to get insights into how we are thinking currently and to see our philosophy in action.

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Founded in 1997, Multi-Act is led by Prashant K Trivedi, 54, a CFA charter holder, who is also CIO of his family’s office. It employs over 50 people across 2 offices in Mumbai and Pune. The team comprises mainly CAs (the equivalent of CPAs in USA), statisticians and economists.

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“I believe that the major problem hindering families from realizing their Financial Goals is the inherent clash between the structure of the financial services industry, the behavioural biases (of clients and agents), juxtaposed against the actions of Central Banks.”

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Subscribe to our quarterly newsletters to understand our investment strategy and what we are thinking in the current environment.

Praxeology – The Multi-Act Equity Research Blog

Central Banks, Moral Hazard and the Prospect for Global Markets

Central Banks across the world have frequently used quantitative easing (QE) as a means to introduce greater liquidity into the economy. However, QE has raised the risk of moral hazard: investors will take greater risks, knowing that the potential costs will be borne, in whole or in part, by others. Moreover, QE has increased asset prices, which in turn has severely affected the ‘prospective return’ on all assets.

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why invest in gold

Why Indian Families Must Invest in Gold and Gold Mining Shares

By | Gold, India Equity | No Comments

Gold has been in use as a form of currency or a high value commodity for at least three millennia. Records show that India has had an intense relationship with this glittering metal for almost as long. The picture of an Indian bride is incomplete without her being weighted down by masses of gold jewellery and tales of palaces being inlaid with gold leaf abound.

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Why care about China’s Shadow Banking Crisis?

By | What We Are Reading | No Comments

In this article:

Credit growth is a well-known factor behind bubbles and China’s credit growth in the recent past should be a definite concern. Shadow banking channels (which make traditional reporting obscure) is a further negative. History shows, in many cases, how it ends in the scenario of tightening or loss of confidence among participants walking a tightrope of duration mismatch.

Read on for more insight on shadow banking risks in China.

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Bad News Investor – Buying “Bad” Stocks

By | What We Are Reading | No Comments

In this article:

Bad news investor is a person who invests primarily in stocks of companies that are in news due to bad reasons. But does it make sense? Theoretically it does. You need to be sure as to why your reason for investing in so-called bad stocks is sounder than the reasons of those who are selling.

Cyclical businesses are known to witness regular flows of good and bad news depending on the cycle of their businesses and effects of bad news can be temporary. So what should you do if you hear some bad news about the company whose stock you always wanted to buy? Learn how bad news can actually be good for you here and how to choose what stocks to buy.

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Bad News Investor – Investing on Bad News

 

traditional market conditioning approach

Traditional Market Conditioning: Why We Need to Break Away from It and How

By | Behavioral Finance, Global Equity | No Comments

It is important to remember that all investments are subject to a certain amount of risk. ‘Risk” can simply be defined as the probability of losing whole or part of the sum invested. This probability must be considered before investing. Various tools may be employed to identify investment-worthy stocks such as fundamental analysis, price-to-earnings ratio, technical and quantitative analysis. Fund managers may combine two or more systems to determine the strength of investment.

By and large, traditional investment strategies are based on a fixed percentage mix of stocks, bonds, and cash for varying risk tolerances. It is often the money manager’s job to select the best investment options based on various theories that can be based on the long-term average performance of investment assets. For example, a moderate risk investor is likely to keep fully invested in 60 percent stock and 40 percent bond allocation without taking into consideration the risk. Institutions and fund managers may follow a relative investment approach, which in our opinion, has fundamental flaws as it focuses on short-term horizons and fails to incorporate emerging trends.

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Companies and their Moats: Network Effects

By | Investment Insights | No Comments

When Warren Buffett stated “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” he was talking about companies with wide economic moats. The term Economic moat, famously coined by Warren Buffett, refers to the sustainable competitive advantages that immunize a business from competitors – similar to a moat protecting a castle. Mr. Buffett’s investing strategy is to invest in companies with strong economic moats as they are likely to remain successful over a long period of time.

Different types of Economic Moats offer different competitive advantages. Of all the competitive advantages a company can have, network effect is the rarest that is produced but once it occurs, it is likely to last for a long time.

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Volatility is not the same as Risk

By | What We Are Reading | No Comments

In this article:

Why do people equate volatility with risk? Volatility is NOT the same as risk. Risk is defined as the chance of losing some or all of your investment. The path that the price of the stock takes between when you buy it and when you sell it shouldn’t matter, at least from a financial point of view. In fact, in many cases higher volatility equals LESS risk

The psychological impact of the price changes can convince you to make non-optimal choices with your money. Read this article to find out how volatility and risk are related in an investment scenario and learn how you can minimize investment risk.

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