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Investment Insights

Holistic Approach to Identify High Quality Business

A Holistic Approach to Identifying Quality Businesses

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The advantages of focusing on quality cannot be understated. By investing in quality you significantly reduce the probability of permanent loss of capital.

And since the business is strong, the long term returns are far superior to average quality businesses. Thus investing in quality is the perfect recipe to generate superior risk adjusted returns. But quality has become a generic term today when it comes to investing. No investor would tell you that they don’t invest in quality stocks. But the definition of quality is different for everyone and one might even say that quality is often in the eye of the beholder.

Rather than debating on the various definitions of quality we would like to discuss how we look at quality in Multi-Act.

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Investor thinking about how long to stay invested

How Long Should You Stay Invested?

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There is a lot of literature out there on investing that mostly focuses on buying decision. However, you would find very limited discussion on what to do once you have bought i.e. when to sell. Possibly the reason for it could be there is no correct answer to this question. We would like to approach the sell decision through a different route. Thus rather than focusing on when to sell we would like to address this by answering the question – How long to stay invested? We believe if we try to bring in a disciplined approach to our sell decision in addition to the buy decision, we would avoid the behavioural pitfalls that most investors have to go through.

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Indian Generic Pharma Companies

Indian Generic Pharma Companies – Miracles of a Shaman?

By | Case Studies, Investment Insights | No Comments
‘Well, in our country,’ said Alice, still panting a little, ‘you’d generally get to somewhere else — if you ran very fast for a long time, as we’ve been doing.’

‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. 

-Lewis Carroll

(Through the Looking Glass)

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why HNIs must invest in gold

5 Reasons Why HNIs Should Invest in Gold

By | Gold, Investment Insights | No Comments

Ultra High Net worth Individuals (UNHIs) and High Net worth Individuals (HNIs) know that successful investing entails diversifying their assets and building portfolios that can handle any form of turmoil in the markets. The secret to this is to build portfolios with assets that are contrary to each other to a certain extent.  Prashant Trivedi, Chairman of Multi-Act Trade & Investments Ltd. states “Essentially the way in which the portfolio is constructed is, you give one-fourth to different asset classes – one-fourth to cash (and/or gold), one-fourth to fixed income, one-fourth goes into equity and one-fourth is given to real estate”.

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Best Investment Quotes by Famous Investors

7 of the most Inspirational Investment Quotes

By | Investment Insights | No Comments

There are gurus and there are finance gurus. Most people approach the markets like a maze or a puzzle expecting to be confused and overwhelmed losing their way in the many alleyways and avenues in the investing world. There are some who are more enlightened when it comes to navigating finance with fresh approaches and successful strategies that serve as guides for others. We’ve put together what we consider to be some of the best investment quotes from these experts! Read More

Indian Investors should invest globally

Investing Globally: Why Indian Investors Should Consider Global Allocations

By | India Macro, Investment Insights | No Comments

When discussing portfolio construction with Indian investors, one question that frequently comes up is whether it makes sense for an Indian investor to invest outside of India. Indian equity markets have compounded capital at high double digit rates over the past thirty plus years and with the Indian economy expected to grow at the fastest pace of the large economies globally, investors continue to expect great returns from the Indian equity markets. Why then invest outside India? Read More

Calm investor making investment decisions

Staying Calm and Keeping Behavioral Biases Aside while Investing

By | Behavioral Finance, Investment Insights | No Comments

“The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.”

 – Seth Klarman.

When Warren Buffett famously stated that investing was simple but not easy, he meant that the rules we ought to use in order to make good investment decisions are easy to learn but actually adhering to them is difficult. Disregarding rules while investing cannot be attributed to open rebellion but can be ascribed to the basic human survival instincts that have been ingrained in us since time immemorial. Certain traits favored in the process of Natural Selection and helped our ancestors survive in the jungle actually do not help in the market.
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social network connection for online business

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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Mis-defining Investment Quality

(Mis)Defining Quality: Counting When It Cannot be Counted

By | Behavioral Finance, Global Equity, Investment Insights | No Comments

This article originally appeared on Advisor Perspectives.

 “Ben felt that what I do now makes sense for my situation. It still has its founding in Graham, but it does have more of a qualitative dimension to it because, for one thing, we manage such large sums of money that you can’t go around and find these relatively small value-price discrepancies anymore. Instead, we have to place larger bets, and that involves looking at more criteria, not all of them quantitative. Ben would say that what I do now makes sense, but he would say that it’s much harder for most people to do.” – Warren Buffett 1 responding on apparent divergence from Graham, emphasis ours.

 “The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.” –Charlie Munger

“Not everything that counts can be counted, and not everything that can be counted counts.” – William Bruce Cameron 2

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Notes:

  1. Joe Carlen, The Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham, 244.
  2. The quote is frequently attributed to Albert Einstein. However, it is likely an incorrect attribution. Read more here.

Portfolio Management Services (SEBI Registration No. INP000002965) are offered through Multi-Act Equity Consultancy Private Limited (CIN: U67120PN1993PTC074692), which is a wholly-owned subsidiary of Multi-Act Trade and Investments Private Limited; Investment Advisory Services (SEBI Registration No. INA000008589) are offered through Multi-Act Trade and Investments Private Limited (CIN: U65920MH1997PTC109513).