Professional Documents
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my Investing
Career
What is investing?
nsists of three steps: Buying, Sizing and Selling
Know the
Careful on Works best in Be
counter Have a grip on
leverage cyclical cognizant
view on the intrinsic value
sectors stock of risk
Have a grip on
intrinsic value
Things I Believe In
Common Sense
s I Believe In
S&P BSE Sensex Levels vis-a-vis ICICI Prudential BAF Net Equity
Exposure (%)
Net Equity Net Equity
77.7 38,667
40,000 77.4 80
Net Equity
30,000 60
57.5
55
25,000 50
45
23,002
20,000 40
18,620 35
15,000 30
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sensex Level Net Equity Exposure %
Source: BSE India & MFIE, Data as of September 30 2019. The in-house valuation model starts from March 2010 onwards.
Stock Picking
Trailing
price to Trailing
earnings price to
book Trailing price to
Leverage cash earnings
of per share
company
All big
mistakes can
be avoided by
looking at...
Dividend Market
yield cap
PO/QIP
activity Balance
in sector sheet
quality
Market Cap
Cement + Metal Sectors
osys + Wipro
Rs. 31,623
Name Mcap
(In Crs.)
Rs 1,07,604 Mcap(In Crs.) Metals
Dec-99
Natl.
Aluminium 8,151
Name Mcap Hindalco Inds. 5,995
Name Mcap (In Crs.) Tata Steel 5,208
(In Crs.) Cement Dec-99 SAIL 4,647
IT Dec-99 Ambuja 4,797 JSW Steel 781
Infosys 48,005 IndiA Cements 1,004 Hind.Zinc 697
Wipro 59,599 Heidleberg 132 Vedanta 212
Total 1,07,604 Total 5,933 Total 25,690
Data as in December 1999
Market Cap
Mcap(In Crs.)
Top 5 stocks Mcap
sorted By Mcap (In Crs.)
PSU
Universe Rs. 16,81,081 Name Sep-19
Reliance 8,44,530
TCS 7,87,738
Top 5 HDFC Bank 6,71,509
stocks Hindustan
sorted By Rs. 30,84,528 Uniliver 4,29,055
Mcap Infosys 3,51,696
Total 30,84,528
170
130
Incremental Money to Debt
110
Neutral
108.19
90
Invest in Equities
70
Aggressively invest in Equities
50
Sep-06
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Equity Valuation index is calculated by assigning equal weights to Price-to-Earnings (PE), Price-to-Book (PB), G-Sec*PE and Market Cap to GDP ratio. G-Sec – Government Securities. GDP – Gross
Domestic Product; Asset Allocation – Schemes that invest both in equity and fixed income
Market Cap Analysis
x 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mar-19 Jun-19 Sep
100 79 79 75 74 71 79 77 78 79 78 81 75 74 72 65 70 73 73 74
250 9 11 12 12 13 11 12 13 13 14 13 14 15 15 16 16 16 16 15
ve
12 11 13 14 16 10 11 9 8 8 6 10 11 14 18 14 12 11.7 10
op 100 indicates top 100 companies by market capitalization,101-250 indicates next 150 companies by market cap and above 250 indicates 251st onwards by
arketcap. Source : Kotak Research , Data as of September 30, 2019
Valuations - Credit
Parameter: Gap between yield –to-maturity and repo rate
Data as on September 30, 2019, YTM values taken since scheme inception. Past Performance may or may not be sustained in future.
Valuations – Gold/Cash
Gold/Cash is a residual
asset class based on the
aluations on the other
asset classes
When all other asset
classes are costly gold
and cash are cheap
and vice versa.
Valuations
Valuations––Real
Real Estate
Estate
6% 5.70%
5% 5.70%
3.95%
4%
3%
1QFY…
2QFY…
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
Market Cycle
Burst
Best • Equity
Institutional • Real Estate in
Selling
Time to invest Markets in
• e-Commerce i
2006 & 2017
aggressively Institutions not Boring 2014
and valuations • Bitcoin in 201
buying, • Equity in 1999
attractive valuations Institutions both Boom • 2007
attractive buying and
selling, valuations Institutional Bubble
not cheap buying,
valuations Valuations off ch
Lehman costly new valuation mo
Crisis 2008 emerge, investors
forget the existen
Dot com • Equity Markets in the World Risk
burst – 2001 2011-2013 .
• Equity Markets in
2015- 2016 (China Equity Markets
slowdown) currently
• Debt Accrual
Schemes currently
y philosophy will not allow me to ...
3 Asset Allocation
ng of theory
sy but
mentation of
you know is
Keeps you alive
llenge
and interested in
the world
sadvantages of being an Investment Professional
CYCLES PRE-MORTEM
Howard Marks Michael Maubouss
THANK YOU