The Peter Lynch way in

Indian Markets

SOIC
Intrinsic Compounding
 SOIC
Strategy 1: Proxy Bets
The output of gold rose from $5 million in 1848 to $40
million in 1851. However, only a miners made much
money from California Gold Rush.

Intrinsic Compounding
SOIC
You can mine for gold or sell pick-axes to those who
are mining for gold.

Guess who made more money

Levi Strauss and Samuel Brannan didn't mine for gold
themselves but instead sold supplies to miners
wheelbarrows, tents, jeans, pickaxes etc.

Intrinsic Compounding
Similar Trends in the Stock Market
Case Study 1:

SOIC
You can either invest in companies that produce
commodities. E.g: steel, coal etc.

OR
You can invest in companies that help them produce
commodities. E.g: refractories, mining equipment, forged
media (used as a consumable)

Intrinsic Compounding
 The Comparison

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ROCE:5-15%
V/S Orient Refractories

ROCE:30%+

Intrinsic Compounding
Case Study 2:

SOIC
You can either invest in companies that manufacture
medicines. 
OR
You can invest in companies that supply raw material
for manufacturing medicine.

Intrinsic Compounding
 The Comparison

SOIC
V/S Alkyl Amines

ROCE:15% ROCE:25%+

Intrinsic Compounding
Case Study 2:

SOIC
You can either invest in companies that produce oil.

OR
You can either invest in chemical companies which help in
oil production.

Intrinsic Compounding
 The Comparison

SOIC
ROCE:10-15%
V/S
ROCE:40%+

Intrinsic Compounding
 SOIC
Strategy 1: Value Migration
Value Migration- Gaining market share at the expense
of the competitor

Lets apply it in the Indian context

Intrinsic Compounding
 SOIC
Case Study 1:
Public Sector Banks losing market share to
Private Sector Banks

Intrinsic Compounding
 SOIC
Case Study 2:
Chemical production moving from China to India
East China provinces crackdown on chemical
factories.

Intrinsic Compounding
 SOIC Why is it important
to catch such trends?

"There is a tide in the affairs of men, which, taken at the

flood, leads on to fortune; omitted, all the voyage of their is
found in shallows and in miseries."- William Shakespeare

Intrinsic Compounding
What are the Trends that will Continue
for the next decade in the country?
Private Insurance players gaining market share
from Public Insurance players.

SOIC
Private Sector Banks gaining market share from
Public Sector Banks.
Asian CDMOs gaining market share from
Western CDMOs.
Food Delivery and eating out vs Homemade
Food.
From Railways to Airways
From China to India in terms of Chemical
Production.
From Physical Assets to Financial Assets

Intrinsic Compounding
Company's Benefiting
out of the Trends

SOIC
Intrinsic Compounding
Intrinsic compounding