Sanjay Bakshi Sir's lectures have changed the way we invest.
We always looked for undervalued and unpopular companies going through a transition. We were number guys and focused mostly on financials of the companies. We sold the stocks when they sort of doubled.
Prof's lectures taught us to focus on qualitative aspects. These models help us evaluate the companies better and ride them longer. It helps us increase our concentrations and think more like owners. Prof. Sanjay Bakshi taking up a case study This course was full of case studies. The class discussed dozens of concepts. I cannot summarise them in a blog post.
3 topics that I am thinking most about are:
Prejudice against PSUs
Using Porter's 5 Forces
Endurance, Scarcity and Dependence
Prejudice against PSUs
PSUs are often excellent monopoly businesses
Most of the PSUs are paid up-front and generate float
Yet we (I) refuse to even look at them because they are a PSU
Prof took us through lots of examples where this prejudice might be unwarranted
PSUs have a "promoter risk". And that promoter risk should be evaluated like we evaluate it in any other company.
Look at "growth mindset"
Look at capital allocation
Many PSUs have behaved a lot like private companies. They have reduced the number of employees. They have lean structure and ~500 employees.
These are worth looking. They sometimes trade at 4-5 times earnings and give dividend yields of over 5-6%.
Avoid PSUs which are of political interest or consumer facing: eg oil and mining
Porter's 5 Forces I read about Porter's 5 forces in school. But never used it as a framework.
We can use it to understand the "robustness" and "anti-fragility" in a business.
I hope to incorporate Porter's 5 Forces in my checklist.
Endurance, Scarcity and Dependence Professor screened the interview of Anthony Deden. Anthony looks for companies that survive for generations. These companies have endurance. They have something which is scarce. And they are less dependent on others.
