Commodity Businesses

There are many concepts and thoughts through which one can see commodity businesses. They are termed as cyclical, low PE deserving companies and generally have restricted weightage in one’s portfolio.

Right Definition: We believe that any business or trade where goods are sold without any value addition or without any differentiation can be referred as commodity businesses. Here word “Value addition” has vital meaning and impact. Generally, metals, cement and agro stocks are considered as commodity business. We believe if company has capacity to resist to volatility in base commodity price due to scale, stock or other natural advantage it can be considered as different company from pure commodity play.

Parwati Sunil K
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Keep monitoring
Buy and Hold? or Buy and Forget?

Let’s start with a famous saying “You Should Never Outsource Your Eyes”

We now produce an illustrative conversation between a client and a portfolio Manager:

Portfolio Manager: Our investment philosophy which says ‘Buy and Hold’, to further clarify the concept internally we think it should be ‘Buy and Forget’.

Client: So, once you are invested what you do?

Portfolio Manager: We search for other better option and we keep monitoring existing investments.

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Mindset to invest in equity
Want to make a quick buck? – Equity may not be the right place

Confused…..Let us explain

A group of people had together decided to put money in a single stock based on some so-called ‘hot tips’. They were assured that the stock price will double in few months. What an incredible and an easy way to make quick buck, isn’t it?

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Ownership – most important consideration for investing

Let us re-phrase the title at the very beginning — Ownership is the most important factor, it is the ONLY thing you should have in your mind before, at the time and after investing. In fact, we believe that this is the only criteria why anyone has ever succeeded in the stock market. You will find endless literatures, quotes and views on this subject but through this white paper we would like to clarify on few basic points which justifies why this is the “best criteria for investing”. It is also the criteria to decide exit.

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