Book Summary and Notes - Manual of Ideas.

The book, 'The Manual of Ideas', is an interesting book for experienced investors. The books discusses specific value investing strategies for generating ideas to pick stocks. Though these ideas are not new, as they have been written in classics such as - Security Analysis, Investment Fables, Little Book That Beats the Market, etc.

The Manual of Ideas discusses these ideas in context of modern stock picking discipline.

Given below are the short notes and my views on the different topics explained in the book. 

Q & A with Nilesh Shah, Managing Director, Kotak Mutual Fund

In January 2015, what started with murmurs got confirmed when it was announced that Mr. Nilesh Shah has joined Kotak AMC as the Managing Director. In his previous assignments, he has held leadership roles with Axis Capital, ICICI Prudential Asset Management Company, Franklin Templeton and ICICI securities. 

He shares his vision for Kotak AMC and his views on the market along with the reason why he wrote an open letter to Jim Rogers. (You can read that letter here)

Picking stocks like Joel Greenblatt

Many investors wouldn't recognize the name of Joel Greenblatt in India, but on Wall Street he has built a reputation for an excellent stock picker.  It is said that his hedge fund, Gotham Capital, earned an annualized return of 50%+ over ten years.  In fact after he had published his book, ‘You can be a stock market genius’, many hedge funds sprang up claiming to be following the approach Greenblatt’s book taught. It was on investing in special situations: take over, merger & acquisition etc.

In conversation with Stefano Gatti: 'Signs of a Bubble'

Stefano Gatti, is the Director of the B.Sc of Economics and Finance at Università Bocconi. On February 5, 2015, I had an opportunity to meet him and discuss his view on Europe and World Economy, while he was in Mumbai giving lectures at the Bocconi MBA institute. 

Though my meeting was initially for a story but since the story was cancelled, I thought of sharing the full interview on this blog. 

He also takes classes for Coursera and he is one of the senior advisor with B Capital Partners. Given below is the full transcript of that meeting.  

Howards Mark's at Google Office

Howard Marks is an American investor and founder of the Oaktree Capital Management which specializes in alternative asset management. As of December 31, 2014, the company managed $90.8 billion, primarily on behalf of pension funds, foundations, endowments, and sovereign wealth funds. He is very well known within the investment community for his "Oaktree memos" to clients which detail investment strategies and insight into the economy. In 2011, he published the book, ‘The Most Important Thing: Uncommon Sense for the Thoughtful Investor’. 

Recently he gave a talk at Google office, where he shared some of the important ideas that formed his investment philosophy. You can watch the entire video here. If you don't have 69 min you can read the summary points he made and the full Q&A. –

Tata Sponge -- Centrum's view

Centrum in its latest report on Tata Sponge has reiterated buy rating on the company. It has stated a target price of Rs 1,050. Its current market price, check here, When the report was prepared, it seems the market price was in around Rs 670.

Asset Allocation Funds Demystified!

Kumar Aditya is an IT engineer based out of Bangalore. He prefers handling his own investment and does not believe in taking advice from a professional advisor. He says his first brush with the term mutual fund was in 2009 when one of his friend’s suggested it to him, but when he had a look at the fall in Sensex during 2008, he decided to go ahead with fixed deposits. Although later at the end of the year, he believe he had missed the bus in 2009 when the markets surged. But then he says, “I didn’t knew when to invest in equity?”

The Warren Buffett Way

The Warren Buffett Way by Robert Hagstrom (second edition)

The book is interesting. The theme is broadly on how Buffett came to think the way he does. How does he look at investment in business, and how he built his expertise. It also gives a glimpse on how four people have influenced Buffett’s investment style: Benjamin Graham, Philip Fisher, John Burr and Charlie Munger.

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INFLUENCE 

Given below is the synthesis of what Hangstrom had to say about these four personalities.

Portfolio update- Year 1

Yay!!! It's been a year since the dummy portfolio started. (view here)

I was supposed to check the portfolio at the end of 11th month, although didn't do so. Sensex is up nearly 40% over 1 year period, hence, there was no point in looking at the stocks after 11 months. Now that its been over a year, bringing the portfolio in order is necessary.

So the results are as following.

Why should Greece affair be closely monitored

PLEASE NOTE: This is merely my personal opinion.

I came across this interesting article where Mohamed A. El-Erian (erstwhile CEO and co-CIO of PIMCO) says that American's should take note of Greece in the following article -- Click to read.

For over a month now, I have been interacting with various market experts and the general opinion I see is everyone believes that Greece is no threat. Because it doesn't have options. If Greece tries to go back to drachma, then there will be no takers and the country will fall into an abyss of depression.

Jack Lin of Pioneer Investments, shares his views!

Jack Lin, Head of Asia Pacific, Middle East and Africa, Pioneer Investment, has been visiting India for 25 years and for the first time he is witnessing such high enthusiasm among Indians.

Lin shares about his views various facets of investments and India with Shoaib Zaman. 

Outlook 2015

The Indian stock market showed a stellar performance in 2014 as it turned out to be among the world’s best-performing market with the benchmark BSE Sensex rising 29% from 21140 points on January 1 to 27,350 points on December 12. There are expectations that the string run would continue with the government poised for new reforms, strong liquidity flows into India, backed by a revival in manufacturing and likely improvement of macro-economic situation.

The first thought of new year

A very happy new year to all of those reading this post.

Among the journalist fraternity, my encounter leads me to conclude that there are three types of journalist, especially those writing in the personal finance or very specifically stock domain.

The first is type and the most common are those who would air their view as a classic text book stereotype of a journalist, they would say, 'As a journalist I am not supposed to take a side. it is my job to provide all views and let the reader form the conclusion.' It makes sense to follow this approach when people are giving sector views and explaining the big picture of a business. For example a big picture story would be of Adani's bet on the coal industry: Click here.

Second type that I would come across is the one which gives an opinion, but it is always delivered with if and but, or the final opinion will be that of an expert substantiating the view that the writer believes. This is also a common tactics, I will not share any example, if you observe then you can spot it easier. Happens everywhere.

Now the most intriguing types are the ones who recommend stocks on their own and are blunt about it. But this is rare and few. The biggest drawback or problem that I see with this category is that they rarely make assessment of the overall performance of the various recommendations they have given throughout the year. And also on what went wrong with their recommendations. I think the right thing to do would be to review the stocks/funds quarterly or annually and not limit to that but also discuss about what went wrong. A near example would be what FundsIndia did recently, when it talked about all of its recommendations in 2014. (Click here)

Perhaps it is this willingness to discuss and accept about what went wrong that differentiates an investor's approach to a punter's approach. Maybe by this definition or approach we can easily say that most, not all, of the journalist's writing on stocks are actually punters