Basant Maheshwari Talk (2014)
It's a 90 min video and a 10 year old conversation. Context: This came after 2014 results, during NaMo 1.0
I have been following his videos for some time now. Don't always agree with what he says (because he changes the narrative to suit his choice of stocks). But this video is actually top notch.
Key things that I remember: (didn't take notes; should have 😔)
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Invest in market leaders. Laggards will give superior returns only in bull-cycle, but won't sustain for long term. If you buy market leaders at expensive valuations, it will likely impact your returns I've long term; but if you buy inferior company, you'll most likely lose your capital.
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Cyclicals won't give you returns for long-term. The time to play Cyclicals is when they are showing losses and the moment they give their best quarters, you exit.
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Have a concentrated portfolio, but only in companies you can bet your house in. Capital preservation is the key. Two companies - One gives 40% CAGR over 4y and halves in Y5 (14% CAGR) and the other which gives 20% CAGR over 4 years and returns 0 in Y5 (16% CAGR). Second company is better [He gave an example with different set of numbers. But this is more powerful]
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If you are holding a structurally good company, then Macro is not very relevant. A good company in bad macro will grow 15%, and in good Macro will grow 35-40%
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Concentration is key. A stock that grows 100x, but where you put only 1% allocation, will only double your portfolio.
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The only reason to enter stock market is to grow your wealth 5/10/20/50x (over long term). And you can't do that, if you exit from your stock with 20% profits.
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For structurally good companies, Valuation catches up to the price when they become expensive. But for Cyclicals and structurally bad companies - price catches up on day 1.
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How to identify market leaders and structurally good companies - Read his book.