In this newsletter, let’s try to absorb in investment wisdom of the legendary investor, Mr. Govind Parikh.
“In the markets, one thing is for sure – if you don’t make any mistakes, you will never learn.” – Mr. Govind Parikh (Managing Director, Govind Parikh Securities Pvt. Ltd.)
Mr. Govind Parikh is a seasoned investor with a remarkable track record spanning over four decades in the Indian equities market. A chemical engineer by qualification, Mr. Parikh began his investment journey in 1979–1980. He initially started as a stockbroker, but his keen eye for identifying potential blue-chip companies early on propelled him to become a successful investor.
We had the honour of meeting Mr. Parikh. During our time with him, we gained invaluable wisdom and insights from his extensive investing journey. Mr. Parikh was kind enough to give us his autograph and convey his best wishes.
Before getting into the learnings, we recently released a new Idea 💡under our Bastion CORE, which has following characteristics:
🥇Leading player in the industry with sub-Rs. 2,250 Cr Mcap
😎Operates in a consumer-facing industry
🏁Enjoys a leading presence in the most compelling geography for its products
🤝Was acquired some time back and some bold steps were taken, impacting the business performance off-late.
🌟Stock is trading significantly below its acquisition price. With the festive season ahead, better growth and profitability are on the horizon!
👩🏫A new professional management is driving the transformation
This company is now part of our active tracking list with a solid margin of safety, which are hard to come by in such markets.
If you do not wish to miss out on such opportunities, click on the link below to subscribe to Bastion CORE
Here are 7 learnings from the legend himself:
1. A Good Entry Point in the Market:
When a negative macroeconomic event occurs, the market often drops sharply. This creates an opportunity to buy stocks at lower prices. The most significant profits are made during these times.
2. Buying Process:
To avoid losing money, start with a very small investment in a promising stock. Then closely monitor the company and gradually increase investment within a set price range.
3. Holding a Company for the Long Term:
While most stocks in the portfolio are held long-term, I do sell some shares occasionally. Markets are risky, so even if I’m confident in a stock, I don’t need to hold all shares until they reach their full potential. If the market drops and the stock price falls, I can buy more shares at a lower price.
4. Managing Risk:
- Maintain Cash Reserve – Keep 10-15% of your portfolio in cash. This allows you to take advantage of market opportunities during downturns.
- Invest in Blue Chip Stocks – Most of the portfolio should consist of blue-chip companies, which are well-established, financially stable, and have a track record of success.
- Portfolio Rebalancing – Regularly adjust your portfolio allocations to manage risk. This involves buying or selling assets to maintain your desired asset allocation
5. Business Economics vs. Management:
Good management in a bad industry won’t perform well. Bad management in a good industry might do okay, but shareholders won’t benefit much. Both are important, but good management is more crucial.
6. Public Sentiment on Bull & Bear Market:
In bull markets, people believe shares will be scarce and money will keep flowing in. In bear markets, no one wants to buy shares.
7. Sleeping Point Investment
I don’t borrow money for my investments. I should be able to sleep well, knowing that even if my stocks become worthless tomorrow, I won’t have to worry.
Until next time, happy investing!
Source: Masterclass with Super-Investors Book.
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