VALUE INVESTING LOST VALUE?
Somebody told me that "Debarghya, you are not the second richest person in this earth. You can not make comments on Buffets style." He replied me 4 months ago. Because I said "Days has changed. Buffet system is not suitable in this market situation. As we all knows that "Nobody believes you till your hairs are not white and your father and his father is not in this business blah blah blah". Now look at the story of our own Mr. Rakesh Jhunjhunwala
Ace investor Rakesh Jhunjhunwala, who has often been referred to as Indias Warren Buffett, seems to be distancing himself a bit from his mentors investment philosophy.
At a recent discussion organised by Motilal Oswal Securities, Jhunjhunwala partially debunked Buffetts very long-term approach to investing, where he almost holds stocks for life.
Every stock in life doesnt have to be bought for 40 years. All of us cannot be Mr Warren Buffett in life, let me tell you. Just because he thinks that every stock should be bought for life does not mean that we should also buy every stock for life, Jhunjhunwala said. The edited transcript of the discussion can be found at DNA newspapers website (See here).
At the time time of Buffets our market structure was not as complex as it is now. Many bulls and bears are here. More and more information are avialble to us ( even though we all have doubt on RATE and Index available to us). How same way market can move?
Jhunjhunwala, who has taken serious hits to his portfolio in the current market scenario, is clearly revising his investing approach.
I think he was bear at time of "Harsh Meheta"
Of course, there can be serious doubt as to whether even Warren Buffett adheres to his past style of investing. As Firstpost noted last month, Buffett has broken some of his own taboos, including avoiding technology shares and debunking share buybacks. This year, he bought IBM shares and Berkshire Hathaway announced a plan to buy back its own shares.
At the investment jaw-jaw session, where investment gurus Raamdeo Agrawal of Motilal Oswal, Madhusudan Kela and Ramesh Damani engaged Jhunjhunwala, the latter gave a new spin to Buffetts idea of value-investing: Value investing is also buying a stock, keeping it for 12-18 months and selling it at a handsome rate. Value investing is buying value where it may not (always) be lasting value. That value could be encashed over two or three years.
One is not sure if Raamdeo Agrawal, another Buffett fan, agreed with Jhunjhunwalas revisionist ideas on value investing, but he seemed to like the idea of blue-chip investing. Said Agrawal about his investing strategy in this beaten-down market: I am aligning (myself) more to buy more blue-chips or emerging blue-chips. I look at individual companies rather than sectors and look at their performance. I dont buy 10-15 companies in a year. If I can add one or two companies in a year, thats good enough.
Kela seemed more gung-ho about mid-cap stocks, which have simply been thrashed out of shape in the current bear market. Kela also thinks the real value of the NSE Nifty index is far lower than its current level because only 15-25 companiesare making this index. His preference is for mid-cap stocks, which will deliver huge returns over the long-term.
As for the impact of the rupee, Jhunjhunwala, who once saw himself as a rupee bull, is now unsure. He thinks there is a 75 percent chance that the rupee will lose more against the dollar a prediction that has already come true, as the rupee fell below Rs 53 on Tuesday.
Will the cheaper rupee bring in more dollar flows from foreign investors? Raamdeo Agrawal does not think so, because investors are still sitting on huge losses in India. I dont think it works. In fact, the guys who are there (in India) are going through their own pain after losing 35-40 percent of the years opening balance (due to the rupee fall). So, first that pain has to be handled.
And one more opinion of mine is , none of the foreign investors or oil companies are at loss because of Rupee depreciation BECAUSE everyone is hedged... When they are in such big business, They show losses on paper, But behind the scenes , they are hedged and are making profit.
