new age businesses on digital platform

with the growing euphoria where new age business are going public below are my thoughts on it

its a great respect for this entrepreneurs and their team who have taken there organization to this level and made it public. I would say they have accomplished their journey from 0 to 1. 

This guys have created a great eco system to new generation to chase their dream irrespective of various challenges in India with community ideology /  education systems etc .

now they need to take a journey from 1 to 10 many of them sure will involve from here on this journey...

we all have to observer them in this journey our  forecast industry will not be able to understand this entrepreneurs and vice versa even this new age entrepreneurs will not understand the question raised by forecast industry and they need to learn to deal with them.

Note: our forecast industry itself has not involve much no new algorithm to analyze data patterns / human psychology / global changes /  technology changes  etc same old questions when will you make profit / how much margin  / can your business sustain in longer duration / can you explain  your business model blah blah blah......  how many analyst out there can forecast what food will be made at their home for dinner today without asking anyone at home ? so simple question ?  the forecast industry in India need a change I am sure someone will come and turn the table in this industry with technology + simple common sense for analysis.

how many forecast analyst ask question to explain how your product works not in terms of making money but in terms of its functionality ? if you dont know how the product workflow work how will you analysis how this product make money ? most of them are analyzing from user usage prospective which I think is not correct. 

Forecast industry doesn't have the edge to foresight people's ability and skills where its moving towards hence they hardly adapt and visualize the change at very early stage. 

if this entrepreneurs think about this question all the time I don't think developed country like US which you see now would ever have reached to this point where its called developed economy.

companies chasing dream / learning / adapting in public eco space is hard and life itself is hard so why not to do the hard job rather going easy. What will happen more than just a failure its also a lesson to learn and grow again.

many of this companies has given a fair deal of exit to existing investors via IPO as they have being with the organization to support them for so long and its healthy to give fair deal of exit.

beware some companies are well aware their growth will get saturated hence better to cash out from IPO. 

lot of public investors feel its not fair for them to invest with such a high valuation. This are the same groups of public investors who are complaining who made a lot of money via IPO listing so my question is what's unfair valuation which is for all the IPO's not just 1 or 2 or your greed which didn't get fulfilled ?

so its simple stay away and wait when you are comfortable with fair valuation keep observing this companies how they take decisions growth model executions in upcoming years if you see patterns of changes which you  are comfortable then take your decision based on it rather having a herd mentality.

my thoughts and observation on Vijay Shekhar Sharma and their team(Paytm) this are the guys who dreams connect adapt learn from failures their brains works like a child which is always curious hence you will observer their answers to analyst questions will be different than the normal executive as child speak from their heart full of emotions not manipulated brain and sure they will handle it better in upcoming days.

 when such a team learn and adapt the growth goes unmatchable for rest of the industry to reach to that level in the same space and other companies start partnering in their growth(this is early pattern which is key to look out for ) but when such team don't learn and adapt then it falls under below category. 

 Many will not survive in long run for growth and profitability example nykaa / policy bazaar / car trade/ zomato and many upcoming which are in singular segment either they will get killed slowly in next 5 to 10 yrs  unless they keep it upgrading ahead of market making it local to global  and I dont see that hunger in their management team for growth or some large player will buy them out.( patterns to recognize for down fall  looking for aggressive acquisitions / equity dilutions very often / investing in other startup / partnering  outside their domain of businesses and many others which can be recognized in upcoming annual meetings and conference calls through their psychological behavior and talks)

I have not put paytm in the list of survival for growth and profitability for now ?

part A) paytm has a huge user / customer base and its rapidly increasing to all smartphone devices this gives the customer / user a trust relationship factor which get build earlier then rest of the players - this is their current key MOAT. How many analyst will consider this as MOAT ?

any new digital services launched by other players paytm has an opportunity to explore and copy the same model of services on its platform to this huge customer / user base this gives them an add on advantage for fast scalability for the same compare to rest of the players in this space of super app /payment/finance  or upcoming services. It hard for a customer / user to switch out to other app just for few cashback or reward points or extra margin gain unless there is any new player to burn cash for next 10 years and keep better offering.

also note paytm need to be very quick in copying  or launching any new digital service on its platform upcoming in market.

it also need to maintain the same trust relationship with its customer / user  keep it compounding without any greed - there will be many allegations / stories created by other player to break this trust MOAT in this journey.

example : UPI services 

it was last in the league to provide UPI services but the add on advantage made them to reach in top 3 in a short duration of time.

Part B) paytm is not the only fintech solution available there are  many and you need 4 to 5 players to do the all the data point collection for each individual users to a central point which can be shared to each credit providers to design a better credit products also while validating new credit offering to borrowers and reduce bad loans and its happening across the global this will also support to move toward cashless/cardless system to move currency into the system digitally and reduce the cost of capital.

part C) we just cant be dependent on NPCI as a monopoly for transaction solution and settlements there is need to have 4 to 5 players which can build similar solutions and reduce the dependency on single largest players like NPCI.

while moving toward digital movement what happens when NPCI solutions goes down for 2/3 hours the whole of system gets hold if we are in a complete digital mode hence here as well fintech solution can be build which will provide complete robust transactions solutions and settlements 

part D) there is a generation which operate in cash , there is generation which operate in cheque there is generation which operate in net banking and there is generation which now operate only via mobile 

as a billion users where avg age of person is between 25-28  there is need to serve this new generation with this new medium called digital bank this will also support to reduce the cost of capital

We still don't know whether paytm will be one of them or not only time can answer it

there should be  4 / 5 player to service this generation as digital bank so competition will give them an edge to grow and provide better services to its customers as well as better credit products and collection methods.

this data points should already be on the table of regulators to allow private players for payments settlements solution similar to NPCI for robust digital economy and to have  digital banks as well for full fetch financial services.

once regulatory policy and license are build this should give such fintech to know in which direction to move and which experiment to stop giving them a clear direction where their business should move towards.

disclosure : haven't invested in any of this companies will wait to see some patterns out only then I will bring them in my portfolio and my thoughts can also be wrong or different from yours.

The valuation of success

my view how to value success 

I don't value success in term of money fame winning here are my thought on it. 

money fame winning are the materials which fate away with course of time its temporary protective tool to live life in society but to live a life with a improvement and learning everyday I find it as success as this give enormous fulfillment and satisfaction.

money is needed to meet the basic requirements like house, food, medical expense, travel, security from uncertainty, academic education for families. If you are struggling to make this then you need to make this achievement first. But the problem start when we human start chasing things which is beyond this and don't know how to balance out the extra back to human betterment.

more money is used to gain more money and more.... but we forget the more which we get more we need to make it back to human betterment who are struggling out there and not so privilege in terms of basic necessity, knowledge, skills.

we don't need to make them slaves of our funds but its important to build a package with our knowledge skills money in such a way which will make people independent from their struggle to meet basic necessity. 

The way we learn how to ride a bicycle we also need to learn this else the materials achievement will not get compounded so your method of valuation of success as well.

most human communities are build which reward us as successful when it see money fame winning else not hence its important to be detached from such community rewards to learn more to improve our thought process.

It could be many people in our family or community were struggling to meet basic necessity which they were able to overcome by chasing money and it was by default available to us when we were born in this community. So we need to understand why our community rewards tag of success only to this components. This understanding will help us shape better how to interact and react on certain thought process and action we perform living with the community.

The more success feeling we get attached with the more fragile we become hence its important to cherish each moment of setback and failures this are tools which build us more and more stronger as its a reward from nature to make you antifragile so acknowledge it and move forward rather than feeling sad and disappointed during those time.

I am witnessing there is change happening in the collective thought process in our communities regarding valuation of success and we will see an evolution of change with this which is beyond my imagination what change outcome will happen but sure it will be better than today giving upcoming generation a better backbone to chase their dreams.

never give advice to upcoming generation what to do in their life or how to live  let them make  their achievements and value failures just give them the tools which are needed to build a learning and adaptive mindset. 

 

Science Technology Spirituality

 

Science Technology Spirituality all three terminology has specific contribution to evolve human experience for its conscious living.

reading facts and stories of human evolution in history we human the whole life were engage to just meet the basic necessity for survival of  human body which is food but from centuries and centuries learning, experimentation build the knowledge around it what to eat how to grow it and engage different food together to generate a better taste so we have come to a point where we don't need to engage all our life just for food but just 30 to 60 mins out of 24 hours available for the day to prepare and eat it this is happening in present.

going forward from here century further this amount of time will also reduce to just few mins to meet the basic necessity of life , similarly to meet other necessity will also get reduced like sleep time , travel time, working hours in organizations and many of other activity which human is performing today will get reduced. 

question is wont it impact the human functioning and companies achievement ? reducing sleep time , working hours.

it wont impact rather human will flourish better.

enough scientific research  together with right method of  technology  will be discovered to make this happen and will be normal in upcoming centuries.

the way we grow food the way we eat the way we work the way we live will change.

the experience of human will be completely different which you or me cant even imagine at the present. 

change is the only permanent thing which will happen rest just fate away with time and is forgotten with the course of time.

the point I am trying to make here be part of the change and live in the present  to take this experience and dont worry about outcome for it.

we don't know the future what's coming hence should not worry on it rather participate in the present and keep learnings.

building the correct attitude toward life to keep doing karma

strong mental model

patience to keep looking for solution 

compassion selfless toward other living soul.

technology will transform the way we operate from travel , finance, human relations, thinking, living.

example: technology will also transform and make our planet better we don't need more activist or awareness program or discussion as they have created less impact to transform things rather

we as human only find solution when the problem severely impact our life which is happening now so I am expecting there will be solution upcoming for global warming whether its recycling / energy resource , understanding nature in a better way / the way organization function and the way large investment are made. 

China has already started doing various majors to tackle climate change and technology the way it will drive in future for better living and will dominate next set of technology revolutions.

problem related to health will also find its solution whether its covid / cancer or any other life threatening diseases with the pace bio-technology keep making discovery about how human body function and how to fix such problems with early detection.

if you read research article / books which describe how earlier human life span were 100+ yrs ago we find there is significant contribution how we eat and what we eat has a major role to play and what set work of life experience give us satisfaction.

technology will also evolve and discover how to make human connection better even if its not present physically together device and sensor which give same feeling as we get when we human work together face to face.

space science technology will also create revolution when discovery are made this will create same revolution what you and me are observing today for electric vehicles and fuel cell many players will rush to gain for space science its normal human behavior whether its you or me or industrialist. 

the more science discover inner human body and its function the better will be discover on space / universe how it operate. There is connection between human body and universe and science need to discover and prove this connection.

Software technology will also see revolution where you don't need skilled resource for providing solutions to industries , industries will see product which will operate as plug and play like we do with our phone today just few swap of data from old to new phone and the change is done ready to use.

spirituality play a big role to build a common human being into a more conscious and aware mind to get optimum experience of human life.

one part of it example: it give various example and tools how our mind work how it process various information and senses data from our eye / hear / smell / touch.

it provide tool how to focus - like meditation and focus on one thing on your breathe and nothing else so simply but so difficult to do when you close your eye so many thoughts runs around. 

how to recognize patterns based on intuition / inner voice / observation this is what currently AI and ML are doing based on data.

human mind have this tools but we hardly aware about it hence never used or optimize it.

how much less is more for us since we have a finite time for living.

how each decade of life should be lived/learned and experience it.

 परिवर्तन संसार का नियम है (change is the rule of the world)

-this words of wisdom is around in the scripts available to human for so many year.

it teaches you how to be adaptive to be part of change and never be in illusion of knowledge rather keep on learning  

spirituality teaches us how to control greed / anger / detachment / being rational / ego / taking decision / courage / to face uncertainty / time utilization  / selfless / ability to find when our mind get distracted

it give steps to train your mind  and ability to visualize things to find solution for your problem

formal education created by society is just a necessity for survival but the actual learning of journey  start after this which most of us forget and get into illusion of living which our society created rather creating your our path when you start your actual journey of learning and recognizing yourself and human relationships with each other. 

many mystery are also shared in scripture when you start looking for answers for your problem which science still need to discover

example what happens when human go to deep sleep ? how is the experience ?

 

Portfolio review start of H2 2021

 

Note: new / exit position was build during the period of H1 2021 

View on current scenarios related to pandemic wave 2 in India - May 2021

 covid wave 2 in India is hit hard and also reached to villages which was very rare case during the wave 1 2020 and the medical infrastructure in such area are not as good as in the urban city but yes the authority are working on it to tackle the challenges.

 Government is acting on it and hope the results will show up in coming months.  

my thought on it

Most of the medical infrastructure across the country are facing extreme pressure and challenge and the best to support them is to keep ourselves and  people around us educated to follow the necessary precaution.

 This is the least thing we can do which contribute directly to people who are currently facing the challenges whether is medical team or people out their working 24/7 to get all the supply chain management in the country to support medical team. 

1 ) wear mask / wash your hands / keep good ventilation around you 

2) wholesome home cooked food and water to keep the body enough energy for building good immunity and hydrated.

3) avoid gathering whether is buying groceries out keep some distance and wait with patience for your turn.

4) get yourself vaccinated - I am currently not getting vaccinated will wait for some time here as there are people who still need to step out of their home for work let them get their slot first.

their should be guideline give a gesture note by government which I think is missing out  if you have the facility to work from home then let other people who are not privilege for this facility let them get vaccinated first as they need to go out and work in this situation today. 

5) keep positive thought which also boost your mental health. Eliminate all the noise which is generated out of social / print / news media very less of them are spreading positive news and awareness.

6) if you or someone who you know of gets infected please ask them to avoid all the solution given out by social media who think they got PhD in covid master management.

get doctor consultation done who are right team working on ground reality who can address your query. 

Get tested jump into isolation find solution if house you are living is not equip for isolation self help awareness need to be build.

Big question running all over news is why 2nd wave happened in India who is responsible for it ?

if we blame just the government then that not correct we all are responsible for it.

when the government started giving relief major by opening lockdown in 2020 after good sign of control didn't you go out without wearing mask ? or hanging mask on the neck ? didn't you do mutual gathering with family friends ? outdoor activity ? travelling ?  may be some of us were contributing the spread without even realizing about it ?

some people think wave2 spread is done by government purposely  ? will any government do it and then take such extreme pressure to tackle the situation ? 

as we see the outcome in wave 2 to understand why necessary precaution cannot be taken as granted at least till 2022 end where we would be in better position to see how vaccination contribute for herd immunity across the globe.

its true nobody took learning lesson from other countries where wave 2 / 3 were spreading out and create awareness to rest of the world also each country need to share the data with transparency which is not done up to the mark to avoid the shame of  their failures.

politicians /leader need to take learning lesson as their act are directly followed by others.

all gathering event should be completed avoided and denied permission till we see sign of herd immunity.

I had conversation with my friends in Jan 2021 for planning vacation trip so when the question comes cant we avoid it this year ? we come to a point on discussion where  politicians / leaders are doing election rally no social distance / no mask and ask others to follow the covid guidelines ?

large gathering event are allowed  ? so why should we follow the guidelines ?  

politicians / leader have easy access for medical service not the common man hence we should follow it for our benefit.

 very rare there are leaders in the world who acknowledge their failures with their people most of them try to avoid this.

leaders in the country are responsible for slow pace to build the require medical infra in last one yr from last Mar 2020 they knew this very well as most region in the country doesn't have good medical service which it suppose to just realized this failure now in wave 2 when it hit hard.

and its not just government of country its all the other state / districts  level authority have also failed to do so  and only blame game is now going around for each other and some where we citizen of country is also responsible for it.

did any media run any show highlighting how medical infra can be build in better ways in last one yr knowing it how the current medical infrastructure is specially outside cities.

 Media is still highlighting negative side on current situation 

when will media take responsibility for it ?  highlighting  better stories to cover with facts and suggestion ?

media are selling what people are buying to see i.e criticism for others 

do we still have right task force build on global level to share the data with transparence so it can be avoided in other part of the globe its still a big question mark ? we need better medical commando to handle such pandemic rather than WHO.

WHO - is as good as role of local police in the country.

if any country goes into war like situation military are force in

to handle such situation we need military like medical force who should be equip to tackle such pressure. WHO is the only one which is playing this role but its not good enough for the world and its not acting into agile manner.

there are politician who were criticizing and spreading  non-sense talks all over election rally and social media for  most of big corporate house and billionaire when they generate billions of money blaming them for looting the country.

if you see now this corporates were the first to come and contribute to people in this tough time hope this politician can take learning lesson as this corporates and billionaire when generate billions of money is not by stealing from others but by providing them better services. 

stock market view : 

 sit tight its just landed due to bad weather once its clear it will fly again don't try to take another flight.

 

finding value / growth companies in current scenario

is it possible to find any listed company which can be bought in this high volatility  ?

if your answer is no or difficult  to find then stock market is not the place you need to be.

there is always some where companies stock price are traded less than their actual performance ? 

how do you decide the stock price is trading less than its performance ?

example companies growing revenue / sales / PAT  / EPS 15 to 20 % and stock price not even moving more than 20% in that year.

this are the companies where you need to dig more and research the reason why ?

elimination factors:

are this companies are cyclical business ? is this down cycle ? 

does the management has history for miss-management or bad decision / dilution of equity very often / bad capital allocation ?

is company growing with high debt on books ?

not paying dividends ?

will the product generated by companies make sense which can grow well in upcoming days ?

is the company enhancing's the product / innovating new / upgrading technology ? how well it can add value to companies growth ?

read management commentary / con call / interviews to understand the temperament of management. 

decision making : the main stuff which depends on person to person 

all above should give better way of  visualization - now this depends on individual how well they can visualize things with the current data and judgements from above inputs.

then comes the main part - to decide on buying it in the desired price range which you think its best price range to cover margin of safety from sharp downside incase of uncertain event which could affect the current market sentiments. This also depends on individual how good are they to decide and you need to believe in yourself to make this decision rather others opinion.

 once you decide the buying price range now decide how much concentration of money you can allocate in it. 

Note: its very important to also allocate concentration when you are investing as actual wealth for compounding is dependent on this. 

risk control:  this also depends on individual 

Never allocate all your income portion in it always keep certain portion to cover margin of safety in case of uncertainty  for the company  / your family.

below is what I try to follow to cover risk and I do skip sometimes the exact allocation percentage  bcoz my believe in the management is so optimistic that I am ready to allocate a high concentration

example: if I have say 10K of free cash. 

I will allocate 5K in the company

2K reserve to add more incase their is any downside 

3K for family

this becomes as 

50% invested

20% reserved as insurance to cover downside

30% reserved to cover family

   

portfolio review start of H1 2021

 

Enhancement made in writing journal

 Sooner I will be sharing my complete portfolio of stock investment and review them each time in H1 and H2.

if I have made a entry and exist for a company stock I will also write my note the reason for exposure / exist taken.

Note: I will not be writing my entry and exist the moment I make or break into a stock it will be purely twice in H1 / H2 as this is not to influence others to buy/sell the same but its more of journaling my thoughts process about companies and what made me to land or fly away from it.

start of H1 - end of H1

start of H2 - end of H2 

Learning from 2020

lot of learning made in 2020 here are some  key of them which I had noted for improvement.

when it comes to taking decision on investing in bear market I did failed in 2020.

I failed to add / increase my exposure to quality company like allcargo / polyplex during 2020 lockdown disruption it was all  in my mind but didn't have the courage to make the decision.

both of this companies performed better then expected during the Q2 / Q3  of 2020 probability is high they will in upcoming years.

Failed to take exposure in pharma companies during bargain stock price I was convinced  pharma will perform in 2020 as this is necessity to keep the supply chain available of medicines globally.

reason no courage to make the decision.

Lesson learned : I need to enhance my thinking process which is needed  for investing to get clarity of thoughts for decision making.

bear market and disruption are the best opportunity  to invest in quality management who can stand still and increase exposure when company are performing well during uncertainty.

lost patience in one of the quality company stock polyplex and made a early exist.

Lesson learned : question why you want to sell ? if the answer is uncertainty then hold that moment erase all the noise.

I have enhanced my approach to get clarity in  decision making process here is my key question and checklist I consider to take exposure for companies

1) why do you want to invest ? is it growth / stories / or your own thought process that brought you to this companies ?

if its story then better to trade on story rather then parking money for long.

if its your thought process then take a next steps for checklist for long exposure

2) is cashflow / balance sheet supporting ? 

how much % of operational cash is getting converted ? is it on higher side 15 to 20% + ?

what % of  operational margin it makes ? 25 to 30% + ?

3) is the company investing in its growth and how its investing via debt / equity or cash usage ? 

if its via debt / equity question why is not using cash available ? no cash available then how is the companies sustaining in the industries ? check other companies in the same industries is it same case ?

past investment scenario how it was done and its performance ?

3) is the company paying dividend ? what is the yield ?

no dividend question is why ? if no dividend and I assume it must be using the money for investing in companies growth ? if not then where is the money going ? is the management eating up the cash via higher payments to them ? check employee cost ?

4) is it a cyclically scenario of company  ? commodity based product ?

yes - then long exposure cannot be made - set a target when to sell once exposure is taken as commodity based product are cyclically like crude / steel / cement / chemicals .

no - is it a monopoly business or in the top 3 franchise of its industries ? any dependences of its product in market ? what can cause failure for monopoly business ? what is the probability  of such failures ?

5) study on management team ? can it be trusted  ?

- increase research about management team / search interviews / read con call details / annual reports.

check how well is the management answers the queries raised are they making too much forcast for growth ? do they acknowledge the gaps or failures made or just cover up the story ?

if it passes this condition I take exposure in the companies when the stock price is at bargain range.