Investment Management – Page 2

Signal vs noise – what game are we playing?

“In life, the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.” (Kwame Anthony Appiah http://appiah.net/)

CLSA is a reputed broking house. It published a report 2 days ago recommending investors book profit in India.

We agree with CLSAs that valuations in India, on aggregate, are stretched. In our last letter we mentioned, we were “cautious, but not bearish” and that because we have borrowed returns from the future, we could be in for a period of muted returns.

Our Process For Exit Decisions (Part 2)

We have put together a brief note explaining how we take exit decisions.

Developing a process to shut out the noise

We have put together a brief note to discuss the importance of shutting out the noise and our process to do the same.

Our perspective to some commonly asked questions (Part 1)

Enclosed note contains our perspective on some commonly asked questions.

The futility of taking Cash Calls

Enclosed note explains why we don’t take cash calls.

Our perspective to some commonly asked questions (Part 2)

Enclosed note contains our perspective on some commonly asked questions.

Our Process For Exit Decisions

We have put together a brief note explaining how we take exit decisions.

Playing the game vs being clear on what game you are playing

In trying to optimize short term performance and also long term performance simultaneously is a very hard game to play. We can choose to be smart in the short term or in the long term – but can’t choose both. It’s a rare genius that can trade short term and invest long simultaneously. Most people who claim they can do this lie about their returns.

Why did Franklin Templeton wind up Six credit funds?

Franklin Templeton Mutual Fund, on Thursday announced it would wind up six credit funds with a large exposure to higher-yielding, lower-rated credit securities.

Why did they do so? The Corporate Bond markets in India are fairly illiquid. FT schemes have got impacted because they invested in papers with low credit rating (they actively took on credit risk).

Positioning portfolios in context of the Corona Virus (5)

As a follow up on the 2 scenarios we shared earlier on 18 March, the scenario likely to play out is perhaps something between Scenario 1 and Scenario 2 that we envisaged. No one knows, “for sure”, the road map to normalization. We are likely to see 2 steps forward and 1 step back approach based on “trial and error”.