Ranking of Business Model Framework

Over a period of time, we worked on developing a framework looking at major wealth creators historically in the Indian market.

We have sought to distil common characteristics of such businesses and make a framework to identify future wealth creators.

We call this proprietary framework the ‘Ranking of Business Models’ framework.

This framework helps us first select a good business model and then allocate higher to great businesses.

The framework was presented at various forums like CFA Society India - Mumbai, Calcutta, Hyderabad, Chennai, and Indore Chapter, Delhi Investors Association, and also at B-schools like IIM Calcutta, IIM Indore, IIM-K Delhi Alumni Chapter, ISB Mohali.

The video and the slides of the CFA Mumbai event are attached below.

Ranking of Business Models framework Ashish Kila of Perfect Research at CFA Mumbai - October 2019 from Perfect Research

To download the presentation - Click Here

We look forward to your comments and suggestions on how we can further improve this process.

Response from the audience after the presentation

For more images click the below-given link

https://drive.google.com/drive/folders/1BuVBzqkErWJ1KoQV-JIGv3ax0zx_grhL?usp=sharing 

Acknowledgement

The author, Mr Ashish Kila would like to thank his entire family & team at Perfect Research for their extensive help in the preparation of the above presentation, especially our Chairman and his father Mr R.A. Kila for all the guidance and support.

Disclaimer

• We are not SEBI Registered Investment Advisors
• Nothing in this article is, or should be construed as investment advice. The stocks mentioned in the post are for educational purpose only and are not recommendations; the purpose of this post is to highlight a framework which an investor can apply to any company.
• This is not an offer (or solicitation of an offer) to buy/sell the securities/instruments mentioned.
• All the posts on this blog, including this one, are for educational and discussion purposes only.
• Please do not take buy/sell or any investment decision based on articles you read on the blog. These are only meant to provide information and initiate discussion. The final decision is and always should be of the reader only.
• There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth.
• Perfect Group’s officers, directors, employees, principals, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this letter.  

A framework to understand the Banking Sector.

The Banking & Financials sector constituted the major chunk of Warren Buffett's portfolio as on June 2018, also, this sector has emerged as India’s biggest Wealth Creating sector over 2013-18 dethroning Consumer/Retail and was also an outperformer over 2012-2017, according to the 23^rd Annual Wealth Creation Study by Motilal Oswal.

Quoting Warren Buffett:-

“If you are going to function in society, as an individual, a mom-and-pop business, or a billion-dollar corporation, you need one or more of the following: a bank account, a business loan, a car loan, or a mortgage and with every bank account, business loan, car loan or mortgage, comes fees charged by the bank for the myriad services it provides.”

We analyzed the Banking Sector and used one company to illustrate our framework; which was presented at Best Ideas 2019 hosted by MOI Global and IIC 2018, also, the video of Best Ideas 2019 is attached here.

Investors may use the aforesaid framework in evaluating the Banking Sector and may apply the thought process to look at other Banks also.

Understanding the Banking Sector by Ashish Kila (CIO, Perfect Research) at Best Ideas 2019 (MOI Global) 

To download the Presentation- Please visit this link  

We look forward to your comments and suggestions on how we can further improve this process.


Acknowledgment
The author, Mr. Ashish Kila would like to thank his entire team at Perfect Research for their extensive help in the preparation of the above presentation, especially our Chairman and his father Mr. R.A. Kila for all the guidance and support.


Mr. Abhinav Mansinghka for bringing the idea to our notice and being our sounding board for this idea

Disclaimer:

• We are not SEBI registered Investment Advisors
• Nothing in this article is, or should be construed as investment advice. The stocks mentioned in the post are for educational purpose only and are not recommendations; the purpose of this post is to highlight a framework which an investor can apply to any company.
• This is not an offer (or solicitation of an offer) to buy/sell the securities/instruments mentioned.
• All the posts on this blog, including this one, are for educational and discussion purposes only.
• Please do not take buy/sell or any investment decision based on articles you read on the blog. These are only meant to provide information and initiate discussion. The final decision is and always should be of the reader only.
• There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth.
• Perfect Group’s officers, directors, employees, principals and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this letter.

Capacity to Suffer Framework

Hi

Every year we strive to share our thought process on the challenges being faced by us in our journey of value investing. 

This time we build upon the capacity to suffer framework discussed in the post published before 
http://perfectresearch.blogspot.in/2016/01/identifying-businesses-exhibiting.html

Just to refresh.... 

Capacity to suffer is the management's ability to endure through early burdens on reported profits in short run in order to advance their long term competitive advantage.“Capacity to Suffer” is a key ingredient for long term wealth creation and one must not make the mistake of punishing companies in the short run for choosing pain to develop long term competitive advantage.

The ppt was presented at various forums like IIF and TIA Chennai's 20-20 Ideas Meet. 

A condensed version of this presentation was also presented at October Quest forum by me jointly with my dear investor friend Abhinav Mansinghka

We would again like to draw the reader to have a look at disclaimer attached at the end with respect to the stocks being discussed. The stocks (businesses) being discussed are clearly to be seen in the light of understanding the concept and at no point to be construed as an investment recommendation. We are not SEBI registered Analysts.

Here is a link of the video of the presentation made at TIA Chennai 20-20 Ideas Meet

We look forward to your comments and suggestions on how we can further improve this process...
PFA the PPT below

TIA Chennai 20-20 Ideas meet presentation - Capacity to Suffer Framework from perfectresearch

To download the Presentation- Please visit this link  

Acknowledgement

The author (Mr. Ashish Kila) would like to thank his entire team at Perfect Research & his investor friend Abhinav Mansinghka for their extensive help in preparation of the above note.

Disclaimer

• We are not SEBI registered Investment Advisors
• Nothing in this article is, or should be construed as, investment advice. The stocks mentioned in the post are for educational purpose only and are not recommendations, the purpose of this post is to highlight a framework which an investor can apply to any company.
• This is not an offer (or solicitation of an offer) to buy/sell the securities/instruments mentioned.
• All the posts on this blog, including this one, are for educational and discussion purposes only.
• Please do not take buy/sell or any investment decision based on articles you read on the blog. These are only meant to provide information and initiate discussion. Final decision is and always should be, yours and only yours.
• We may or may not have a position in the stocks discussed on this blog

Why standard valuation matrix is not the best way to value great businesses

Hi

Every year we strive to share our thought process on the challenges being faced by us in value investing. We started our moat investing journey with the ppt "Role of Management in Long term investing" to highlight that when Buffett says that business quality is more important than management he is referring to the competence of the management, however we wanted to highlight that in India a lot of managements are unethical and an investor needs to be discerning enough to differentiate the good from the bad. Else money will be made only by the management and not the minority 

Then we discussed on our 4C's of Investing Process (Cloning, Checklist, Capital Allocation & Checkout) on how we shortlist ideas, bet money and exit them.

Now we discuss that since stocks are no longer trading at attractive multiples, the standard valuation matrix of PE multiples would not help us hold on or buy great businesses. So the post attempts to discuss a framework to value great businesses. 

The topic of the ppt is "why standard valuation matrix is not the best way to value great businesses", the ppt was presented at various forums like IIF and FLAME Investment Lab - Alumni Meet in Pune recently. Foundation for Liberal And Management Education (FLAME)

We also won the best speaker prize at FLAME 2015 alumni meet for the above presentation and we were gifted a great book - "Anatomy of the Bear: Lessons from Wall Street's Four Great Bottoms". One can read about Flame Investment Lab here.

We look forward to your comments and suggestions on how we can further improve this process...

why standard valuation matrix is not the best way to value great businesses from perfectresearch

To download the Presentation- Please visit this link  

Acknowledgement

The author (Mr. Ashish Kila) would like to thank his entire team, for their extensive help in preparation of the above note.

Disclaimer

• We are not SEBI registered Investment Advisor
• Nothing in this article is, or should be construed as, investment advice. The stocks mentioned in the post are for educational purpose only and are not recommendations, the purpose of this post is to highlight a framework which an investor can apply to any company.
• This is not an offer (or solicitation of an offer) to buy/sell the securities/instruments mentioned.
• All the posts on this blog, including this one, are for educational and discussion purposes only.
• Please do not take buy/sell or any investment decision based on articles you read on the blog. These are only meant to provide information and initiate discussion. Final decision is and always should be, yours and only yours.
• We may or may not have a position in the stocks discussed on this blog

"Identifying Businesses exhibiting the Capacity to Suffer"

Our Second Article on CNBC TV18 Website Moneycontrol.com - "Identifying Businesses exhibiting the Capacity to Suffer" - https://t.co/TSICh8FXp7 

Over the last few years we have realised that investors fail to appreciate great businesses and managements which display the capacity to suffer.

Capacity to suffer is the management's ability to endure through early burdens on reported profits in short run in order to advance their long term competitive advantage.

“Capacity to Suffer” is a key ingredient for long term wealth creation and one must not make the mistake of punishing companies in the short run for choosing pain to develop long term competitive advantage.

We wrote briefly about it earlier on https://twitter.com/ashishkila/status/614794354381565952

The current article is an attempt to briefly summarise a few key points from our presentations on the aforesaid topic this year...(Thanks - Nikhil /moneycontrol.com /(‪#‎PerfectResearch‬ )

Disclaimer: 

Acknowledgement

The author (Mr. Ashish Kila) would like to thank his entire team, for their extensive help in preparation of the above note.

 

Disclaimer

• Nothing in this article is, or should be construed as, investment advice. The stocks mentioned in the post are for educational purpose only and are not recommendations, the purpose of this post is to show capacity to suffer as a framework which an investor can apply to any company.
• This is not an offer (or solicitation of an offer) to buy/sell the securities/instruments mentioned.
• All the posts on this blog, including this one, are for educational and discussion purposes only.
• Please do not take buy/sell or any investment decision based on articles you read on the blog. These are only meant to provide information and initiate discussion. Final decision is and always should be, yours and only yours.
• We may or may not have a position in the stocks discussed on this blog