Edited excerpt of conversation with Abhishek Banerjeesmallcase manager, Founder & CEO, Lotusdew:
What event in the history of the Indian stock market would you associate with the victory of the world cricket cup in 83?
According to the Western world, 1983 was the year when the Indian team was the weaker team and was not expected to win the World Cup. This was one of the few times in that decade that the nation felt proud to be called Indian. The team’s heroes delivered what was expected and the fans were delighted, happy and excited by their performance. In the last few years we have witnessed many such heroic efforts by the great players of Team India.
I think the way the RBI manages inflation relative to its neighbors does not lack such a heroic act. Even though we don’t celebrate enough, how to manage covid in India, how to manage inflation in India, how GST is implemented in India – these are millennial events that are as one as victory in 83 .
All Indians residing anywhere in the world witness the pride of being Indian. In fact, the desire for the best minds to migrate outside of India is dwindling, and the reverse osmosis of talent back into India is happening daily.
Do you think that, just as winning at the start of a match can be one of the factors that determine the outcome of a match, the number of registrations should also be one of the factors for choosing an IPO?
Basically, winning a toss helps a team decide which strategy to start with. Every captain has a strategy, whether he wins or loses on toss. Likewise, every manager has a bear and bull case strategy for their business. The important thing is to perform like a good captain Virat kohli and can adapt to the situation as it changes. Registration is some point in time, while a company exists after the IPO. It’s like asking if we should decide our married life based on the number of wedding guests. How many people came that night has little to do with how married life turns out for the couple.
What are your selection criteria for building a portfolio; Do you believe in a player’s past achievements or pedigree? Who is your cricket idol and what qualities would you like to replicate in your portfolio/strategy?
Both are necessary. You can think of past achievements as the pitch and athletics as pedigree. A person with good pedigree can do well in a bad yard. Likewise, a good yard can support newcomers. Investing is a business that values uncertainty by measuring better than others. Therefore, in the context of cricket, having a good venue is just as important as the players on the team. Home advantage is like a forward wind.
It must be virat Kohli. I am a fan of his courage, his talent, and his indescribable charisma. I think a lot of that comes down to quality and therefore we focus on the quality of the board’s governance as one of the key criteria when selecting microcap stocks.
Do you choose an expert or a holistic person for your portfolio/strategy and why?
That’s a good question, just as a team needs all types of players, so does a portfolio. We need heavy mercenaries and good farmers as well. You can think of heavyweights as high beta stocks and speculative stocks as stocks on which the rest of your portfolio depends, when the heavyweights don’t perform. good like that.
Narrate a market-changing event that you might associate with victory in India’s GABBA test in 2021.
While it’s a great diversion, I generally don’t believe in turnaround, as minority shareholders need a sustainable strategy. Likewise, game, skill, and luck are equally important. Therefore, rotation is not something we focus on as a mass market investment strategy.
However, the situation is quite different in our private market portfolio. Private equity has an internal perspective, controls and co-directs with management. When a reputable private equity firm steps in to influence the turnaround in publicly listed companies, that’s when we get excited. One person who recently did that is the case of the Adani corporate group.
Who wants to nominate Dipti Sharma for your portfolio (a company well run by a female business leader)
nykaa is that company and Falguni Nayar is that player. She had all the experience to see such efforts go awry, but she dared to do it. Entrepreneurship is often associated with courage, luck, and skill, not math. Therefore, what she has done deserves such a nomination. However, I am not sure if I am doing justice to anyone by comparing such great leaders from different fields.
How do you decide your investment strategy for investors whether they should opt for Test Match or One Day or T20?
Buy an index fund to play a test match and buy baskets of stocks for T20 and One Day. When you look at every type of game, be open to all kinds of investment solutions in your portfolio. Just like a balanced diet for a top performer, a properly balanced allotment is crucial to keeping your portfolio in good shape.