Key Learnings from Masterclass with Super-investors- Vijay Kedia

 

Vijay Kishanlal Kedia started trading in the stock markets in his mid-teens with zero corpus. Always thinking big, he overcame many challenges and transitioned to a successful investor by betting big on selected companies. A self-learner, his forte has been identifying unknown companies, with capable management, at low valuations, holding them for long periods of time, and also getting a few big winners in every bull market.

Key Learnings from Masterclass with Super-investors- Vijay Kedia are as follows:

Kedia's key lessons from trading

• The most important lesson was there should be a stop loss.
• when you have nothing, your intuition helps.
• Markets are like the ocean, you can go for fish as well as oysters. The market rewards you as per your perception.
• one has to take risks, but how well you take it depends on your courage, your intelligence, and your luck.
• In trading, there is no value of fundamentals, and in fundamental investing, there is no value of stop loss.
• Once management thinks that they have made a lot of money, their hunger for growth goes away.

The strategy helped catch a big winner in the bull market

• Focusing on the companies that were the leaders of the bull markets after that focus on small caps as it generally moves after large caps. The trick is to find the dark horses from the sector. one has to read a lot for that.

Big Misses

• One should not sell shares just to book some profits, one should hold the shares till the company is growing.

Return Filter

• It should be multi-bagger. 
• If the economy is growing, the company should grow.

Generating Ideas

• Mostly through readings.
• Focus on understanding which sector will do well.
• Reading business news 
• One should have the passion to be aware of new developments.
• What is happening around the globe in a broad manner? and that development will ultimately happen in India.
• One should identify a fish in the ocean and not a crocodile in a pond.

Evaluating Management

• One should look for three things- honesty, hunger, and smartness in management.
• Honesty is he/she not only creates value for him/herself, but also for shareholders.
• Hunger is when you don't limit yourself to certain success.
• Smartness is when he/she is smart enough to know how to maneuver the company when a crisis or opportunities come.

Valuing business

• Primary importance to growth.
• If the current numbers are average then the company's future growth would be better than the industry's or economy's growth.
• Should be able to trust the management.

Stock buying criteria

• Normally do not buy high valuation stock.
• Reasonable cash flows but low valuations with growth scope.

Avoiding value traps

• One should analyze the company's past track record of 15-20 years as more than a decade or so tells all the ups and downs through which the company had gone.
• Analyzing the company's commitment that what they had said in the previous bull run and what they had delivered.