TIA Bullet Proof
9th September 2023, Chennai
Speaker 2 Manish Chokhani @chokhani_manish
@TIA_Investors
#learnfromthemasters
#bulletproof2023
9th September 2023, Chennai
Speaker 2 Manish Chokhani @chokhani_manish
@TIA_Investors
#learnfromthemasters
#bulletproof2023
- in Chennai, you find many companies with value and values
- Investing is a fun, spiritual profession. You've to be immersed and your learning is cumulative. Horizons are always expanding
- Valuation is an interplay of micro, macro, market cycles
- Investing is a fun, spiritual profession. You've to be immersed and your learning is cumulative. Horizons are always expanding
- Valuation is an interplay of micro, macro, market cycles
- Principles are MOS, circle of competence and self awareness
Current investment landscape
- We looked upto the west but their economic situations are becoming worse due to printing, demographics are against them
- China invested ahead of requirements (property), also printing
Current investment landscape
- We looked upto the west but their economic situations are becoming worse due to printing, demographics are against them
- China invested ahead of requirements (property), also printing
- India is well poised in comparison. Apna time aagaya.
- We have right leadership, entrepreneurship and demographics
- We could be at the center of the world for this golden decade
What's happening in the world
- Govts seem to be in fantasy land due to printing money
- We have right leadership, entrepreneurship and demographics
- We could be at the center of the world for this golden decade
What's happening in the world
- Govts seem to be in fantasy land due to printing money
- with everything in the world, everything is a cycle. Countries are the end of their productivity life cycle.
- India and China gaining what weost years ago
- India will rise to become 3rd largest economy in the world
- From GFC, incremental 25bn printed-
- India and China gaining what weost years ago
- India will rise to become 3rd largest economy in the world
- From GFC, incremental 25bn printed-
- but this didn't create Real GDP growth
- in Japan, UK standard of living has declined
- you land back to India and you see the rise of Asia
- for countries, upto 30% of GDP goes to interest payments. It'll lead to bad currency policies
- in Japan, UK standard of living has declined
- you land back to India and you see the rise of Asia
- for countries, upto 30% of GDP goes to interest payments. It'll lead to bad currency policies
This began in Bretton woods conference when gold was delinked with currency.
- Technically multiples should be going down as rates rise, but money printing led to inflated asset prices
- Issue is Fed can't stop US from spending, causing a wealth effect
- Technically multiples should be going down as rates rise, but money printing led to inflated asset prices
- Issue is Fed can't stop US from spending, causing a wealth effect
- We are seeing Americans steal food and break into shops while LVMH does record business
- Look at Chinese blow up in real estate
- US market is being held by the FAANG and NVIDIA
- There is disruption coming from the west
- these things take longer to come, but when it comes..
- Look at Chinese blow up in real estate
- US market is being held by the FAANG and NVIDIA
- There is disruption coming from the west
- these things take longer to come, but when it comes..
- US social security and healthcare figures are scary
- Demographic storm - 40% of taxes spent on senior citizens
What does economic stagnation looked like? Japanification
Everyone feared Japan earlier - they will takeover manufacturing worldwide
- Demographic storm - 40% of taxes spent on senior citizens
What does economic stagnation looked like? Japanification
Everyone feared Japan earlier - they will takeover manufacturing worldwide
For 35 years, Japanese markets couldn't cross their highs. In fact they not only manipulated interest rates, their central banks also bought stocks (16% of market)
- China is 40% consumption, 40% investments, 40% exports and 20% is imports
- China is 40% consumption, 40% investments, 40% exports and 20% is imports
- Nobody questions Chinese 40% savings in an over invested economy
- Infra is 12% of GDP - financed by state owned banks - created ghost cities
- China drove commodity mania - consumed half of the world's commodities
- Infra is 12% of GDP - financed by state owned banks - created ghost cities
- China drove commodity mania - consumed half of the world's commodities
- in absence of consumption from China, we are still seeing high prices in commodities because of money printing
- China seems to be in trouble - their stocks are cheapest, but nobody is putting money there - repeat of Japan
- As China cools, one of the beneficiaries is India
- China seems to be in trouble - their stocks are cheapest, but nobody is putting money there - repeat of Japan
- As China cools, one of the beneficiaries is India
- If West is growing old, it means growth will shift to Asia & India is in the center of that
- Wall of money waiting to come to India
- India is at the opposite of US and Chinese markets - At every dip, we are going higher and higher
- Wall of money waiting to come to India
- India is at the opposite of US and Chinese markets - At every dip, we are going higher and higher
- Lot of money chasing our markets - we can take growth money and give better terminal values
- We are the cleanest dirty shirts out there
- 5 sectors are 75% of India's profits
- Only 5 cos make > 5bn profits
- Clearly lot more cos waiting to make large breakout profits
- We are the cleanest dirty shirts out there
- 5 sectors are 75% of India's profits
- Only 5 cos make > 5bn profits
- Clearly lot more cos waiting to make large breakout profits
- Top 3 in each sector will eat bulk of the profits
- 30 cos are 1/2 of India's market cap
- Big money from abroad has to come into these stocks
- Think - can HDFC Bank become the 1st trillion dollar co from India ?
- Tipping point - it took us 2007 to get to 1tn dollars
- 30 cos are 1/2 of India's market cap
- Big money from abroad has to come into these stocks
- Think - can HDFC Bank become the 1st trillion dollar co from India ?
- Tipping point - it took us 2007 to get to 1tn dollars
Next tn dollars took 5 and next took 3 years.
Next 15-20 years is most exciting period and growth we saw in China is possible here.
- India's working population in 2050 will be world's 2/3rd working population
- Consumption India = Mexico + Phillipines + Sub Saharan Africs
Next 15-20 years is most exciting period and growth we saw in China is possible here.
- India's working population in 2050 will be world's 2/3rd working population
- Consumption India = Mexico + Phillipines + Sub Saharan Africs
- Consumption to see a J curve
- Chinese car market is 9x by volume and 27x by value
Bear case is
- Weak BoP
- Weak fiscal position
- Chinese car market is 9x by volume and 27x by value
Bear case is
- Weak BoP
- Weak fiscal position
Themes
- Financialisation of savings
- Privatisation beneficiaries
- Platform plays
- Discretionary consumption
- Financialisation of savings
- Privatisation beneficiaries
- Platform plays
- Discretionary consumption
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