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Management

I think in investing, identifying the management is one of the toughest steps I generally face. Identifying the right management is one of the longest processes. No one can identify the management in a week or months. Sometimes it takes years and years for people like me. Every time, a hidden fear appears within me, as if I misidentified the management or paid the wrong price. I know that making mistakes is normal in the equity market. I made lots of mistakes in the past and have made new mistakes. As time passes by, I am just trying to improve myself and become more conscious so that I will not repeat those mistakes that I have made in the past.

    I think that management is one of the most important parts of equity investing. If I pass this step, then I think my majority of work is done. Management is like a driver for me. Let's say I have to go from one place to another. Only a perfect driver will know which road is best, which road will use less fuel, or where those potholes are present. Choosing the best driver has become important for me. And the next important question that comes to my mind is which car will be driven by the driver. The car may be a BMW or a small middle-class car. But for me, it does not matter so much. The car should be fit and fine. Just think, if an unprofessional driver drives a BMW, it does not make any sense. He will be going to crush it for sure. So a professional, good driver is very important for my investment. If the driver drives a Maruti 800, that is also fine for me. It may take some extra time, but he will definitely drop me off at my destination. So, like the driver, the management of the business is very important for me to invest in. I just want to find some good management and sit back in his back seat and enjoy my journey. I understand clearly that there will be some potholes in my path, like inflation, rate hick, FIIs selling, commodity price hick, oil price hick, euro problem, war, job loss, and so on. But if I find the best driver, he will definitely take care of those potholes on my road and drop me off at my destination.

    I occasionally see some management. They unlock their value in the bull cartel. Raising the fund and buying some businesses that are not related to their existing business. I thought at a PE of 800,200, it did not make any sense to invest in the business for me. I am not going to live for the next 800 years from today. And I do not know what this world will look like after 500 or 800 years. Also, I am not a visionary thinker enough to think about what will happen after 800 years. So, it does not make any sense for me to invest in those companies.

    Management is everything to me. Finding good management in a good business is a gift from God. The Tatas are well-known for their management skills. Tata-like management in a good business-like IT. The world has seen its result, TCS. If we see TCS, 38,000+ PAT, ROCE 54.9%, ROE 43.6%. I feel so proud that India has such a great institute and also creates lots of jobs for Indians. TCS has a market cap of 11.5L Cr and is also growing at 15-20% annually. I just want to be under such management. If I find someone like this, then my job is done.

    Thank you for giving up your valuable time. Happy Investing.

 -Shaishab

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Comments

  1. atulSeptember 11, 2022 at 9:23 AM

    Well explained. Thank you for this financial education particularly equity investment beginners & boosting their confidence level

    ReplyDelete

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