"Indians today are governed by two different ideologies. Their
political ideal set in the preamble of the Constitution affirms a life of
liberty, equality and fraternity. Their social ideal embodied in their religion
denies them."
—B. R. Ambedkar (Indian,
1891-1956)
Word
for the day
Ostensible (adj)
Outwardly appearing as such; professed; pretended, e.g., an ostensible cheerfulness concealing sadness.
Malice
towards none
When would Dr. Manmohan
Singh retire from public life?
From economic viewpoint - his incremental contribution is negligible!
From aspirational
viewpoint - he has no more heights to
scale!
From social viewpoint - he
is a misfit in young India.
This could be one of the most unfortunate things to occur to a society
when the TRP potential of an issue decides social, political and religious
priorities.
As highlighted earlier also, the life insurance advertisements in
India are blatant in depicting Indian women as totally dependent on their
spouse and fathers. This does not outrages and feminist, whereas a dress code
or restriction on mobile use in campus prescribed by an educational institution
does.
Similarly, CEAT advertisement on TV implying that common Indians
are non-compliant and have no road sense has not seen blood of anyone boiling.
Millions raised hue and cry when Ms. Kiran Rao pointed out that non-compliance
is rising in India, and she fears it.
Sir, please guide me, what should I do?
Shri R. K. Damani is certainly one
of the most revered names amongst the financial investing community in India.
Thousands of investors like me have grown up following his footsteps.
Long known as known as true value investor, in past few years he
has established himself as a successful businessman through his retail venture
popularly called D-Mart.
The company owning D-Mart retail business recently made an IPO
priced at Rs299/share. The share price has raced to ~Rs800 in less than 3weeks
of listing of IPO. Every day there is virtually a stampede in the market to buy
stocks of this company.
As per consensus earning estimate, the stock is trading at ~40x
FY20 earnings. The company has indubitably performed much better than all its
peers. It has been profitable, mostly due to cost and procurement efficiencies.
It mostly owns the premises where its stores are run, thus saving on rental
cost.
In past Infosys has used this model of owning most of its business
premises. But Infosys has the advantage of getting land at highly subsidized
rate and tax rebates. Moreover, the company has the entire world as its
business area.
PVR, the leading film exhibition company in the country, also
started with this model, but changed the course midway. The growth post change
in business model to leased premises has been phenomenal.
D-Mart, is in a business that needs to be located within or close
to residential areas. Finding such places is difficult and expensive
proposition. This business has low entry
barrier, is intensely competitive and facing serious challenges from large
online retailers. There is little proprietary technology involved. The
procurement and marketing innovations cannot be patented and would be emulated
by many.
Though certainly not impossible, it is tough to foresee it growing
from present 118stores to 1000 stores in next 10yrs, while maintaining same
profitability and business model.
What I am pondering, before jumping onto the bandwagon is—
(a) If the stock could have
been sold at Rs1000 in April, as most market participants are telling me today,
why did a seasoned investor like Shri R. K. Damani sold it for Rs299 in March?
(b) If this company was not
owned by Damani ji, would he be buying this stock today as a value investor?
(c) If as one of his
disciples, I take this idea of buying a grocery store at ~40X FY20 earnings to
him, what would be his reaction?
(d) The people who are
buying at Rs800, what is their return expectation?
Till the time I get answers to my inquisitions, I am just holding
my horses back and resisting the lure to own pure gold.
The army of Damani Ji's fans may please forgive me for the
blasphemy I might be guilty of committing here.
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