I had a brief moment of indecision whether to read Saurabh Mukherjea’s Gurus of Chaos: Modern India’s Money Masters (2015). The book had received a pointedly negative review in Outlook Business magazine and hence I hesitated. But having once picked it up, I found it unputdownable.
There are a lot of books featuring interviews with Western money managers and I have read a couple of them. Books featuring Indian money managers, however, are relatively rare and this is a welcome attempt. In addition to interviews, the book also features essays on long term investing.
Mukherjea states: “There is an image out there, not just amongst young people, but also with the public at large that the stock market is a casino where gamblers and operators roll the dice and where, those with inside information have an edge. This is unfortunate because not only does this deter millions of individuals from investing their savings in stocks …, it also draws young professionals to the stock market for all the wrong reasons….”
Mukerjea goes on to write: “The reality of long term success in the stock market is very different. Whilst there are some investors who rely upon inside information to make money, truly successful long term investors use other techniques to make money…. Successful long term investors use a simple but powerful set of rules to make money in the market.” To follow the rules, one needs to look at the companies’ balance sheet, understand the business model and also to use the concept of “margin of safety”. In addition, one needs to read extensively and discipline oneself mentally.
The book was very revelatory about the conservative Indian mindset. People mostly use simple guidelines to select stocks. They may look at PE or ROE or ROCE, very rarely at free cash flows. And nothing deep like Warren Buffett or Ben Graham or mind boggling like George Soros. Also there are no quants like Jim Simons who use sophisticated algorithms to trade in the market. It should also be mentioned that India’s market are not as deep and liquid as other markets.
Mukherkjea holds up Asian Paints and TTK Prestige as two well run companies whose stocks have generated wealth over a long time. One of the investors mentioned in the book, Sanjoy Bhattacharya, invested Rs 15,000 in Asian Paints in 1983. The investment became Rs 6 lakhs by 1990 when he sold. If he had held on to the shares, now it would be in excess of Rs 5 crores. I am happy to say I have invested in Asian Paints, albeit only recently.
An interview I particularly relished was that of Sankaran Naren, an IIT-IIM product who is now CIO of ICICI Prudential Mutual Fund. His evolution as a stock picker from more or less a gambler to a seasoned value investor was instructive. Naren hopes that “value investing is more recognized as a good investment technique in India as it is in the West.”
There is also a mystery interview in the book in which the identity of the investor is not revealed. Wonder who it is.
There are a lot of books featuring interviews with Western money managers and I have read a couple of them. Books featuring Indian money managers, however, are relatively rare and this is a welcome attempt. In addition to interviews, the book also features essays on long term investing.
Mukherjea states: “There is an image out there, not just amongst young people, but also with the public at large that the stock market is a casino where gamblers and operators roll the dice and where, those with inside information have an edge. This is unfortunate because not only does this deter millions of individuals from investing their savings in stocks …, it also draws young professionals to the stock market for all the wrong reasons….”
Mukerjea goes on to write: “The reality of long term success in the stock market is very different. Whilst there are some investors who rely upon inside information to make money, truly successful long term investors use other techniques to make money…. Successful long term investors use a simple but powerful set of rules to make money in the market.” To follow the rules, one needs to look at the companies’ balance sheet, understand the business model and also to use the concept of “margin of safety”. In addition, one needs to read extensively and discipline oneself mentally.
The book was very revelatory about the conservative Indian mindset. People mostly use simple guidelines to select stocks. They may look at PE or ROE or ROCE, very rarely at free cash flows. And nothing deep like Warren Buffett or Ben Graham or mind boggling like George Soros. Also there are no quants like Jim Simons who use sophisticated algorithms to trade in the market. It should also be mentioned that India’s market are not as deep and liquid as other markets.
Mukherkjea holds up Asian Paints and TTK Prestige as two well run companies whose stocks have generated wealth over a long time. One of the investors mentioned in the book, Sanjoy Bhattacharya, invested Rs 15,000 in Asian Paints in 1983. The investment became Rs 6 lakhs by 1990 when he sold. If he had held on to the shares, now it would be in excess of Rs 5 crores. I am happy to say I have invested in Asian Paints, albeit only recently.
An interview I particularly relished was that of Sankaran Naren, an IIT-IIM product who is now CIO of ICICI Prudential Mutual Fund. His evolution as a stock picker from more or less a gambler to a seasoned value investor was instructive. Naren hopes that “value investing is more recognized as a good investment technique in India as it is in the West.”
There is also a mystery interview in the book in which the identity of the investor is not revealed. Wonder who it is.
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