Tag: Deepak Shenoy

Following Warren Buffett’s advice blindly no good, says myth-busting investor

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most investors believe that expert advice is a way to success, but often such advice devolves into myths that may cause damage if followed blindly, tech engineer-turned-investor and entrepreneur Deepak Shenoy said.

In a blogpost, ‘The five myths about investing,’ Shenoy talks of myths that one should steer clear of.

Myths like investing early in life and taking risks are very different from reality, the Founder and CEO of Capitalmind said. In reality, a young person earns just about enough to get by and not much is left to save. Once older, not only is the salary higher, but the investor is also more experienced.

Also read: Investing: You don’t need to own the next big thing to earn high returns, says this finfluencer

According to Shenoy, the amount invested is the game changer. Even if the investor places a higher amount in a fixed deposit at a later age, he may end up ahead of someone investing early.

“If someone tells you that you need to take risks or that you need to invest early to make it, they’re both wrong. You can start any time, and in all likelihood, you will find a way to make enough money without taking insane risks,” Shenoy said.

Another myth is that investors should track their money every day, Shenoy said, adding that only a short-term trader needs to look at his investments on a regular basis. Long-term investments require time before being evaluated.

Breaking the myth around insurance, Shenoy said such policies are beneficial only when the investor has dependents who can get financial help when they are gone.

“When you reach a stage in life where, if you should die, your dependents are well taken care of, and your loans are already repaid, then you don’t need insurance,” he said.

While veteran investor Warren Buffett’s advice is timeless, following it blindly will not aid in growing your money, said Shenoy.

Giving an example, Shenoy demonstrates how Buffett’s quote, “Our favourite holding period is forever,” is used to prevent selling stock in a short period of time. However, some stocks are short-term investments and need to be sold when the investor gets better returns.

Also read: Not investing Indian investor’s biggest mistake today: Axis MF’s Gopani

Shenoy is not the only investor who has warned against following ace investors blindly without doing research.

Popular CNBC TV host Jim Cramer earlier said it was advisable to have your own opinion than getting burned by Warren Buffett’s moves on the stock market.

“If you like oil, you should own Exxon. If you don’t like oil, you should sell it. Don’t try to mimic Buffett — you’ll just get burned,” Cramer had said.

There is also no truth in reducing equity investing as one grows older, Shenoy said. It is best to learn from your own mistake while making investments, he added.

Also read: Stay invested: Leading global investors’ advice as Omicron threat weighs

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IPO boom: Experts suggest what to buy, avoid and sell

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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This week was by far the most hectic week in the primary markets. Nykaa saw a big bang listing hitting a Rs 1 lakh crore market cap value on listing day, India’s biggest initial public offering (IPO) so far, Paytm also opened for subscription this week, however, the issue saw muted subscription. 

In 2021 so far, a lot has happened. As many as 46 companies floated IPOs to raise a total of over Rs 80,000 crore. Experts believe that this year could close with Rs 1 lakh crore of primary market fundraising.

This week itself three IPOs—Paytm, Sapphire Foods India and Latent View Analytics—opened for subscription.

In CNBC-TV18’s special show, Smart Money, Bharat Lahoti, co-head and fund manager at Edelweiss AMC and Deepak Shenoy, founder at Capitalmind, discussed which IPOs to buy, which ones to avoid, and which ones to sell post listing.

Also Read: Bajaj Allianz Life Insurance partners IPPB, Dept of Posts; launches 2 new products

According to Lahoti, apart from easy money, there is also buoyancy in the market that has led to this IPO market. There is a structural reason, which is leading for IPO companies to come in.

“Over last few years, because of reforms, financialisation of savings, formalisation of economy, rising per capita income, changing preferences in the way we buy goods and services, has led to many private equity venture capital firms investing in many emerging ideas. These private equity venture capital firms in our opinion – when mature – tend to sell some of their best-investing companies and these companies are now coming for IPOs,” he said.

Shenoy would want to build up a position in Nykaa over a period of time and add as and when the company shows fundamental increases.

Also Read: Positive on SBI, ICICI Bank, Axis Bank, Federal Bank & DCB Bank: Kotak Institutional Equities

“The profit is likely to double from here in the near future. I do expect the growth to come in but I do think that price will also probably correct and they will be volatile over time, so it is better to spread in investment rather than get all in right now,” he explained.

Lahoti, on the other hand, believes one should participate through funds for retail investing.

According to Shenoy, the world is going to move into more types of insurance. There will be online purchase and management of insurance and more group plans and term plans, which is what PolicyBazaar sells the most, he said.

“So the PolicyBazaar business is exciting. I think we are paying an extremely high price for it, 40 odd times sales, so if this were to go to 80 times if the stock market were to double its price or even if it were to remain at the same price, it is a pretty high price to pay for a company where technology is not the primary driver of revenue. I would give it a little bit of less of criteria, however, if you like the space, if they perform, if they do some acquisitions, longer-term this will be a good play but then again build a position over time. Patience is key here and we will have to wait for the business to perform,” he explained.

For the entire discussion, watch the accompanying video.

To watch other videos in this series, click on the Smart Money tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Betting on RIL and Bharti Airtel, HUL expensive, avoid Ultratech: Capitalmind’s Deepak Shenoy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian benchmark indices, Sensex and Nifty closed a percent higher Thursday led by strong gains across the board, amid positive global cues. Deepak Shenoy, Founder of Capitalmind analysed the quarterly performances of the big names that announced their results today as well as are going to come out tomorrow.

In the telecom sector, according to him, the average revenue per user (ARPU) increase is an indication that telecom players are willing to consider price increases. He disclosed that he owns Bharti Airtel and Reliance Industries Ltd (RIL).

“This might be interesting. You do have a feeling that if Reliance keeps the prices low, no other players can increase prices – Bharti Airtel is going against this and it has in the last few months. We own Bharti, we also own Reliance. So we are betting on the two of them getting maximum market share here.”

UltraTech Cement reported a sharp 114 percent jump in its consolidated net profit for the quarter ended June 2021 at Rs 1,700 crore as compared to Rs 794.2 crore in the year-ago period. However, the cement major is an “avoid” for Shenoy.

“I have not invested in UltraTech Cement. The next quarter is full of rain. So that usually doesn’t do well in sales. For me, it is mostly an avoid, most cement companies are,” he explained.

“Given the structure of the market, if there is a big real estate recovery, we will change our mindset but in general we are avoiding cement at this point of time,” he added.

Bajaj Auto today reported a sharp jump in earnings for the first quarter of fiscal 2022 owing to a lower base with revenue in line with estimates and net profit and margin missing estimates. According to Shenoy, the two-wheeler space is a very exciting space for the next three-four years.

“Two-wheeler is going to see a recovery in our opinion,” he shared.

He believes Hindustan Unilever Ltd (HUL) is a good story but he isn’t investing.

“I think it is very expensive. For this kind of growth, I wouldn’t pay this kind of valuation. Overall, not interested in expensive fast-moving consumer goods (FMCG). HUL is still at 70 times earnings for what is a 12 percent company. It is a good story but not investing,” he mentioned.

For the full interview, watch the accompanying video.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zomato IPO: Should you subscribe?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Market regulator Securities and Exchange Board of India (SEBI) has approved Zomato’s application for an initial public offering (IPO), where the company is looking to raise Rs 7,500 crore through issue of equity shares, and an offer-for-sale to the tune of Rs 750 crore by Info Edge (India) Ltd. However, Info Edge, in a regulatory filing, said it will now be selling only 50 percent, or Rs 375 crore, of the initial offer as offer-for-sale (OFS) in Zomato’s IPO. Info Edge is one of the largest shareholders in Zomato.

According to Deepak Shenoy, Founder of Capitalmind, the IPO of a tech-led delivery company is new in the market as compared to a lot of the other spaces.

He is excited about the opportunity. “It is an interesting company in the space and I am biased because I am both, a user and I would probably like to subscribe to the IPO as well,” he said.

“We like technology companies, there is a lot of scale on technology. I would personally invest primarily because it is a tech-led business – the apps give you the ability to track your deliveries – these things change the industry dynamics, so I would love to invest,” he stated.

The business is growing tremendously and the lockdown and pandemic helped them dramatically change their business model.

“The company has turned profitable on a per-order basis. I believe, this is a five-ten year story. This market has a large potential to grow especially in tier-II and tier-III towns. The story of profitability is not for today, it is for another few years down the line,” he mentioned.

He believes, it is time for the National Restaurant Association of India (NRAI) to create competition that will perhaps force Zomato, or create a value for Zomato to reduce their commissions in certain cases.

“The organization of delivery at this scale is very difficult for any player to do at scale and Zomato has been in this business for many years. A lot of the restaurants have been affected positively. There will be some ups and downs. Overall, the business is sound and it provides a lot of value,” he shared.

(With inputs from PTI)

For the full interview, watch the accompanying video.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow