| Author |
Message |
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
   Posted: 18/Jun/2007 at 11:19am |
Originally posted by basant
Originally posted by getmanoj
An interview with Prof. Sanjay Bakshi. He is a profeesor at MDI and rare combination of people who "put theory in practice" .... He was one of the persons who found TRENT in very early days .....
http://www.capitalideasonline.com/articles/index.php?id=2262
It might be useful to TED members.
Manoj
|
This link has a interesting take on pure holding companies. The first part of the interview is a must read for anyone interested in holding company valuations. Bakshi explains how he went for pure holding companies in 2002 and his experiences thereafter!
It is important to remember that Bakshi is indicating pure holding companies with no operating businesses of their own.
If you read Sanjay Bakshi's take on this whole holding company discount he makes two very important distinctions:
1) Pure holding company with no other operating business
2) Holding company with other operating businesses as well.
In that interview Sanjay goes on to state that given a choice he would buy the category (2) company even if that is coming with a lesser discount because once the operating businesses starts to throw back cash the discount should narrow out.
He talks of such assets as cash or cash equivalents.
|
Originally posted by vip1
Basant , can you give examples of the above 1 and 2 ? |
Examples of 1 are companies like Balmer Lawrie Investment, Jindal SW Holdings etc examples of 2 are Nw18, UB holdings etc.
In category 2 the company do something more then actually holding the underlying listed subsidiaries.
Edited by basant - 18/Jun/2007 at 11:50am
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
 IP Logged |
|
|
|
 |
|
investor
Senior Member
Joined: 06/Sep/2006
Online Status: Offline
Posts: 1745
|
Posted: 18/Jun/2007 at 11:33am |
How would you slot Tata Investment Corp?
Originally posted by basant
Examples of 1 are companies like Balmer Lawrie Investment, Jindal SW Holdings etc examples of 2 are Nw18, UB holdings etc.
In category 2 the company do something more then actually holding the underlying listed subsidiaries. |
|
|
The market is a place where people with money meet people with experience.
The people with experience get the money while people with money get experience!
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 18/Jun/2007 at 11:43am |
Tata Investment is like a quasi MF which will never sell its holdings so as investors we could be just mirroring the performance of the Tata group companies.
But tata Investment also has a stake in Tata MF so it could qualify under category 2!
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 24/Jun/2007 at 10:03am |
Originally posted by kulman
Investors should estimate the value of our operating subsidiaries, and the value of our marketable securities. That gives you the value of our operating business. But you also need to estimate how effectively we’ll deploy our retained earnings.
In 1965, Berkshire’s entire value lay in its prospective reinvestment of its retained earnings into new businesses, not in its textile business. We now have $80 billion in retained earnings to invest.---Charlie Munger
-------------------------------------
Basant jee....your comments please!
|
The operative word here is "estimate" Investors should estimate the value of our operating subsidiaries. It would have been better had Munger indicated the way he wanted this estimation to come about.
Broadly since he mentions it I would not think that he would have been talking about any sort of a discount. Rather (my assumption is that) Munger's statement indicates that the value of the operating business should be taken face value.Everything else looks clear!
Companies with operating subsidiaries should not be valued at a dscount. At least this is what I can make out from the above statement.Can
you post the full reference or the context or the link?
Any other views?
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 25/Jun/2007 at 9:03pm |
Originally posted by kulman
Actually it was in response to a question by a shareholder during recent annual meeting. The whole conversation went like this...........
Question: How do you calculate intrinsic value?
Warren: The intrinsic value of Berkshire Hathaway equals the amount of its future cash flows, discounted at a proper rate.
Charlie Munger: Investors should estimate the value of our operating subsidiaries, and the value of our marketable securities. That gives you the value of our operating business. But you also need to estimate how effectively we’ll deploy our retained earnings. In 1965, Berkshire’s entire value lay in its prospective reinvestment of its retained earnings into new businesses, not in its textile business. We now have $80 billion in retained earnings to invest.
Warren: If Charlie and I wrote down our estimate of Berkshire’s intrinsic value, the numbers would not be the same.
|
Munger is referring to operating subsidiaries as operating businesses not as holding company subsidiaries etc. This means he finds no differnce between operating businesses and operating subsidiaries. See this quote "That gives you the value of our operating business."
Buffet sums it up the best "If Charlie and I wrote down our estimate of Berkshire’s intrinsic value, the numbers would not be the same."
Over the weekend I read Graham and Dodd's security analysis. That book explains the differnce in valuation depending on whether a company holds 50% and above; 20% - 50% and less then 20% of voting rights.
In case a company holds more then 50% and above voting rights the Graham says that investors should look at consolidated results Pg 263- 265. There is no mention of discount.
Edited by basant - 25/Jun/2007 at 9:25pm
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
kulman
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
|
Posted: 25/Jun/2007 at 9:36pm |
|
In my view, it would be interesting to see not only how NW-18 is being valued by the markets but how they invest to grow their operating businesses.
|
|
Life can only be understood backwards—but it must be lived forwards
|
|
IP Logged |
|
|
|
sidhartha
Newbie
Joined: 29/Jun/2007
Location: United States
Online Status: Offline
Posts: 5
|
Posted: 30/Jun/2007 at 12:55pm |
|
Basantji & other Senior Members,
Your views required on the below holding companies-
1. Nalwa Sons Investments (NSIL) - A pure holding company with just one employee ( a company secretary). Has investments in Jindal group of companies.
2. Kojam Finvest - Holds stake in Gujarat Glass. from the house of Piramals.
3. DGP Securities - an extremely "unknown" kind of a company. I follow Ramesh Damani's chats on rediff. He is mentioning VIP industries as a great investment in the Indian Travel sector. DGP (belongs to DG Piramal Group) and holds 33% stake in VIP Industries. Promoter holding in DGP is more then 80%.
4. JK Investo Trade - Holding company for Raymonds group. Has valuable stake in JK Ansell & JK helen Curtis. Also owns a small stake in the group's brightest star - Raymonds.
5. Aeonian Investments - refer http://www.aeonianinvestment.com/ for details. Its the trade and investments arm for Mumbai based Chokseys. Go to the website and download its annual report, they seem to have stake in many indian companies.
6. H.B. Stockholdings - HC Bhasin owns the company (...now i admit that this is no introduction for a company..). He has been buying the stock from the market for last many months. The company owns a basket of stocks - and lot of value comes from its investments in JP Associates.
7. Aravalli Securities - Holding company of delhi based Poddar family. Owns stake in Sirpur paper mills. Also owns / has a stake in a 7 star hotel (some palace in Rajasthan). Poddars are not suppose to be investment friendly folks.
Regards
Sidhartha
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 30/Jun/2007 at 2:20pm |
|
Very interesting names. Let us start threads on each of them and analyse them seperately.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
