About Madhusudan Kela:
Madhusudan Kela is an Indian businessman and investor from Kurud, Chhattisgarh. He was chief investment strategist at Reliance Capital until 2017. He is currently the promoter of MK Ventures and a member on Board of various companies. Madhusudan Kela frequently comments on Capital Markets
He graduated in 1991 from K. J. Somaiya Institute of Management Studies and Research (SIMSR), Mumbai with a Masters in Management Studies. Thereafter he did equity research at CIFCO and Sharekhan. In 1994, he joined Motilal Oswal to start its institutional desk before moving to UBS in 1996. In 2001, he joined Reliance Mutual Fund.
During this tenure, Reliance Mutual Fund`s assets grew from nearly Rs 200 Crore in 2002 to more than Rs 1 Lakh Crore in 2011. Under his leadership, Reliance Mutual Fund received many awards and was rated the most trusted Mutual Fund House for three consecutive years by The Economic Times. He is also one of the investors in the Healthcare startup Sukino Healthcare Solutions Pvt. Ltd.
Kela was awarded the Business Standard Equity Fund Manager of the Year (2004) by Manmohan Singh, the Prime Minister of India.
Intelligent Investment Learnings in Stock Market by Madhusudan Kela
A. Investment Learnings - Portfolio Allocation/Stock Selection:
1. There is always a bull market somewhere - One of the keys to successful investing is to understand the macro direction, and get your thematic calls right. There is always an investment opportunity to be found in every market condition. Why swim against the tide, when you can swim right with it.
2. Prudent capital allocation - Getting our Asset Allocation right drives majority of the total long-term return of an investment portfolio.
3. Choosing the right Horse - Look out for businesses or companies (horse) with scalability potential and capability to generate hard cash, maintain consistently good ROEs. However, in some cases, we also seek out investments where there can be frenzy in a particular sector e.g. IT, Pharma etc.
4. Selecting the right Jockey - Always look out for promoters with passion/hunger and integrity towards the business. Only a passionate jockey can drive the horse to the winning line!
5. If you have 3 aces, bet big! - The most important rule to creating significant wealth, is to get it big. We only need a few big ideas to work. Companies like Amazon, Google, Apple, are anyways not created everyday. Hence, when you have all the right ingredients for the investment and are confident on top of the business, bet sizing is what will differentiate your portfolio!
B. Investment Learning – Portfolio Monitoring
1. Tracking of Portfolio - While longer term convection is very important, close monitoring is very important, so you are in sync in with reality. A lot of investors end up chasing the next multi bagger, when their earlier investment bets would have done the tricks! Being convicted with what you have and constantly evaluating that conviction is critical to successful investment monetization.
2. Play for the Bull Run and not for the Bounce - Differentiate between tactical trades and investment. Cut your losses whenever you realize that a particular investment was a bad one.
3. Making Money vs Being Right - The market does not acknowledge being right. It only acknowledges making money. So, focus on the investments that will make you the money, rather than trying to be right on every investment. Concentrated bets are the key.
4. The Art of Selling - Selling is an art; most people do not appreciate it enough. Only if you know how to sell and when to sell, will your paper profits ever materialize into something concrete.
5. Well defined investment process with clear exit strategies - Have high conviction in your process and adhere to it with discipline. Only this will allow you to hold on to your winners better, and let go of the bad investments.
C. Investment Philosophy – Behavioral
1. Patience and Long-term mind set - In long term Wealth creation “Time” becomes the most determinant of returns. We prefer staying invested over longer periods on our conviction bets. Divi’s Lab, to quote an example. We have invested for over than 14 years, through thick and thin.
2. Perception Gaps - Sometimes, great business can remain under appreciated by markets for long. When this gap corrects, it leads to a huge opportunity for wealth creation. Indiabulls Group is an excellent example – one of the biggest wealth creators in India.
3. Digest the right information and ignore the noise – This is biggest Challenge in the present world.
4. Keep it Simple - Stay focused and have a disciplined approach.
5. Investing can not be modelled for disruptions - Companies like Google, Amazon, Tesla, Facebook, Netflix etc. have to bought early, with a strong belief the underlying opportunity and a disregard for the near-term numbers. This, is also an art few understand.
6. Finally - Do it yourself only if you have the required understanding. Else there are lot of good people doing this for a nominal fee. Rarely on experts to do their jobs. Devote time, learn and look for opportunities.
https://en.wikipedia.org/wiki/Madhusudan_Kela
https://www.youtube.com/watch?v=aEHBzfzlDV8
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