Being Reproduced faithfully for this audience
"Article in PI INsider for March '2010
ARTICLE
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To be frank as i was struggling to pick up a topic for this article it suddenly occurred to me - why cant I write about something i am passionate about?
There are two things which have always excited me
1) Technology
2) Stock Markets
But for a change it wont be about Technology but I would like to share some of the Fundamentals i have picked up as an learner in the Stock markets
and I would like to relate it our career aspirations. This imbibes most of my mistakes as well, and i have made tons of them and continue to make them :)
As an Investor its key that one should FOCUS on the FUNDAMENTALS of the business
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To Explain From a Market context:
Though this may not make sense for this audience - every business has its cyclicals - Ups and downs. But the key fundamentals of
the business is reflected in the Annual Financial statements.
- Vision & capability of the management
Where does the management see itself 2-3 yrs down the line.
What are the Key Opportunities in this timeline(Quantify them)- This typically should be in the Chairman/CEOs report
(for a serious investor read the letters from Warren Buffett to Shareholders in Berkshire Hathway’s Annual reports)
- Whats the Execution strategy
What is the plan for grabbing these opportunities
Is a non linear approach feasible to get to some of these opportunities
- Operational ability
Is the Organization in a position to turn these opportunities into business
Are there internal challenges which can be a bottleneck for the organization from execution perspective
- Could be government regulations
- Competition
- Capacity and Operations to undertake the challenge
- Is there a differentiator that sets the Company from rest of the competition
Does the Organization have something inhouse/acquired which can help it get faster to market and realize cashflows
Ultimately this is what is also reflected in the Balance sheet - QoQ/YoY.
But this P&L value in Balance Sheet mostly will not be reflected in the Stocks performance. For an Investor thats why you have Opportunities in both
Boom/Bust markets.As an Value investor if you have the patience and confidence in the fundamentals of the business and opportunities out there,
the stock is going to go up.But its important to do your math right and understand if the company's performance is priced rightly into the stock's
price and should have the patience to stick with it.
Eg: When I started dabbling with stocks, I picked up BHEL in 2005 for Rs545, the stock never moved beyond Rs 570 for 6 months and finally I sold at a loss of 20Rs a share. 5 years down line BHEL has moved 5x quoting 2450Rs/share. This is just one of my mistakes to quote for this audience.
As for gains, I still hold Infosys at Rs500/share and you know where it is now
Let me try to relate this to a Career Context
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Always Have a Vision/Goal:
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What do I want to be in the next 5 to 10 years.
- Business Leader/Client Engagement Manager/Own a Business of some size.
- Make a pick and quantify your goal( Size of business/ Pay package)
If you dont know what you want to be you will get somewhere but may not reflect your capability.
Execution Strategy:
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Key Aspects to get there
- Try to understand what you need to do in that role - JD/Typical targets/Skills required
- Try to Pick up the skills that you will need to be able to Execute that role. If you don’t get to learn something new in your role, ask for a role change but be clear as to what you want to pick up.
- Ensure you have the right connects in the organization/outside who can groom you for that role. This will only help you scale faster.
Operational Ability:
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When you come to work every day look at what you can do every day that can take you closer to the identified goal. Have fun in doing this.
Eg: If its an EDI expert that you want to be, ensure you pick up one key element of EDI map for a functional object that you will learn.Over a period of time, you will be an expert no matter what it takes.
Differentiator
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This is the key which sets you apart from the rest of the group.Identify what is it that you can pickup that can create you that opportunity for moving towards your goal.
By the way, dont come to office thinking will what i do today result in a hike/progression. These are just milestones which may happen in time/may not but ensure whatever you try to do, you have done the best job of it. Rewards and recognitions will happen if you have the right attitude, abilities and mindshare with your stakeholders.
Speaking of the Stakeholder, the fruits of the labor are in the riches but ensure you set the right expectations with all your stakeholders - your boss, your team,your family, your customers and try to achieve them. BALANCING is not easy and is NEVER EASY.
That should be all for this edition, its been fun launching this newsletter and interacting with the creative minds in this time. By the way if the PI- INSIDER ever has a section on investing, be assured I will be one of the contributors.
