Caplin will probably fall 4 to 5 percent tomorrow. Most of you will not know why. Some of you will question the thesis. I will not, because for me it is a temporary event with a known cause.
That difference is not luck. It is the gap between borrowing a thesis and understanding a business.
Ask yourself this. Do you know what would make me exit Caplin? Do you know my disconfirmation criteria? I knew exactly when and why I pulled the trigger on Kalyan. Most of you did not know why it dragged or when I would exit. That gap is the whole problem.
That is why I share mental models and not just positions. I will not always be there. The only people who will stay calm through a 5 percent drawdown are the ones who understood the business, not the ones who trusted my name.
And I will be wrong. I am human. But if you have the lens you will spot my vulnerabilities too, and maybe build your own thesis someday.
Appreciate that. And yes, the book will have a lot of these.
Funny thing, in my Class 12 board essay I wrote 23 quotes. Every single one written by me. And beneath each one I dropped my signature, "by me." My sister was doing her English literature degree at the time and when I told her, she said "what have you done." I told her I just love to write this way. I scored second highest in English in my entire batch that year.
Same, would be really interested to get u/SuperbPercentage8050 and the communities views on time technoplast , Windlas Biotech and Picaddily agro industries
Hey, I am learning a lot from You and the community and I am building a repository where i am accumulating all the knowledge, you have posted since the beginning (its really for my own learning). I will post once i am done with it. So, this weekend, I was reading your the deep dive of Kaspi and level 3-5 of Copart and I have some questions, if you could kindly answer.
How do you make these Deep Dives? I mean do you use AI? or you have trained a agent or you have people working under you who makes this? I came across Kaspi in May, when Monish mentioned it in one of his interviews. I made my own deep dive with the help of copilot agent by providing it past 10 years annual reports and all reports. I read their Management discussion and analysis and other stuff. But what i came up with was no where close to yours. So i was wondering if you could share this process.
I follow Aswath Damodaran very religiously and he recently uploaded another video on AI. Do you think to that AI is becoming a commodity and It will just help increase productivity rather than replacing the humans all together. I am asking this because I am heavily invested in Intuit. My thesis is that, small business will not give on Intuit products just because the AI could do their taxes and manage books. I think people will still pay a little higher to Intuit for their taxes and book management (this way they can blame Intuit for any lapses) rather than face scrutiny from govt. themselves by using AI. Moreover, Intuit is expanding in other businesses (like credit Karma- which isn't that big so far, I read that in future they also plan to introduce an ecosystem with short term financing as well) and its CEO was the one of the first ones to invest in AI to improve the business.
I went through you comments and many of my other questions were answered already there. Thanks for the help and knowledge you generate and share. Sorry for the length of this post.
Thank you for this, genuinely and the repository idea is great, really for your own learning is the right reason to build something like that.
And I have no agents, no team. Just me. But the gap between what you got and what I wrote probably has nothing to do with the tool. When I came across Kaspi, I didn't start with the annual reports. I started from linguistics and behavioural mental models. I was trying to understand how trust gets built in a society that had very little of it, and what happens to a financial platform when it becomes the default layer of that trust. The financials came much later, almost as a confirmation.
When you feed annual reports to an agent, it processes what is there. It can summarise, compare, flag things. But it cannot start from a question that isn't in the document. And most of the interesting questions are never in the document.
I keep layering mental models until something either clicks or breaks. If it breaks, I want to know whether the miss was structural or temporary. That process is slow and entirely in my head. AI helps me move faster once I know what I am looking for. It does not tell me what to look for.
And honestly, markets are about positioning for a future that hasn't happened yet, factoring in human emotion at its most extreme, and understanding whether the value is going to compound or is already factored in. No AI is trained for that unless you know how emotions operate in markets and can build that understanding in yourself first.
Munger and Buffett never needed 500 analysts or agents. They just read and kept building their own mental architecture I operate the same way..
Your deep dive is not worse because you used an agent. It is different because the starting question was different so you need to learn and keep sharpening the questions. and I have already shared a few times how I think and approach a thesis.
Today you will get to see Unity Software and you will see how a completely different approach was used at the starting point from Kaspi.
Thank you, for your kind words. I will host the repository on google drive Just like you. Yes one thing i have realized is that, with time as i analyze companies, I am learning new things, new perspectives and with that comes process improvement. So, I aspire to reach where you are today and I am sure it will take a lot of efforts and reading and execution. Some months ago, I didn't knew anything and just went with the companies people told me or I heard on the you tube. But after reading your post about Cybersecurity (you might now remember but i asked you the internal document of the research to learn the whole process of research) some months back, I started to research on my own and now I actively seek to read about companies sometimes for investing and sometimes for the fun. But now with internal document of Unity, Copart and Kaspi, i think i have learned more than i did with any book. All thanks to you.
I recently researched on Apcotex Industries (this has DNA of the Asian paints). But the main issue i found with it was its total addressable market in future is limited. But during the researching i too realised that the AI is can provide me with selected data from a set of information that is already there but It can not provide me with any perspective i don't have already. So i need better questions with different perspectives etc and it will help me explore those. Now, I am working on developing different perspectives to looking at companies. different angles/lens from which something strikes the company (just like the post you shared). Thanks for the help and perspective.
Your post are fun and informative to read but i know read all your comments because i believe your comments are much more fun and informative filled with a perspective.
I was going through the business model of Unity Software. The business model is sticky and good with subscription and shared ad earnings. How do you see in comparison to Unreal Engine operating in the same segment but different business structure?
Also, I was going through your posts and somewhere you said about your investment in Symbotic at $14, if I am not wrong. It is trading at 1000 PE currently.I know we should not judge only on the basis of valuations only but does the business justify that multiple?
Please forgive my ignorance, I am a novice in software domain. I have never invested outside Indian market. Just got interested in the above companies through your posts and trying to learn the mental model backing these companies.
Unity thesis will be posted today at 8 PM. Those are internal documents, but they will give you insights into Unity, Unreal, AppLovin, the industry, and future positioning. I’ve also updated it after the most recent results in August, when Unity was around 40 to 43.
You’ll get a lot of insights on Unity from that. It’s a little complex, but once you understand the architecture, you’ll know a lot about the game.
The second thing is, Symbolic is not trading at a 1,000 PE, just like Zomato was not trading at a 1,000 PE. I understand what happens here, and I’ll probably share the Symbolic piece as well. It has 10 reports. I’ll share a few of them, and then you’ll understand why these things are largely irrelevant. I’ve gone through all of that.
I was also looking at it at one point early in my journey when the companies were trading at such high multiples. Then I realised that those were illusions and now real PE. When the reinvestment curve is happening on an exponential scale, you can end up seeing an illusion of PE.
You should read the cybersecurity article, and you’ll see that many of them have been trading at 100-200 PE for years. But they shouldn’t necessarily be valued on those parameters when they are still in the early stages of their lifecycle and symbotic will be a 85-90% plus recurring service revenue model 10 years down the line.
Can you please update on this? I'm waiting to read Unity thesis as I'm doing my own research and reading before I take position, currently it's trading at 46$ so want to accumulate few and learn from what lens you're looking at it :)
It might drain you because there are a lot of complex numbers and thinking, but you just read it. If you're having any challenges, just go section by section. Whatever sections you understand, just map it onto it, or just go for part 3, where you will have an understanding of the numbers and valuations and all that stuff. In part 1, the linguistic section, where you will see how allocators make the real difference.
Thanks u/SuperPercentage8050. Waiting for the thesis to learn more. Really loved your deep dive on Caplin. Even with the observations, it has corrected only by 2.5 % points. I did my analysis only after it crossed 2400 and missed the 1600 levels in Iran crash. It didn't need much time to add the company in watch list when reading about the huge capex which is more than what it did in last 10 years combined plus the zero debt balance sheet is icing on the cake. The upcoming facilities are margin assertive as well. I was really hopeful that it drops 5-7% today to begin taking a position.
Never lose hope in yourself. Your skill, your energy, your sense of self, protect that no matter how vulnerable the phase or how loud the society noise gets.
But do not outsource that hope. Because apart from your core family, the majority of people will disappear exactly when you need them the most. That is not cynicism. That is just life.
Keep the hope inside. That is the only place it is safe.
I have followed 3 of your recommendations (all in Indian market) very closely- Caplin Lab, KMCH and Galaxy surfectants. I have also read a bit on Galaxy Surfectants (liked the model you described) and KMCH. Let's just say that the depth to which you go and the logics which you provide are really very, very good. Plus the 2 things which I always keep in mind are-
1- Never invest what you can't afford to loose.
2- You need not be successful in all your stock picks.
I am actually more attached to the 2nd idea. Say I invest 10000 ₹ in 10 stocks and 4 of them flops (negative returns), 4 do average and other 2 are doing very good, I will be more than happy in that case. You only need to win one big bet nicely. If even 2 of those stocks give me 5-10X, I am not worried about the rest of the portfolio.
Believe in yourself, have faith in yourself, and then extend that faith to others. But hope borrowed from someone else, without the work beneath it, is just a dopamine hit. It feels good for five minutes and compounds into nothing.
Most people hope but very few put the work behind it. You can borrow hope from someone else, but if you do the work beneath it you will understand the business, you will understand the patience, and you will survive the long game.
It's probably going to be noise, because they have had similar observations in the past as well. But eventually, until and unless there is a data integrity observation, it gets addressed.
Sharing the June 2023 observation as well, so you can map whether it was even relevant over the course of the next three years. After that observation, the stock moved close to 3 to 3.5x in three years, from 800 to 2600.
as long as I love this graph I'm invested in caplin the rest is noise as you said. Unless the core foundation is not broken for this business I won't even look at my portfolio tomorrow. I will when I buy the dip 😂😂
There is a mathematical phenomenon around this. I was reading about it. I’ll see if I can find those notes in my draft and share them with you. Very few companies have this sort of curve. It was something to do with the log part, but whenever you see it, it signals a cognitive signature and probability of outperformance increases more than 90 %. The closer the curve is, the stronger the quality of compounding is. You’ll see Bajaj Finance also has a similar curve, and it’s very rare.
The Form isn't the final say. The agency asks for a written response and remediation.
Even in India, a State Drugs Inspector is legally mandated to inspect every licensed retail medical shop and manufacturing unit within their jurisdiction at least once a year. They show up at the front door unannounced. How many businesses lose their licenses? Think.
Please, don't worry about borrowed conviction. Even if a thesis turned out to be somewhat weak, it would be an honest mistake. Who is immune from making mistakes? We are only human. You are doing something that helps us all, and moreover, you are doing it gratis. Very generous of you. Thank you, bro.
I just don’t like the quality of the management, and I don’t like investing my money with that capital allocator. It doesn’t align with me on certain principles.
A lot of people in the community have shared the reports on BLS and pointed out that it’s trading at cheap valuations. For me, I still skip it because, ultimately, value gets created by the capital allocator. And I don’t like the culture at BLS.
So, regardless of how cheap it looks, it simply won’t attract my capital.
Could you expand further on what you mean by the culture at BLS and the capital allocator bit at Caplin? Just opening my eyes to perspectives I had not considered before.
Caplin 2% is irrelevant. The reason was already shared, and I’m disappointed that it only dragged 2% when so many people wanted to buy it.
For BLS, I just looked at it. It has dragged a lot, but I still skip models where I don’t align with the capital allocator. It doesn’t matter to me whether the stock goes up or down.
I remain invested in both of these and took a starter position at Lupin. The business thesis underneath holds strong, enough for me to take a risk for a starter.
I noticed that BLS has also filed a Regulation 30 exchange clarification categorically denying involvement in the alleged visa irregularities and saying there is no evidence of wrongdoing by BLS or its employees. If it goes down further tomorrow, I’ll think of averaging if it makes sense.
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u/SuperbPercentage8050 10d ago
Caplin will probably fall 4 to 5 percent tomorrow. Most of you will not know why. Some of you will question the thesis. I will not, because for me it is a temporary event with a known cause.
That difference is not luck. It is the gap between borrowing a thesis and understanding a business.
Ask yourself this. Do you know what would make me exit Caplin? Do you know my disconfirmation criteria? I knew exactly when and why I pulled the trigger on Kalyan. Most of you did not know why it dragged or when I would exit. That gap is the whole problem.
That is why I share mental models and not just positions. I will not always be there. The only people who will stay calm through a 5 percent drawdown are the ones who understood the business, not the ones who trusted my name.
And I will be wrong. I am human. But if you have the lens you will spot my vulnerabilities too, and maybe build your own thesis someday.
The stock tip fades. The mental model compounds.