Since this is our first post about Professor Sanjay Bakshi, lets begin with a small introduction about him. Professor Sanjay Bakshi is an experienced and successful value investor and is also one of India’s best-recognized finance professors who teaches at Management Development Institute, Gurgaon. As a practitioner of value investing in India for more than 20 years, Sanjay has an excellent long-term track record.
Sanjay received M.Sc. (Economics) from London School of Economics and Political Science and B.Com(Hons.) from University of Delhi, India. He is also a fellow member of the Institute of Chartered Accountants of India. He teach MBA students a popular course titled “Behavioral Finance & Business Valuation (BFBV)”. He is also Managing Partner at ValueQuest Capital LLP— a value investing specialist in moats investing.
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| Professor Sanjay Bakshi |
Story of Sanjay Bakshi and Eicher Motors
Recently Sanjay Bakshi delivered a talk titled “Seven Intelligent Fanatics from India” which is all about value investing. In the talk he mentioned about the "stupidity" he did by selling the Goose that lays golden eggs. After completing his masters from London School of Economics, along with his colleague Paresh Thakker, he founded ValueQuest Capital LLP.
Back in October 2008, a they wrote up a document on a Graham and Dodd cash bargain for our clients. The document was about "How to acquire an option on Volvo India's truck business and a few other things for nothing" October 2008 was a great time to invest, and it was not surprising that Eicher Motors was selling below cash. Those “few other things” included a small, insignificant motorcycle manufacturing business.
He bought the stock for Rs 200 around October 2008 and sold it for about Rs 600 in December 2009. So in just 15 months, Eicher Motors became a 3 bagger for him and he could not resist the temptation to sell it. Below graph shows where Eicher Motors stands now from the sold price of Rs.600.
He bought the stock for Rs 200 around October 2008 and sold it for about Rs 600 in December 2009. So in just 15 months, Eicher Motors became a 3 bagger for him and he could not resist the temptation to sell it. Below graph shows where Eicher Motors stands now from the sold price of Rs.600.
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| Eicher Motors Graph |
Sanjay Bakshi talked passionately about the "crazy guy" who loved touring bikes - CEO of Eicher Motors, Siddhartha Lal, who courageously took an almost bankrupt company called Royal Enfield which has been making the iconic Bullet motorcycles in India for more than 90 years and turned it from nothing to a business worth $9 billion in seven years which is just $3 billion short of Harley Davidson’s.
Lesson Learned by Sanjay Bakshi
Professor says that he had learned the lesson and then followed a simple rule set by Charlie Munger, Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett.
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| Charlie Munger |
Where Fundoo Professor Sanjay Bakshi stands now?
In his own words - "when I returned to India in 1994 from from London School of Economics, my total savings were Rs 3 lacs. Today, I can say with confidence that I am financially independent. To use Robert Kayosaki's (author of Rich Dad Poor Dad) words I no longer work for money. Rather, I find myself in a position where money works for me. The money I get from Management Development Institute is not even 1% of what I now earn in a year."
In his own words - "when I returned to India in 1994 from from London School of Economics, my total savings were Rs 3 lacs. Today, I can say with confidence that I am financially independent. To use Robert Kayosaki's (author of Rich Dad Poor Dad) words I no longer work for money. Rather, I find myself in a position where money works for me. The money I get from Management Development Institute is not even 1% of what I now earn in a year."
Now the immediate question that comes to our mind is "How much would be Professors salary in MDI??". Isn't it??. You can read the full talk here
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