Updates from Rubber Expo 2013

Indian Rubber & Tyre show is being conducted in Bombay Exhibition Center (BEC) from 22-24th Jan, 2013.

Since, it is being conducted in BEC ( Owned by NESCO) and GRP has a stall in it, i thought it would be a good idea to do a visit here.

Updates from the visit are given below:

GRP & Industry::

1. Overall demand situation is not great,  but company is somewhat insulated as 70% of their sales are with Tyre Companies
2. Focus is now on Asia & Indian markets, and company is trying to make players aware of the products launched by them
3. Company was surprised to see 7-8 new competitors, although all seem to be of small scale. Also, according to marketing manager, it is difficult to break existing clients as testing process of reclaimed rubber is around 1-1.5 years
4. Brand name of the company is very well established, so participation is more of a showcase event
5. There was very low participation from European companies which are usually present in large numbers, but a lot of Chinese players were present. Also, a very active stall was from Srilanka.
6. Not much info on thermoplastics, apart from the fact that they are starting to get good response. Saw leaflets of these products.
7. Most of the products were either rubber compounds or products related to synthetic rubber. 
8. On tyre section, very small showcase, mostly from known players like CEAT, BKT etc
9. Overall felt that the reaction to show was quite Tepid, with low footfalls and not much hustle. Maybe it could be because i went at around 11 am :)

NESCO:

1. Company seems to be chugging along. IT Building- 4 is ready and is around 15-20 storeys I think. External work and lobby work is still in progress
2. Also, saw starting of levelling and digging in few land patches, so maybe company has already set plans for another building
3. Companies like SERCO, Citibank etc currently occupy halls, which are double storey. In case NESCO is able to get more FSI on these halls, they can also be converted into mutli-storey towers.
4. It is fair to assume, that NESCO is not a valuation mismatch story, as from ground it seems company has no plans to sell its land. It thus, can be a growth story with lumpy revenue jumps basis sale/rental of additional office space and hence critical to have a view of 3-5 years here

cheers,

Saurabh

PS- Invested in both GRP and NESCO

PPS- If any one else has visited the exhibition do share your comments.

Sporty Investment Insights

I am a huge sports fan, courtesy my school days and watch almost every sport ( much to the annoyance of most people around me).

To me sports brings out the raw human traits and those excel in sports are ones who are able to master these traits. Also, it is the best way to learn taking losses on the chin and looking ahead.

Buffet in his famous baseball example and Howard Marks in his Tennis example have spoke about the correlation between sports and investing.

In the paras below, I try to capture the essence of my favorite teams/players and try to see how they can be metaphors to investing.

Football: FC Barcelona: There philosophy is simple, if opponent doesn't have the ball they can't score. So they keep the possession ( usually in high 60's) and wait and wait for the right opportunity to attack. Similarly, when they lose the ball they work double hard to get the ball back in their possession

Similar to Barca style, one needs to wait patiently for the right moment to attack the market quickly and decisively. In case we make an error in investing, we need to rectify it at double speed to regain control of our investing field.

Tennis: Roger Federer: Arguably the greatest player in Tennis ( arguably, since i dont want to start a debate on tennis here :P ).  He has a complete game with great serve, good ground strokes and one of the best net players. In my limited knowledge he is the complete player.

Drawing an analogy here would mean that if one really wants to succeed in investing then we need to improve our all round investing game. If we are good in stock picking, but poor in capital allocation then success in long term will elude us.

Cricket: Rahul Dravid & Steve  Waugh: Both players though have had a fantastic career and are legends of the game. There determination, hunger for runs, and ability to stand tall when things were not working out both for team or for them individuality is exemplary.Both these batsmen built there games on strong defense and had ability to leave a lot of balls.

We can inculcate the same concept that in investing it is not necessary to chase every stock idea. Another thing to learn from them was their focus on process of batting and their ability to cut noise surrounding them. Similarly our focus should be on the process of investing (using checklists, limiting number of stocks etc)

MotoGP: Valentino Rossi: In his case, unarguably Rossi is the best Moto GP racer of all time. His ability to win races in worst of circumstances is unparalleled. While he was a very agreesive rider, his ability to win came from his ability to master braking or deacceleration. In high speed races where almost all bikes are equally fast the ability to slow at a lower rate than other riders ensures your victory.

In investing Rossi teaches us to invert. He won most races not only because he was faster, but also because he deaccelerated at a rate slower than other riders. Similarly, when we invest it is imperative to look at why and in what circumstances will your stock hypothesis not stand true and take a call based on that.

Apart from the above a common trait in these teams/sportsperson is that all of them are extremely humble and realize that there is life beyond sports.
I think Seth Klarman had commented that any buy/sell decision in stock market is by de-facto an arrogant decision since you are telling the person on other side of trade that he is wrong.

Thus, being humble and realizing that investing is just a part of life and not the whole life is critical to we being happy and doing well.

In the end wishing all of you a to have a Sporty and fantastic New Year. 

cheers,

PS- My new year resolution for last quite a few years is too start playing a sport, but no success there :(. Pointers to improve this will be much appreciated.