I am Back

Emerging from a Year Long Sabbatical

Silence is the most powerful weapon - To comprehend, reflect, reminisce, dream, energize and re-emerge.

The last one year was the most dramatically beautiful and rewarding year for me.

Four of my dreams came true. And in addition a miracle happened…..

Firstly

After 27 years in the corporate world, having established some formidable brands in the hospitality industry at the helm of their operations, I realised my dream to become a full-time finance entrepreneur at the age of 45 – ‘on time’. Success and failures are the unavoidable crests and troughs of life and one can live with these, but living with a regret of not pursuing one’s dream is unpardonable. With this thought, I decided to pursue my passion of Wealth Management a dream that I have protected and pursued fiercely since I was 15.

Secondly

For a large part of last 2 decades, I had some differences of opinion with my Dad. I shifted to Chandigarh – suffered a bit, because I had to leave my wife and daughter alone in Bangalore, but spent a year with Dad and repaired all the emotional Balance Sheets of life. 2 Fathers spending time with each other has an entirely different perspective rather than a father and son. I spent the most beautiful few months with Dad, sharing a drink, singing, learning to play the flute (he was a master flute player) and sadly lost him to a sudden heart attack in Feb this year.

If I hadn’t mustered the courage to take definite steps to spend time with him, and if birth and death are predestined, I would have been living with the biggest regret for the rest of my life.

He was an exceptional human being and a very talented craftsman and I have tried to capture his life in this obituary/ode for him.

Thirdly

We opened a new office of our AMC - MRG Capital, in Chandigarh in addition to Bangalore and partnered with Capt. Amar Bath. We discovered each other over a chance coffee. Amar will be the catalyst of our growth in North India. One thing about business alliances is the essentiality of congruence of aspirations, life philosophy, speed, definitions of integrity and above all character. I have rarely come across such a fine, low decibel and remarkably intelligent professional.

Risk Management is an underappreciated yet most essential element of Fund Management and while everyone talks about it, human nature that manifests on the bedrock of greed chooses to ignore it again and again – In life, in relationships, in investment styles because of an inherent human nature to win every race. I realised that no one understands risk management better than the Capt. of a ship - in this case Capt Amar, who is transporting hundreds of thousands of tonnes of gas/oil at cryogenic temperatures in high seas.

Getting safely from point A to B with cargo and crew is of far greater importance than to win a race. And that’s how we are developing the personality of our company where our top priority is Capital Protection of our clients, over relentless pursuit of generating alpha thereby throwing caution to wind.

Fourthly

We secured a respectable line of credit / equity from a US based company that will catalyze the success of our future growth and help us catapult in the direction that we have always dreamt of taking.

As a fund manager who has been entrusted to manage and grow life savings of people, last 12 months have been rather noisy and tempted me to opine on the narratives of some celebrated Fund Managers who were professing the charade of BAAP (Buy at any price) and this time its different, while we were quietly building portfolios for our clients while sticking to the most commonsensical fundamentals of investing that have survived the test of time and market cycles over decades.

Clichédly - as Buffett says over a short period of time markets are voting machines and over a long period of time they are weighing machines.

Its ironical that almost all fund managers claim to be the disciples of Munger and Buffett and peddle their philosophies as their own and end up doing exactly the opposite.

And lastly the miracle

Its was a rather stressful day in July of ’21, when Gods Own Company, the celebrated ITC filed a defamation suit of 100 Cr against me for writing a simple blog asking some pertinent questions, drawing some efficiency comparisons with their peer group. For a middle-class person who hasn’t had the luxury of working for companies that pay their executives top dollar for destroying shareholder wealth and thrive in inefficiencies, it was indeed stressful, causing a considerable financial and personal stress. 

But the fate and the macrocosm connived in a beautiful manner that I was able to put up a formidable defense - even though at a huge personal cost. Am doing my best to counter ITC’s habitual and frivolous lawsuit habit (ITC keeps filing these defamation cases against anyone who asks a difficult question) and all I can say is time is all powerful.

Good to be back – my dear friends. So many of You reached out to me, checking on my welfare, health, extending help, encouraging me to write and above all helping me in so many ways.

Will try and write a weekly now--------

And lastly – most of the people in the financial markets must have absorbed most of the present data points such as -

• Markets have time and value corrected. They can only go up over a long period of time. As I post this, markets are already up 2000 points from their lows in no time.
• Corporate India has steadily grown during this time.
• Companies have stronger healthier Balance Sheets.
• Banking is in robust shape.
• NPA’s are declining.
• And we as a nation, are more positive and hopeful of the future than ever before.
• Investments must be made during extreme despair and misery when the economic indicators or externalities are predicting an economic doomsday.

BECAUSE

The world has only progressed, survived, become more intelligent over generations and homo-sapiens evolve at an alarmingly fast rate to tide over all the temporary vicissitudes of life to make the world and species better.

About MRG Capital.

We have only 1 objective at MRG Capital, Protect our client’s wealth, avoid stupid mistakes and stick to sound and tested investment rationales/philosophy. And Our asset management fees is one of the lowest in the industry.

The real performance or the strength of the fund/ PMS can only be gauged when the portfolios are compared in terms of resilience shown by other portfolios during the downtrend.

Below is the snapshot of how our different portfolios performed during the recent market crash,

While our Maximiser portfolio purposely comprises of some high conviction investments, it has underperformed during the downturn since Oct’21 because of its high Beta, our Enhancer and Protector funds have outperformed the index with lower standard deviations.

We didn’t want to abandon our faith in some large cap IT companies during the recent downturn. A large part of my wealth was invested in Infosys when the “Vishal Sikka” saga was at its peak and the legend Mr. Narayana Murthy was taking on all flak just because he wanted the core values of Infy to be upheld. I posted a strong rebuttal to Mr Omkar Goswami through this blog that was published on Huffington Post in response to his scathing criticism of Mr. Murthy.  Well what can I say, it turned out to be – not such a bad investment afterall.

Other PMS funds have cut their IT exposure while we continue to believe in the story of ‘IT’ being the only consistent sector which has predictable earnings growth, reliable cash flows, dividend history and above all good corporate governance. We added more of IT after its significant correction and expect the street fears to dissipate as the sector reports improved earnings over the next few quarters.

Write to me at manu@mrgcapital.in for feedback, free portfolio advice (no strings attached), suggestions for topics that you would like covered in future articles or just about anything.

  

Our Services:

Portfolio Management Services:

We offer discretionary portfolio management services with an aim to deliver respectable returns to our clients. Our investment portfolio consists of stocks, fixed income, debt and cash and the portfolio would be tailored to meet specific investment objectives of the client.

We have 3 investment products which are curated keeping client’s Age, Risk profile and Tenure of Investment.

Product	Reco Age bracket	Risk Profile	Reco Tenure (Yrs)
Wealth Maximizer	Up to 40 Years	High	6 – 10
Wealth Enhancer	30 - 55 Years	Med - High	4 – 8
Wealth Protector	Above 50 Yrs	Med - Low	3 - 5

Note: As per SEBI guidelines the minimum investment amount is Rs 50L.

 

Advisory Services:

We use Smallcase as a platform to provide Advisory services to our clients, It is a DIY platform where we would only suggest investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor. You can subscribe to Our Core portfolios directly through your broker. If you have a broking account through any one of these 11 brokers, setting up a smallcase account is just a 10 min job. You can buy / sell multiple stocks with 1 click and the stocks you buy are held in Your existing demat account. We have curated 3 baskets of stocks by keeping in mind the client’s Age, Risk profile and Tenure of Investment.

Product	Reco Age bracket	Risk Profile	Reco Tenure (Yrs)
Wealth Maximizer	Up to 40 Years	High	6 – 10
Wealth Enhancer	30 - 55 Years	Med - High	4 – 8
Wealth Protector	Above 50 Yrs	Med - Low	3 - 5

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Definitions

Standard deviation: Portfolio returns go up or down on daily basis due to the movements in the prices of their stock holdings. Standard deviation tells you how much the portfolio returns over a period of time vary from their average value. If the value is too high, that means the portfolio returns are very volatile and risky to invest in