It is difficult to disagree with Warren Buffett. However, remember that India is not USA, and I am not a big investor like him. So that’s the caveat…

1. I do think that Management is bigger than the business – Ramdeo Aggarwal says Management is multiplicative. So damn true. If you take 1 billion and multiply that by ‘0’ in management, its a zero. So in a country with better disclosure, active shareholders, sensible analysts – chances are business is more important. Not true in India.
2. Hdfc does not have a “promoter” but the trust on that group today is higher than the trust in many other groups. Started by an EMPLOYEE of Icici – Mr. H T Parekh. Today it is the Taj of Indian business – every FII does visit Hdfc group – whether he buys the share or not. The greatest contribution of Deepak Parekh is to maintain the culture.
3. A Few groups have the ability to attract talent that would stick with them from age 23 to age 63! Hdfc, TCS, – are 2 names that come to mind. How many groups can you think of? Murugappa group seems to be losing this ability. To me that is scary. A few Mnc can of course – HUL, Siemens,…How many Indian groups can you think of?
4. Focus – Hero Honda -or now Hero -who have stayed focus. Hdfc (again!) has stayed focused on financial products. They could have entered cement, steel,…and the great media would have lauded it as great “backward integration”. Not too many Indian companies could remain focused.
5. Scaling up -if you are funded by a Venture Capitalist – they would want everything growing at 23% per month. Sadly somethings can’t grow at that speed. I visited a speciality restaurant – Millet – in Chennai. Sadly it is funded by people who will push for growth. Somethings can’t scale up. Professions can’t scale. Don’t try.
6. Scaling up – not many Indian promoters have the ability to scale up. TCS and Infosys are amazing exceptions.
7. Timing the market – When Ruias (Essar) exited Telecom, I thought they got the timing right brilliantly. However, I would hate to be a lender or an investor in that group. So getting one or two transactions right is not enough in a long run. Clearly direction is far more important than speed. Marico surely was slow for long periods of time – but have done well. No great timing.
8. At least 50 companies allowed you to make 100x after they have listed. Not too many groups. Be careful. Some PSU also allowed you to make money AFTER listing. Nestle, Lever, Pidilite, PnG, Hdfc, Hdfc bank, Asian Paints, Supreme, …..stick to them. All these have a lot of cash.
9. Almost all these 50 companies came out with an IPO when pricing was controlled by CCI. Free pricing meant that list will go down, not up.
10. Today many companies are 100 baggers – but I hate companies without cash. I love to see say Rs. 500 crores profits, Rs. 200 crores TAX PAID,….and then do a 100 bagger. It is difficult to see a small company and trust them. I can’t trust a company with market cap of Rs. 100 crores. Shit scary.

personal learnings. Use to learn. Don’t cut paste.