Confessions of an equity analyst

Vikas Vardhan of Valueresearch in this piece gives investment advice why confessions:

  • Confession: The investible universe is very small as compared to the total listed stocks
  • Confession: There are dozens of investment rationales but the most compelling ideas are built on just a few.
  • Confession: We are no expert at running businesses. Analysts are often given the status of ‘demigods’. In reality, they are simply numbers experts. Managements, on the other hand, take years to master their businesses. An analyst covering multiple sectors and companies can never know the business the way an entrepreneur does.
  • Confession: We like it when markets behave irrationally as that creates opportunities.
  • Confession: We do not know where the market is headed in the short term.

Hmm..

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