MeritorQ Advisory:Forensic Accounting Using Quant Methods Boosts Returns
Over the past 16 years, the average return of market cap weighted BSE 500 index has been 10.3% p.a. on a 3-year rolling basis. But the story changes completely when we differentiate between the index constituents based on their accounting quality. There is a clear deterioration in returns and a rapid increase in risk and […]
MeritorQ Advisory: Strength Lies in Numbers
The operational efficiency of the quantitative approach we take in MeritorQ allows us to analyze and rank stocks over a large investment universe on a consistent set of metrics. Ranking over a large peer group of companies magnifies the power of statistical analysis and hence the reliability of the screening and selection steps. Another benefit […]
What KCP Lenders Can Teach SVB’s Management
Even as the global financial system is reeling from the stress created by the sharp increase in interest rates over the past year, the Indian banking system is well placed to overcome this crisis owing to its granular liability franchisee, well matched asset-liability (ALM) schedules and more calibrated monetary policy conduct by the central bank. […]
Who blew up the Nord Stream pipelines?
It is incredible that the pipelines bringing Russian gas into Europe were blown up right in the middle of the Russia-Ukraine war and we still don’t know who did it and how. Early last month, an octogenarian Pulitzer winning American investigative journalist named Seymour Hersh wrote a rather elaborate piece on how America was responsible for the […]
Is it Easier for Investors to Forecast the Long-Term or Short-Term?
As Morgan Housel wrote in the earlier read about our inability to accept uncertainty, we exhibit this trait to know for certain even with our investments, as this piece shows: “Forecasting most things is difficult and we are notoriously bad at it. Predicting the behaviour of a complex adaptive system such as financial markets is […]
LME finds bags of stones instead of nickel in metal warehouse
The forensic accountants in Marcellus have to work hard to identify the latest greatest tricks being used by Indian promoters to steal money from their lenders and shareholders. However, as crooks across the world have shown for centuries, stealing money is not very difficult – sometimes it is just easy as telling a buyer that […]
Courting India — the unpromising origins of British power
Anybody who goes to school in India is taught that 1757 (the Battle of Plassey) and 1857 (the Mutiny) are the two key dates which nailed India to the cross and subjected the country to almost two centuries of colonisation. Rockstar historian William Dalrymple says that to these two dates we should add an even […]
From bank runs to a credit crunch, the financial future looks bleak
In last week’s edition of Three Longs & Shorts, we had highlighted a blog by Marc Rubinstein in which we had explained that what is unique in the latest wave of bank runs in America is that depositors no longer have to queue up to get their money back and that makes the banking system […]
Rapidly Rising Profits Alongside Falling Share Prices
Over the last decade, while the BSE Small Cap index constituents have grown operating profits in low teens, the Little Champs constituents have consistently delivered 20%+ EBITDA growth. This has resulted in superior, consistent long term returns alongside sharper recoveries post drawdowns than the BSE SmallCap index. In recent quarters, while the fundamentals for Little […]
How Williamson looks at big moments and takes their power away
The ‘Fab Four’, as the four greatest cricket batters of the current generation are called, refers to Steve Smith, Joe Root, Virat Kohli and Kane Williamson, with just one test century separating each of them in that order. Williamson not only has the least of them but is also less celebrated than the others. Yet, […]
Some jottings on Pulak’s book
Some of us at Marcellus had the good fortune of serving the team at Nalanda Capital from our previous stint on the sell-side and have been great admirers. Anand Sridharan, one of the team members at Nalanda, through his brilliant essays, has helped us get a deeper understanding of their investment approach. This week saw […]
Long live Humanities
Nigam Nuggehalli is the Registrar of the National Law School in Bangalore. He seems to have written this piece in the Indian Express to a piece published in the New Yorker recently: “Last week the New Yorker published an article titled ‘The End of the English Major’, that discussed dramatically lower enrollment rates in the humanities […]
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