Be it any field, learning must never stop. Persistent learning never exhausts the mind. It is the zeal to learn something new every day that keeps one going.
Shridatta Bhandwaldar, Head-Equities, Canara Robeco Mutual Fund describes himself as a constant learner. Be it contextual lessons or philosophical learnings, Bhandwaldar describes how his experiences have helped shape his thought process over the period. He is a BE in Mechanical and MMS in Finance.
A man who started by working at a brokerage firm as an analyst now manages eight schemes at Canara Robeco Mutual Fund today. He attributes his success to learning from his mistakes over the past 15 years during his management and investment journey.
| Mutual Funds managed by Shridatta Bhandwaldar | ||
| Name of the fund | Category | Three-year returns (in %) |
| Canara Robeco Flexi Cap Fund | Multi Cap Fund | 62.1 |
| Canara Robeco Equity Hybrid Fund | Aggressive Hybrid | 51.3 |
| Canara Robeco Bluechip Equity Fund | Large Cap Fund | 58.1 |
| Source: MoneyControl | ||
Being caught in the web of responsibilities and fraught with insecurities due to constant fluctuations in the market can have a mind-numbing effect on a fund manager. However, Bhandwaldar swears by the following principles while explaining his recipe for success in the stock markets.
Focus on business quality
Undoubtedly, the stock prices of many businesses and sectors with higher capital efficiency are more likely to go up. However, more important is the efficiency of the industry as it adds immensely to the quality of the products and services to its customers. Checking the quality of any business is foremost important as it contributes to growth sustainability and capital efficiency. Good management translates to the compounding of cash flows and greater downside protection.
Earnings are cyclical
Expecting an industry to be profitable throughout is nothing short of folly. To earn profits, investors must understand which pockets would fire up soon. This is also important as all sectors report cyclical earnings from moderate to deep cycles. Realizing this soon enough has helped many to be on the right side of earnings deviations.
Be flexible in your thinking
You cannot be rigid and hope to earn profits from your trades. While you may hold a lot of conviction in your views, you must not be bound to them permanently. Narratives change frequently with facts. Macro factors are responsible for the change in facts too, which is why one must have the humility to accept when one is wrong and adapt to change accordingly.
Take uncertainty in your stride
Stock markets are all about uncertainty. This is why you must strive to buy profitable businesses at below-average valuations to avail of enhanced returns during cycles. Focus on the long term as market behaviour in the near term is always overstated.
Learn from your mistakes
It is okay to make mistakes while investing. Most mistakes are made in buying stocks of businesses not supported by strong management. Once you concentrate on both business and management quality, you have won half the investing game. One must remember that stock prices depend on underlying cash flow and growing profits. Businesses that pay no attention to their shareholders cannot be expected to earn many profits.
The journey from an analyst to a fund manager was not easy, especially, in the formative years when there was too much excitement surrounding many businesses. Trailing through sectors with weak industry sectors, questionable management practices, high working capital cycles and weak balance sheet structures teaches a lot in terms of investments. Most importantly, this journey teaches a lot about what one must avoid as an investor.
The bottom line of all investing is “Focus on spending time in the market rather than trying to time it!”
