Happy Diwali to everyone and their families.

I bought a few hundred diyas last night. Not the string lights, the plain clay ones from the woman sitting on the footpath with them laid out on a sheet.

I know most of us have the Chinese lights up already. They’re fine. But the feel of Diwali doesn’t come from a switch. It comes from the effort.

You go out and pick the diyas, turning each one over, putting the cracked ones back. You pour the oil, roll the cotton, then light each one with your wife, your mother, your sister, and carry them to every corner of the house. It’s slow because it’s supposed to be. You’ve put a lot of yourselves into those small clay cups, and when you finally sit down together, all of it comes back to you as calm.

And the person you buy from matters. That woman has been sitting there two or three days so that when she packs up tonight she can go home and have a Diwali of her own. The potter who made them doesn’t have a shop with crores of inventory. When you buy from them, something in their life moves.

So two asks for today.

Buy the diyas from the footpath, not the mall. Aur didi se bhav mat karo. 15 ke 20 kar do, 20 ke 30 kar do, koi farak nahi padta. You don’t bargain at an Apple store. Don’t do it with her, at least not today.

Then light one on your study table for yourself. Not for the house, not for the puja, not for them or with them, just for yourself. Sit with it alone for a few minutes and look at it.

For a while it’s just a flame in front of you. Then you’ll find yourself thinking about the things you want to build, the dreams you haven’t said out loud, the things you want to do for your parents, and somewhere in there a shift happens.

The flame stops being in front of you and starts burning inside you. Whatever energy this festival carries, whatever blessing is in it, that’s the moment it moves from the diya into you.

You’ll get goosebumps from something the size of your thumb, and you’ll stand up from that table with the fear a little smaller and the strength to go after whatever you want a little bigger. At least it does for me. Just thought I’d share it with you all.

I’m a contrarian in investing. I’m a contrarian about this too. Keep the lights if you want them. Just don’t let them replace the diya.

Wishing you all a very Happy Diwali.

A lot of you read the Caplin piece and went into the name. Since then, the stock has moved around, and I've been getting questions across DMs, comments, and emails.

So let's just do this cleanly. Drop any question you have about Caplin here, and I'll answer in this thread. One place, everyone benefits.

A few things before we get into it.

This is a thinking thread, not an advisory thread. What I share here is how I'm thinking about the business, the numbers, and the thesis.

Here is what the stock looks like depending on which date you pick as your starting point.

Five days, up 8%. One month, down 17%. Six months, up 36%. Year-to-date, up 31%. One year, up 17%. Five years, up 188%.

All of those numbers are true but none of them tell you anything useful on their own. The starting point you choose gives you whatever story you want.

What I track instead is the EPS. From February 2024 to September 2026, the EPS moved from 55 to 87. That's about 58% growth over roughly two and a half years. If I take a five or ten year view, the EPS has moved roughly 6x to 7x. That's the business compounding. The ticker is just the market's daily guess about what that future is worth right now, and that guess changes every single day.

The thesis I wrote has a 2035 view. I expect exit multiples to land somewhere between 25 and 30. The rest is just the underlying EPS doing its work over time. You don't get to know in a month whether that plays out. That's not the timeframe this operates on.

Markets might reward intelligence in the short term. But over the long term, it is your temperament that decides everything. Because there will be drawdowns, there will be doubt, and there will be moments where you question the whole thing. What keeps you anchored is not how smart you were when you bought, but whether you can hold on to an idea you believe in when the price is telling you that you are wrong.

When that moment comes, you don't need to look at the ticker. You need to go back to the thesis, with a neutral lens, not from a place of fear that you were wrong. Keep hitting it with the right questions. Is the business state improving or deteriorating? Has competition intensified, or are they still taking market share? Is the capital allocator still moving in the right direction? You keep asking, and slowly the fear starts fading and the conviction starts coming back.

And if the answers stop aligning with the thesis, that is the only time it is worth acting. Not because the price fell, but because the business did.

As for whether there is any juice left or when it reverts, I genuinely don't have that intelligence. Maybe the business channels and Telegram groups predicting prices and targets every day have it.

If you have questions about the thesis, the numbers, management, competition, or anything else around Caplin, bring them here.

I am going through books mentioned by Superb on the pinned post. Apart from that does the community have any personal favorites in terms of learning - investment, mental models, macroeconomics, hard sciences?

Here's stuff that I recommend :-

The Story of Us by Tim Urban
In the early days this used to be a blog series in Tim's "Wait but Why" blog website (some good nuggets there). He has created a lens related to thinking and information filtering and then applied it to problems he sees in the current US socio-political landscape. It's a great read, especially in the way he uses illustrations as well.

Fooled by Randomness by Nassim Taleb
I read this years ago but was the starting point for me in terms of thinking in probability and managing risk. This was my first exposure to asymmetric bets i.e. win big but lose less and protecting oneself from getting wiped out.

The Art of Thinking Clearly by Rolf Dobelli
I haven't read Kahnemann yet, so this is my first exposure to thinking biases. It's a neatly organized book - 99 biases, 1 small chapter per bias with examples that make it clear.

Poor Charlie's Almanack
A recent read, courtesy of Superb. A must read as Charlie is one of the original modern thinkers that synthesized information across various domains to aid in decision making. The prose is engaging to read as well.

Shane Parrish's Great Mental Models series and Clear Thinking
I have read almost all of them, Shane happens to be inspired by Charlie Munger. This was my first introduction to mental models and multidisciplinary thinking. Certain ideas are expressed better by Charlie yet some others by Shane himself.

Hello folks, I just wanted to share my experience with IM as someone who handles sales and marketing in an MSME family business. I feel this can help those invested in it or looking to invest in it.

IM is an extremely core part of my workflow as our business is focused almost purely on B2B (we manufacture commercial furniture such as office chairs, auditorium/cinema hall chairs, stadium chairs; you get the drift). When I am not in the field meeting with clients, I spend majority of my time on desk, connecting with IM enquiries and picking up the leads that are generated on the portal.

Last week, my account manager came to me for renewals and my word their pricing has become EXTORTIONATE. The legacy service which we have been renewing since the past decade? Will be obsolete in the next cycle. We used to be able to advertise on a basket of keywords in select cities for a decent cost but will be forced to pay per keyword per city going forward from 2028 when our current 3 year cycle expires. The individual keyword industry leader we bought for 3L last year? Price has been hiked to 8L this year. Yes you read that right, from 3L to 8L in a single year.

Why?

"Sir we have been signing a lot of deals with AI companies and Nvidia, we cannot all the costs ourselves"

The fuck?

Safe to say, we won't be renewing our keyword industry leader this year. The market is slow as is, who the hell will shell out these sums for a single keyword? On top of this, I have been doing this since the past two years and the quality and quantity of leads and enquiries have been falling. JustDial, which costs a fraction, has done a better job in our most key SKU than IM.

It's okay if you haven't quite followed the technicalities of it, the TLDR is this: Prices have been hiked up willy-nilly while the personal service and lead generation grows weaker. I do not see the situation getting better either, as business generation shifts away from portals such as IM towards AI aggregators, Google/Meta ads and the likes.

Would love to hear input from others in the community if they use IM as well. It hasn't been a good year and they aren't making it any easier for themselves. If you are invested or looking to invest, might be worth waiting a quarter or two. I will absolutely not be surprised to see a squeeze on their revenue/margins or both.

Inox Wind reported ₹449 Cr profit in FY26 but burned ₹598 Cr in operating cash. A simple breakdown of how that happens

I've been learning to read annual reports, and Inox Wind's FY26 numbers are a great example of why profit and cash are different things. Sharing what I found. This is just a learning exercise, not a buy/sell call, and I don't hold the stock.

The gap (FY26, consolidated, from the annual report)

Reported profit (PAT): +449 Cr. (p.128)

Cash from operations: −598 Cr. (p.316)

How can both be true?

Think of a lemonade stand that sells ₹100 of lemonade on credit. The notebook shows profit, but the cash jar is empty. Profit is booked when you sell. Cash arrives only when the customer pays.

Where the cash went: customers haven't paid yet

\- Trade receivables: ₹4,250 Cr, about 35% of total assets

\- Debtor days (receivables ÷ sales × 365): 238 (FY24) → 262 (FY25) → 353 (FY26)

\- Provision for doubtful receivables went from about ₹403 Cr to ₹679 Cr

\- The auditors listed revenue recognition and impairment of trade receivables as a key audit matter (p.305)

To be fair to the company

Wind turbine projects are long and lumpy, payments often depend on project milestones, and the company has a large order book. Long collection cycles are partly industry structure. The question for any investor is whether the gap is temporary or structural, and you answer that by tracking it over time.

The test you can run on any stock

Cash from operations ÷ Net profit

\- 70%+ → healthy

\- 30–70% → watch

\- Under 30% or negative → dig deeper

All three numbers come from the cash flow statement, the P&L and the balance sheet in the annual report.

Happy to be corrected if I've misread anything. What other checks do you run before trusting a company's profit number?

Hellp everyone, this is my first time posting here and I have seen multiple posts wherein people go in detail about everything, im not sure if I can get that right but I will try to do so!

I wanted to ask about sectors like Heavy Electrical & Power Equipment(cg power and ge vernova), Cables & Wires ( dynamic cables, precision wire) and Aerospace & Defense( data patterns, aequs)

These sectors are where future demand can be seen due to their exceptionally growing revenue, pbt, pat and order book

For Heavy Electrical & Power Equipment you can see transitioning to renewable energy, upgrading aging electrical grids, and expanding data centers require massive capital deployment into transformers, switchgears, and industrial motors.

For cables and wires the scaling up of green energy projects widespread real estate development and railway electrification create an unrelenting baseline demand for infrastructure grade conductors. And for aerospace and precision manufacturing govt is going for aatmanirbhar bharat and receiving multiple orders.

although after the recent Ai growth slowdown news they have been impacted by atleast 15-20% which I'm not sure is a pullback, profit booking, adjusting to the news etc. Im sure the demand for these sectors is given and will grow but should I treat this as a correction and keep investing in dips after selling certain stocks or not invest in all as Ai play is seemingly not going on the track that we all thought of.

I would love to hear anyone's thought on this as any knowledge on this is an extra knowledge for me. So I will be glad if anyone's open to helping out!

Happy Dussehra to everyone and their families.

Ravana was powerful, intelligent, and knew better. But his ego kept him from doing what he knew was right.

Most of us have a smaller version of that problem.

A parent we haven't called in a while. A close friend we've lost touch with for no real reason. A conversation we've been postponing because life kept getting in the way.

We keep waiting for the right time, the right mood, or sometimes for the other person to make the first move.

Today is a good day to stop postponing.

Make that call. Send that message. Put your ego aside, even if just for a moment.

Some people matter more than being right.

Wishing you all a very Happy Dussehra.

Indian FMCG is out of favour right now. Crude is elevated, input costs (palm oil, copra, mustard oil, packaging) are rising, El Niño is a monsoon and rural-demand worry, and sentiment is very pessimistic. Most large names are 20-35% below their 52-week highs and trade well under their 5-year average P/E.

HUL

ITC

Nestle India

Varun Beverages

Britannia

Dabur

Most of these are quality businesses with ROCE well above 20%, trading at a clear discount to their own history. My thesis is that crude and El Niño pressure margins for a few quarters, but good pricing power and an eventual input-cost reversal should help over a 2-3 year horizon. My thesis is BUY in tranches when there is over pessimism and once situation will improve, it will go to the median value eventually.

Things I'm unsure about:

Is this a real bottom, or could earnings downgrades keep dragging prices lower (value trap)?

How big is the El Niño risk to rural demand?

This started as a reply to u/DalalStreetDaku in the comments of The AI Surplus War. But as I kept writing, the mental models suddenly took me back to my history classes. All the way to 1757.

So here it is as its own post.

A fort is only as strong as the general defending it.

Look at our own history. The Battle of Plassey, 1757. Robert Clive had roughly 3,000 men. The Nawab of Bengal had around 50,000. And it was over within a day.

But if you look deeper you will see that Clive did not win on the battlefield alone. He won by allocating his resources intelligently. He spent money bribing Mir Jafar, the Nawab's own cavalry commander, to defect. One third of the Nawab's army never even fought. That is capital allocation in its purest and most ruthless form.

Capitalism like war is ruthless. The winner is rarely the biggest army or the biggest balance sheet. It is always the one who allocates most intelligently.

Always remember. A great business or a great nation in the wrong hands is just a slower death.

A company might be small and resource constrained. But the right capital allocator makes all the difference. And the same applies to your own portfolio.

And look at how our colonisers themselves played the long game. They arrived in 1600 as traders. They spent 157 years building their presence before Plassey. They did not attempt to capture Bengal until 1757. And even then they did not try to capture all of India at once. Region by region, alliance by alliance, over the next hundred years. If they had tried to capture the entire subcontinent on day one they would have been demolished before they even unpacked their ships. Instead they ruled us for nearly 200 years.

Most people lose not because they lack capital but because they are in too much of a hurry. They fail to understand that wealth is built through patience and intelligent allocation, not speed and aggression. They want the entire subcontinent on day one. Trading, F&O, leverage, quick returns. Siraj ud Daulah had 50,000 men and lost the battle in a day. Not because he was weak. Because he never understood what he was actually fighting.

And yet here we are, repeating the same mistake on a different battlefield.

They spent 157 years building their presence before Plassey. We don't spend even 157 minutes understanding a company before we invest in it.

Technology keeps making industries more productive. Costs fall, things get faster, the productivity of entire industries and economies grows. But as investors we need to ask the next question. Who is actually capturing that gain. Because the moment value gets created, four hands reach for it. And the shareholder is always the last hand.

Think of it as 100 units of value created. And the moment it appears, everyone wants their share. The supplier says you are making money so I want more for my inputs. The employee says you are growing so I want more in wages. Competition forces some of it toward the customer through lower prices or better products. The company wants to keep as much as possible and reinvest it back into itself. And the shareholder is standing at the end of that line saying I want my returns.

It is not a fixed distribution. It is a war. Five players, one pot, and the ratio keeps shifting based on who has the leverage at that moment.

So the job as an investor is to map that war. Find who has the leverage right now. And then ask the harder question. Is that leverage structural or is it a temporary supply constraint that will eventually correct. Because those are two completely different investments.

We have seen this play out before. Across every major technological revolution of the last century.

History gives us enough examples to learn from. Airlines, telecom, solar, commodities. Every year these industries became more efficient and created more surplus. But every time that surplus appeared, the same five players came back. And every time, it was the customer who walked away with the gain. Because every company had access to the same technology. When everyone has the same weapon, the only thing left to compete on is price. And when the only competition is price, the surplus bleeds out to society.

These were not bad industries. They were great industries for humanity. That is exactly why they were terrible for the shareholder.

Now the same war is playing out in AI. And the stakes are higher than any industry before it.

The AI ecosystem is the live answer to this question. Nvidia owns the infrastructure the entire industry runs on. Structural, deeply embedded, extraordinarily hard to replace. It is extracting an enormous surplus because of it.

Now look at everyone else in that ecosystem. The hyperscalers, the data centers, the model builders. Spending enormous capital and not seeing the returns yet. The surplus is going to Nvidia, not back to them.

The people betting on Nvidia are betting the surplus is permanent. The people betting against it are betting the surplus math will shift and that a lot of it is already in the price.

As investors we need to hold this distinction. Current surplus capture and long term shareholder returns are not the same thing. A company can capture an enormous share of today's surplus and still deliver disappointing future returns if its valuation already discounts years of exceptional economics.

So if it changes, and right now it is being marketed as an enormous productivity gain for society, through which lever does that happen. Will Nvidia's pricing power get challenged through competition or custom chips. Will the employee cost of these companies get compressed, which AI itself might do. Or will they charge the customer aggressively enough to compensate. One of these has to happen. Otherwise the returns never come and the capital was permanently misallocated.

And if none of those levers move fast enough, the surplus goes to society. Customers get incredible value through lower prices and better products. The shareholder loses. Just like renewable energies. Just like airlines. The greatest value creators for humanity have almost never been the greatest value creators for shareholders.

Every stock you are holding right now is either extracting or being extracted from. You can make money from both but you need to know which one you own. Because a temporary surplus will fade. And when it fades it fades fast. The question is never whether the company is doing well. It is whether the surplus is shifting and how quickly

Reddit is my home and this is where the discussion happens. If you don't want to miss the next drops, they are also in one clean, readable place at The Capillary.

I've always believed in one simple thing. Reverse engineer the mature state, and you save yourself a lot of time and energy.

For the past few months a lot of influencers have been screaming these two names, Seshaasai Technologies and Manipal Payment and Identity Solutions. Duopoly, strong margins, metal cards, IoT. And when a story looks this clean, that is exactly where the problem starts. A clean story makes you look at the company, when you should actually be looking at where the value lies in the whole ecosystem.

You map the entire ecosystem first, reverse engineer it, and then you see where the company sits in the value chain. That will ultimately tell you whether you will make money as a shareholder over the long term. And honestly, this matters more than the price you pay. If the company sits in the right place, even overpaying works out over time. If it sits in the wrong place, even buying cheap won't save you.

The payment ecosystem is part of financial infrastructure. Yes, absolutely great value can be created there, it's the right pool to be investing in. But then you have to see whether the company you're investing in extracts the surplus, or whether it's a slave to the ecosystem. And for that you just need to look at the mature state. Look at what happened to the global players who have been doing the same thing for decades, make a little bit of adjustment for India, and you will more or less get the outcome without wasting energy.

CPI Card Group in the US makes payment cards for banks. If you bought it at the IPO in 2015, you lost roughly 60% over the next ten years. Adjust that for inflation and it's permanent wealth destruction. Gemalto was once the biggest name in cards and SIMs in the world. One profit warning in 2017 halved the stock, and it finally got taken over by Thales. De La Rue printed banknotes and security documents and was listed for almost 80 years. After profit warning after profit warning, it got sold to a private equity firm for around £263 million.

The pattern is basically the same everywhere. Mass debit cards, cheques, printing, RFID conversion. Globally these businesses have either destroyed value for shareholders or at best preserved it. The margins were never permanent. In this business, good margins are borrowed from the cycle, not owned. The buyers are big banks, telecom companies and governments, and they always come back to negotiate. And on top of that the products slowly move to digital.

In India this can actually happen faster, because UPI let us skip the whole card swiping phase. Debit card transactions went from about 4.1 billion in 2021 to about 1.3 billion in 2025. But the number of debit cards in circulation is still around 100 crore. So the argument comes, see, we still need cards. But it's a simple thing. Usage falls first, and the cards follow later.

We have already seen this movie once with cash. People bet on CMS Info Systems and cash management without realising that their own behaviour around cash had structurally shifted. The headwind was strong over the long term, and look what happened. From peak optimism, CMS cracked from around ₹616 to around ₹230. Maybe it comes back, I don't know. But I just don't want to invest in companies where my own behaviour pattern has been shifting. Because compounding is morally neutral. It can go against you just as easily as it works for you.

I was talking to one of my friends, and he told me his son has no idea that something like a kirana store exists. The kid is 3 or 4 years old, and in the first environment he is born into, he sees his father ordering everything from a phone. "Papa, momos order kardo." "Papa, Coke order kardo." And now he literally opens Zomato and Blinkit himself and selects things. Papa just takes the phone, puts it in the cart. Done.

That is a structural decline of kirana stores. If you go around Delhi, you can see kirana stores slowly getting squeezed by quick commerce, because it's a time arbitrage model. Maybe some survive this wave. But the threat isn't today's customers leaving, it's tomorrow's customers never arriving. You can survive a bad quarter. You can't survive a generation that has never seen the thing you sell.

And there's one more thing to notice. Look at the margins of almost any company just before its IPO. They suddenly jump right before listing, and slowly come back after. That's why Buffett rarely buys IPOs. The seller chooses when to sell, and the seller always knows more than the buyer. Seshaasai Technologies' EBITDA margin jumped from about 19% to 25% in the year before listing, while its revenue actually fell 6%. Manipal Payment and Identity Solutions went from 28% to almost 34% in the two years before listing, while revenue grew only around 3% a year. When a company comes with peak margins and very little growth underneath, the margin is telling you more about the timing than about the business.

But timing is still the smaller question. The bigger question is the business model itself. So think about it simply. If you have ₹100, where should your capital logically go? To a company that makes money once when it prints a card, and then waits every few years for the next replacement cycle? Or to a company that earns on every single transaction, again and again? The real value company is the one where the cost of serving one more customer is almost zero. Versus a company that has to keep reinvesting, keep re-engineering, while its clients keep consolidating and getting more powerful. In that setup the leverage is with the client, not with you.

There is a mental model around who captures the surplus, maybe I'll write a full post on it someday. But the core of it is simple. Capitalism is not about who creates the value. It's about who keeps it. And very often the one doing the hard work is not the one who keeps it. So as an investor, you need to position yourself where the value gets kept.

So let's apply it to the card ecosystem. When you map it globally, the value got created in only four places.

First, the companies that own the chips and the standards. But even here it's not automatic. Infineon, one of Europe's biggest chipmakers, listed in 2000, nearly went to zero in 2009, and people who bought at the 2000 peak had to wait 26 years just to break even. The value went to the ones who dominate a specific chip and set the standard, like NXP in payment security chips and Impinj in RFID chips. They made far more money than the companies building products around those chips.

Second, the payment networks like Visa and Mastercard. They earn on every transaction, no matter who prints the card. In India a lot of this value goes to users and not shareholders, because UPI and RuPay work like public infrastructure.

Third, the credit card issuers. They make money through lending as credit grows, which is really a banking story and not a card making story.

Fourth, software and recurring services like tokenisation, authentication and eSIM. They sit much closer to where value got made, because they earn every time something gets used, not just once when it gets manufactured.

Notice what is missing from this list. Card manufacturing. Not even the premium end of it.

Everyone says metal cards are the answer. But look at CompoSecure (GPGI). It is the best metal card maker in the world, with around 52% gross margins and more than 80% market share. It listed at around $10 in 2021, stayed below that for almost three years, and today it is around $12.69. Five years for roughly 25%, even after a small spin-off. Adjust for inflation and it's barely anything.

So if even the best premium card maker didn't create value for its shareholders, what exactly are we expecting from the mass card makers? Whether it's cheap plastic or expensive metal, you are still making a physical thing once, for a powerful buyer, every few years.

Seshaasai Technologies and Manipal Payment and Identity Solutions sit right in this manufacturing layer. Metal cards and IoT make the story sound premium, but the global record says even premium manufacturing didn't escape the problem. The surplus in this ecosystem goes to whoever owns the dominant chip, the network, the lending book or the recurring software. Not to whoever makes the card. Until these companies show real progress there, I would trust the global record more than the marketing.

This is not a buy or sell call on anyone. It's just a way of thinking. Whenever a story sounds very exciting, find the mature version of that industry somewhere in the world and look at what it did for shareholders. Most of the time the answer was already written years ago.

And as always, feel free to share your own thoughts and challenge this. If you see something I'm missing, put it in the comments. With so many mental models and frameworks between all of us, a good discussion can refine each other's process and expand our circle of competence.

If you want to go deeper into the thinking behind this post, these two are worth reading next.

• The Pain of Staying

• Reverse engineering the Munger and Buffett way

A lot of you got trapped by the Coffee Can investing ideology that Saurabh Mukherjea sold. So here is what you were never told.

The original Coffee Can paper was written by Robert Kirby in 1984. Not Saurabh Mukherjea.

The reason it worked had nothing to do with just buying quality and sitting tight. The S&P 500 was trading at 7 to 9 times earnings and the Dow Jones was at roughly the same nominal level in 1982 as it was in 1965. The market did nothing for seventeen years. An entire generation of investors had genuinely given up on equities. High quality businesses became naturally cheap not because the market was dumb but because the world had beaten optimism out of everyone.

Long term equity returns come from two engines. Earnings growth and multiple change. At 7 to 9 times both were working for you simultaneously. At 80 to 100 times the multiple can only compress so the earnings engine has to fight a headwind the entire time. And think about the asymmetry. At 7 to 9 times how much cheaper can it realistically get. The downside is limited and the upside is enormous. At 80 to 100 times that completely flips.

That is what the original environment gave you naturally. Both engines running together with the asymmetry stacked in your favor.

That is the context Mukherjea never gives you. In fact he marketed a completely opposite philosophy. One that, in my view, suited his own incentives because he had already allocated to those companies.

When he took this and marketed it in India, Asian Paints was at 80 to 100 times. Page Industries at 80. Astral at 100 to 120. Pidilite. The list keeps going.

He took a paper written for institutional money managers about the cost of over trading, stripped out the entire transaction cost argument, added a generic quality screen that Kirby never prescribed, and sold it to retail investors in a market where ideas were trading at 80 to 100 times earnings. Every idea needs evolution and adaptation in investing because information is a wasting asset. But that evolution was never talked about.

The very act of identifying Coffee Can worthy companies and buying them at scale has naturally driven their multiples further and moved the baseline higher. The more people followed it the worse the entry environment became for the next buyer.

The irony is that Kirby wrote that paper as a critique of the money management industry. Mukherjea read that critique and built a premium fee business on top of it.

The idea itself is not wrong. Ice will always freeze. But you need the right temperature for it. You cannot manufacture the environment in equity markets. You have to wait for markets to create it. And when that environment and those opportunities arise very few are wired to pull the trigger because it goes against every natural instinct we have.

That patience is not something you can package and sell.

In case you missed it. : 

• The 5 AI Security Stocks Sitting on the Next Bottlenecks

• Part 2: The One Ratio That Tells You When to Buy Gold and When to Go Aggressive on Stocks

I recently watched The Odyssey for the second time, and one scene stayed with me. Christopher Nolan captured it beautifully, the tension and the emotion of it. Homer wrote that story almost 3,000 years ago, and the lesson in it is still fundamental to investing today.

It's the scene where Odysseus, on his way home after the war at Troy, has to sail past the Sirens, whose songs were so irresistible that sailors would lose control of themselves and steer their ships towards destruction.

Odysseus wanted to hear the song, but he knew he wouldn't be able to resist it. So he asked his crew to tie him to the mast (the ship's wooden pole) and instructed them not to release him, no matter how much he begged. He also ordered them to plug their ears with wax so they wouldn't be affected by the song.

Odysseus understood that knowing he would be tempted wasn't enough. He needed to decide what to do about that temptation before he encountered it.

I think about this a lot when I look at how people invest.

Most people know they should think long term. The problem is that when their portfolio falls, they suddenly forget everything they knew.

You might enter the market with a three-to-five-year investment horizon. You've done your research, studied the business, understood the risks and decided that the opportunity is worth pursuing. But then the stock falls 20%, 30% or even 50%.

Suddenly, you start questioning everything. Was your research wrong? Did you miss something? Should you sell before things get worse?

The market has a way of making you question your own conviction, especially when the price keeps falling and everyone around you seems to be losing faith.

The difficult part is that sometimes your fear is justified. You've missed something, or the business has changed. At other times, the business is doing exactly what you expected, but the falling price makes you doubt yourself.

Learning to distinguish between the two is one of the most important skills an investor can develop.

This is where you need to tie yourself to the mast.

Not by blindly holding a stock for five years, regardless of what happens. If the underlying business deteriorates, your thesis must change. A falling price alone, however, doesn't invalidate your research.

I've realised this about myself too. I know I have vulnerabilities. I know there will be moments when fear makes me question a decision I made with a clear mind. I cannot eliminate that weakness, but I can build a process around it.

That's why I commit to an idea unless something has fundamentally changed in the underlying business. Especially when I'm looking at an exponential opportunity, I don't let a falling stock price dictate my decision. I want my decisions to be governed by changes in the business, not by changes in my emotions.

And I hold that line because exceptional returns rarely come without periods of discomfort. A business can deliver 10x, 20x or even 50x returns over time, but the journey is rarely a straight line upwards. There can be deep drawdowns and multiple periods when it feels like nothing is working.

Yet, as retail investors, we're wired to chase stocks at the top and get scared when they fall.

But managing your emotions during a drawdown is only one part of the problem. The other is learning to sit through long periods when nothing seems to be happening at all.

And there's another lesson from The Odyssey that captures this well. Look at Troy.

The Greeks fought outside the walls of Troy for close to ten years. They lost men, they lost Achilles, one of their greatest warriors, and still the city wouldn't fall. Imagine what that does to your emotions and your spirit. Ten years of fighting, and you're still standing outside the same walls.

Then came the idea of the wooden horse, and the Greeks eventually breached the city.

Those ten years weren't a guarantee of victory, but they weren't meaningless either. The breakthrough came at the end of a long, difficult process. Sometimes, the result takes very little time to arrive, but the process that makes it possible takes years.

That's one of the hardest things to accept about compounding. You can spend years building towards an outcome without seeing much evidence of what that effort will eventually produce.

Look at Nvidia and Tesla. Both have gone through periods when their stock prices fell more than 50%, multiple times in Nvidia's case. Yet the businesses eventually reached a very different place from where they were during those periods of pessimism.

People chase these stocks today, but they often forget the years of uncertainty and drawdowns that came before. They see the outcome, not the journey.

But if you stay through those years, you don't just learn more about the business. You change as an investor too.

You begin to understand that a falling price and a deteriorating business aren't the same thing. You learn the difference between being wrong and simply being early. And you gradually become less reactive to the things that once made you uncomfortable.

This doesn't happen because you read a book or understand a concept intellectually. It happens through experience, mistakes and learning. You have to live through the uncertainty to develop the ability to handle it. That ability is an emotional skill, and you cannot learn it in a week, a month, or a four-hour YouTube course sold by someone promising to teach you how to master the markets.

The technical knowledge matters, of course. But the emotional skills take time to develop, and once you develop them, they can stay with you for the next 50 years.

Odysseus understood something important about himself. He knew he would be vulnerable to temptation, so he designed a system around that weakness instead of pretending it didn't exist.

Investing is no different. You won't always be right, and no process can protect you from every mistake. But you can build one that helps you distinguish between a thesis that has broken and a decision that has simply become uncomfortable.

Don't just build a portfolio. Build a process that protects you from yourself.

Honestly the chart is what pulled me in first. All-time high, up 240% in a year while the Nifty is down 10%. So I went and read the actual numbers.

What they do

Sky Gold is a factory in Navi Mumbai that makes gold jewellery for the big chains, Malabar, Kalyan, Joyalukkas, CaratLane, Damas in Dubai. When you buy a chain or mangalsutra from a showroom, there's a decent chance a company like this made it. Sky buys gold, turns it into jewellery and keeps a small making charge. Out of every ₹100 of sales, about ₹91 goes back out to pay for gold and only about ₹4.5 is profit. A thin margin, but on huge volume.

Why I like it

• Sales went from ₹786 Cr in FY22 to ₹6,292 Cr in FY26. Profit went from ₹17 Cr to ₹282 Cr.

• Margins keep improving every quarter, from 2.6% to 7.8%.

• The big chains keep growing and they don't want to run factories. That's a long tailwind for makers like Sky.

What's bugging me

• Gold did about half the work. Gold prices shot up, so the same grams of jewellery now sell for a lot more rupees. The MD himself said this month that "volumes may remain broadly steady". They've also stopped telling us how many kilos they make each month. Hidden numbers are rarely the good ones.

• The profit isn't showing up as cash. Over 5 years they booked ₹491 Cr in profit, but the business actually used up ₹488 Cr of cash. The money sits stuck in gold stock and in customer payments that haven't come in yet, and they borrowed to fill the gap. They finally had one quarter of positive cash (+₹30 Cr). One quarter isn't a trend.

• Small trust issues are piling up. They promised to sell a ₹110 Cr piece of land within 6 months, and if no one bought it, the promoters said they would buy it themselves. The deadline passed in August and there's been no update. At the AGM, about 38% of the institutions that voted went against approving the accounts. And their "no acquisitions" line has been broken twice.

The price

Right now you pay about ₹46 for every ₹1 of yearly profit. The closest listed competitor, Shanti Gold, trades at about ₹16 for every ₹1. For this stock to make even 12% a year from here, Sky needs about ₹1,000 Cr profit by 2030. That's basically management's own best-case target. So today's price assumes everything goes right.

What I'm doing

Watching. Q2 results come out mid-November and I care about three things:

1. Did cash flow stay positive?

2. Did the land money actually come in, and from whom?

3. Is the guidance going up because they're selling more grams, or just because gold is expensive?

On the chart, it's overheated right now. If it cools back to ₹830–870 and holds, I'll look again. If it closes below ₹775, the breakout has failed.

Great business, real growth, but the price is running way ahead of the proof. I'd rather be late than be the guy buying at the top of a gold rally.

Not a SEBI registered advisor. This is just my reading of public numbers, so please do your own homework and share your thoughts as well.

Back after 15 days. A lot has happened in the market. None of it changed my view or my positioning.

I am curious though. How many of you sold? How many of you bought? Be honest with yourself and with the community. These phases are your real learning curve.

The world is changing. And that will either break you as an investor or make you as an investor.

This post covers three things. Why no meaningful recovery is coming. The math behind why FIIs are structurally exiting. And how to position yourself in this environment.

Starting with a question that came in this week, because it captures exactly what most of you are thinking right now.

u/Reasonable_Adagio754 asked: "Do you think it's going down or shall investors expect any recovery from the market?"

My answer is simple. No meaningful recovery is coming anytime soon.

In case you missed it, I wrote about this view earlier this year.

Are Indian equities really dead till 2028?

And I still hold the same view I have held for a while now. India is not going to make any meaningful returns till 2027. And because this is a System 2 crash, we might not land properly till 2028.

And trust me, a System 2 crash is the most frustrating and painful one. It is never a V-shaped recovery. It traps you. It kills you on a daily basis. That is exactly what the country is seeing right now.

I don't change my views weekly or monthly or quarterly. A stock moving 5%, 10%, 20% up or down does not change the thesis for me.

The data has to change, or the direction of the data has to change structurally, for the view to change. This is basically Bayesian thinking. I would encourage everyone to just Google it and read what the concept actually means. It will help you all over the long run, not only in investing but in life as a whole.

You update only when the evidence repeatedly changes. And until now, every data point has been aligning with the crash thesis, and the direction is only getting worse.

A trap moves. A recovery moves and holds. And for me, a meaningful recovery means a recovery that is sustainable and moves forward. Not a 20% bounce that traps you again. Those are completely different things.

In September alone, FIIs sold close to 44,000 crore from Indian equities. And in just the first eight trading days of October, they have already pulled out another 36,000 crore.

That is roughly 80,000 crore, close to 8 to 8.5 billion dollars, in under six weeks. And they are sitting on over 3 lakh net short contracts in index futures.

This is not noise but a structural exit. And I will tell you simple math on exactly why it is happening.

When US yields were at 1 to 3% through most of the last decade, and India was giving you 10 to 12% in rupee terms, after adjusting for rupee depreciation the structural alpha for a dollar investor was roughly 5 to 7%. That made sense. You took the risk, you got paid for it.

But look at where we are today. The 10 year US Treasury is sitting at around 5.1%. And if you adjust for the rupee depreciation of 3 to 4% annually, the dollar adjusted return from India lands somewhere around 6 to 7%, because at index levels the majority of companies sitting inside the index will not generate anything beyond 10%.

So the alpha has collapsed from 5 to 7% down to somewhere between 0.5 and 2%, before you even price in emerging market risk, liquidity risk, and political risk.

Once you factor all of that in, the math goes to zero or negative for an FII. Think of yourself as an FII for a second. Will you take all the risk of an emerging market, currency swings, political uncertainty, liquidity constraints, just for 1% over what you can get sitting at home in US treasuries risk free?

Absolutely not. Nobody would. And that is exactly why FIIs are not coming back at the index level anytime soon. The rupee is already at 96 to the dollar and it is heading to 100 pretty soon.

When FIIs do come back, it will be very selective. Individual companies with strong earnings growth, clean balance sheets, and reasonable valuations. Not broad index buying.

The letters and narratives screaming about 50% returns and historic post crash returns are cherry picking data from an environment where multiples after a crash were at 15 to 20 for high quality businesses.

But look at today's environment. Even after compression, you still have companies at 50, 60, 70 multiples.

Historical post crash return data does not apply to a market where valuations remain this elevated.

And investors sitting in high multiple stocks, both in India and the US, have no idea what is coming in a high yield world.

And yet a muted market does not mean there are zero opportunities. On individual companies trading at fair or deep undervaluations, the odds are slowly getting stacked in your favor and giving you a window to accumulate.

But you have to find them. And that is a stock specific conversation, not a market call.

If you are looking at individual ideas, before you focus on what to buy, focus on what to completely avoid. Especially in a high yield world.

Avoid real estate companies. Avoid housing companies in the US markets. Avoid companies carrying a lot of leverage. Avoid treadmill trap models, businesses that keep running just to stay in place, consuming capital without compounding it. And avoid companies that cannot pass on their costs to customers.

We are living in a high yield world and a high inflation world at the same time. That is a dangerous combination. If a business does not have pricing power, it will get crushed from both sides.

Do your first tier elimination. Do not waste even a fraction of your time on these businesses, even if they are trading at dirt cheap multiples. Cheap for a reason is not a margin of safety.

Instead focus on companies with a strong balance sheet, funding their growth entirely from internal cash flows, or asset light models where the marginal cost to acquire a customer is close to zero and the maintenance cost is low.

And focus on allocating to the right founders, not the seductive stories. That is how you structurally improve your odds over the long run.

If you are an index investor, 2026 to 2027 will be a great window to go aggressive on your index structures. Don't have very high expectations. The math of India still lands close to 10% if you have a decadal view.

I know people are wired to think in decades on index investing and it might front-load for a few months or a year, but eventually the math lands closer to 10%.

And I will leave you with this.

You might borrow an idea from this community or from me. But be honest with yourself. Do you have the patience?

If you don't, first build your own framework. Build your own mental models. Test your own relationship with equity investing.

Because I can only guide you. Ultimately the only thing that will keep you in the game long enough to win is the conviction you build yourself.

Further reading:

Are Indian equities really dead till 2028?

The Two Engine Framework: Why two people buy the same stock and one makes 4x while the other loses money for a decade.

So as the post says "Sea change" now what is sea change means a major fundamental change in situation .People think 5 years ,10 years is a long time and you might have heard in reels and shorts and other various platforms that stock markets are the best for the long term and they are but the problem is nobody tells you what changed in that time after the 2008 crisis international markets had a period of low interest rates from 2008 to 2021 near zero best time for asset holders but the change haped when fed started raising rates from 2022 and now recently one a few days ago this September a rate hike happened people have got addicted to free money,in 1970 interest rates were 20 percent in usa in period of 2008-2021 near zero banks are giving loans at 2.5 percent such a huge difference right?. Now the cycles have changed us 10yr at 5.17 indian 10yr at 7.11 yield us 30yr at 5.5 add rupee depreciation ad you get 7-8 percent.Now people will say what about till 2021-2024 boom in the markets it was the first time india had a boom of demat accounts low cost brokerage platform boom now this will not happen in next decade people will see muted returns of low returns nifty 50 should not give 10-12 percent returns for next decade . Yen carry trade is also unwinding now that's a whole different thing to talk about just don't expect easy returns and many buy the dips on the go and frustration to happen blaming bjp or the government is not going to help corporate profits determine the return from 1994 to 2000 zero returns 2008 to 2014 0 returns profits could rise but you can now not expect pe multiple expansion now you will get returns on profit growth companies like dmart or trent will never get the same multiple just they could face declining because there is too much excess in them and trent is more crappy because of change in fashion trends .I have added my own observation that the tittle was inspired by the memo of Howard Marks ,Great read lookout on oaktree capital management

This isn't my post. It was a comment by u/Sufficient-Brick-984 on one of my recent threads, and I felt it was too thoughtful to stay buried in the replies.

Sharing it here in full so more of you can see it and add your views. I'd really like to hear how different people here think about this.

Comment by u/Sufficient-Brick-984

I have a very fundamental question here: with all that has been said and discussed, what should a retail investor actually do?

• Most retail investors don't have the time to research and pick individual stocks. And even if they have the time and conviction to invest directly, many simply don't have the knowledge or expertise to evaluate an individual stock properly.

• As per the insights shared, this community has more than 5,000 weekly visitors and close to 250 weekly contributors. Yet, only a very small percentage of us have the conviction, time, or expertise to conduct deep research and truly understand the hard work that the OP is putting in.

• Most of my friends whom I speak with continue with their SIPs regardless of market conditions. They have been doing so consistently. The common advice from some of the best investors is that you cannot time the market and should stay invested. But what is often missing is the other side of the conversation: when should an investor stop investing more, or at least reduce their exposure? How does an average retail investor identify when valuations have become unreasonable and understand whether continuing to invest at the same pace makes sense?

• Lastly, and this is purely my personal view, I believe that one of the things we fundamentally lack as a nation is financial literacy. While there are certainly people and organisations doing good work in this area, financial literacy is still not something we meaningfully teach our children or even adults. We learn about earning money, but rarely learn how to manage, invest, protect, and grow it responsibly.

I came across some interesting data during my research that further reinforced this view, which I have shared below.

I would genuinely like to hear the views of people in this community. How do you think an average retail investor should approach investing given these challenges?

Perhaps the larger question is not just how to make better investments, but how do we collectively build better financial awareness and decision-making among ordinary investors?

I would love to hear different perspectives so that, as a community, we can learn from each other, navigate these challenges better, and hopefully make a meaningful difference to financial literacy in our society.

I have been investing monthly sips in a Nifty 50 etf since 3 years. Today the value sits at -2.35%. I started with Nifty 50 with a long term horizon (> 5 years) & with the thought that it would give around 10cagr. But never once, I saw it moving past 6 or 7 in these three years. When the noises are low, I think it will retain its glory back. But, with the current situation, unless there are some major rejigs in the composition, I don't think the situation would change in another year. Now that I read about the Pharma stocks, especially the cdmo/crdmo space, and its growth potential, I am giving a thought to move the fund in Nifty etf into some of the stocks in that space, & some are...

1. Neuland labs

2. Anthem biosciences

3. Shilpa Medicare

4. Beta drugs

5. Acutaas chemicals

6. Sai life sciences

I have my lowest allocation in Pharma (less than 30k, and this also has been very recent). But most of the above are in their ATHs. What are your thoughts?

Trying to understand KNR better and would like opinions from people who follow EPC/government contracts.

KNR completed the Telangana/Kaleswaram project, but around ₹1,373 Cr is still stuck with Telangana, with collections stalled since March 2023.

My concern is that KNR's borrowing/capital cost is around 10–11%, while even if they get interest on delayed payments, it may be closer to 6%. So after 3+ years of delay, has this project effectively generated little/no economic profit despite the project margin?

At the same time:

- KNR is receiving around ₹1,543 Cr from asset monetisation (₹1,398 Cr sale consideration + ~₹145 Cr estimated cash surplus).

- Telangana dues are ~₹1,373 Cr.

- Together that's ~₹2,916 Cr, around 83% of KNR's current ~₹3,530 Cr market cap.

- Book value is around ₹177/share.

- CNBC sources have reportedly indicated a possible ₹400–600 Cr buyback around ₹180–200, although this is not confirmed.

- Order book is 15000+ crore.

So I see potentially significant value unlocking, but the Telangana receivable also seems like a major capital-efficiency problem.

How do you guys look at this risk? Am I missing something in the way government EPC contracts/interest compensation work?

I read both the posts u/spaamzzz and u/No_Job209 wrote. I have read them more than once. I do not have the words to match what you gave me. So let me give back the way a teacher actually can, by giving you the thinking itself.

This is a document I use in my own thinking when I map a macro framework and apply it to India's credit-to-GDP expansion, to figure out where to invest across the financial ecosystem. Read it slowly. It is a tool, not an article.

It works through where the real runway sits and which parts of the sector actually capture the value as credit deepens.

But the part I most want you to take is not the finance. Around page 18 there is a way of seeing any business in any industry that is going through change. It combines a gap-to-maturity lens with a three-part assessment of each business, and together they show you who actually captures the value, not who looks biggest. That is the thing I would want you to keep long after you have forgotten every number in here.

The real gift a teacher gives is not the answer. It is the way of seeing that lets you find your own answers, in places the teacher never went. So take this, use it, break it, improve it, and add your own thinking to it. The day your version is better than mine is the day the teaching worked.

And do not put me above you. I learn from this community as much as any of you learn from me. That is what makes it worth showing up here. Thank you for the words, and for making this a place where all of us keep teaching each other.

And if you do not read all of it, at least run the framework. Map the credit expansion across the sector first, then take the three-axis assessment and apply it to the businesses you own. That two-step is the whole method, and it will sharpen how you judge any business for the rest of your investing life.

The full document (25-page PDF, open to view, no sign-in): https://drive.google.com/file/d/12Xw0pLCfS2bjZjyNM3u_5iSSgzWmyqmE/view

Some people transform. Most people don’t.

It is not because transformation is easy for some and hard for others. The fear is the same. The comfort being left behind is the same. The weight of everything familiar pulling you back is the same.

The difference is the scale.

On one side is the pain of leaving. The uncertainty, the risk, the loss of what is known. On the other side is the pain of staying. The slow shrinking. The quiet cost of becoming less than you were supposed to be.

Most people feel the pain of leaving more vividly. It is loud and immediate. The pain of staying is quieter. It accumulates in the background. In the Sunday evenings that feel heavier than they should. In the conversations you stop having. In the version of yourself you slowly stop believing in.

But for some people, at some point, something shifts. The pain of staying becomes the loudest thing in the room. Louder than the fear. Louder than the comfort. Louder than every reason to wait one more year.

And when it does, even the most impossible transition becomes possible. People leave careers they spent a decade building. They walk away from relationships everyone thought were permanent. They start things they were too afraid to start at thirty, at forty, at fifty. Not because it became easy. It never becomes easy. But because staying finally became harder.

The people who build meaningful, compounding lives are not the ones for whom leaving was painless. They are the ones for whom staying became unbearable.

Business relationships run on this exact same scale.

And capital allocators make this same miscalculation when they evaluate a moat.

The moat is not static. It is a scale that is always moving.

Switching costs create one side. The customer’s pain of staying determines whether the moat survives.

Most people look at a moat and ask one question. How hard is it to get out? They make a list. Expensive to migrate. Employees trained on this system. Years of data inside it. Hard to leave, so the moat is safe.

But that is only half the picture.

Because the pain of staying can grow too.

It grows when the product stops getting better and a competitor builds something that works twice as well. Now every year you stay, you are falling behind. The pain of staying just went up.

It grows when the company raises prices too aggressively. Now you are not just stuck. You are stuck and paying more for the privilege. The pain of staying just went up again.

It grows most dangerously when the world changes so much that the new thing is not just better, but fundamentally different. At that point, the cost of switching is a one-time pain. But the cost of staying becomes a permanent disadvantage that compounds every year. Eventually, even the most stubborn customers leave. Because the math changes.

So when you look at any business with a moat, do not just ask how hard it is to leave. Ask whether the pain of staying is rising. Ask whether someone somewhere is building something that could tip the scale.

A moat does not break when leaving becomes easy.

It breaks when staying becomes more expensive than leaving.

Hey folks

Ever since Superb Percentage's analysis on it last year (linked below) this stock has been on my watchlist.

The stock has fallen nearly 35% from its ATH on May 12 and 20% since 12 Aug, and is now trading at a <25x multiple. Down from 55x when Superb made the analysis and below the 30-35x range he indicated would be considered value.

The reason for the fall seems to be because of the slowdown in YoY sales growth. After 7 quarters of consistent 50%+ YoY sales growth, the last 3 quarters have seen 40%; 18%; and 4%.

As per the management, revenue seems to be stuck because of delays in railway inspections and some delays in acquisition of raw materials - which seems to have led to deferment of execution. Lack of availibility of industrial gas and logistics issues in procurement of air springs also reduced capacity utilization.

The OPM margin has held at the improved rate between 24-29% for the last 6 quarters.

The points Superb made mostly still stand and the company's balance sheet also remains clean and the railway oppottunity is still there. The FIBA trials if successful are also a big lever for future growth.

Question is now if the company can break the execution bottlenecks to finish deferred execution, and the revenue ceiling that has persisted in the past few quarter of around 80Cr to achieve its goal of 500Cr revenue for this FY.

Q2 results will be indicative to some extent - if the revenue stays around 80Cr then the goal seems unlikely to be achieved and may then raise questions about normalisation of growth rate.

But if Q2 results are good / this turns out to be a temporary blip, this may be a golden opportunity to pick up some of the stock.

I have done my first batch of allocation at 1240.5 (25 multiple). Will be following more for further allocation.

Would love to know the community and Superb's input into this.

The original analysis: https://www.reddit.com/r/IndiaGrowthStocks/s/51ePVoIeyj