Rajeev Thakkar talks about Scalable businesses – Identifying the next multi-bagger

The presentation can be downloaded here for your reference.

https://www.ppfas.com/pdf-docs/b-finance/growth-and-scalability.pdf

It is always a debate whether to buy a business with high growth or a business with high growth at cheap value. As per Buffet buying a value business will include intrinsic growth as the company would have a margin of safety and much below the intrinsic value.


This means that in the process of value investing, a business that an investor does consider buying will factor in growh. It is often a challenge to identify high growth businesses’ but at times it is apparent when there is a paradigm shift occuring.

Take for example, a digital cameras vs old fashioned cameras with rolls. There was a paradigm shift and it was evident that Kodak would run out of marketshare and profits unless it innovated. Digital cameras became a scalable business. The point is that one can identify trends which supersede government policy as well as other macro factors and one looks at sheer business model and Buffet’s checklist, it is possible to identify business which may grow multi-fold over a few years.

To conclude, it is always hard to find a business with high growth and scalable business at a cheap price. One should be aware of trends, paradigm shifts and changes in business environment and follow the Buffet checklist.

Rajeev Thakkar

He is the Chief Investment Officer of PPFAS Mutual Fund.

Regarded by many as a polymath, his presentations, cover diverse topics ranging from the state of the shipping industry, corporate leadership, capital allocation and individual companies like Google. His audience usually takes to him wholeheartedly, as he possesses the endearing quality of 'talking to' them and not 'talking down to' them. Apart from them, certain presentations may be made by a few of their colleagues on account of them being well versed with a specific topic.

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