Investing by the Books #31 Gautam Baid: The Joys of Compounding
Position Sizing
- Size positions based on risk evaluation, with larger holdings in lower-risk, higher-potential businesses.
- Start with 3-5% allocation and increase if management exceeds expectations.
Advice for Emerging Fund Managers
- Seek long-term partners, adapt to changing conditions, maintain a low-cost setup, and invest personally.
- Choose service providers carefully for smooth operations.
Client Selection
- Select clients carefully by assessing their attitude towards short-term volatility and time horizon.
- Ask potential investors about the purpose of their investment to gauge long-term goals.
Gautam Baid is the Managing Partner and Fund Manager at Stellar Wealth Partners and author of The Joys of Compounding. He has previously worked as a portfolio manager at Summit Global Investments and as a senior analyst at Citigroup and Deutsche Bank. During our wide-ranging conversation, we discuss Gautam’s investment philosophy, common misconceptions among investors, and typical traits of a high-quality business.
We welcome all suggestions of interesting authors, books, investors, and voracious readers. For more info about the podcast, go to the episode page and follow us on Twitter. This episode was recorded on August 5, 2022.
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Episode Chapters
(00:00) Intro by Eddie & Niklas
(04:31) Why and how The Joys of Compounding came about
(07:08) When compounding works against you
(09:02) Why value investing has endured for so long
(10:11) The importance of financial independence
(12:18) Gautam's investment philosophy
(20:22) Traits of a high-quality business
(22:36) Common misconceptions among investors
(24:31) How to behave in bear markets
(26:55) Thoughts on portfolio allocation
(28:42) Advice for aspiring fund managers
(33:01) The fee structure in Gautam’s fund
(36:43) Why invest in India?
(44:21) How to evaluate corporate governance
(47:53) Investing in developing versus emerging countries
(49:19) The two themes of Stellar Wealth Partners
(52:15) Gautam's reading habits and book recommendations
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Books Mentioned
- The Joys of Compounding - Gautam Baid
- A Random Walk Down Wall Street - Burton Malkiel
- Investing for Growth - Terry Smith
- Mastering the Market Cycle - Howard Marks
- You Can Be a Stock Market Genius - Joel Greenblatt
- More Than You Know - Michael Mauboussin
- Seeking Wisdom - Peter Bevelin
- All I Want to Know is where I'm Going to Die So I'll Never Go There - Peter Bevelin
- Common Stocks and Uncommon Profits - Philip Fisher
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More on Gautam Baid
The Joys of Compounding: https://www.thejoysofcompounding.com/
Stellar Wealth India: https://stellarwealthindia.com/
LinkedIn: https://www.linkedin.com/in/gautam-baid-cfa-b40b7110/
Twitter: https://twitter.com/Gautam__Baid
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About the podcast
Intro episode: https://www.redeye.se/podcast/investing-by-the-books/817383/0-intro-to-investing-by-the-books
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What is Investing by the Books?
Investing by the Books was founded by Henrik Andersson, Bo Börtemark, Mats Larsson and Michael Persson. It has published hundreds of book reviews in the past 10 years and operates on a non-profit basis.
Visit the website: http://www.investingbythebooks.com/
Follow on Twitter: https://twitter.com/Investbythebook
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What is Redeye?
Redeye is a research-centered boutique investment bank from Stockholm. Founded in 1999, Redeye cultivates investors through timeless knowledge, a humble attitude, and a strong focus on quality.
Visit the website: https://www.redeye.se/
Follow on Twitter: https://twitter.com/Redeye_
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Disclaimer
Notice that the content in this podcast is not, and shall not be construed as investment advice. This information is meant to be informative and for general purposes only. For full disclaimer, visit Redeye.se