Basant Maheswari's - The Thoughtful Investor

“Finally, after taking almost a month, I was able to complete my reading of ‘The Thoughtful Investor’ and can easily say that this book is a must read for anyone willing to make a living out of investing in Indian Stocks.

This book has two kinds of readers.
1. For guys new into the market , this book will be an eye opener in real sense and will break many investment myths stored in their head e.g buying low P/E cheap stocks , considering even a cyclical stock as blue chip etc.

2. For others like me who have known/ followed Basant ji and his investment style for quite some time , this book through an excellent blend of theory and practical Indian examples , has reinforced our conviction on the investing principles practised and preached by him. I think the key investment mantra , which the author has been successful in conveying through this book, is that it makes sense in the longer term to buy quality stocks by paying little more than to buy cheap stocks by paying little less.

Key Chapters that stood out for me and that every reader must pay attention to are:

1. Chapter- 25- How P/E Ratio is influenced by host of other factors besides the growth rate: Majority of investors try to treat/ analyse P/E Ratio as a function of growth rate only and then cry foul when they see stocks like Gruh, Titan or Pidilite continuously command a higher P/E sometimes not justified by their growth rates. This chapter wonderfully succeeds in solving this mystery as to why some stocks always remain expensive.

2. Chapter 12 -How to Identify Tops and Bottoms: When Basant ji again recommended Gruh Finance at around Rs. 220 in October last year even after stock doubling a year earlier ,I thought “ last year hi to 250 ka high banaya hai or kitna age jayega? and hence did not buy the desired quantity. On15th April of this year (day of his book launch!), Gruh touched another life time high of Rs. 375. On reading this chapter now, I realised that the top was not made at around Rs. 250 since Gruh was sustaining those highs.


3. Chapter 19-How the organised markets grows faster at the cost of the unorganized one: I would have bought Kajaria had I read this earlier. Do I need to say more?

4. Chapter 24: Analysing Mortgage Financers: Can a story be explained more clearly?

5. Chapter 41- The Final Checklist: Basantji poured his heart into preparing this exhaustive checklist. Has anything been left out?

Knowing him and on reading the book, I am convinced that he has not kept back anything for himself as he passionately and incredibly decoded his two decades of his experience in 428 pages. If this is not generosity, then what else is?
In my view, this book is not about growth vs value Investing etc, it is about making money whenever the opportunity presents itself be it in bull market or bear market .I think every Investment book is a product of the prevailing socio economic local environment and so is this book ; any attempt to compare this book with another book of any other era will be futile.

To conclude , this book through a flashback on the investing journey of the author ,is successful in conveying that investing is not always about making quick financial gains here or there but it sometimes also involve penance (tapasya) with its own set of rules ,in order to achieve ‘financial nirvana’.”