At the Berkshire Hathaway AGM 2019 when Warren Buffet and Charlie Munger were queried about the pile of cash that they were holding, Warren Buffet made this statement, “we would like to go elephant hunting but we don’t see any good opportunities”. Either prices were too high or there were no companies that filled their universe of stocks that was as big as an elephant.
Elephants fit into many type of metaphors. By their size, they are the biggest land animal on earth. They are very strong. They are very gentle, move with grace, have very long term memory, is a very good friend of man, have qualities like honoring their dead, demonstrates qualities like following the leader and be a leader.
In the southern Indian state of Kerala from where I come - owning an elephant is a big status symbol. The man with an elephant is more recognized and talked about than the man with the Cadillac. So when my friend send me the below amusing story I wanted to apply it for Tanla Platforms.
An elephant and a dog became pregnant at the same time. Three months down the line the dog gave birth to six puppies. Six months later the dog was pregnant again, and nine months on it gave birth to another dozen puppies.
The pattern continued.
On the eighteenth month, the dog approached the elephant questioning, “Are you sure that you are pregnant? We became pregnant on the same date, I have given birth three times to a dozen puppies and they are now grown to become big dogs, yet you are still pregnant. What’s going on?”
The elephant replied, “There is something I want you to understand. What I am carrying is not a puppy but an elephant. I give birth to only one in two years. When my baby hits the ground, the earth feels it. When my baby crosses the road, human beings stop and watch in admiration, what I carry draws attention. So what I’m carrying is mighty and great.”
Likewise, if you break your equity investments in one or two years, you will get puppy wealth and if you keep your good quality equity portfolio for 5 to 10 years, you’ll make elephant wealth.
Think before you sell your quality portfolio equity investments mid-way.
Do you want to settle for puppy wealth that lives for 7 to 8 years or do you want elephant wealth that will stay for 100 years?
Uday Reddy may not be the most articulate man on TV but he is a great strategist. I really liked his statement that the company has still to achieve much in India. It is his home turf. It is like our cricket team playing test matches in India. For the most part no outside team can beat India in India. The time for international expansion will come and he is approaching this very methodically. Current price action may disappoint most investors. But if you really understand the difference between price and value you should be able to sleep well at night.
Be a good saver. Become a better investor. Happy Investing!
Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.