Why is Marcellus strategy flawed? - The issue is in the narrative
And why narrative is imp. Because your investments are all based on the narrative. And you need to stick to the narrative no matter where the stock price goes.
Here is the selling note from Marcellus on Relaxo
And why narrative is imp. Because your investments are all based on the narrative. And you need to stick to the narrative no matter where the stock price goes.
Here is the selling note from Marcellus on Relaxo
Lets decode the sell narrative.
"Our recent channel checks raised market share loss"
What is channel check ? How many channel's they checked ? Since this is sensitive information management do not publish this information.
"Our recent channel checks raised market share loss"
What is channel check ? How many channel's they checked ? Since this is sensitive information management do not publish this information.
Also for a sector like foot-wear where there are too many unorganized players , it is difficult to even find the MarketShare forget about market share loss.
So basically he might have walked into a store and asked casually to the sales guy over there. - Channel check done !!
So basically he might have walked into a store and asked casually to the sales guy over there. - Channel check done !!
Deep MOAT
Marcellus Investment Managers were usually vocal about the deep MOAT of companies they owned.
For ex here in a 14th Nov 2021 video he talks about 103 Rs chappal from Relaxo as a MOAT for wealth creation.
And in just one year MOAT evaporated.
Marcellus Investment Managers were usually vocal about the deep MOAT of companies they owned.
For ex here in a 14th Nov 2021 video he talks about 103 Rs chappal from Relaxo as a MOAT for wealth creation.
And in just one year MOAT evaporated.
Exit note talks about recent price hikes in Relaxo as a reason for exit.
Well in last 6 months there was inflation everywhere and this fund manager expect Relaxo as exception ?
Ideally his exit thesis should have contained any note if Relaxo has disproportionately raised prices
Well in last 6 months there was inflation everywhere and this fund manager expect Relaxo as exception ?
Ideally his exit thesis should have contained any note if Relaxo has disproportionately raised prices
In his exit note he believe that when Relaxo raise price they will loose market share , but refuses to believe that they will gain the share when they reduce prices so much for the MOAT :-)
And the last para is the funniest one and here is the English meaning of the same.
And the last para is the funniest one and here is the English meaning of the same.
"us reducing the firm’s longevity scores" - Meaning - as long as the price of the stock keeps rising, the longevity scores in our portfolio remains.
"When these reduced estimates are fed into our position sizing framework" - We do not know what is hapenning , so we are selling.
"When these reduced estimates are fed into our position sizing framework" - We do not know what is hapenning , so we are selling.
So in a nutshell this is Marcellus strategy.
Find out stocks which have gone up considerably in last 5 years. Invest in them thinking that they will keep moving up. Sell if they go down.
So basically, this is what investors in their fund experiences - Buy High Sell low.
Find out stocks which have gone up considerably in last 5 years. Invest in them thinking that they will keep moving up. Sell if they go down.
So basically, this is what investors in their fund experiences - Buy High Sell low.
Now this simple strategy will not find enough takes if told just like that. So you basically sugar coat it with Jagrons like Consistent compounders , Coffee Can investing , Rising Giants etc etc
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