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Sunday, November 29, 2020

Say Hello to DSP Value Fund

Dear Investor,

Legendary investor and Vice Chairman of Berkshire Hathaway, Charlie Munger once said "The single most important skill set that you can bring to value investing is patience." Today, if you have some patience, we'd like to tell you how we can add 'value' to your own portfolio.

Interested? Read on.

Great investment ideas like value investing are not necessarily complicated. Most of us have grown up on famous quotes, lessons, books and blogs inspired from legends like Warren Buffet, Charlie Munger, Howard Marks or Benjamin Graham (who literally wrote 'The Intelligent Investor'). These greats have inspired generations.

Here are their key investing principles:

Invest in 'good' companies at 'good' prices: While in the current low interest rate world, good companies rarely come cheap, it is important to apply disciplined rules to identify such companies at reasonable prices (valuations).

Diversify across the world and within India: Add good international companies to try to benefit from their innovation & expertise, which can also help reduce overall portfolio volatility (as against owning only Indian companies).

Keep cash available: Every good company once in a while, maybe every few years, is bound to become overpriced. The ability to maintain some cash during such times respecting valuations, allows one to wait for the right prices and take advantage at the right time.

It is essential to note that these principles aren't for everybody. This investing style demands patience and longer time horizons. One could also encounter long phases of performance deviations from benchmarks or other funds. So if you're impulsive and select investment options based on short term returns, it will not be easy to adopt this style of investing. However, just like in life, good rules eventually pay off. Investors who are able to stick to these principles across time horizons are likely to do well over time.

Would you like to consider an investment idea that follows the rules above?

Say Hello to DSP Value Fund. It will aim to invest in good companies. It will respect valuations and buy companies at reasonable prices. It will search for opportunities irrespective of market cap or geographical boundaries. It will aim to cushion your investment through volatile times. It will also offer you favourable equity taxation when you book any gains. In short, it could help you unlock more 'value' from your investment, over the long term.

Having said the above, please remember that DSP Value Fund is an equity fund. This means this fund will also go through phases of underperformance. In fact, let us also tell you that good companies which could be classified as value stocks today, for the last many years have been underperforming.

Which is why, long-term value investors also need one more key ingredient to do well. The temperament to live through long periods of underperformance. They need to think of investment horizons in terms of decades, not just years. Value investing can behave very differently than the rest of the market, this comes with the territory.

So while it can be extremely enriching and rewarding in the long run, there is also a price to pay. Please be aware of this before you invest.

If investing over the long term while following these principles resonates with you, we welcome you to DSP Value Fund.

Are you ready to join the 'tribe' of long-term value investors?

Consider DSP Value Fund -

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