"Buying is dependent on pricing but not on timing"

Insights of a fund manager at PPFAS Mutual Fund

Do successful investments share some common traits? Questions like these have kept investors awake countless nights. We don’t profess to have definitively cracked this age-old puzzle. However, seeking insights from a seasoned expert with over 11 years of experience in the equity markets seems like a good start.

Hence, we turned to Raunak Onkar, Fund Manager and Research Head of PPFAS Mutual Fund, to tap into his wisdom. In our conversation, we delved into his investment philosophy, the balance between diversification and concentration, and crucially, the key attributes he believes successful investments share. We also asked him about common investing mistakes most investors make.

Where do you get your investment ideas from? What method has worked the best for you? 

There are many sources for investment ideas. Firstly, it is quantitative, driven by many screens that filter out companies based on long-term trends of return on capital, growth, valuation, etc. We also screen ideas based on some known factors like quality, value, etc. Other sources are reading about different sectors/companies and finding linkages to various vendors/suppliers/ customers of those companies. Even sell-side research sometimes becomes a good starting point to evaluate some ideas.

No single source is more important than the other. It’s the consistency of evaluating different companies/ sectors that keeps throwing up interesting ideas from time to time.

According to you, how many stocks are too many? Where do you stand on the concentrated versus diversification divide?