PPP Investment Proces - Turtle Wealth

This is Turtle Wealth’s Copy Righted Process: Price, Profits and People. This Investment Approach is designed solely by our Turtle Team by taking insights from our CEO & Portfolio Manager Rohan Mehta, of his 17 years of experience from selling MF to Managing 100’s of Cr. of fund. This approach comes from the thought in the market where market runs because of 3 factors:

1. PRICE – “Bhav Bhagwan hain”

With lot of thesis written on stock or business, at last the bottom line is what price to be bought and what price to be sold, as price is a very important factor while investing. As it is said a picture has a 1000 words, Price has 1000 Pictures, all sum up in the investment world to one thing and i.e. PRICE, at Turtle with our in-depth research we buy companies only which are above its All Time High, has consolidated from a longer period of time of an average of decade or more. Now the reasons as why we buy a business at All time high are as follows:

Historically we have witnessed the company crossing its ATH after a decade or so is a high conviction point of turnaround possibility in the company. Hence price gives us higher conviction to buy.
Because of PRICE, we never buy the company which has fallen brutally or have any chance to do bottom fishing or emotionally buying just because stock has gone so much low.
With Price we avoid the Gestation time in the company, we may buy higher, but we may not lose a lot of time invested in the company, Conviction gets higher for allocation.
Stock should not only be at ATH, but also should be outperforming NIFTY 500 and its Sectorial Index. This gives us edge of not buying companies which are non-market performers

With Price the biggest advantage we have is to decide when we will EXIT in the company. We are one of the unique PMS House which decides EXIT 1st before we enter in the company. 1st exit is decided on the base of price, from that our Risk Management System gets activated (You will understand this in Risk Management System)

Initially we always used to focus on price, but as we mature, we added one more variable into it, and i.e., PROFITS, because price alone can some time fool us, but adding profits it becomes more robust.

2. PROFIT – Business and Balance Sheet is heart of any company

In Investing there are thousands of Ratios, every ratio can be different depending on company to company and sector to sector, but one thing which one cannot debate is Profits which is one of the most important part of the company, and we focus on PAT. As discussed above the 1st rule of Stock to be at ATH & secondly the Stock PAT also should be at ATH. Now it would be very interesting that the stock is available at the consolidation of an average of a decade but the same time stock Profit are rising and the stock has done its ATH. A company can forge anything, but cannot forge its Net Profits. Now once the stock is at ATH, Profits are at ATH, we deep dive in the company Fundamentals, Business and what has led to the turnaround in the business, it’s the sector, it’s the season, or what is the reason. Every stock has a different story, we make sure we go into the reasoning. But sometimes even after all the hardwork, you don’t know what is happening around and that’s the reason we introduced the 3rd P is the segment and i.e. People.

3. PEOPLE - The company is driven by the Promoters and the People (Team)

We make sure we don’t buy companies without meeting the management and without doing Scuttlebutt of the company. Meeting dealers, employees and management team we get the nerves of only one question “What is the turnaround factor”? as we have already deep dived in to price and the company business and management after this only the 3rd stage comes, many company fail to answer and convince us about the turn around and many does, but still we are not backed by only one P, all 3 has to come into common to come as a buy.

If these 3 things gets merged with each other and we can find a Turnaround story and it gets place in one of our portfolio. Now just check logically, we have hardly left any gap of a leakage for a company to enter in our portfolio, and if it does we also we have an exit point of flushing out, also this strategy gives us freedom to be in sync with Team, Clients and Markets.