Ep. 23 - Puru Saxena, Portfolio Manager: Growth + Price = Success

Puru Saxena was the founder and portfolio manager of a Hong Kong based money management firm. He set up my first firm with 2 partners in 2001 and then branched off on his own in 2005 and ran money until 2016; which is when he retired from the business. Thank you so much for listening, we really appreciate you. If you have found this valuable, please consider leaving us a review as it will help more people find it! Thanks you're awesome! You can find more information and content by going to these places: Website: https://www.investingcity.org YouTube: Investing City Twitter: investing_city Instagram: investing_city Or feel free to email us at service@investingcity.org Again, we really appreciate that you would take the time to listen. Hope it was valuable. Let us know if you have any questions! Transcript: Puru 0:01 So the key question you have to ask yourself is, if I am looking at this business, what are the substitutes available and as a customer of that business, what is the likelihood of me actually going to the other business as opposed to this business, and that gives you a fairly good indication of a mode. Ryan 0:21 Hello, everyone and welcome to the investing city podcast where the goal is to get better at investing business and life. Thank you so much for taking the time to join us, it really means a lot. Without further ado, enjoy this episode is presented for informational purposes only, and is not investment advice. This information must not be relied upon in making any investment decision. Investing city cannot be held responsible for any type of loss incurred by applying any of the information presented. Furthermore, securities discussed in this podcast may be held by the investing city and members thereof. Thank you. On today's episode, we have the pleasure of talking with Puru Saxena. He's the founder and portfolio manager of a Hong Kong based money management firm that he set up with his first partners in 2001. And then he branched off on his own in 2005. He ran money until 2016, and then retired, and now he just manages his own portfolio. We talk a lot about his research process, what the two drivers of investment returns are his trend following strategy in order to limit severe drawdowns and much much more, including a lot of discussion on Uber and Lyft, and the ride sharing industry. I hope you enjoy this one because Puru is really sharp, and he has a lot of great insight. Enjoy. Okay, on this episode of the investing city podcasts, we're happy to have Puru Saxena on. So thanks so much for being here. Puru 2:00 My pleasure. Ryan 2:01 Great. So I thought we'd start with kind of a deep dive on your research process. And I feel like our research processes are fairly similar being kind of growth investors, but I just want to dive in a little bit about how you think about starting to research a company and then kind of the process in which you analyze one. Puru 2:23 Okay, I mean, basically, I realized a long time ago, that proves why a shareholder makes money from investing in the business. The first reason is obviously, the growth of the business. And the second aspect is the valuation of the business both at the time of investment and the time of divestment. So there are two factors at play here. You know, there are a lot of investors who get caught up in the value traps because they think something is cheap, but they don't realize, you know, something is cheap for a good reason it the top lines are shrinking the business growth isn't there? Well, there is some competitive threat lurking on the horizon prestigious can't see or discounted and modeling. So for me, I try and look for those businesses, Ryan, which are dominant in the respective fields, generally businesses, which are disrupting the existing industry, because obviously, it's a lot easier to steal existing demand from within an industry than it is to actually create...