Pranav Gokhale's most precious investing lessons

When I started my investment journey during the early 2000s, markets were conducive for anything with a growth mindset. The macro didn't matter, nor did the cash flows. The P&L mattered more than the balance sheet, which also percolated down to my investment style then. The global financial crisis made me understand the importance of the balance sheet and cash flows. If I look back through my investment journey, we have travelled from a lack of data to an overburden of data. Filtering valuable information from data and avoiding noise have become paramount and I was lucky to have a mentor who led me to the path of ignoring the noise and relying on hard facts supported by data. This is essential in the context of the current market, where one is overloaded with data. One important aspect I learnt over my investment career is that real research doesn't always happen sitting in front of spreadsheets. One needs to understand the various facets which make the industry by speaking to subject-matter experts, various participants and understanding the situation from the ground level. We avoided a few companies using this scuttlebutt approach, which helped us over the longer term.

This article was originally published on August 04, 2022.