“It’s a sad day. Whenever I sat with him, I would walk away wiser. I am going to miss it,” said Parikh of his mentor Chandrakant Sampat. It is known that Radhakishan Damani is regarded as guru of legendary investor Rakesh Jhunjhunwala. But do you know who taught Radhakishan Damani his long term investment strategy?
Yes you guessed right. It is Chandrakant Sampat. Let’s get to know about few details about the grand master Chandrakant Sampat biography. Image Credit: ET
Chandrakant Sampat Biography, Principles
We will shed light on his early life, his big bet, Personal life, his last phase as investor and finally his investing strategy.
Sampat was born into a Gujarati family in the year 1929. Unsurprisingly his father was taking care of their family business.
He was one of few people then who came to understand about software. His software background and his Perl (Practical Extraction and Reporting Language) skills enable him to make such brilliant assessments. His skill sets apart from his vast sea of knowledge is what gives him an edge over other investors.
When he grew he was not like most of the people of his time. The young man decided to say good bye to his family business and take stock investing full time in the year 1955.
He had the impression that why to run a business if you can buy some wonderful companies listed in BSE at attractive valuations. The same advice he gave to his another disciple Parag Parikh when Parag had a business failure and went to Sampat for advice.
His big bet
Sampath was greatly inspired by greatest management theorist of all time, Peter F. Drucker. In accordance with Peter F. Drucker, every company is measured on a rigorous scale of productivity and innovation before forming a part of his portfolio.
Sampat was well-read and kept up with the Economist and the international edition of Fortune. In the year 1970 Foreign Exchange Regulation Act or Fera was introduced. The legislation required foreign companies to dilute their equity at prices lower than their intrinsic value.
He was practicing value investing religiously. He was well aware of the size and scale that these businesses could achieve. So he became one of the early investors to join the Fera party.
His picks included Gillette at the price of Rs 16, when it was called India Shaving Products Limited. The ace investor also bought Hindustan Unilever, Nestle when the shares price were in its teens.
All those stock went on to become super duper multibaggers and Sampat earned the title as one of the foremost value investors in the country.
A bit of Personal Life
Like all great investors he was also no exception; he used to read a lot and kept himself updated with latest market news around the globe.
He always believed in maintaining a simple life. For him physical fitness was one of the top priority. Sampat was a regular jogger and extremely active.
Not only does Chandrakant Sampath make a lasting and powerful impression as a master investor, Sampath also makes a mark as a man of unflinching and rigorous discipline.
An out and out fitness freak, the octogenarian investor’s fitness regime includes yoga exercises, iron pumping and jogging.
Moreover, he follows a very simple diet. “I have not eaten sugar, fatty foods or salts in the last 50 years! I just have my salads, bananas and sprouts” he says.
Last part of Journey
Starting almost from scratch, simply by picking stocks and companies for investment, he was often referred to as a guru.
He came across as being obsessed with moneymaking. Nevertheless, he was amongst the most objective and emotionally detached persons you are likely to hear in a lifetime. Moreover, that includes detachment with money.
His emotional intelligence especially his ability to defer gratification was probably his most important strength.
Towards the last part of his journey he became bearish on stock market and moved most of his money into cash or cash equivalent.
“There was a time where I have 70% of my networth invested in equity” He said once.
The drastic change in diversification is more of a shuffle at old age when risk taking capabilities reduced quite a bit.
He fell sick for few days and in the year 2015, at the age of 86 created a irreplaceable vacancy on Dalal street.
Chandrakant Sampath advocates value investing and long term investing as the 2 cornerstones of wealth creation.
“Markets and mistakes are the best education. The conventional education just closes the mind”, he feels.
“Experience is not an asset. The future is going to be entirely different, and the past can provide little clue about the future,” he states directly.
He puts high importance on free cash flow and longevity of business.
What is Sampat’s secret to good investing? when asked answer came.
Invest in a business you understand, the company should have either zero or very little debt, the share should be available at a P/E ratio of 13 to 14 times the current year’s earnings and lastly, it should be available between 3.5% and 4%. “It is that simple!” he says.
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