Investor Codex

The investor's edge in equity research is not analytical sophistication — it is the habit of looking where others don't bother to look.

Lynch managed a portfolio that at its peak held as many as 1,400 positions — not because he bought everything, but because he evaluated thousands and rejected most, and the looking itself was the edge. Every company he passed on after careful review sharpened his judgement about the next one he looked at.

In India, the equivalent resources are freely available and almost entirely unread by most retail investors — NSE bulk deal disclosures that show when significant investors are buying or selling large blocks of shares, mutual fund shareholding data that reveals where institutional money has been quietly building positions, and quarterly concall transcripts in which management reveals its real priorities in the gap between prepared remarks and actual answers.

None of this requires a Bloomberg terminal. It requires the habit of looking where most people don't bother.

What are you reading that most investors in your network aren't?

Peter Lynch is referenced as the source of this quote. This post does not constitute investment advice.

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Two companies can report similar returns on equity — one earning it on its own capital base, and the other borrowing to achieve the same number. The difference is not visible in the ROE figure, but it is visible in ROCE.

Return on equity measures how well a business uses its shareholders' money. Return on capital employed measures how well it uses everything — equity plus whatever it has borrowed. When a business takes on significant debt to fund its operations, its ROE can look attractive even if the underlying business returns on total capital are modest. ROCE removes that distortion.

Bajaj Auto has maintained near-zero net debt for years, with ROCE consistently above 30% — returns earned on the company's own capital base. IRFC, by contrast, is a lending institution whose business model involves borrowing from capital markets to on-lend to Indian Railways — the high ROE reflects that leverage structure, not underlying operating returns on capital. Both are investor favourites in India's listed universe, and both tell an entirely different capital story.

The next time you use ROE as a filter, run ROCE alongside it — the gap between the two is worth understanding before you build a conviction.

Save this before the next earnings season.

Bajaj Auto and IRFC are used for illustration purposes only and do not constitute recommendations to buy or sell.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

A framework for market cycles — written in 1994 — describes every cycle since, including India's last one.

In March 2020, the Nifty fell to approximately 7,500. The prevailing mood was not caution — it was close to genuine fear, and investors who added during those weeks were doing so without the comfort of any signal that the worst had passed. The recovery through late 2020 and into 2021 was met with persistent scepticism as market participants expected another leg down. By 2022 and 2023, the tone had shifted to optimism, and retail participation grew alongside it. By September 2024, when the Nifty reached a new all-time high, monthly SIP contributions were at record levels and financial media was writing about structural bull markets.

No market cycle announces which stage it is in. Templeton's framework — written in 1994 — names them, and every cycle since has followed the same pattern.

Where do you think India's market sits in this cycle today?

John Templeton is referenced as the source of this quote. This post does not constitute investment advice.

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India's largest IPO in 2024 raised ₹27,870 crore in a single week — and the company kept none of it.

Hyundai India's listing in October 2024 was a 100% Offer for Sale — the existing shareholder (Hyundai Motor Company, South Korea) sold its stake to Indian public market investors, which is a legitimate transaction, but the Indian business had the same assets, the same liabilities, and the same operations on listing day as it did the day before.

Before applying to any IPO, the first filter is not the GMP or the subscription count but a simpler question: who is selling, and what does that tell you about why they are selling now?

The answer is in the first ten pages of the DRHP, which most applicants never read.

Hyundai India is used for illustration purposes only and does not constitute a recommendation to buy or sell.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

The best research Peter Lynch ever did was shopping at stores, filling up at petrol stations, and watching what his family bought.

He managed the Magellan Fund to 29% annual returns for 13 years — not through superior access to management, but through superior observation of the world around him.

In FY2024–25, D-Mart stores remained visibly crowded — especially on weekends — even as quick commerce competed for grocery wallet share. Any regular D-Mart shopper was sitting on a real-time signal: stores were crowded, baskets were full, and the same-store sales data that followed confirmed what any consistent observer could already see.

In India, every commuter, shopper, and service user is sitting on the same kind of observable data every day. The investor who pays attention to what is working around them — and then goes to verify it in the numbers — has a genuine research edge.

What business do you understand better than any analyst will — because you use it every day?

D-Mart (Avenue Supermarts) is used for illustration purposes only and does not constitute a recommendation to buy or sell.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

Most investors spend their energy trying to predict what the market will do next.

Howard Marks built one of the best long-term records in investing — not by predicting, but by preparing for multiple outcomes. Preparation looks like: knowing what price makes a position cheap enough to add, knowing what development would break your thesis, keeping enough flexibility to act when others cannot — and none of this requires being right about timing.

What does your investment preparation look like right now?

Howard Marks is referenced as the source of this quote. This post does not constitute investment advice.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

A company can report profit and run out of cash at the same time — and this is not rare.

The P&L is the story a company tells, while the cash flow statement is what actually happened.

Free cash flow — cash from operations minus capex — is the figure that cannot be dressed up by accounting policy; the number either exists or it does not.

In FY2024–25, Naukri's standalone operating cash flows remained strongly positive even as Info Edge's consolidated P&L was weighed down by fair-value changes in its listed investee portfolio. Investors reading the standalone FCF had a cleaner picture of the business's earnings power — before the consolidated headline caught up.

Next time a company reports earnings, scroll past the profit headline to the cash flow statement — that is where the real picture is.

Save this before the next earnings season.

Info Edge (Naukri) is used for illustration purposes only and does not constitute a recommendation to buy or sell.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

Indian retail investors poured ₹41,887 crore into equity mutual funds in October 2024 — even as the Nifty had already corrected roughly 8% from the all-time high it had set in late September.

That is the crowd behaviour Buffett's principle on fear and greed describes — no single dramatic trigger, just ordinary investors quietly moving money into the market at exactly the moment the more cautious ones were stepping back.

Buffett's insight is not a trading signal but a behavioural mirror — one that tells you what to notice about yourself, not what to do next.

Save this and re-read it the next time a mutual fund advertisement quotes a 3-year return.

Warren Buffett is referenced as the source of this principle. This post does not constitute investment advice.

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.

Philip Fisher spent his career walking factory floors and talking to competitors, suppliers, and customers before ever opening a spreadsheet — a method he called scuttlebutt research.

An Indian equivalent shows up in fund managers who insist on deep, boots-on-the-ground research into a business's quality and capital allocation before ever asking about price. IRCTC is a case where this kind of attention would have paid off: the shares fell to a 52-week low of ₹1,291 in November 2020, then surged 386.67% to a peak of ₹6,375.45 by October 2021 — a business every Indian train traveller had already used for years.

Two research methods that look nothing alike on the surface are built on the same instinct: notice what the people close to a business already know, before it shows up in a quarterly number.

Next time you think about a business you use every day, ask what you already know about it that a spreadsheet hasn't caught up to yet.

(Reference to Saurabh Mukherjea and IRCTC is for case study illustration purposes only and should not be taken as an investment recommendation.)

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On March 10, 2025, IndusInd Bank disclosed a derivatives accounting discrepancy of roughly ₹2,000 crore, found during an internal review of its derivative portfolio.

The shares fell 27.17% that single day — the steepest one-day fall in the bank's listed history. Millions of customers had used its branches, cards, and apps for years, entirely unaware that an error of that scale was sitting inside the business.

Familiarity with a brand tells you it's convenient and that people trust it enough to use it. It tells you almost nothing about what's actually happening inside its balance sheet — mistaking one for the other is exactly how a familiar name becomes an expensive surprise.

Next time you feel confident about a stock just because you know the brand, ask what you actually know about its balance sheet.

(Reference to IndusInd Bank is for case study illustration purposes only and should not be taken as an investment recommendation.)

To learn the complete investing principles, frameworks and mental models used by the world's greatest investors — enrol via the link in profile.