Confessions Of An Owner-Manager

[giofranchi]

I am sure there will be many more transitions before life comes to rest. There remains a question about what I would do differently if I were to relive the past. There are a few things, which would qualify, but only a few.

 

One is that I would not get into capital-intensive greenfield ventures without having a deep understanding of the industry. Of course, there is no way to know an industry fully until you are neckdeep in it. Having said that, one can derive a lot about an industry that is similar to one you may already be in. You could also learn by talking to close friends who have some understanding of the industry. But even after all that knowing, if I am uncomfortable in the gut, I will take a pass.

 

The second thing I would do differently is that after making an investment into a new business, I would become more hands-on early on. Once you gain a good understanding of a business, you can decide to bring professionals and let them do the day-to-day heavy lifting.

 

Lastly, I would always want to keep a certain amount of cash at my disposal. Life is uncertain. And just like we plan our personal affairs by stashing away some money for a rainy day, I would keep some cash in reserve for a rainy day. For rainy days do come every time the business cycle turns or there is a discontinuous shift in an industry’s landscape. The depth and length of those days cannot be predicted in advance. And having cash at such times can be both a safety net as well as a weapon to capture interesting opportunities.

 

Cheers!

 

giofranchi

Confessions_Of_An_Owner-Manager.pdf

[Gopinath]

Thanks giofranchi for uncovering value investing people in India!

[giofranchi]

Thanks giofranchi for uncovering value investing people in India!

 

My pleasure! :)

 

giofranchi