RIP Parag Parikh – Value Investor, Fund Manager, Author & Guru

Renowned for his analysis on Investor’s behavior in investment field and his long-term stock picking ability – yesterday Mr Parag Parikh lost his life in road accident in Omaha (US) – he was there to attend investors meet of Berkshire Hathaway (Warren Buffet’s Company). I was sad & shocked by the news & not sure how to react – when one of my friend shared this news in the morning, first thing that came to my mind – Life is too short… and indeed a bubble 🙁

He was veteran investor since 1979 & managed investor funds through PMS – in 2013 started PPFAS AMC. He was big fan of Warren Buffett style of investing – which was clearly visible in his writing & asset management. Like to many, he impacted my life & thoughts – his demise is big loss to Indian Financial Industry.

He was different!!

• 
  His AMC managed only single fund – PPFAS Long Term Equity Fund – no other equity or even debt fund. And no plan to launch second equity scheme. In a previous interview, he said Asset Management is not a grocery store business. There is just one single way to right investing. You can’t have 20 ways.
• Their ads & communication clearly mentioned “Investors should note that this Scheme is suitable for investors who have investment horizon of minimum 5 years.”
• Only AMC to conduct unit holders meeting similar to company AGM.
• You will be surprised his funds biggest holding is “Google” – almost 10%. I don’t think there is any other diversified fund in India – where you will find international stock in top 5 holdings.
• He was the first who talked about “skin in the game” – in Feb 2015 employees held approximately 9% units in the fund.

His Book – Value Investing and Behavioral Finance

(My daughter did her calculation on this page)

I bought this amazing book just before starting my practice – I still remember that I first read this book when I was on the way to Ajmer. I am a slow reader but I almost completed 60-70% of the book in one day trip. This book was published in 2009 & covered markets from starting of Sensex to bear market of 2008. It’s an amazing book on Behavioral Finance & Indian Market History – his ideas & guidance have lot of impact on our practice & TFL Blog. 

First Page of His Book – WHY PEOPLE FAIL

When he launched AMC – his words

“For us, mutual fund is not a business, it is a money management profession. We will do things which benefit the clients. Currently, we notice the mad fight for assets under management (AUM) by AMCs, because the profession has become a business. Our foremost goal of getting into asset management, is to make money for the retail investors. I am not concerned if the assets we manage are large or small. We want the investor’s money to be managed in a very transparent manner. More than two decades ago, we started as a broker firm and gradually moved into the portfolio management services (PMS). The mutual fund is a logical extension and transition for us. I genuinely believe that mutual fund is a very good asset class for investors. As we have the expertise in money management, we can add lot of value to small investors.”

His Last Tweet

Current Price of 1 Berkshire A Share is $ 2,16,000 – 10 Shares Rs 13.6 Cr.

(Overall Gain 1964-2014 – 18,26,163% or 21.6% CAGR)

Parag Parikh, was a flag bearer of value investing, disciplined approach to financial management and penned his understanding in his 2 famous books: Stock to Riches- Insight on Investors Behavior and Value Investing and Behavioral Finance: Insights into Indian Stock Market Realities. Being co-dreamer of the same philosophy Parag was bold articulator of his thoughts on Financial Planning.

His insights, convictions and practice helped change minds and financial positions of lot of investors. His books and views will continue doing so, but I hoped he could continue witnessing such changes… RIP Parag Parikh.