Suri spent more than eight years of his formative years, learning from and working with the company Big Bull runs. He fondly recalls how the ace investor would patiently listen to every thesis you bring to the table and then ask you to put it to practice and show results.
“It was a rewarding phase working with him, because he is a person with a very long-term perspective,” says Suri, who now runs his portfolio management scheme (PMS) called Marathon Trends that manages money for the wealthy.
Suri joined Jhunjhunwala’s Rare Enterprises in 2008 as an analyst and did mostly quantitative work. He left the firm in 2016. “RJ is a very patient investor. The best part is, he gives you the freedom to experiment with various styles and techniques till you discover your own style,” said Suri.
“When you have a mentor like him, you get a big enough canvas to create your own painting,” he added.
Marathon Trends stands out in India’s almost crowded PMS space because of a unique stock selection process it uses by blending fundamental stock research with market technicals.
Suri says there has not been a greater lesson in his journey as a money manager than to see the power of compounding in the wealth creation journey of Titan, a Jhunjhunwala favourite stock that has grown 174 times since its listing in 1995. The Big Bull first bought the stock in 2002.
“It is probably the first chapter one learns in every textbook on finance. I saw it happen in front of my eyes. It was a very big education,” Suri recalls.
He says Marathon Trends today tries to create wealth for investors through the same path of compounding that he learnt from Jhunjhunwala.
And what qualities does one require to be able to work with the ace investor? Suri has a ready answer: “Fearless in thought, integrity in action and risk control as an overriding mantra.”
The Journey So Far
Suri, 50, considers himself lucky to have got a chance to work with Big Bull, often referred to as India’s own Warren Buffett. He says that exposure made him a polished investor in the equity market and the same is reflected in the performance of his fund.
“What Marathon Trends does today is a reflection of my personality,” he says. The PMS delivered 17.45 per cent in 2019 compared with a 7.30 per cent expansion in the benchmark NSE500 index.
Some of the key holdings in the PMS portfolio during the year were Bajaj Finance, Berger Paints, Bata India, Bajaj Finserv, Kotak Mahindra Bank, Jubilant Foodworks, HDFC Bank, Procter & Gamble, Reliance Industries and Pidilite Industries.
Suri says he prefers to keep about 20 stocks in a diversified portfolio. “Companies that continue to grow or deliver even in tough times are something that really stand out and are the kind of stocks we like to own in our portfolio,” he said.
Suri follows a hybrid approach for stock selection. He starts by identifying companies having sound fundamentals and then tries to shortlist the ones that show trending earnings and trending price patterns.
“This combination is born out of an upheaval we saw in 2018. We found that trends were emerging in new spaces which were essentially high-quality financial and consumption stocks. We were able to navigate from the smallcap and midcap universe towards this space, simply because it reflected trending earnings and trending prices. This core philosophy is clearly reflected in the performance of our PMS,” Suri points out.
Trending earnings and trending prices are expressions used to mean consistency in performance.
How long should one hold a stock?
Suri says he is comfortable holding a stock as long as it reflects trending earnings, trending growth, sales and profitability even amid market volatility.
“Short-term market volatility may offer an opportunity to buy. When we do quantitative studies, they give us a great risk management discipline, which makes us comfortable to hold companies for longer time. When the tide turns or things get bad, quantitative work helps make exit decisions and that is something we specialise in. This actually sets us apart from most other money managers in India,” says Suri.
Technical vs fundamentals
Suri is equally proficient in both fundamental as well as market technical and refuses to take sides. “We belong to both camps, and this is our strength,” he claims.
“I began my career as a fundamental analyst, so that is my orientation. However, we used quantitative analysis. We do not use technicals in the traditional sense. We do a lot of quantitative work. This kind methodology, systems bring about a healthy overlap. It is our belief that these different styles can actually complement each other and can overlap,” says the Mumbai-based money manager.
He says he always worked on creating a complementary structure between fundamentals and quantitative analyses.
View on current market
Suri’s reading of the current market is, Nifty will top the 13,500 mark in 12-15 months. According to him money will continue to pour into quality frontline stocks until the market sees a broadbased industrial revival.
“The market is rewarding to select largecaps which are delivering earnings. Smallcaps and midcaps will relatively underperform. We really do not know when the revival is going to happen in the economy. We have been awaiting this for years. As a strategy, we will continue to focus on the midcaps to largecaps and avoid the riskier smallcaps,” says he.
Why investing as a profession?
Suri was doing his chartered accountancy when he got introduced to well-known equity analyst Parag Parikh, who had set up India’s first formal equity research desk. Suri was intrigued by Parikh’s thought process and philosophy in his initial years in the early’90s.
“I am a forward-looking person, who likes to look into the future and the stock market is the ideal place for me. Here, we look into how economies, industries, companies will shape up in the future. The passion of looking into the future and to be able make a profession out of it was something in which I found a much better alternative than practising as a chartered accountant where I would be looking at the past and pointing out the people’s faults. So, this really became a natural choice, which was a good fit with my personality,” Suri recalls.
He says he got immensely influenced by a book titled Future Shock by Alvin and Toffler. Two other books he likes to recommend are Market Wizards by Jack D Schwager and The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.
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4 Comments on this Story
Juan Garcia83 days ago
Raj Ku Agarwalla103 days ago
I am new to the market how could i follow
Digvijay Patil263 days ago
Best strategy to choose stocks !