Rakesh Jhunjhunwala Portfolio - December 2006

No.	Name	% stake
1	Aptech	18.4
2	Agro Tech Foods	4.3
3	Alphageo (India)	1.6
4	Bharat EarthMove	1.5
5	Bhushan Steel	2.4
6	Bilcare	11.6
7	CRISIL	8.1
8	Geojit Fin. Ser.	13.1
9	Geometric Soft.	2.9
10	Hind.Oil Exploration	3.9
11	Infomedia India	5.4
12	Karur Vysya Bank	4.8
13	Lupin	3.6
14	Mid-Day Multimed	5.0
15	Nag. Constructn.	6.7
16	Panama Petrochem	1.2
17	Pantaloon Retail	1.7
18	Praj Inds.	10.4
19	Prime Focus	6.9
20	Punj Lloyd	1.9
21	Ramco Systems	1.0
22	Titan	6.7
23	Vadilal Inds.	2.9
24	Viceroy Hotels	12.1
25	Zenotech Lab.	3.1
Source: Bseindia.com

Bill Miller's Legg Mason Value Trust Portfolio - December 2006

No.	Name	% of Net Assets
1	Tyco International Ltd.	5.2
2	The AES Corp.	5.2
3	Sprint Nextel Corp.	5.0
4	UnitedHealth Group Inc.	4.7
5	Amazon.Com Inc.	4.5
6	J.P. Morgan Chase and Co.	4.4
7	Google Inc.	4.4
8	Qwest Communications International Inc.	4.2
9	Sears Holdings Corp.	4.0
10	Countrywide Financial Corp.	3.5
11	Aetna Inc.	3.4
12	The DIRECTV Group Inc.	3.2
13	Yahoo! Inc.	3.1
14	IAC/InterActiveCorp	3.0
15	Citigroup Inc.	2.8
16	Eastman Kodak Co.	2.6
17	eBay Inc.	2.6
18	Time Warner Inc.	2.5
19	The Home Depot Inc.	2.3
20	American International Group Inc.	2.3
21	Health Net Inc.	2.3
22	Expedia Inc.	1.9
23	Pulte Homes Inc.	1.7
24	Hewlett-Packard Co.	1.7
25	Centex Corp.	1.6
26	Capital One Financial Corp.	1.6
27	Pfizer Inc.	1.6
28	Cisco Systems Inc.	1.6
29	Dell Inc.	1.6
30	Seagate Technology	1.6
31	Electronic Arts Inc. (EA)	1.6
32	General Electric Co.	1.4
33	International Business Machines Corp.	1.4
34	KB HOME	1.0
35	WPP Group PLC	1.0
36	CA Inc.	1.0
37	NIKE Inc.	0.9
38	Masco Corp.	0.6
39	Waste Management Inc.	0.4
40	Symantec Corp.	0.3
41	General Motors Corp.	0.1
Source: Legg Mason

Update -Rakesh Jhunjhunwala Portfolio - September 2006

As promised earlier, I am updating the list of portfolio stocks held by RJ as at end of September 2006. (you can access the previous post containing the portfolio here)

Lupin (4.09% stake, value of stake = Rs.164 crore)
Provogue (2.96% stake, value of stake = Rs.19 crore)
Alphageo (1.56% stake, value of stake = Rs.1 crore)

Total Portfolio value = Rs.1873 crore (up 16% over June 2006 quarter)


Note: The ace investor has added the following two new stocks in his portfolio in September 2006 quarter:
.Alphageo – for research click here.
.Panama Petrochem – for research click here

Rakesh Jhunjhunwala Portfolio - September 2006

The above portfolio of RJ is as declared to stock exchanges as on Oct 31, 2006. I shall update the same as and when more information is filed with the exchanges.

Note: Panama Petrochem Ltd is the new stock addition to the master investor’s portfolio in September 2006 quarter. I shall shortly post more research on Panama Petrochem on this blog.

Rakesh Jhunjhunwala Portfolio - June'2006

The above portfolio of RJ is as declared to stock exchanges as at June 30, 2006

Warren E Buffett – A Profile

Warren Edward Buffett is an American investor, businessman and philanthropist and is the largest shareholder and CEO of his investment vehicle, Berkshire Hathaway. He is ranked by Forbes as the second-richest person in the world, behind the Microsoft co-founder Bill Gates.
As on February 2007, the value of his stake in Berkshire Hathaway was valued upwards of $50 bn.
In June 2006, he made a commitment to give away his fortune to charity, with 85% of it going to the Bill and Melinda Gates Foundation.
Investment Philosophy:
Buffett’s investment philosophy had the following key tenants:
· Invest in companies with a large economic moat (high degree of competitive advantage) which is reflected in its ability to raise prices of its products over a period of time.
· Invest with in your circle of competence (invest in companies and businesses you understand)
· Invest only for the long term. Buffet immortalized long-term investing by following quote – “my favorite holding period is forever”.
· Invest in businesses with a consistent and high absolute return on capital employed, which should be reflected in a market price to book value of greater than one (a company should generate more than $1 for every dollar invested in business)
· Invest a price which provides a very high margin of safety (purchase your investment a huge discount to its intrinsic value)
· Intrinsic value of a business is equal to the present value of all the future cash that can be taken out of that business
· Focus on Owner Earnings (free cash flow) in valuing a business.

Bill Miller – A Profile

Bill Miller is currently the Chairman & Chief Investment Officer at Legg Mason Capital Management, Baltimore, USA. Bill Miller joined Legg Mason in 1981 and manages the Value Trust and Opportunity Trust mutual funds. He was Legg Mason's Director of Research from October 1981 through June 1985 and assumed overall responsibility for the equity funds management area of Legg Mason in late 1990. Prior to joining Legg Mason, he served as Treasurer of the J.E. Baker Co. Bill graduated, with honors, from Washington and Lee University

in 1972 with a degree in Economics. He is on the Board of Trustees at the Santa Fe Institute, a leading center for multidisciplinary research in complex systems theory. Bill received his CFA designation in 1986.

He is a portfolio manager of the Legg Mason Value Trust mutual fund, the after-fee return of which has beaten the S&P 500 index for 15 consecutive years from 1991 to 2006.

Investment Approach:

Bill has often being criticized that he is a growth investor in the garb of a value seeker, as his portfolio is dominated by so called growth stocks like Amazon, Nextlel, etc. However, as he correctly puts it, he is literally a “Value Investor”, a long term patient investor (and not trader as can be seen from his low portfolio turnover) who seeks value (which he defines as a deep discount to his assessment of intrinsic value). According to Mr.Miller, intrinsic value is not judged simply by the book value or earnings per share (EPS), but by free cash flow generation, return on capital employed and long term sustainable high RoCE growth. This value changes with passage of time and hence the models of value also need to be changed peiodically, which can make a stock which was expensive two years back at the same price, a value buy today. Thus, the heart of Mr.Miller’s investment philosophy is the judgment of intrinsic value and then buying the business at a deep discount to such value.

Rakesh Jhunjhunwala - A Profile

Mr Rakesh Jhunjhunwala is a well known and astute Indian investor and trader. He is both a Value investor as well as a trader. Those hard core value investing fans might be wondering how can a single individual be both an investor as well as a trader (since both require completely opposite mental make-up)! Mr. Jhunjhunwala is known for his knack for picking undervalued stocks and sitting on them patiently for years to yield supernormal returns. His most famous quote is "I have made most money not by being right but by sitting tight".

Summary of Investment Philosophy:

According to Mr.Jhunjhunwala, key aspects to consider in an equity investment are:
. Size of the external opportunity
. Sustainability of competitive ability
. Scalability and operating leverage
. Management quality and capital efficiency
. Price and value divergence
Out of the above 5 factors, the last one, i.e., price what you pay is the most important, and if this condition is not satisfied, Mr. Jhunjhunwala will never invest in a stock.He also places great emphasis on superior business models rather than sectors for his investment decisions.

Introduction

The author intends to discuss his personal views and opinions on the masters (or gurus) of investment world. The blog shall also publish articles, news, portfolios of featured investment managers/ investors. The objective is to share views with like minded long term investors/analysts/readers that follow or intend to follow the philosophies of such stock market masters.

Author invites comments /opinions/articles from like-minded investors/analysts/readers on the opinions discussed in the blog. If you have any interesting article/news, please feel free to post a comment for the same on the blog or email me at indian.analyst@gmail.com

Disclaimer:
The views and articles discussed in this blog are strictly for educational purpose only. The investments discussed in this blog may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advisors as they believe necessary. The author may have positions in stocks at the time of its discussion on the blog. Users are advised to peruse the articles and other data in the blog only for their information. This blog does not have any affiliation, expressed or implied with the organisation where the author is working.

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