Veteran stock broker, investor and portfolio advisor Parag Parikh met with a fatal road accident in the US on Sunday, while visiting the country to attend Berkshire Hathaway’s annual shareholder meeting at Omaha. Parikh was killed on his way to Eppley Airfield, when the car collided with a pickup truck. Parikh was accompanied by his wife, Geeta Parikh and Rajiv Thakkar, Chief Investment Officer of PPFAS Mutual Fund.
Rare insights Parag Parikh, 61, was the rare market participant who always had an unusual take on companies, markets and investor behaviour. When he visited the BusinessLine office way back in 2009, domestic markets were soaring, having made a stellar recovery from the crash of 2008. But Parikh made a compelling case for investing in US-listed stocks such as Nestle and P&G.
Not only did they have an emerging market exposure, but the US listed companies were also better governed and were available at huge discounts to their Indian arms, he argued. As he predicted, the US markets outpaced India by a significant margin in the three years that followed. A keen student of behavioural finance, Parikh was a severe critic of herd mentality that makes retail investors buy into much-hyped IPOs or jump to buy flavour-of-the-market stocks when a bull phase is on. He was a proponent of the Buffet way of investing. Identify companies with wide moats and stop paying so much attention to daily market gyrations — was his admonition to small investors.
Tortoise with a difference In 2013, Parikh decided to put his acumen in stock selection to good use on behalf of retail investors, by launching a mutual fund. Parag Parikh Financial Advisory Services (PPFAS) Mutual Fund came as a breath of fresh air into the industry. Adopting a tortoise for its logo and sticking to just one scheme, the fund house differentiated itself through its long-term focus, that didn’t give in to market fads.
Stating from the outset that his fund would not chase assets under management or confuse investors with multiple offerings, Parikh’s sole scheme — Parag Parikh Long Term Value Fund adopted a unique mandate of tactically moving into cash if markets were overheated, taking overseas exposures of up to 35 per cent and also investing across the market cap range. In the ongoing rally, the fund has retained a fairly large exposure to US-listed stocks, continuing to believe that stocks such as Google, Apple and Nestle offered better bargains than most India-listed blue-chips.
‘Skin in the game’ mantra He was also the original proponent of the idea that MF sponsors and personnel must have their own ‘skin in the game’ and actually invest their own money in the funds they manage. Not only did he invest his personal funds in PPFAS Long Term Value Fund, but all the 40-odd employees of the fund house also followed suit. It was after Parikh’s initiative that SEBI brought in a ‘skin in the game’ rule for sponsors of AMCs.
Last year, Parikh also held the first AGM of unit holders by any MF house in major metros, telling this paper that funds must be open to public scrutiny just like the companies they invest in. Mighty excited to be attending Berkshire Hathaway’s annual general meeting at Nebraska this year, Parikh sent a series of tweets from Omaha this week capturing investment insights from Buffet and Munger.
“So much of starting a business or affecting change is the confidence and courage to simply try” — said one of his final tweets, quoting the author Simon Sinek. In his career spanning over two decades as a stock broker, investor and advisor, Parikh never hesitated to take the road less travelled.
“All of us at PPFAS mourning but we are strong. With the support of @npparikh6 and @sahilparikh we will take his vision forward” — (referring to Parikh’s sons — Neil and Sahil) Thakkar tweeted after the news of Parikh’s demise was announced.