Just like any other youngster, Jiten Doshi, in his childhood, was inspired by his father’s investing acumen. Years later, he got the opportunity to work with market doyens Vallabh Bhanshali and Nemish Shah, and made the most out of it. Today, as co-founder and CIO of Enam AMC, he oversees assets worth nearly ₹28,000 crore and is the guiding force behind ENAM India Core EquityPortfolio generating positive alpha in 16 out of 22 years.
In this exclusive interaction with bl.portfolio, Doshi takes a trip down memory lane, talks about his tryst with the stock market, valuable lessons learned, and the highlights of his profession over the last three decades. Excerpts from the chat:
Did your family have an effect on your investing interest?
It was fortuitous for me to be born in a business family that was astute in investing. The family had quite a few members who were actively engaged in investing — my father being the most astute among them. Growing up with such elders was constantly an inspiration, and the thought was always, “Why not look at investing as a full-time career?”
What is it like, working with Vallabh Bhanshali and Nemish Shah?
I was lucky to have got opportunities to work with masters of the game early in my career. The good part was learning the art of investing, but there was a lot more to learn about business ethics, values, and timeless principles. They have had a huge influence on me not just to make me a better investor but also a better human being.
When did you start investing personally in the stock market?
I went into the business very early, just after I finished basic schooling. While studying in college I had already started exploring the stock markets with my little savings. Among my early day successes, I remember having bought Tata Finlay (rechristened thereafter as Tata Tea and now Tata Consumer & Beverages) — led by the core tenet that a business backed by the Tata brand with a large asset base was available below par value. That investment more than doubled in two years. This was instrumental in further strengthening my desire and conviction to explore investing as a career option.
How did you start at Enam?
Excited by my early explorations and with a desire to work with the masters, I managed to seek a meeting with Nemish Shah, with a very clear focus — to get to work with him. I met him in his office on March 1, 1992, for an opportunity to learn under him and pursue my passion to be a wise investor and hone my skills to pick investment opportunities that generate outsized returns. He was gracious enough to accommodate my request and took me under his wings right from that day. Under him, I have learnt to analyse balance sheets, understand businesses and, most importantly, understand whether the management interest is aligned with its investors or not.
Tell us about your equity investment philosophy.
Investing is simple but not easy. When you invest, you are buying a business. In the long term, shareholder value tracks the progression of economic value of the business. We believe in diligence, conviction, and concentration.
Our investment philosophy seeks to identify businesses with a unique business model, superior moats, long and strong runway for growth that creates long-term sustainable shareholder value. We feel management is a critical cog in this equation — both in terms of commitment to shareholder value as well as governance (disclosures, transparency, and fair treatment of minority shareholders).
We do not chase momentum and invest only when the price vs value equation offers an adequate margin of safety. This ensures disproportionate reward for the risk that we undertake in our clients’ portfolios.
How does your typical day in office look?
Investing is a field of passion, not a slave of time clock. It is not a job; it is like penance (Tapas). One needs focus, commitment, and ability to be in the flow. You are thinking 24x7 on the next opportunity, next idea, and the next development that you are keen to embed in your understanding, conviction, and hence, your portfolios.
The day begins with reading business newspapers and ends with browsing of the business news before sleeping. In between a productive day is where one meets companies, promoters, new set of investors, etc, where the focus is on learning something new in every engagement to harness our minds. Interspersed are deep discussions with team mates on thoughts, ideas, and views on what we learn collectively. At Enam AMC, we are blessed to have a team with amazing capabilities and thought processes that help us learn something new every day.
Some of your professional life’s best and worst equity investments.
We were among the first few investors in the Kotak Bank story where we were convinced on the strength of the franchise, the business model, the management quality and prudence to navigate the transformation from a boutique NBFC to a universal bank. We kept adding to our belief, conviction and allocation as the story evolved. The core learning here is that, over time, a right management in a right business will deliver outsized returns.
One of our monumental errors came from an exposure in Sun TV where we were sold on a great quality business with excellent financial numbers. However, our error on judgement on the increasing question marks on the longevity of business, coupled with consistent indifference of the management towards concerns of minority shareholder value, resulted in holding on to a position that was undergoing a sustained de-rating.
Tell us about your personal asset allocation, goals.
I have always believed in the principles of Jainism which teach importance of simple living and high thinking. I feel financial goals are a by-product of how you conduct yourself with the highest standards of integrity, values and principles in your business and personal life.
As regards my investments, I am a perennial bull on Indian equities and have almost 99 per cent of my investments in Indian equities. I am a firm believer in the India story. I remain firmly committed to my philanthropic goals of giving back to society. As a result of this belief, I have pledged my entire stake in Enam AMC to my charitable foundation for the upliftment of the underprivileged in our country.
How has the investing profession changed over the last 30 years?
Over the last 30 years, India’s GDP has grown 10x in dollar terms while dollar itself has appreciated 4x. Markets have tracked this growth beautifully. During this period, markets have evolved along with the economy across multiple dimensions such as dealing, execution, technology, information access, news flows and operating processes.
You believe that reputation and regulation are above everything else in business. Why?
Our Founder Vallabh Bhanshali has constantly taught us that the foundations of any organisation are built on ethics, trust, values and principles. He always emphasises to us that, “It takes decades to build a reputation but minutes to destroy it”. Hence, we need to be very conscious about maintaining our reputation. We continue to live by these principles. We keep reminding ourselves every day that we are in the business of trust management as a desired value and execute portfolio management as a derived outcome of this ethos.
Compared to several markets globally, India is blessed with one of the finest market regulators in the form of SEBI. At Enam, we believe in staying a few steps ahead of regulatory requirements. We continue following the highest standards of governance, transparency, and disclosure standards. We believe business success is a tertiary effect of following contemporary trade practices.
What would be your words of advice to investors?
My advice to investors is to stay firmly committed to the equity markets through any uncertainty. The India story has just begun its next phase of growth. Remain diligent and committed to invest in high-quality business through thick and thin. Stay calm, patient and focus on long-term value creation. Make volatility your best friend and keep increasing your equity allocations. Our ability to create sustainable long-term wealth will be subject to our own belief and conviction in the long-term potential of the India growth story.