Govind Parekh sir began his career as a chemical engineer. Govind sir was advised to invest their money into stock market by his uncle and Mr. Kishan chokshi (Broker at BSE) while they were in 3rd year of graduation, Mr. Kishan Chokshi teached Govind parekh sir to analyse a business fundamentally.
After Govind sir completed their studies, they went for an interview but unfortunately, they weren’t selected by that firm so Govind sir decided to join Madras stock exchange as a broker.
1) During their early days as a broker, Govind sir was very keen on seeing how the stock prices fluctuated. Govind sir started investing their own money along with their clients’ money.
2) Their MNC Ideas: International company AR weren’t easily available at that time but somehow Govind sir managed to get 6 International companies AR whose subsidiary were listed in India name:
a) Birla 3M
c) SKF bearing
d) Nestle &
Reading AR helped them to build a conviction and some of these companies became their stock ideas. Their ideology for betting on 3M India:
- They had around 60,000 Products
- 1/3rd of the products was invented in last couple of yrs
- It was darling of US stock market
- Birla 3M didn't have the same product portfolio as 3M so Govind sir decided to accumulate the shares of Birla 3M at around 200 rs.
Key Investment Bets:
- Madras cements &
- Laxmi Machine works (LMW): This was the first investment of Govind sir. Investment thesis:
o Reading AR and scuttlebutt (visiting their factory) built their conviction.
o Company was having 10% holding with Writer machine works (World’s number 1 company)
o Good Management
o Available at cheap valuation
o They entered the stock at 180 and that stock went 7500 after 1:1 bonus. They didn’t hold the stock for this long but have generated a very good amount of return from Laxmi machine works.
- Laxmi machine works was the company which kickstarted/ helped Govind sir to go deep into the markets.
Becoming an Independent Investor:
Investing in Dr.Reddy Lab:
There was a conference of Dr. Reddy's first public issue in Chennai. Govind sir attended that conference and one of their friends (who was a merchant banker) insisted they stay and attend dinner they planned with the management.
Govind sir was very excited as Dr. Reddy in his speech has talked about many things which no one could imagine at that point of time. Qualities of Dr. Reddy:
1) Making products which no one was making.
2) Make profits and the time competitors use to enter the market they would switch/ create a new product (Superb R&D).
a) Management Right
b) Company right, they made a very good amount of money from Dr.Reddy and decided to become Independent Investor.