The timing, some may say, is ominous. As global investment pundits sound the death knell for value investing, Dalal Street lost one of its foremost practitioners of the art. Chandrakant Sampat, considered by many as one of the original value investors in India, died on Sunday in Mumbai. He was 86.
Hypothetically, if trademarks were assigned to value investing styles in India, Sampat's investment method would have easily bagged one. His investment philosophy has partly shaped the thoughts of some of today's best known minds in the stock market, including Radhakishan Damani.
Best known for picking winners among multinational stocks, including Hindustan Unilever and Gillette (then Indian Shaving Products), he held them for decades, a practice that would have frustrated the most patient of the current crop of leading investors.
Sampat started his stint in capital markets in mid-1950s when the Controller of Capital Issues (CCI) was in charge of the primary market. A first-generation investor, Sampat quit his family business, fascinated by the world of stocks and investments. His criteria for picking stocks were simple: the company should have high return on capital employed (RoCE), good track record in paying dividends and limited capital expenditure. These requirements reduced the number of candidates to a handful in the stock market universe.
People who knew Sampat well said he believed in maintaining discipline in all facets of life. A fitness freak, he was known to jog about seven kilometers — from his residence in Haji Ali to Marine Drive — daily till even a few years ago.
Like his investment style of patiently holding stocks, his frugal lifestyle, despite amassing huge wealth, is unlikely to strike a chord with market participants today.
"He was a different man," said Parag Parikh, chairman of Parag Parikh Asset Management. "Unlike the rich of today, who rely on wealth for everything, his philosophy was 'how many things can you do without'," said Parikh, who credits Sampat for his entry into the stock market.
A conversation with Sampat is most likely to be peppered with quotes from Peter F Drucker, one of the leading investments gurus who has influenced his thought process. Market participants who interacted with him said he did not tolerate mediocrity.
"He would prefer you sit with him and listen rather than keep asking questions. He loved sharing insights," said Arun Kejriwal, founder of investment research firm Kris Consultancy.
The irony, however, is Sampat may have missed out on the best years of the rally in consumer goods multinational companies such as HUL and Nestle in the last four years because he exited the market much before that, said brokers. Sampat had consciously stayed away from investing as he criticised the loose monetary policy followed by global central banks that has propped up asset prices.
Sampat was also irked with the declining corporate governance standards of Indian companies. He made his displeasure public in an open letter to the directors of Wyeth India in 2006. Sampat had criticised them for approving the transfer of a drug's marketing rights to another Indian subsidiary.
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