First of all, this is one of the biggest interviews I have ever conducted. In this edition of investor interview series, I asked a few questions to Ayush Mittal who co-founded Screener.in, which is the most used software by every market participant ranging from a retail investor to a fund manager. The tool has definitely made everyone’s life easier and saved countless hours.
So without further delay, let’s get to know more about him –
Tell us a little bit about yourself.
I’m based out of Lucknow, CA by qualification but a full-time investor in equity markets. I consider myself to be lucky that my family has been into investing, My Dad started in the early 80s from scratch and has gradually learned things on his own over the years unlike, other Indian families where a full-time career in stock markets is discouraged. My brother is also into full time investing and tries to automate the workflow and quicken the research process by building tools like Screener.in. I have 2 small kids. Coming to our investing style, we remain focused on the small-cap space.
How did you start your investing journey? What got you to the markets?
It was early 2000 or so, and the internet had just come. To get to use the internet, I had to assist my Dad in compiling the quarterly results of the companies. While doing that, I developed interest and could soon start figuring out which are the companies that are posting good results and what more data Dad would ask for. As some of the stock prices did well, it attracted me more to venture full time into the same.
The first stock you bought, first loss and what did you learn from it?
I don’t remember the first stock as such. But there is an interesting incident – when I initially joined and was getting trained by Dad to look for companies at low PE/PB etc but the same was boring in the short term as those companies would be unpopular and nothing much would happen. As I started watching CNBC, I thought Infosys is so popular and Dad is doing wrong by not investing in it. I started telling him as to how good Infosys is and the stock is moving etc. Soon dad just bought a few 100 shares or so. Post that I got glued onto the price ticker and would frequently look at price to see gain/loss. As the stock fell, I started panicking. Eventually sold off the stock at breakeven but realized how simple and glamorous big names look but money-making is not easy.
First big loss – Vasawi Ind – I was doing well during the 2005-06 time frame by finding new small caps. I also started investing my Mom’s money. As luck would have – I got interested in micro-cap co Vasawi Ind – which had reported good quarterly results. I jumped onto that and allocated a high percentage of money. After some time the company closed down and my invested money became zero. Later I realized that the company was in deep losses and there were a number of auditor qualifications. So what did I learn here? – I hadn’t done the basic homework of reading an annual report.
What are the basic metrics you look at a business when you are valuing or looking at it to invest?
One of the key things that interest us is the change in earning profile and growth. We like companies with small equity capital (preferably no dilution). But we don’t want to overpay. We would prefer buying such companies at single-digit PE multiple.
In your investing journey – one thing you did which you think you did great and one thing you regret doing?
Great – Writing on public platforms – we started writing on dalal-street.in and before making each post, I used to do a lot of re-work and spend a couple of days before finally publishing as it was a great responsibility. It helped in thinking several times and making sure that decent work has been done. It helped me connect with fantastic investors across India. Later we started contributing on ValuePickr.com and I feel lucky to have been part of this platform.
Regret – not sure. Perhaps lacking discipline and getting carried away during good times
When do you sell a stock? What are the criteria according to your rationale that a stock has reached its life? When do you know it’s time to get out of stock?
I’m really bad at this.
Any example where patience has paid off for you?
Polymedicure/Avanti Feeds – both these companies had some major concerns and perhaps a completely rational mind wouldn’t have invested or would have exited midway. However, we continue to be invested in both these companies for several years and it has been a wonderful journey (though very volatile) of growth and eventual re-rating.
Tell us more about Screener.in – what led you to creating this go-to software of every market participant? Also, what are your future plans for the same?
Credit goes to my brother – Pratyush for his relentless pursuit and hard work. He is a CA by qualification and hasn’t had proper training in IT. Yet, out of passion and aim to develop tools to reduce our workflow he started creating Screener almost a decade back for our internal use. We had never imagined that the constant efforts and additions of features over the years will be so powerful.
It was Dad’s dream to empower the retail investor with better and faster data so that they can make informed decisions and catch new opportunities. It is his constant push and new ideas which led to new features on Screener. He kept pushing us to keep it free for maximum time and users. We are focussed on improving the features further and make it the default go-to website for the research needs of any investor.
One up on wall street, Zebra in a Lion Country, Warren Buffet way, Finding the next Starbucks
Tennis, Spending time with friends & family and travelling
How do you increase your market knowledge?
By tracking and owning a large number of small and mid-sized companies. They force you to keep reading a lot with reference to them. Add to this participation on public platforms which contributes significantly to your knowledge and research skills.
Who is your role model in investing?
Multiple gurus. I love the writing of Prof. Sanjay Bakshi.
Disruptions – What do you think of them and how do you evaluate if a business you are looking at as a prospective investment won’t get disrupted easily?
I don’t think I have done well here. In fact, because a stock is too cheap and growing currently, I have participated in the same despite long term disruption risk.
One advice you would like to give to younger people who have just started earning/saving/investing in the financial freedom journey?
The most important thing is to be curious and to have an open mindset. This field is beautiful and perhaps one of the rare areas where experts are ready to share their knowledge/experience with anyone provided he can value add and is honest in his work. In the early stage of investing, it’s important to catch some big trends or catch onto something which can make a material difference.
Hope you liked the interview,
Stay tuned for many more interviews.
More Interviews –
Disclaimer – Stock names discussed here are by no means a recommendation.