Welcome back to the Market Chat. Puru Saxena is a growth stock investor and former Money Manager based in Hong Kong who managed over 400 million in assets. In this interview we talk about his background and go in depth into his growth stock investing process from fundamental metrics he focuses on all the way to determining capital allocation and finally when to sell a position.

We also cover his favorite growth stock investing books including the following:

Growth Investing Books Puru Mentioned:
Think and Trade Like A Champion by Mark Minervini https://amzn.to/3uKQR16
Trade Like A Stock Market Wizard by Mark Minervini https://amzn.to/3tgiHSH
How to Make Money In Stocks by William O'Neil https://amzn.to/3a5fVYz
Common Stocks and Uncommon Profits - Philip Fisher https://amzn.to/3dYWZMp
One Up on Wall Street by Peter Lynch https://amzn.to/3a5gilV

There are many great golden nuggets in this one, Enjoy!

Connect with Puru
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Timestamps:
0:00 Intro
0:31 Puru’s Investing Background as a Professional Trader
1:25 Starting his own Investment Firm
2:38 Managing 400 Million in Hong Kong
3:54 Learning about stocks from his Dad
6:43 Working at a Firm versus managing your own Capital
9:57 Growth Stock Investing Book Recommendation and Thoughts
11:41 Philip Fisher Common Stocks and Uncommon profits
12:17 Puru’s Process from Initial Idea to Buying Shares
14:00 Position Sizing based on conviction
15:09 Portfolio Turnover for Portfolio CAGR
15:50 Fundamental versus Technical Analysis
17:50 SaaS Companies
19:55 Warren Buffett on Cash Flow
20:31 You want to own companies that are in charge of their own destiny | Price Setters
21:34 Industries to focus on for the Next 5 Years. E-Commerce, FinTech, Gaming, Software
22:00 MELI OZON SEA
22:30 Fintech Stripe SQ
23:05 Green Energy + EV | TSLA, Lucid Motors, Proterra
26:00 Online Gaming SKLZ
26:45 Cloud, Software
27:15 EVTOL EH, RTP Jobi Aviation
29:18 Will you invest in a Company just based on the Story?
31:32 How does Puru assess the Management Team
32:20 The Pedigree of the Management
33:00 Shareholders Reputation
34:06 Luckin Coffee Story - Delayed Earnings Report Red Flag
35:45 NKLA Story | Company response in writing
38:11 Founder Led Business - Skin in the Game
39:00 What Fundamental Metrics doe Puru Focus on
39:30 Revenue Growth and Margins
40:45 SNOW
41:00 Valuation - Selling Shopify and AfterPay
42:49 How does Puru establish a Position
44:51 Ego is the biggest enemy in this business
46:24 Amazon versus TDOC and GDRX
46:52 Puru avoids doubt in businesses
47:58 Does Puru take into account Price Action and Relative Weakness
48:45 What to do when a stock is underperforming
51:24 How does Puru Manage Risk | Position Sizing and Hedging
52:17 Diversification
52:47 Diworsification
54:15 Mass Position Size 13%
54:54 Focuses on Risk before establishing a position
55:53 Hedging Strategy Explained - Shorting the Arkk ETF
56:35 If you have a 50% Drawdown, you need a 100% gain to break even
57:45 Technical Signal for turning on hedges. EMA Cross
1:00:00 How effective had hedging been for your account?
1:02:00 Smoothing Equity Curves
1:02:50 Dealing with Volatile Names
1:05:27 2020 was not normal
1:08:40 Interest Rates - How they will affect growth stocks
1:09:30 Inflation and Bond Yields
1:10:20 Puru’s Routines
1:11:30 When a Company Reports Earnings, What does Puru care about most
1:11:45 Revenue, Users, Net Retention Rate, Arpu, guidance
1:13:47 When does Puru Sell a stock?
1:14:05 Sell when Management Misbehaves
1:14:40 Business Growth Rate slows down.
1:15:50 When there is a new, better Idea
1:16:15 When there is a incredibly strong rally, Thesis is met prematurely
1:18:00 Valuation, Price to Sales Multiple, Estimates
1:20:00 PEG. PE Ratio
1:20:50 What mistakes has Puru Made, what is he working on improving
1:21:00 Controlling Ego
1:23:57 If starting out, Focus on the Future for valuation
1:25:50 Rather Pay up for an exceptional business.
1:26:55 Advice for new investors
1:31:40 Stay Objective, follow your plan, consider ETFs
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Music from Absent Mind:   / absentinlife  
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Disclaimer
The content of this video is for educational purposes only and should not be taken as a suggestion to buy or sell anything