Scalability Is Not Accidental

I spend most of my time researching listed companies in India. India has thousands of companies that have a market capitalization of less than $200 million. I spend a lot of time trying to figure out whether companies are scalable or not.

In my research I've found that many companies become big by accident. They either catch a product/demand wave or a capital wave or a regulatory wave etc. However, none of the companies that become big by accident are able to stay big and sustain themselves as organizations. If the company is extremely lucky, it gets acquired at its inflated size and implodes inside the acquirer. Most of the time, however, the disarray that sets in at its inflated size is publicly visible. More...

Return On Capital Matters

Momentum in the markets is seductive. Most people (even seasoned investors) find it very difficult to argue with rapidly rising or rapidly falling prices.

Since at some level most people have been infected by the efficient market theory (EMT) virus, most people will justify any rapid change in price with fundamentals. More...