Good morning my dear readers,

Wish you a very happy weekend ahead. Today, we will keep it very brief, just want to say something in a nutshell today..

~~

Let's start with a picture ..

No, I have not started a vegetable shop.

(Read below to get context for this photo).

~~

Be in areas where no one wants to be.

Become a Specialist in that area. A Champion of that neglected or niche area.

It should be our life's mission to acquire as much data and knowledge about the area which we want to specialise in.

~~

What is the benefit of operating in a niche or neglected area?

1- You will start developing PERSPECTIVE.

2- You will start recognising trends or patterns which most cannot see.

3- You will find great deals, which only you and few others can understand.

Eventually while they see Potatoes, you will see Tomatoes. And there is great money to be made if you can develop a vision like this.

(This is what most 'Contrarian' investors train themselves to do over years).

~~

And once we learn to operate with a specialisation in a niche or neglected area, this will unleash 'Independent Thinking' throughout our lives.

~~

The biggest benefit of being in a neglected area of the stock market, according to me.

If everyone is neglecting something............

One sec, Close your eyes and teleport yourself in an imaginary auction..

What will happen in an auction where there is an item which no one understands or doesn't like?

Naturally, no one will bid like crazy for the said item.

*Teleport back to this newsletter, now.

The takeaway, my dear Watson, is that, just like the above imaginary auction, the stock market is also an auction house where items get valued each day.

And,

1- Items which are 'easy' to understand get valued perfectly in the stock market.

2- Items, which are shiny and bright (coffee can stocks), get valued insanely high.

But, neglected or niche/difficult to value items don't have a lot of excited bidders.

So you, my ace, with the right kind of expertise can master the art of picking up 'unbid items', where while others don't understand and hence, don't like, BUT YOU.....understand and love the same unbid item.

(Contrarian investing though, must have immense patience too).

~~

Conclusion:

Simply put, look for Value.

But Value isn't available openly in an auction environment.

Hence to find Value, you must be a specialist in some areas. Being a specialist let's you find patterns which others cannot see.

And what the majority of the crowd doesn't like, they won't bid like crazy for the item.

Hence, the said item will likely be available cheap.

With the right amount of patience and diversification, value investing works well.

For me, I find value in Special Situations, like my mentor who I have never met, Joel Greenblatt. =)

______________________________________________________________________

That is all from me today my friends.

Have a great weekend ahead. See you next Friday.

My Best,

Neil Bahal

Founder

Negen Capital

Disclaimer: This newsletter is for educational purposes only. While the newsletter discusses just general market insights and past case studies, still, the stock market is a very risky place which can result in losses.

Hence, always check with your financial advisor before acting on any contents of this newsletter.

No one has paid us to write this newsletter.

No representation or warranty, implied or statutory, is made as to the accuracy, completeness or fairness of the contents and opinion contained herein. The information can be no assurance that future results or events will be consistent with this information. Any decision or action taken by the recipient based on this information shall be solely and entirely at the risk of the recipient

Again, investing in equity market has high risk. You must consult your financial advisor before making any stock market related decisions.

Negen Capital is a SEBI registered PMS & AIF.