A Quiet, Disciplined Path to Compounding
My long term investing playbook - Six principles I’ve learned from walking factory floors, not reading spreadsheets.
Most people think investing is about predictions.
I think it’s about patterns. And patience.
Over the past decade, I’ve sat across the table from small-town founders, walked dusty warehouses, and tracked Indian businesses through every kind of market mood.
What I’ve learned is this: compounding doesn’t happen by chasing. It happens by choosing.
Choosing the right businesses.
Choosing the right mindset.
And choosing to do nothing—again and again.
This is my investing playbook.
It didn’t come from theory. It came from the field.
Step 1: 🧠 Think Like an Owner, Not a Trader
I don’t own stocks. I own businesses.
When I invest, I ask:
Would I want to own 100% of this company for the next 20 years?
That single filter eliminates most of the noise.
I avoid what’s popular.
I focus on what endures.
I anchor to one timeless idea: What won’t change in 10 years?
Step 2: 🔍 Filter Ruthlessly for Quality
India has 5,000+ listed companies.
But only a few can actually compound.
I look for:
Consistent 20%+ ROCE for 10+ years
Honest and thoughtful capital allocation
No governance shortcuts or glamour narratives
For newer businesses, I watch how incremental capital is treated.
You don’t need perfect companies. You need persistent ones.
Step 3: 🔎 Understand the Why Behind the Returns
High returns are nice.
But I ask: Why do they exist? Will they last?
I break ROCE into its parts—growth, margin, reinvestment
I prefer market leaders. In India, being #1 is hard-earned
I always run a Devil’s Advocate analysis
What’s hiding in plain sight? What could go wrong, fast?
Step 4: ⏳ Wait for the Business to Come to You
I value businesses across scenarios—bear, base, bull.
Then I wait. Sometimes months. Sometimes years.
My rule:
Only buy below 1 standard deviation of long-term average multiples
Look for >20% IRR
Never rush
The market tries to provoke you every day. Your edge is to remain still.
Step 5: 🧱 Build a Portfolio of Conviction, Not Convention
My portfolio tells a story. It’s not a checklist.
I start with 1–3% positions; rarely go above 8%
I hold 25–40 stocks, across sectors—but never make macro bets
I turn over slowly. Movement ≠ progress.
Diversification is not the same as distraction.
Step 6: 🧭 Exit with Clarity, Not Emotion
Selling is harder than buying.
I stay close to my businesses, not their share prices.
I exit only when:
The business breaks
The culture shifts
The valuation goes way beyond future value
Everything else? I hold.
The goal isn’t to win today. It’s to stay in the game tomorrow.
Final Thought
This playbook may sound simple.
But it’s not easy.
It’s built to work in India’s complexity.
It favors trust over tactics.
Stillness over activity.
Quality over quantity.
I don’t claim it’s the best way. But it’s my way.
And it has helped me compound quietly, over time.
You can download the summary of this article from here.
Until next time,
Ravi Srivastava
Long-term investor | Author, Postcard from India
📬 Reflections on investing, India, and quiet compounding