GuruFocus had the pleasure of hosting a presentation with Dr. Ashok Patel, the CEO and chief investment officer of Pavaki Capital.
Patel is a board-certified allergist. He underwent his fellowship training in allergy immunology at the prestigious National Jewish Health. A patient's mother once called him an "angel" and his YouTube channel is full of numerous patient testimonials. However, Patel wants to improve both health and wealth.
When he received his first paycheck, he started investing. Six years ago he decided to manage his portfolio actively, like a family office, and the returns amazed him. With the knowledge he gained, he opened a hedge fund. Since then, Patel has passed his Series 65 exam and is actively preparing for a CFA certification.
Watch the full stream here:
Key takeaways
Patel kicked off his presentation by taking a look at his investment performance over the last several decades. He explained that his portfolio has taken a hit multiple times alongside the market, including over the last two weeks as the market has fallen sharply.
From there, Patel jumped into some of his own background. He described living in a state of fear growing up where he did not know where his next meal would come from. This drove him to start saving money at an early age.
He then highlighted many of the characteristics of value investing that have been emphasized by prior guests. He spoke directly to a margin of safety, which he explained was popularized by the legendary Warren Buffett (Trades, Portfolio), but accounting books have been using it for a great period of time.
After jumping into several stock examples, Patel returned to his own background. He spoke of his childhood when his mother wanted him to help tend to their land and his father encouraged him to study. Alongside his father’s encouragement, he started a "gang" in high school that competed for the top grades in their class. The so-called gang produced exceptional results, producing three physicians, a wealthy civil engineer and an entrepreneur.
Patel continued to describe how he caught the investment bug after the hospital he completed his residency at offered 100% retirement matching while he was there. He began investing his own money, read constantly and learned about the power of compounding.
Drawing conclusions on several more stock examples, Patel explained that investing in other parts of the world does not constitute an endorsement for different styles of government. He emphasized his belief that investors can act as bridge builders to connect different cultures, companies and ideologies. He continued to say that the value investing strategy can be used to approach geopolitical problems. Through this approach, he believes peaceful solutions can be found.
Stocks
Patel used a plethora of stock examples throughout his presentation to explain his investment approach. The stock he spent the most time on was Tatneft PJSC (MIC:TATNP, Financial). He explained he thinks Tatneft is a deep-value opportunity coming from an integrated oil and gas company. With a prediction of rising energy prices in the future, and Tatneft increasing its production, Patel believes the company is set to beat any competitors.
Questions
The first question Patel received asked him about his thoughts on value strategies moving into 2022 and if he thought they would fare better with the recent shifts in the market. This sparked an explanation from Patel about his investing philosophy and how he trades beyond the confines of value investing.
He used Tesla Inc. (TSLA, Financial) as an example in his explanation. Many investors see Tesla as a value stock based upon the growth it has seen and expects moving into the future. However, he does not believe a discounted cash flow model supports Tesla’s valuation. He believes that Tesla is currently a fad in the market.
Returning to the original question, he explained that he believes value investing will succeed over the next several years, but makes no guarantees about what will happen. With value and growth connected at the hip, he thinks many companies have the potential to offer strong returns for investors in the future and they should remain wary of any value traps.
Another interesting question asked Patel if his background as a physician makes him biased toward health care stocks. He named several companies throughout his explanation that he has been paying attention to and specified that his background lends itself to being interested in these types of companies.
He regularly finds himself looking into different drugs and treatment options, but at times finds that he has to balance his opinions as a medical practitioner and investor. Any time he begins to question whether he is recommending a treatment option due to his investments, he sends patients to find a secondary opinion. He is well aware of the bias that he can bring toward investments, but does not believe he has let that bias affect his portfolios.
