Prof. Sanjay Bakshi, who teaches at MDI Gurgaon and also heads Tactica Capital is one of the leading value investors in India. He has a wide following and rightly so. His blog Fundoo Professor is read by many investors.
Unlike my usual posts, this will be a short post with nothing more than a link pointing to a great presentation he has created on Floats and Moats.
For those who are new to these words. A float is a situation where a company receives money from customers in advance or services or products which are delivered later and paid for by the company relatively later. Think of a coaching class which takes fees 3 months in advance. A student receives the coaching service later. The teachers get paid at the end of every month. A float is a good to have for any company as you are running the company with others money and consequently need less of your own capital.
Moats are competitive advantages enjoyed by a company. Examples would be strong brands like Nestle, Gillette or Maruti. Moats may include size benefits which act as barriers to entry to potential competitors. Think of the size of Reliance Industries for example.
Do read the presentation on floats and moats by Prof. Sanjay Bakshi. Click here.