Unethical promoters, dodgy financial accounts, shady political nexus, illegal insider deals — welcome to the Indian stock market. Throw in the fact that it is the least liquid among the top 50 financial markets globally. Against this backdrop, a few fund managers invest effervescent money and yet manage to consistently deliver market-beating returns. They are true Gurus and Saurabh Mukherjea’s Gurus of Chaos offers a glimpse into their minds.

Simple and straight

The book is a set of interviews with a few exceptional money managers hoping to understand what shaped their thinking and gain from their distilled wisdom. Mukherjea also offers practical advice with handy rules to follow and traps to avoid in the market.

He also lays out the framework for doing in-depth research on a company. The detailed case studies of Asian Paints and TTK Prestige are quite helpful to explain the concepts.

The book also delves into the workings of the brain and how we can overcome hard-wired reflexive thinking that makes us reactive to situations.

Well-trained as he is, the author ensures that there are no jargons or complex financial metrics that would throw-off readers and concepts are stated in a simple and straightforward way.

Mukherjea applying the principle of thinking contrarian — to invest his family savings in small-mid cap equity fund in August 2013 when there was rampant pessimism — is illuminating.

While Mukherjea shines the light on Gurus, the book’s editor handles the chaos part. From wrong headings for charts, mixed-up footnote reference, incoherently stringed sentences in a paragraph to grammar issues, readers experience their share of randomness and confusion.

These shortcomings don’t diminish the value of the book. Often, authors write to showcase their knowledge. Mukherjea, however, has written the book to ‘learn’ from the great financial minds in the Indian market and showcase them.

Neither is he hoping to get rich by selling the books — the proceeds go to the Oditi Foundation, a non-profit set-up for Ambit Capital’s support staff.

However, a few things could have made the book a true 21-gun salute to these generals who did not mind losing a few battles to win the war.

For instance, Sanjoy Bhattacharyya saying that his selection as CIO of HDFC Asset Management was probably helped by Deepak Parekh knowing “my father for many years” is not comforting.

Likewise, the examples used do not illustrate the point made. For instance, when making a case for the importance of a company’s ability to deliver high return on capital employed (RoCE), Infosys is compared with Accenture and IBM. While Infosys’ RoCE fell from 36 per cent in FY03 to 21 per cent in FY13, the other two saw an improvement.

But what one notices is that the share price returns for the three companies do not track the RoCE, nor do the two companies that stepped up their RoCE get better rewards.

Also, giving data to substantiate the stellar performance of the Gurus interviewed would have packed more punch.

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