A Professor Called Sanjay Bakshi by Arvind Thanu, Life and Business

Certainly one of the best profs who teach in MDI. Its not just his expertise and succesful experience in value investing (in stock market) that makes him so, its also his ability to share them so well with us. It is undoubtedly the most popular course here. The course is called “Behavioural Finance and Business Valuation” and now, he is teaching us social psychology as a foundation.

He is CEO of Tactica Capital Management Private Limited. The articles he gives us to read, the books he recommends and above all, his presentations, the videos and the movies he shows us as part of the course are simply amazing. I look forward to becoming a value investor when I have earned enough money.

Following is his reply to a mail of an alumnus of MDI a few years before. His story is certainly inspiring and I find it very worthy that I have put it here.

—–Original Message—–
From: Sanjay Bakshi [mailto:(####)]
Sent: Thu 11/18/2004 12:41 PM
Subject: My Own Story

Some time ago, Kumar Saurabh sent me a mail in which he asked me some personal questions that got me to reflect on my life. I then wrote a long mail to KS in which I tried to give answers to his questions. Subsequently, with KS’s permission, our mail exchanges were posted on my yahoo group.

I am now posting the same exchange between KS and me over here. Read KS’ mail first which is at the bottom and then my reply.

Some minor mistakes relating to dates were subsequently found but I have chosen not to make any changes.


From: Sanjay Bakshi
Date: 10/04/04 00:12:20
To: [####]
Subject: Re: Not Urgent

Hi Kumar:

I wonder if you know about feedback theory? In a negative feedback loop, like a thermostat geyser, suppose the maximum level of temperature is set to 90 degrees. Assume that the geyser is on and the water is getting heated. Soon enough the temperature will rise to 90 degrees and the sensor in the thermostat will sense this and will act by cutting off the circuit. The water will now stop getting heated and will slowly but surely cool. Sooner or later it will reach the minimum level of set temperature, say 60 degrees – whereupon the sensor in the thermostat will sense this and will re-connect the circuit and the process will start all over again. Negative feedbacks loops like this one are stable i.e. they restore stability. A whole lot of things around inside us are negative feedback loops – stuff like our own body temperatures, our digestive system, our, respiratory systems. In fact negative feedback loops are visible all around in nature as well.

Now think of a positive feedback loop. Suppose that the sensor instead of stopping the heat from getting hotter, when the temperature reaches 90% starts to send even more heat energy in the water. This will ensure that the process of heating accelerates. Of course, in this case, the heating cannot accelerate indefinitely because it will break some laws of physics if it did but there are many other feedback loops which can last for a long long time.

Your reference to the profit multiplier model reminded me of this theory. If you really think about it, all business successes have an element of positive feedback loop in them. My own success has followed a positive feedback loop. But I didn’t design it like that. I just worked out that way. Its only now that I am recognizing these patterns in success that you are also recognizing and given that you are much younger than me, you are way ahead of me in thinking along the right track . . .

I’d like to tell you my story which is quite fascinating. I was not very good in my studies in school. The only subject I really liked was math and even there I had terrible teachers. So school (DPS, Mathura Road) was a disappointment. In 1983, I entered Kirori Mal college to do my B.Com and started liking the subjects I was studying – accounting, economics, law etc. My interest in academics started to increase. I also got myself a girlfriend, who was also my first student (she studied accounting from me in college) so you can understand why I got attracted to teaching! After we finished college, in which did I extremely well, I joined Price Waterhouse as an articled clerk in 1986 and my girlfriend joined some other local CA firm to pursue the same profession as me but she found she hated it, so she moved on to do a Masters in Finance and Control in University of Delhi. I started to love accounting and auditing and learned a lot about how businesses perform, or d o not perform, by going to audit many clients over the three years I spent at PW.

Because my love of the subject like accounting, economics, law, finance, auditing had grown quite a bit by then, I did well. I passed both my CA exams – the intermediate and the final in the first attempt (which is quite a feat) and in the minimum possible time. Even before I completed my statutory article period of 3 years, I got a job offer from American Express. At that time Amex was the place to get work for CAs. Giving into social proof, I took the plunge and joined Amex sometime in June 1999. By December I had quit my job with no other job in hand. Obviously, this will give you an idea of my nature. Whenever I have made the big decisions in my life by deciding to do something or to run away from something, I have never really had a plan B. In case of Amex, I just knew I had to quit (Big decision # 1). The job was quite rotten, and I came out of it swearing that I will never work for anyone ever again. So, in a sense, I have much to thank Amex for!

I went back to my favorite partner at PW and told her that I’d like to go abroad to study and until I got a chance could I come back to PW? She said, sure, why not. And so I found myself back in PW as an audit officer. By then, of course, I had been applying to many colleges including the LSE. Also, by then, seven years had gone since I had got this girlfriend towards whom I was much devoted, and since I had a job, we now decided to get married. That’s when all hell broke loose as often happens with young couples who want to get married without the consent of their parents. In our case, the problem was with my parents. Well, again I knew I was taking the right decision. (Big Decision # 2).

After a lot of agony, I finally got married in Feb 1990. For a while I thought my troubles were now over, but little did I know that they had just begun! My house became an Ekta Kapoor TV serial. Soon, I moved out of my parents’ house with my wife and took an apartment on rent

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