ROLE OF STRATEGY IN WAR
Never in South India's history, perhaps, did a man of such extraordinary military genius suffer so extraordinary a military disaster. In late 1700s, Tipu Sultan, an accomplished ruler and military genius with tendency to Islamise the areas conquered , led an army of possibly 40000-60,000 men with 9000- 15000 cavalry and hundreds of guns to conquer Travancore, a Hindu kingdom which was giving refuge to the Nairs and Brahmins fleeing Malabar, conquered by Tipu.
Since King of Travancore was a realist and knew that he had no chances against Tipu, he began to prepare strategies. While he entered into an alliance with British East India Company based in Madras, his efficient General Keshav Das and King's war adviser D'Lenoy (Dutch) made a great wall (kotta) of defence of approx. 50 kms long and 15 ft to 50 ft high at Nedumkotta. (see the link for details https://en.wikipedia.org/wiki/Nedumkotta)
By March 1790, after months of attacks and causalities, Tipu's army conquered Nedumkotta and Travancore army made a strategic withdrawal to Alwaye without defending a the few key towns in between. Instead, Travancore army took position on the opposite side of Periyar river, hoping to put up another massive resistance.
East India Company declared a war on Mysore to force Tipu to return and cease operations against Travancore.
But Tipu didn't care as he was confident of defeating Travancore and imposing his terms on both Travancore and British. Moreover, Tipu had the support of French East India Company and an accomplished French military genius Lally was also part of Tipu's army.
Tipu's Army was all set to cross Periyar river (https://en.wikipedia.org/wiki/Periyar_(river)), the last stumbling block in the invasion of Travancore. Once the army crosses the river, there were hardly any ideal place for Travancore army to hide and fight. Tipu brought forward his ammunition, horses and forces to the banks of river Periyar during early April 1790 for the crossing of the river.
Possibly, unknown to Tipu, there was a large lake in Periyar at Bhoothankettu formed by the large rocks that fell into the river or possibly created by some Bhootams as the local folklore says. The rocks that supported the lake are still visible as evident from the photo below:
The huge rocks prevented the water-flow of the river, that created a large lake behind the rocks.
Travancore General Raja Kesava Dasan, sent a secret strike force upstream to blast a few rocks of Bhootankettu lake to create a temporary flood to wipe out as much as Mysore army as possible.
The plan worked. On the same night when Tipu moved his army to the banks of Periyar, the team sent by Raja Kesava Dasan celebrated 'Mission Accomplished' .
During our recent visit to Bhootankettu, a local person told that the location shown in the photo below could be the breach in the lake , widened by explosions by Travancore Army.
Possibly after 1-2 hours of successful blast at Bhootankettu, the massive body of water hit Mysore army. Tipu woke up at the mid of the night to see a flash flood wiping out his ammunition, cannons, most of cavalry and significant percentage of his fighting men. (The event has some similarities of Exodus, where the Jews, who were slaves of Pharaoh just managed to drown a large of Pharaoh's army in the red sea).
With this massive loss of force, Tipu had no choice but to return to defend his capital, Srirangapattanam, against the British forces. The strategy by Travancore Army helped them to defeat a larger and superior force.
During our recent trip to Bhoothankettu (http://bhoothathankettu.com/) it was a disappointment to see that Kerala Govt authorities did not mention any of these historical events, that played a vital role in shaping the destiny of the state.
...................
ROLE OF STRATEGY IN STOCK MARKET
Now let us have a quick look at the stock market. Indian stock market had run ahead of it fundamentals when it hit 11200 + in Jan 2018
Many in the markets knew it and booked the profits; so the stock market now corrected, with some stocks correcting sharply. If the Indian GDP is set to grow at 7%-8% in the next 15-20 years, the corporate earnings will grow much faster (as 12% - 20%) and such stocks will give opportunities to make money at the current levels
Of course, retailers are pitted against much larger Financial Institutions, who take the markets to dizzying heights and to despairing low levels, when they invest in.
Can retailers apply some kind of strategy to make 18% to 24% per annum in the long run from Indian stock market? A lot can be learnt from Warren Buffet. A few such learning point are:
a) It is ok to underperform the market at times ; but not ok to do so always. During his 50+ years at Berkshire Hathaway, WB underperformed the market on 12 occasions and on a few occasions, the performance was in line with the market. However, he was able to outperform market in many occasions too.
b) The CAGR of Berkshire growth is around 19%, compounded. The big idea worth noting here is that the annualized return WB has earned for its shareholders to achieve such magnificent result over 50 years is just 19% - something people of current bull run would discard as too less! The power is more on the compounding ; not on the return!
c) Buy the right stock and hold on to it. It is also known as 'Buy Right and Sit Tight' policy. Most of the stocks currently held by Berkshire Hathaway are bought in the 1960s, 70s, 80s and 90s.
d) Another important point is to invest. Exactly. Thou shall invest in good companies after making effort to study its fundamentals, future growth potential, etc. If you invest, you invest for long term (& not short term).
e) Don't panic when the market panic- because you are sitting on good stocks with strong underlying business. WB says that during early 1970s when the Washington Post share price dropped by 50% (vs price he made massive investments), he got excited (instead of panic) and added more shares of Washington Post.
Never in South India's history, perhaps, did a man of such extraordinary military genius suffer so extraordinary a military disaster. In late 1700s, Tipu Sultan, an accomplished ruler and military genius with tendency to Islamise the areas conquered , led an army of possibly 40000-60,000 men with 9000- 15000 cavalry and hundreds of guns to conquer Travancore, a Hindu kingdom which was giving refuge to the Nairs and Brahmins fleeing Malabar, conquered by Tipu.
Since King of Travancore was a realist and knew that he had no chances against Tipu, he began to prepare strategies. While he entered into an alliance with British East India Company based in Madras, his efficient General Keshav Das and King's war adviser D'Lenoy (Dutch) made a great wall (kotta) of defence of approx. 50 kms long and 15 ft to 50 ft high at Nedumkotta. (see the link for details https://en.wikipedia.org/wiki/Nedumkotta)
By March 1790, after months of attacks and causalities, Tipu's army conquered Nedumkotta and Travancore army made a strategic withdrawal to Alwaye without defending a the few key towns in between. Instead, Travancore army took position on the opposite side of Periyar river, hoping to put up another massive resistance.
East India Company declared a war on Mysore to force Tipu to return and cease operations against Travancore.
But Tipu didn't care as he was confident of defeating Travancore and imposing his terms on both Travancore and British. Moreover, Tipu had the support of French East India Company and an accomplished French military genius Lally was also part of Tipu's army.
Tipu's Army was all set to cross Periyar river (https://en.wikipedia.org/wiki/Periyar_(river)), the last stumbling block in the invasion of Travancore. Once the army crosses the river, there were hardly any ideal place for Travancore army to hide and fight. Tipu brought forward his ammunition, horses and forces to the banks of river Periyar during early April 1790 for the crossing of the river.
Possibly, unknown to Tipu, there was a large lake in Periyar at Bhoothankettu formed by the large rocks that fell into the river or possibly created by some Bhootams as the local folklore says. The rocks that supported the lake are still visible as evident from the photo below:
Travancore General Raja Kesava Dasan, sent a secret strike force upstream to blast a few rocks of Bhootankettu lake to create a temporary flood to wipe out as much as Mysore army as possible.
The plan worked. On the same night when Tipu moved his army to the banks of Periyar, the team sent by Raja Kesava Dasan celebrated 'Mission Accomplished' .
During our recent visit to Bhootankettu, a local person told that the location shown in the photo below could be the breach in the lake , widened by explosions by Travancore Army.
Possibly after 1-2 hours of successful blast at Bhootankettu, the massive body of water hit Mysore army. Tipu woke up at the mid of the night to see a flash flood wiping out his ammunition, cannons, most of cavalry and significant percentage of his fighting men. (The event has some similarities of Exodus, where the Jews, who were slaves of Pharaoh just managed to drown a large of Pharaoh's army in the red sea).
With this massive loss of force, Tipu had no choice but to return to defend his capital, Srirangapattanam, against the British forces. The strategy by Travancore Army helped them to defeat a larger and superior force.
During our recent trip to Bhoothankettu (http://bhoothathankettu.com/) it was a disappointment to see that Kerala Govt authorities did not mention any of these historical events, that played a vital role in shaping the destiny of the state.
...................
ROLE OF STRATEGY IN STOCK MARKET
Now let us have a quick look at the stock market. Indian stock market had run ahead of it fundamentals when it hit 11200 + in Jan 2018
Many in the markets knew it and booked the profits; so the stock market now corrected, with some stocks correcting sharply. If the Indian GDP is set to grow at 7%-8% in the next 15-20 years, the corporate earnings will grow much faster (as 12% - 20%) and such stocks will give opportunities to make money at the current levels
Of course, retailers are pitted against much larger Financial Institutions, who take the markets to dizzying heights and to despairing low levels, when they invest in.
Can retailers apply some kind of strategy to make 18% to 24% per annum in the long run from Indian stock market? A lot can be learnt from Warren Buffet. A few such learning point are:
a) It is ok to underperform the market at times ; but not ok to do so always. During his 50+ years at Berkshire Hathaway, WB underperformed the market on 12 occasions and on a few occasions, the performance was in line with the market. However, he was able to outperform market in many occasions too.
b) The CAGR of Berkshire growth is around 19%, compounded. The big idea worth noting here is that the annualized return WB has earned for its shareholders to achieve such magnificent result over 50 years is just 19% - something people of current bull run would discard as too less! The power is more on the compounding ; not on the return!
c) Buy the right stock and hold on to it. It is also known as 'Buy Right and Sit Tight' policy. Most of the stocks currently held by Berkshire Hathaway are bought in the 1960s, 70s, 80s and 90s.
d) Another important point is to invest. Exactly. Thou shall invest in good companies after making effort to study its fundamentals, future growth potential, etc. If you invest, you invest for long term (& not short term).
e) Don't panic when the market panic- because you are sitting on good stocks with strong underlying business. WB says that during early 1970s when the Washington Post share price dropped by 50% (vs price he made massive investments), he got excited (instead of panic) and added more shares of Washington Post.
