Coffee Can Newsletter – April, 2018

In our December’17 newsletter, we had used Asian Paints’ example to demonstrate that the type of stocks the Coffee Can philosophy seeks show remarkable resilience, even during stressed market conditions. This resilience is delivered because of the ability of such companies to sustain healthy fundamental performance even during weak economic conditions due to which either: a) earnings growth of such companies more than offsets the ripple effect of a stressed market’s P/E de-rating; or b) P/E does not de-rate for such companies because the market incrementally factors in longevity of earnings.