Harsha Venkatesh is the managing partner and principal officer (through Dwaith Advisory Private Limited) for Dwaith Partners and Dwaith PMS. His stated objective is to beat the worldwide indices over the long term.
Harsha has operational experience in the Semiconductor and Solar industries from 2007 until 2021. He has managed his money since the early 2000s and achieved financial independence in 2018. During his 15 years of corporate life – he has handled a variety of roles from product management, roadmap development, regional marketing, and new product development.
His last corporate role was as Director for Product Line Management at Enphase Energy until 2021. He was a key member in structuring the turnaround of Enphase and contributed to the growth of the Microinverter business. When he joined Enphase, the company was trading at less than $100M in market capitalization. In his 4 years at Enphase – he built the India Product Management, Product Marketing, and Marketing Intelligence organizations which formed a key part of the growth engine. The product line he owned contributed to >90% of the revenues during this period. At the time of his departure, Enphase was the second largest renewables company in the US (behind Tesla) at a $25B market capitalization and was included as part of the S&P 500.
During his stint at Enphase, he created Dwaith Advisory Private Limited (DAPL) in 2018 which managed money; initially for his family. DAPL is now registered as a SEBI-approved Portfolio Management Service i.e., PMS. DAPL also provides investment advisory services to Dwaith Partners.
Before Enphase, Harsha worked from 2007 till 2017 at Cypress Semiconductor, which was founded and headed by TJ Rodgers. He was selected for CYPA (Cypress Performance Academy, slated for top managers within the company) and at the time of leaving Cypress, was heading the worldwide regional marketing team for their largest division, the Memory Products Division. He extensively traveled around the world during his stint at Cypress – to over 60 countries worldwide, marketing various memory products. He spent most of his time outside of India in Germany (4 years) and in the USA (6 years). This contributed to his understanding & learning of various cultures, business models, and human psychology.
He enjoys being involved in business and is a promoter of two power electronics companies in India: Power One Microsystems and Zepco Technologies. He also has significant ownership stakes in a few EMS and Embedded System Companies in India
He has been investing money from the time he was in college and his first stint abroad in Germany gave him time to read and study investment greats like Buffett, Munger, Pabrai, Spier, and Marks, among others. He put the learnings into practice and over time built a substantial personal portfolio. He returned to India to be closer to his investments in 2018.
In 2007, he received his Post Graduate Degree in Management from NITIE (currently called IIM, Mumbai), and before that completed his Bachelor’s Degree from RV College of Engineering. He was consistently in the top 1% of his class during his education. Harsha believes in continuous learning and has completed courses at Stanford (under Stanford CSP – learning about Angel Investing, Cloud Computing, and SaaS) apart from attending a year-long MDP program (tailor-made for Management Executives) at Santa Clara University sponsored by Cypress. He has also undertaken various certifications by SEBI (Securities and Exchange Board of India).
An ardent disciple of Warren Buffett, he has tried to learn about various business models and cultures during his career. He likes to play the long game of compounding. His goal was to become a full-time investment manager by 40, upon reaching financial independence. He was able to pull in the goal by a couple of years when in August 2021, he made fund management and advisory services his primary vocation.
Harsha loves to read, contribute to society, and understand human psychology. He has 2 kids and a wife who is an interior designer. The family loves to travel together. Increasingly, he has also taken an interest in gardening and has a collection of over 1000 plants in his 1000 sq ft terrace garden. He is learning the art of making bonsais.
Here are in Harsha’s words, his investing principles and rules which have remained more or less the same for over a decade:
- I am an investor and not a speculator. I am not as brave as people who are trying to get rich overnight. I like to have a BIG margin of safety (the bigger the better). If I don’t think I am getting a $1 bill for 50-60 cents, I am happy to wait
- I like the Rip Van Winkle theory. If I can’t visualize that the company flourishes in 10 – 20 years, I would be wary of buying the stock. It would need to be a special situation to interest me
- I respect market cycles. I can’t and don’t predict the future. I just prepare for it
- I am crazy about capital preservation. First of all – I am more worried about the return of my money than the return on my money
- I like my companies to grow at a decent pace – 10% YoY (sales growth) operating at a decent margin (varies by industry), with an ROE of 20%+ employing either no debt or very low debt
- I like monopolies that exist in very favorable circumstances. As long as the government does not try to lick into the honey-pot. Or – in private industries as long as the management stays honest
- I like to get dividends. My thumb rule is to invest in companies with 10% YoY dividend growth
- I usually don’t like to sell my stocks; I like to hold my stocks as long as I have a dividend yield of 2% or higher, growing sales at 10% YoY with 20% ROE, and has sensible management in place
- I like to hold 10% of my wealth in cash. I am not clever enough to find a place to park all my cash. I never know when I will need it
- I like to read. I want to read annual reports, disclosures, management write-ups, blogs, etc of my companies. I like to invest in companies whose annual reports don’t excessively use magic words – Vision, mission, culture, commitment, system, integration, and globalization
- I want to concentrate on setting individual targets for the stocks I hold. I like absolute numbers. My favorite growth number is 26%. I have no interest in what the index as a whole is doing
- I like 26% for a reason. It’s a neat number – you double your money every 3 years and you grow 10 times every 10 years. A million grows into a billion in 30 years
- I like sensible management. I don’t like it if the management salaries are excessive. Especially if they grow to over 5% of the profit the company makes. I also don’t like heroes – I like honest, simple, and motivated people to run my company
- I like to be a long-term partner of my company. Yes, I like to call all stocks where I hold stakes as ‘my’ company. I like to see myself as a part owner of the company. I am angry if someone dilutes me. I like companies that don’t dilute me; better still if they reduce outstanding share count when stock trades at a discount to intrinsic value
- I like to look at a long history- usually 10 years. I like companies that know what they are selling. And stick to it. And not go after growth for the sake of it. I get mad if good money is spent after bad
- If companies have more money than they need – I am happy to have more dividends coming in. Decent returns on retained earnings are key and I don’t like companies making < 20% returns on their retained earnings