Delhi airport is a slog to get through.
A special torture feature of Indian airports are the constant security checks. Ten years ago on a business trip to Delhi I was struggling through the barely air-conditioned security lines when I helped an older lady with her luggage. We chatted for a little bit and I didn’t think anything of it until I was on my Air India business class flight back to London.
As I settled myself for the flight back home I realised the lady next to me was the same one I’d met in line - she was wearing ropes of pearls and sapphires, had perfectly applied makeup and the expensive Indian silks she wore rustled as she adjusted herself.
s her chief suitcase lifter upper she was most grateful to me and happy to hear I was willing to help her when we landed at Heathrow. We spent the next few hours chatting and I started to get to know one of the most fascinating people I have ever encountered.
Princess Luciana Pignatelli turned out to be a colourful lady of Italian origin who lived between London, Italy and Jaipur after an exhausting life of modeling, socializing and multiple marriages. She had been world famous for being the beauty behind the Camay soap ads.
On my return to London the Princess invited me out to several rounds of afternoon tea with her and her friends. She seemed to know every old world quirky cafe in the West End of London.
Then an invitation arrived to her jewellery sale held in her home.
Those suitcases I had lugged for her had probably been full of semi precious jewels.
Polished in Rajasthan , her designers strung together lovely colours in swirling loops of shiny stones.
I entered her flat in a in a classic red brick mansion block in Chelsea. It was filled with mother of pearl furniture and rich tapestries and diwans. The marble floors gleamed where they peaked out from under opulent rugs. Her friends were there in force ready to buy up her latest trinkets.
And then the jewelry sale began…. thousands of gems made into necklaces and bracelets, strung with the colours and designs of India.
Despite all her sophistication, the Princess's business was a simple and practical one. She had no use for complication. She traveled to India a few times of year, bought gems cheaply in Rajasthan, had her craftsmen make jewellery according to trendy designs and then brought them back to London to sell them at a profit.
She used the cheapness of gems in India and the higher prices in London to her advantage. He leveraged her network of London ladies who lunch and used her own knowledge of tastes, trends and her classic style to sell well. Basic arbitrage.
Gems are fairly simple to buy, sell and trade -- they are easy to move and are robust and light in weight. Her stones had residual value - if the jewels didn’t sell in London she could always sell them back in India. Even if the price crashed in an economic emergency the value of items would not go to zero and probably hold strongly.
Keeping investing simple:
Unfortunately not all of us can go globetrotting with suitcases of jewels…..
So how do we take an investing lesson from the princess?
What’s the easiest way buy and sell investments? On the stock market of course where you and find buyers and sellers day and night.
What’s the best way to buy a share cheaply? Buy it when it’s beaten down or a “value” stock.
How do you try to make sure you’ll be able to sell the investment at a reasonable price? Buy companies that have “wide moats” or such a strong leadership position that they can maintain it over the long term.
All these traits are found in a style of investing called wide moat value investing --- buying stocks in companies that are cheap but where the company has a durable competitive advantage.
Pat Dorsey (who I once was lucky enough to spend some time with) is the definitive author on the subject and you can pick up his easy to read The Little Book That Builds Wealth http://www.amazon.com/Little-Book-That-Builds-Wealth/dp/047022651X.
Put your money under an investment mattress even a princess could sleep peacefully on….
Have a good week!