About Principia
The physics of investing.
Principia Advisors was built on a singular conviction: that unwavering adherence to a handful of fundamental principles of investing — applied with discipline, and held for long enough — generates a substantial delta over an investor’s lifetime.
The name
A statement of method as much as a name.
Principia is the name of Sir Issac Newton’s seminal work which laid down what we now acknowledge to be the fundamental laws of modern-day physics – ⟡ the laws of motion and the law of universal gravitation.
Financial markets are complex. Our core philosophy is an homage to what Principia stands testimony to: that beneath seemingly complex systems lie a few enduring principles. Our approach to investing begins with the same belief.
We believe that financial markets, and by extension, investing, much like the laws of the universe, adhere to simple fundamental ideas, application of which can unlock the deep mysteries of the world around us, and perhaps can also help outperform the benchmark.
SEBI Registration Details
⟡ PMS: INP000010292
Four Ideas We Return To
The conviction, in full.
The market votes daily, but weighs periodically
Prices can wander for a while on sentiment and noise, but over any meaningful period they settle to what a business actually weighs — its earnings. We spend our time on the weighing, not the voting.
Buying right and sitting tight is easier said than done
Identifying a good business is the easy half. Holding it through cycles, scepticism and your own doubt is the harder — and more valuable — half.
Compounding is the 8th wonder of the world
Time, more than timing, is the investor's greatest asset. We build portfolios designed to be held, not traded.
The snowball effect
A well-made snowball rolling downhill gathers both snow and speed — a small, well-constructed base compounds into an outsized, exponential outcome. That is what we try to build, one right decision at a time.
Our philosophy
⟡ The post-Covid era has seen a steep increase in India’s financialization journey. The exponential rise in the number of formal participants in the Indian financial market has been the jumpstart for the next few decades of wealth building. This growth has been accompanied by an equally remarkable proliferation of approaches, methods and strategies for navigating financial markets. Investing is now frequently conflated with trading, which much like quantum mechanics, operate unpredictably and irrationally. In a world with more information, more choices and more ways to invest than ever before, we believe there is value in returning to first principles.
Investment Philosophy
Gravity and inertia.
We at Principia are firm believers in what we like to call a return to Newtonian physics aka investing. True investing is an intersection of discipline, rule-based approaches and patience. The fundamentals of investing are time-tested, forged in fire by battling scarring times.
⟡ Our flagship Gravitation and Inertia Framework is built around these principles →
01
Principle 1 - Patience
Law of Inertia
An object at rest stays at rest, and an object in motion stays in motion, unless an outside force acts on it.
Picture a small, well-built, well rolled snowball that you are holding in your hand while standing at the top of a hill. Imagine setting it down, deliberately yet gently and watching it roll down the slope as gravity runs its magic with the first law of motion, eventually turning into a giant ball obliterating everything in its path.
This parallel beautifully demonstrates how we look at our portfolio picks. The inertia of time, and the gravitation of compounding magnify the magnitude of the original allocation.
02
Principle 2 – Compounding
Law of Gravitation
every particle in the universe attracts every other particle with a force proportional to the product of their masses and inversely proportional to the square of the distance between them
The French economist, Thomas Piketty in his generation defining economics thesis Capital opined that the rate of return on capital is always greater than economic growth rate. Albeit he was talking about the difficulty of eliminating inequality, our Newtonian lenses saw it differently. What his work actually told us was that a company that is able to efficiently generate returns on the capital it employs, will always be better than a company that is simply growing in isolation. Throw in a management that is competent, fair and of pristine standards and quality, the gravitational returns generated by these two phenomena interacting with each other would be exponential.
Compounding, akin to gravity, is a force which moves exponentially with scale and time. Accumulation enlarges the base, making the effect self-enforcing, self-fulfilling and powerful.
03
Principle 3 – Pragmatism
Open – Eye Investing
The information age heralded over the past few decades by the boom of the internet has been truly revolutionary. The initial problem for quality investing, the lack of quality data, has been inversed by the proliferation of data sources. Yet, in the cruelest of ironies, as Pulak Prasad frames eloquently, humans tend to discard statistical information or facts when it is incompatible with their opinions. Simply put we believe in investing what we can see, not solely based on what we can imagine.
Complexity does not necessarily make for sophistication. A portfolio is best built using an Occam’s razor. Simple, yet with finesse. If an investment thesis requires too many assumptions to work, there are simply too many ways for it to go wrong.
04
Principle 3 – Pragmatism
Avoiding Extremities
“…if you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim…”
Circling back to our original outline, the promise of irrational returns is something that we despise. We do not believe in stratospheric returns during euphoria. The target for us is never just wealth, it is always sustainable wealth. We would rather make good money consistently rather than gamble with the prospects of making or losing substantial sums. In that sense, we always tend to avoid extremities. We at Principia use this as our north star. Chase sustainable growth, chase dreams that let Icarus soar, but never too close to the sun.
How We Think About The Opportunity
India is a growth market, not a value market. We would rather own quality compounding at a fair multiple than "value" compounding at 5% — because in equities, cheap without growth tends to stay cheap.
Our job is to find the businesses where that compounding is real, sustainable, and still under-recognised by the market — and then to have the patience to let it play out.
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Regulatory status
Principia Advisors LLP’s registration with SEBI as a Portfolio Manager is currently in process. View the full regulatory note →