?? "From Melodic Frameworks to Market Fundamentals: What Ragas Teach Us About Value Investing" ??

After missing "Sangita Kalanidhi" vidwan T.M. Krishna's lecture-demonstration on ‘Conceptualising an Abstract Raga’, live, this year and also listening to a bunch of friends exclaiming on how magnificent it was, I was intrigued. Went to Youtube and was trying to make sense of it in my own way, with my beginner-level understanding about Carnatic Music, which I thought was interesting to share.

T.M. Krishna's analysis of ragas emphasizes their intrinsic beauty and depth, not in rigid scales but in their evolving phraseology. This approach mirrors value investing, where the focus lies on uncovering the intrinsic value of a stock, rooted in the nuances of a business and its ability to adapt over time.

1. Phraseology vs. Business Nuances Just as a raga’s identity lies in its distinct phrases (prayogas), a company’s intrinsic value is hidden in its operational nuances like cash flow management, leadership quality, competitive advantages and adaptability to market dynamics. A phrase-based raga like Manji evolves fluidly, much like a company continuously innovating to meet changing market demands.
2. Adaptability and Evolution T.M. Krishna’s focus on ragas adapting to their melodic contexts aligns perfectly with businesses evolving based on market forces. A rigid scale-based raga might limit exploration, just as a company that is unable to adapt to disruptions, struggles to sustain its value. Hindustani lent ragas like Sindhu Bhairavi retain their identity even when borrowed into Carnatic music, similar to businesses preserving their core strengths & moat while expanding into new markets.
3. Overlaps and Contextual Nuance T.M. Krishna highlights overlaps between ragas, like Dwijavanti and Yadukula Kamboji, showing how context makes these overlaps harmonious. In value investing, this is equivalent to understanding how macroeconomic factors and industry trends influence a stock's performance (context is key).
4. Abstract Ragas and Niche Opportunities Abstract ragas like Atana, without rigid scales but full of exploratory potential, are like niche stocks or under-the-radar businesses. Their value lies in unique traits that require deeper understanding, much like abstract ragas demand from musicians. Discovering a lesser-known stock with robust fundamentals mirrors T.M.Krishna’s creation of Kannada Gandhara - a new raga that blends tradition with innovation.
5. Anya Swaras and External Factors T.M. Krishna notes how anya swaras (foreign notes) once enriched ragas but are now restricted. Similarly, external factors like regulations, geopolitical shifts, or consumer trends can either strengthen or limit a company’s growth potential, depending on how they’re leveraged.
6. Dominant vs. Supporting Phrases T.M. Krishna explains that not all raga phrases carry equal weight. Similarly, not all financial metrics or business strategies hold the same importance. Some are dominant indicators (e.g., revenue growth, profit margins), while others provide supporting context (e.g., market sentiment, short-term volatility).

T.M. Krishna’s exploration of ragas teaches us to look beyond rigid frameworks and embrace the organic evolution of music, much like value investing urges us to dig deeper into the evolving fundamentals of a business. Both practices require patience, insight and a willingness to appreciate the context that shapes outcomes. Understanding the nuances and adaptability of ragas - or businesses - helps unlock their true potential, whether in melody or market value.

With harmony in melody and markets,

With love - Sooryaprakash ????