Vishal Khandelwal

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Shyam Sekhar on Mastering the Long Game of Investing

In the latest episode of The One Percent Show, I talked to Shyam Sekhar, the Chief Ideator and Founder of iThought Financial Consulting. Among a lot of insights, Shyam talked about –

• Role of right mentors in life,
• Importance of developing an investment philosophy, and
• Playing the long game in investing.

On his learnings from mentors, Shyam had this to say –

A Few Ideas I’m Thinking About

Here are a few ideas I have been thinking about over the last few days.

Long Term Investing is Hard

The biggest reasons more people do not practice long term investing are that –

1. It flies in the face of anything taught in business schools – that is, short termism – where most influencers/experts come from,
2. It requires a painful degree of patience because it is only over long periods of time that the market eventually gravitates toward value,
3. Life spans of businesses and their competitive advantage periods, on an average, are shortening,
4. Our attention spans and holding periods are shrinking, and
5. Noise is magnifying.

Given all of this, long term investing has become an increasingly difficult and contrarian endeavour. And so, not many investors have the ability or the wherewithal to practice it.

In fact, most people participating in the stock market don’t even understand what they are doing. This is especially when making money gets quick and easy, and they are doing great at it.

I recently met a bunch of high school students, who wanted me to explain them the ‘idea of the stock market.’

One of them asked a brilliant question, “What does the market seem like? What kind of an experience does it provide to a new investor?”

In the course of my interaction with young investors, a question that’s asked by many is this – “What do you think about the idea of trading in stocks early on to create capital, and then invest that capital for the long run?”

I ask, “Why do you want to do this?”

Often, the reply is, “So that I can create that capital for long-term investing fast, and grow rich fast.”

I then ask, “Why are you in such a hurry?”