Investing

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Poke the Box: Sit Tight and Live Wide

Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few days and weeks…

Safal Niveshak got featured among worthwhile value investing blogs to read at Graham & Doddsville and Old School Value. Feel happy and motivated!
I recently interviewed PV Subramanyam aka Subramoney who dispelled some great yet simple ideas on wealth creation. Read the complete interview here.
I met one of the happiest persons on the planet recently. You’ll be amazed at what keeps him happy. Read here.
I turned thirty-six recently. Here are 36 invaluable lessons I learned over these years, which may serve as a helpful guide for those just starting out.
There are several timeless lessons you can learn on life and investing from Guy Spier’s Education of a Value Investor. Read five of them.
Two of the world’s geniuses – Stanley Druckenmiller and Isaac Newton – have some lessons to teach us on why we must not speculate, especially during bull markets. Read here.

36 Lessons from 36 Years of My Life

I completed 36 years in my present state of existence yesterday (7th December). That’s 13,150 days, or around 55% of the average life expectancy of an Indian male.

While spiritualists would want me to believe that I have existed from anadi (before the beginning of cosmos) and will exist till ananta (infinity), I see thirty-six years as a good enough time to find some meaning in one’s life. At least, my greying hair help me realize that.

Now, while it amazes me that I’ve been around that long — I feel like I’ve barely begun.

I’m not usually one to make a big deal about my birthday, but as always, it has given me an opportunity to reflect.

I thought I’d share a handful of lessons I’ve learned — lessons on life, work, family, health, and money – which may serve as a helpful guide for those just starting out.

These are just a few of the many lessons that I have learned in my life, and you may find no wisdom in them. Even I realize that wisdom doesn’t necessarily come with age. Sometimes age just shows up all by itself.

Also, as you get older, three things happen. The first is your memory goes, and I can’t remember the other two. 😉

So before I forget the lessons I learned in thirty-six years of my life, let me start right away.

Safal Niveshak @ Graham & Doddsville

I am not sharing an investing idea today, so you may close this window if you are not interested to read further. 🙂

But if you are still reading, I just wanted to share that Safal Niveshak has found mention on the list of “worthwhile blogs” on the leading value investing site, Graham & Doddsville.

See the list under Worthwhile Blogs here.

This comes after another leading value investing blog, Old School Value, mentioned Safal Niveshak under “10 Slam Dunk Value Investing Blogs to Make You an Investing Star”.

No ROI is better than the motivation I receive from you, dear friend. Mentions from these respected websites are ‘special dividends’. 🙂

So thank you for keeping me motivated to continue to do the work I am doing.

Finally, a lot of you had requested for the PDF version of PV Subramanyam’s interview that I conducted recently. Click here to download the PDF.

Happy reading, have a nice day, and thanks for being there for me!

The Happiest Man I’ve Ever Met

I was recently in Nagpur for my True Wealth Workshop. I had a few free hours prior to the Workshop and decided to spend it touring the Orange City.

It turned out to be a wise decision not only because I loved what I saw of Nagpur, but also because I came to know about Ramesh Shet, an auto-rickshaw driver who took me around the best places in the city. Why meeting Ramesh was a great thing, you’ll come to know in a bit.

“You’ve come here for the first time, Sir?” Ramesh started the conversation as we started on the journey.

“Yeah,” I answered.

“It’s a very nice city. I’m sure you’ll love it,” he said.

I asked him about his family, his work, and income. “So how much do you earn daily?”

“Rs 300 on an average per day,” he replied.

“Is Rs 300 good enough for you and your family?” I asked.

You Are ‘Shockingly’ Terrible At Investing

Not me, this is what research from Richard Bernstein Advisors shows – that the ‘average’ investor is terrible at investing.

This following chart, which shows returns over 20 years, of various asset classes, proves this…

You Are 'Shockingly' Terrible At Investing

Here is what Bernstein’s report states –

The performance of the typical investor over this time period is shockingly poor. The average investor has underperformed every category except Asian emerging market and Japanese equities. The average investor even underperformed cash (listed here as 3-month t-bills)!

The average investor underperformed nearly every asset class. They could have improved performance by simply buying and holding any asset class other than Asian emerging market or Japanese equities. Thus, their underperformance suggests investors’ timing of asset allocation decisions must have been particularly poor, i.e., investors consistently bought assets that were overvalued and sold assets that were undervalued.

Even cash has outperformed the ‘average investor’!

Simple Ideas on Wealth Creation, the Subramoney Way – Part 4

Vishal: What’s your view on gold as an asset class? How much allocation one should have of the yellow metal?

Subra: People keep on saying that gold has no value but unless you outperform gold, you have no right to say it. For example, when Warren Buffett says gold has no value, he makes sense because he has outperformed it. But a fund manager who is underperforming gold and says it has not value is in trouble, because he would have to answer his investors on why he is underperforming gold.

So, there will be points in time when gold will do well, like when there’s uncertainty in the market, or due to geo-political reasons, but if you’re an optimist, you’ve to assume that these kinds of skirmishes will not be much. So, over long periods of sustained development, I don’t see gold having a great place in your portfolio.

But let’s face it. If you were in Kuwait in 1980, or in Pakistan in 1947, and you had to run away from your house, the only thing you could’ve carried is gold. To such people, gold has tremendous value.

What Type of Investor Are You?

In my interactions with hundreds of investors over the last few years, and now during my True Wealth Workshop journey across seven cities over the last few days, I have met investors who have classified themselves under one or more of the following heads –

Defensive
Aggressive
Growth
Value
Risk-taking
Risk-averse
Fun loving
Serious
Just by the way
Self made
Made by crisis
Sane
Insane

But then, as I understand based out of my experience and from reading the investing legends, the only true classification of investors is this…

So what’s your type?

Rising Stock Prices and the Return of Arrogance

Disclaimer: This post is not my attempt to predict what lies in the future and where the stock market is headed, because I have a post-graduate degree in making disastrous predictions, especially about the future. What I am sharing below is what I have started experiencing around me, and why I believe you, as an investor, must be very careful of falling into the trap of people making rosy predictions about the future.

One of the key themes of my discussions with investors during my extensive travel over the past few days was that risk-taking and arrogance is back in the stock market.

I got a hint of this from a lot of people stressing on the benefits of borrowing money to invest in “great opportunities” available out there.

So one participant at my Indore workshop argued – “Why shouldn’t I borrow at 10-12% interest and invest for 25-30% returns that are there for the taking?”

Another asked in Vadodara – “Why shouldn’t I borrow when I know the opportunity to multiply money is great?”

Without doubt, I could answer these questions only to the point I understand the dangers of borrowing money to trade or invest in the stock market. Beyond a point, if someone has made up his/her mind that borrowing money is a great idea (because others have found success doing so), I have no answers to provide.

Simple Ideas on Wealth Creation, the Subramoney Way – Part 3

Vishal: What are the 2-3 big mistakes that have characterized your investment life? What lessons did you learn from the same?

Subra: Funnily, all my mistakes are one – trusting people who are not trustworthy. I will not call them fraudsters. I will call them incompetent. And I thought they were competent because they were known people, and friends.

For example, I got close to bankruptcy when I was 32 years of age, because my broker defaulted. And I remember one employee of the brokerage firm saying, “Subra, you never take risks. But you took this biggest risk of all!” Like I will never do an F&O, or a badla, or things like these. And I was taking a risk on my broker, and my broker defaulted.

I used all kind of support, from police to political, but that guy didn’t just pay. But I paid up for my clients. So that was horrible mistake which was all about trusting the wrong person.

Anyways, these mistakes of trusting wrong people helped me in a good way – I did not get carried away by any of these booms, like the tech boom, and the real estate boom.

Journey of a Value Investor – Part 1

I recently returned from the first phase of my True Wealth Workshops held in Ludhiana, Jaipur, Indore, Vadodara, and Surat, covering around 3,800 KM over six days.

The next phase starts on 21st November, where I will cover Nagpur, Raipur, Bhubaneswar, Ranchi, Patna, and Lucknow. Click here to know more and register.

I wish to thank the following people for helping me out in several ways during this journey –

Ludhiana – Haresh Nagpal (for offering his office as venue and spending his precious time helping me out in other ways) and Sanjeev Bhatia (for just being there for me, including taking me out for the most delicious Punjabi food I’ve ever eaten)
Jaipur – Jitendra Khandal (for bringing me home-cooked food and helping with other arrangements) and Rajveer Singh (for identifying the venue)
Indore – Abhijeet Dongre (for hosting me at his home and helping me with the venue and other arrangements)
Vadodara – Samir Shah (for offering his office as venue) and Reni George (for hosting me at his home, preparing a great breakfast for me, and partnering me in my morning walk at the beautiful Sayaji Baug)
Surat – Premal Thakkar (for hosting me at his home and co-conducting the Vadodara and Surat Workshops with me) and Pratik Patwari (for identifying the venue)

Here are the amazing tribe members I met in these five cities…

The overall experience was great, and here are a few things I learnt (or re-learnt) in this journey.