Every body has their own strategies, and so should you. This is the essence of investing. What worked for Rakesh Jhunjhunwala may not have worked for Ramesh Damani. Investing is not a race or a competition. You follow your strategy and be happy with that.

Just like religion. If I were a religious leader, I would definitely say “follow my religion, others are wrong”. NOT THAT I BELIEVE THAT. It is just that if I tell people that there are many paths possible they will explore all paths without THE DISCIPLINE OF REACHING THE GOAL.

When I say the following, let me say what I mean:

  1. Indexing works: Indexing sip is a disciplined way of investing over long periods of time. Say 10 years. It is a low cost, publicly chosen portfolio with the best Indian companies. Makes it transparent, no fund manager risk, and over a long period almost impossible to beat. Does it mean a Rakesh Jhunjhuwala, a Parag Parikh, a Naren or Prashant cannot beat it? NO. However if you are new to investing, this is a good strategy and over a long period you will create wealth for sure.
  2. Investing is for the long term: I bought some shares in 2014 which have doubled in 2015. I bought Ashok Leyland in 2013 for Rs, 12 and it is now at Rs. 90. Yes some of these did well in the short run, however equities is a long term game. Yes compounding works in an index. There are some people who think that compounding works only in cases where there is a regular cash flow. In fact SIP is a good way of investing in a portfolio. For direct equities, I do buy on and off in the same security, but then I do sell also. I bought Cholamandalam in 2009 for Rs. 65 and recently sold some of it @ Rs. 724. Bought it back at 645. Does compounding work? well I ignore these transactions while computing my long term CAGR, BUT, sure a delivery based trading makes money. However I would warn saying that ‘professionals at work, do not venture’.
  3. Only good quality managements make money for you: Not sure how many of you consider the Taparias of Supreme as good management. Nothing much is known about them. I was lucky that in 1988 I was commissioned to do a research on them and have held on to those shares since then. Ask Motilal Oswal they had called it a top wealth creator last year. I have made money in GMR Infra, Manali Petro, India Cements – none of this is good management. However I have bad returns in Tata Steel, Ta Mo Dvr, Indian Hotels, which are below the index. I have made most of my gains from MNC shares – too many to be named. However there is NO LEARNING for you from this example. Go create your own portfolio. Trade, invest, do asset allocation,….all these things help.
  4. I was lucky enough or smart enough that I chose Franklin India Bluechip, Hdfc Top 200, I pru discovery (when Naren moved in), Hdfc Prudence, Franklin Prima, Franklin Flexicap, has to be luck because i bought them in say 2000. No regrets, now no learning. I just liked the disciplined methodology, NO SURPRISES FUND. The fact is it worked for me. You need to see what works for you. It worked for me because I chose to track these funds and fund managers and had some simple criteria. They stuck to their jobs, I stuck to their portfolios. Caveat: I am more of a direct equities guys, but these fund managers have all had brilliant downward protection strategies.
  5. Many people will read this and argue about how downward protection is necessary and come out with some back calculation of how their strategy worked. To me that is meaningless. I am sure I did not manage my money the best, but hey it worked, so I am not messing around too much. Something else may have worked for you, great.
  6. To say “this worked for me” so that is the only path is WRONG. However if there are people who want to copy me (you) it is up to them. Copying is neither right nor wrong. If you copy a brokerage firm and make money, who is to argue.
  7. So repeating : I write about what worked for me. Read it. Apply your mind. See what you can use what you do not want to use. Choose your poison.

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  1. sir what is different about you is your basic honesty compared to everybody i seen or talking about finance

    most of them just repeat warren buffet told like this shakespeare told like that.

    thanks for reminding us that so and so worked for you and we have to find a way that works for us so that we can have peace of mind

  2. Yes, I like this. Recently I heard about you and started following and it has done nothing but broken some myths I was carrying earlier.
    I also completely agree that “professionals at work do not venture” at delivery trading certainly not the day trading atleast. SIP is meant for them (us) one problem though, not all have the patience for 10 not even 5 years, but that’s the only definition of quick bucks from market.
    Just one question (for sure not a new one), if someone like me a professional at work invested in direct equity with a clear mindset of going long …may be very long (may be 20-25 years as well). If I do not sell in between then I am losing opportunity so the question is again even though plans are to go long but to get maximum one has to sell in between. So what is this in between, how to decide?

  3. Wonderful post -subra sir. Long back you had mentioned parag parikh. I did a research on them and joined pms and later their mutual fund. Now i mirror their portfolio in direct equity. Thanks to you and thanks to parag parikh ….i bumbled through 2007 without making mistakes.

  4. Choose your poison! Very rightly said as investment strategy differs from person to person. While we keep saying invest in equities but the person who is being given this advice may not benefit from it. His financial requirement may not allow him slight volatility or moderate risks.

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