Investments are simple. However you either know it or do not know it. Let me tell you what worries me when I talk to young investment professional. Just finished one such interaction…of future fund managers..my advice:

  1. If you do not know how the ‘Value’ is going to be ‘Discovered’ you cannot be a Value Investor.
  2. Remember the Contrarian track crosser got run over by a train. Understand Contrarian investing.
  3. To be a Contrarian Investor you need to know how to resist peer pressure. Easier said than done.
  4. Peter Lynch did not say ‘Invest in companies if you like their products. He said ‘Research them, then decide’.
  5. Warren Buffet suggests Indexing and Compounding. I have been saying that for 35 years. WB for 85.
  6. Make Rs. 20000 mistakes when you are 28. Cheaper than Rs. 50,00,000 mistakes when you are 58.
  7. 99% of the people reading this do not need margin trading, or FnO. For the retail guy, these are stupid concepts.
  8. You invest with your own money. Investing with borrowed money is making money for the bank.
  9. If you do not know how your adviser is making money, keep your purse at home.
  10. Have you ever gone to a ‘cheap’ interior designer? Do you realize you paid him much more than an expensive one?
  11. When you speak to many fund managers, your belief in Indexing should go up, right? Ask me.
  12. Day trading, Leveraging, worrying about Macros. You can never master them. As a broker I refuse to tell you that.
  13. As long as you concentrate on what YOU can control: How much to invest, how long to keep, 99% of the battle is won.
  14. Growth stories are lovely to talk, and have a sex appeal. Value investing makes money.
  15. Sometimes all the Value lies in the Growth that is about to happen.
  16. Albert Einstein said ‘Compounding is the Eighth Wonder’. He did not see Credit Card debt. Negative compounding is lethal.
  17. Stop Bull Shitting to older investors. We saw 1992, 1993, 1999, 2003, 2007. Nothing like a -46% and +233% teacher.

More to follow..not sure when!!

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  1. Subra Sir, please explain to me how -233% is practically possible, because, as per my understanding, maximum possible loss you can suffer in cash market is -100%; all your holdings will simply cease to exist. I understand that > -100% loss is possible only if one is involved in margin trading or is using borrowed money (both are practically the same thing). I just couldn’t understand the basis for such a loss. Please let us know how you came to suffer such a loss, sir. (I am sorry, I am not very good in communicating with people!!)

  2. No i did not suffer 46% loss but the market crashed post Harshad..i think it has to be 1993.

    I think it was far more difficult to sit tight from 2003 to 2007 without booking much profits. Luck that in 2007 I did sell about 30% of my portfolio and got a chance to buy back some of it in 2008/9.

    remember the 2003-7 boom was an infra book and the pharma and fmcg did not participate…

  3. “RISK”…….it is every where…..
    the reason equity is perceived to be riskier than other asset class …..
    1) you got to see price movement every day, every hour, every second….which is not the case with other asset classes…..
    2) Equity is just a paper asset…..in case of other assets, it has a physical existence (real estate, gold etc….)
    3) equity is more volatile than other assets…..

  4. Albert Einstein said ‘Compounding is the Eighth Wonder’. He did not see Credit Card debt. Negative compounding is lethal.
    It is true for the Bank that issues the credit card !

  5. @shrinivas

    Perhaps that’s the most compelling reason to private banks’ equity shares on all declines!!! Look at the other positives too: nobody can postpone that urge to go for a personal loan to buy iPhone 7, so on.

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