Investing: what worked
First of all I could have called this “eternal principles of investing”. Actually it is. FOR ME. You have to create your own principles and see what works for you.
- I had no goals of investing when I started investing, but today I broadly know how much I need and how much I have for the goals.
- You have to know what is controllable – your behavior.
- You should know what is not controllable – literally everything else. Market, politics, Interest rates,….NOTHING you can influence, forget controlling that !
- You will hear a lot of theories from Fund managers, CeO, media pundits, advisers – most of it, if not all is not worth the time spent on hearing. However you have to hear a lot and then decide what is gyaan and what is noise. There are no short cuts.
- Reading the balance sheet is useful, but these days I prefer talking to a few analysts!
- Investing is like marathon running or mountain climbing – it is about YOU, not the event!
- It is about your goals, not what Buffett is doing or not doing. He has underperformed the index and under-performed GOLD over 20 years. Remember you too will make mistakes.
- Beating the index, portfolio weighted returns, alpha, smart alpha, affordable cheap alpha, …are terminology that I have never worried as an Investor. This is industry jargon to sound smart and make you look dumb. Remember this is just shitty NOISE. Wear your ear plugs. NOW.
- This is not a game. Not a war. Media makes to sound it like all of this. Keep media (including bloggers!) out of serious investing.
- I have done many deals that look like perfect timing, but it was more luck not science.
- If your goals are big and hairy, you will need to allocate more money to them. The market will not give you more returns JUST BECAUSE YOU NEED THE MONEY.
- There is nothing wrong in gambling on poor odds, but put just a small money on that shit. I bought Dhfl – from 190 to 150, my worst buy over the last 2-3 years, but the amount at stake is less than a fraction of my portfolio.
- Being a good investor is far easier than being a good fund manager.