If you have never used an adviser ever in your life, you have no clue what you are missing. I have always used the services of an adviser. I use a broker – whom I have been using since 1979..and consider it more than worthwhile using his services. So I did not shift to a direct brokerage or a much cheaper brokerage firm, ever.

So how does an adviser help you in your journey towards wealth creation? I do think to answer this question a person should have used an adviser (largely equity), done some preservation (ppf is the only serious debt we understood), should have learnt and taught with real life examples. People who have not done direct equity, equity research, have not met can all pretend, but they are just wannabes. You are really tested only when you experience it yourself. It is one thing to read about Riots. It is a different one to be actually attacked. I was just 7 years old when a stone thrown by a Shiv Sainik shattered the glass in my house and flew over my head. That stone is etched in my memory. The fact that 4k sikhs were burnt down / killed in Delhi in 1984 is just a news item. Similarly sitting in the market and seeing Morgan Stanley sell 1 million shares of Reliance is unnerving (especially if you were at the terminal!) than reading about the incident in print 20 years later.

How does an adviser help a seasoned investor like me? Well, I still get carried away when I meet the promoter of a company! With 4 decades of investing you would think you would have conquered that, well, I have not really conquered that. So when I meet the management of a company and I am really bullish, I talk to my broker. He calms me down. Sometimes he cuts my position to 10% of what I want to buy. Phew. I got saved in Dhfl. I still think it is a good management – but they have been taken to the cleaners. At 215 I thought it was a good buy. I bought 10% of the original quantity in my head. Exactly why online trading with the help of “Relationship Managers” cannot work for me. Even now when I think of taking a position or exiting it, I talk to him. I trade in shares like Shanthi Gears, Equitas, Cholamandalam, – and since I am positive about their long term prospects, I can’t cut positions. He does it well for me.

It was Naren who taught me sizing – it must have been 1999. I used to buy 100 or 200 shares. Yes I would add more, but still I rarely went to say 25000 shares. However, it is my broker who cuts positions especially when the going is good. Both are necessary skills – taking big bets, and cutting positions – even in a bull run. In a mutual fund cutting positions is not an issue, but willing to put a disproportionately big amount in Equity is necessary for creating your INFLATION BEATING PORTFOLIO.

Pushing people to do a) Documentation audit and b) making a will is not easy. Even I need to update my will – after my daughter became a major I have not done it. It needs an adviser to pester the client (read me) to finish the paper work. Uff….I hate paper work. Anybody out there who loves it?

Stock picking for investing? For me that is easy. I go and buy more of the shares that I own. I need to buy 3 or 4 shares for my investing portfolio – I mean new ones. That is again a joint effort. My trading portfolio is my broker’s call. We talk only about the stop loss or the averaging – depending on trading or investing positions. Even when a Bharat Forge looks attractive at 470, I have not added to my position which I built at 398. He helps me wait. I am happy with the meditative approach he has when I am excited. It is very useful. I know my mistakes – and I like the way he reduces the size of my mistakes. Some times he says “Good idea” some times he says “Good idea, bad price” and sometimes he says “You are joking, right?”. All 3 answers are useful in the long run.

If the only thing that you use your adviser for is picking stocks or funds, you must be having a bad adviser! In our 3 hour conversations deciding which share to buy could be about 5 minutes. Which shares to avoid – and why – is a much much bigger topic. No website tells you which shares to avoid. Most of my regular readers may know about my Hyderabad bias – Oh I like the Biryani and the Club at which I stay, but I do not like the promoters who are from that city!





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  1. You are lucky to have such adviser. I have tried 3, and all of them don’t say anything before taking the money. Then just prescribe to buy Fund A and drop existing Fund B without any reasoning. The only comment is “trust me” – well trust is earned and I didn’t go back to them. But this process is very annoying. If you can recommend some advisers who are advisers and not following a template, I would be happy to employ or even pay a premium for that.

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