Equity Investing as a full time career?


(Yatharth) #106

Yes, for me, a retired person ::

Income from rental after tax and all - Rs. 30 K
Income from Debt - 1.5 Cr - 8% tax free bond - Rs. 1 lakh
Rest in Equity. Even at 10% that is inflation adjusted return of 3% - more than enough.


(v4value) #107

what is your inflation assumption Yatharth? Why do you take 10% - will this not be negative some yearS?


(gautham1) #108

I agree. This is more practical than the 20x, 50x etc annual expense theories. I think 2cr in debt instruments and 4.5 cr in direct equity should make you really comfortable. As sumit wrote, one can give more importance to absolute gains instead of CAGR when the corpus is large.


(Left this forum) #109

You have touched a hornet nest, anyone who reads your post will jump to opine. I guess answer lies in the words you have written. See through one eye what you have written.

  1. Only 2 reasons for objectives and 13 other reasons, where is your heart lying?:slight_smile:
  2. The question is equity investing as full time career? Career definition is occupation undertaken for a significant period of a person’s life and with opportunities for progress. Equity investment is buying and selling of shares for capital gains and dividend. Are you ready to spend your life time buying and selling shares? I am pretty sure you want to do much more. What type of investing you want to do- value, growth, speculation? These are the kind of questions we need to ask ourselves. Once you know you want to do value investing your career will be centred around information gathering, meeting like minded people, meeting management etc. Money is there in all forms of investing, it’s efforts, skills and similar stuffs unlock wealth.
  3. Even capital becomes a problem with a low or mild start wealth is made over a period. All biggies have started with their backs to wall.
  4. CAGR, portfolio , big wealth doesn’t play any role in career. Will you change to another job only after reaching 1 Cr? No, right? So why one need 10-100 Cr to become investor? You can very well make money even with small capital as you keep moving, all big investors started with same.
  5. Big money and portfolio is financial freedom and security, it’s an eventual outcome of skills and efforts. With your powerhouse qualifications and hard work you can be well off in what you are currently doing. Isn’t it?
  6. It’s going to be treacherous and gut wrenching when you move from one position of wealth chain to other more towards upper quartile like entrepreneurs and investor where risks are higher. You can stay one quartile like employee and still become investor, there are plenty of examples here.

The only pertinent question should be amount of capital and period of capital infusion required to stand successful as investor. If your expenses is 6 lacs per annum, that’s around 15% return on investment. One need to withdraw capital when required when we are playing alone.

By end of 2007 I was sitting pretty well to come out of job, accidentally I withdrew capital to buy a flat and landed up in overdrawing from portfolio. That worked, actually was blessing in disguise as market corrected heavily, so by 2012 I should have gone out completely. Did I? No because my financial freedom numbers kept rising. The basic problem was my definition of becoming investor put the money and enjoy in life. That’s not career.

Today I extract my expenses from trading, it’s not easy. But I am fighting for it, a target of 36% return per annum minimum. When you are stretched you will find a solution for sure. And in the worst case if portfolio collapse and we become bankrupt then what? We are reasonably experienced and qualified , we will go back to jobs. Obviously we will loose experience, positioning in hierarchy and compensation but we will survive.

But isn’t a trade off we have decided to take? Only and only when you know even 24hrs is short in the career you choose!


(Yatharth) #110

Normally a good portfolio should give at least 15% cagr. I am taking 10% to account for some bad years.

Inflation taken at 7%.


#111

My opinions on this topic:

http://sowmayjain.com/2016/10/25/how-to-became-a-full-time-investor-kick-off-your-9-to-5-job/


#112

I am always curious to understand that if everyone becomes full time investor, who will do the real work - various professions including entrepreneurs who help to take civilization forward on path of development.


(Chirag) #113

My answer to your question is “everyone” can never become a full time investor. At least not right from the beginning.

Initial principal is a very important factor. And to create the initial pot of principal one needs to do “real work that will take the civilization fw on the path of development.”

Source: I did real work for 15 year and tool the IT civilization fw on the path of development before quitting the job to take up equity investing as a full time career! :slight_smile:


(Alphin) #114

Does everyone become a musician or a cricketer even though it is enjoyable and pays much more than the stock markets??

Similarly everyone actually does not want to do the slogging that is required to be a investor. Hence there will always be a very small number of people who will be able to be a full time investor.


(Shailesh) #115

Ha ha . True . Everyone cannot be entrepreneurs , sportsman , Actor or Full time Investors .

You are reading a thread in a forum which attracts people who are interested in investing . But if you look closer into your friend circle you will see lot of people who don’t like managing money .

So don’t worry the segment of people interested in full time investing is very small and insignificant …


(Raj) #116

@nav_1996 this question comes to mind only when one feels equity investing is does not need hard work and it gives you free money. It is much harder than a 9-5 work that is the realization I have after going full time.

Most of the people are fearful and afraid of future, hence everybody will not even dare to put money in equities…being full time investor is out of question anyway.


(v4value) #117

The last 2 weeks have been brutal. A lot of us have lost all we made in the year before. I was curious on

  1. how full time investors take this kind of pain
  2. how this experience has impacted plans of newbies to become full time

Very curious :smiley:


(Chirag) #118

I take this pain by increasing the length of my afternoon nap!

Plus I redo my exercise of going thru my holdings and asking “How are the fundamentals? How are the valuations?” questions. I code some new features for my investment screener. Do code cleanup etc.

I try not to move thing around unless the portfolio has become really unbalanced.


(zygo23554) #119

Do we really have a choice other than to live with it? :smiley: Logically everyone knows that corrections do happen but the question is do you have the emotional strength to deal with it when your net worth takes a knock of 6-7% in 2 weeks? My way of dealing with this is to stress on the logical reaction than on the emotional reaction, it is like a function where you increase the weight of logic and reduce the weight of the emotional reaction.

The approach that has worked for me is to consider the full range of outcomes when the times are good and keep reminding yourself that a correction is around the corner and that you can wake up with a 10% erosion in your net worth any day. What is expected is usually not dreaded, hence one way to keep the mind sane when the correction eventually comes. Also helps keep you humble when your portfolio does well


(gautham1) #120

Great question. I too would love to hear from the full time investors and other senior investors in this forum. That will help others.
Anyways, my 2 cents.I am not a full time investor. My asset allocation is 60:40 (equity/debt). That kind of helped me keep calm. And I always knew (since 2014) that my portfolio was overvalued. So I had set aside about 30% for such events. Not watching the portfolio also helped. Moreover I was looking to buy a house. I am pretty sure it will correct big. So hopefully that will nullify it :slight_smile:
My only worry is that, you dont know what to buy now. Unlike other past events like oil, china, election, brexit etc, this one will have an impact on near term earnings. And I cant find high quality predictable earning companies in sectors outside consumer and financials.


(reacher) #121

as a full time investor recent fall has given me a 13% portfolio drop.since i have no debt (either as investment in debt or as a taker of debt ) and being fully invested in equities alone ( except house ) the fall was not as bad as in 2008 because being non-leveraged and being concentrated is a blessing.As to how to cope etc i think it is quite easy once you grow older and your pf crosses some important mile stones.This fall has not changed my behaviour.Perhaps some more maturity it has given.


(kishor barhate) #122

I request, if possible, all full-time investors to please share their
current portfolio & brief strategy to understand & get benefit from their
advice/actions.

Kishor Barhate


(Shailesh) #123

Brutal fall is one wherein Nifty falls to say 4000 or Midcap index falls by 70% .

Current fall has been a small correction and stocks have hardly corrected enough .

So such fall does not warrant any major shift in asset allocation ( I am still 20% in cash) , yes one may nibble some business which are already on your buy list if now price is attractive enough


#124

I’m not a full time investor nor a “senior” however this was not as brutal or painful. Jan/Feb 2016 corrections were even deeper. I’d a great fortnight and made adjustments my PF to the direction I wanted to take. I’ve survived 20% crash and a couple of 10% corrections in the last 4 years but still didn’t get affected emotionally/financially. Want to know what my pain threshold is (and it is more than a 20% correction.) Am fully invested with 0% external debt (only company provided interest free/subsidized loans).

My PF returns for the trailing year is nearly 26% but trailing month return of -13%. I hope the market falls even further. :slight_smile:


(us121) #125

I felt absolutely cool on portfolio valuation perspective, except the learning that after feb 16, i should have held my cash waiting for such an opportunity. This is not in hindsight but is the fact we have always seen for decades in the market but forget it once market keeps moving up for some time.
i felt very good that inspite of NBFC being talked about every day and every where largely i kept away from that sector and have started looking to it seriously now.
Helped to rejig portfolio little bit. made some small purchases in last few days.
Above is due to:

  1. No leverage
  2. putting no money in stock which i need for next 5 years
  3. 1 year cash flow clarity independent of stock portfolio
  4. no penny stocks and holding emotions not to enter or enhance the holdings in the blue eyed sector of the day
  5. also a reasonable understanding of impact of unfolding events on my stocks from short term and long term perspective helped to an extent.