Hi @basumallick . I really liked your posts on full time investing and on narratives.
In my opinion, 2009 to 2015 was a very good time for a fundamental based investor. Because you had earnings growth, consistency and good valuation ( After 2015, only 1 or 2 names had consistent earnings growth until covid. Of course, there was stock price growth in many quality names).
I think investing ( for lesser mortals) is very difficult when earnings are not consistent. I liked your post where you talk about debt portfolio taking care of expenses. That makes sense. However, even though one can live off debt portfolio, one many not be able handle the notional loss in equity. During every crisis, there will be a lot of negativity. And we are worried about the near term or long term earnings, no matter how good the company is. Only in hindsight, things will look good.
What I noticed is that, narrative based investing has given phenomenal returns. ( For example pharma api, agri, telecom, US tech etc recently). Of course, its not easy to catch the signal early. I am also saying it with the benefit of hindsight.
In that context, I was just thinking about the asset allocation. Lets say one’s networth (Investable liquid networth) is 10 crore. Don’t you think, it would be a better strategy to invest 8 crore in debt and use 2 crore for the narrative based investing?. (By that I dont mean pure speculative investment. There has to be some short term earrings growth. 10 crore is just a random number. Replace with any number). Somehow I feel, this would be better than high equity allocation and buy and hold type of investing. I know there is no right/wrong answer for this. But I would appreciate if you could share your views. That will really help.