Hi ! More than the equities, it is the story of your becoming a profitable writer that is more interesting. I shall be very curious to hear more about it. And a shot in the dark, has books, writing or literature influenced your investing style?
Hi, I am not sure about being a profitable writer, it has more to do with intangibles…but I won’t complain if I make some money in future
No there is no direct impact I’ve felt on investing decisions. But once I make an investment decision, writing helps me forget about it for a while. It helps in avoiding any panic calls on short-term movements. Also the waiting period is not that stressful either.
One thing that I would also want to share that some of the members are contemplating leaving their current job to focus on just their own portfolio. Now unless one has made some decent money already (which means own comfortable house without EMI plus atleast 5 cr of corpus in today’s time), I think quitting your own job for just getting returns from portfolio may not be the right decision for most of the people. The simple truth is that in today’s age I dont think less than 5 cr leaves you with any margin of safety irrespective of your spending pattern.
And Even after applying all filters suggested in this thread,
leave the market after minimum consistent down period of 3 Months.
That will be more matured decision and one will have real will power to make the shift work in favour rather than regretting it.
H/T Alpha Ideas
When you have guys like Sunil Singhania, Vinit Sambre, Madhu Kela, Ramdeo Aggarwal and a host of other such people who are committed to this full time, I wonder whats the point in trying to do the same thing with your own money. Whats the chance that one will be able to outperform these guys?
Investing as a full-time occupation only makes sense if you intend to set up a PMS - otherwise whats the point?
Individual stock picking as a hobby though is a different thing altogether. It keeps you mentally engrossed, its fulfilling and most importantly, you wont lose your sleep ( unless you do something really stupid ).
What would be the CAGR returns of the 4 guys that you mentioned?
Lot of them have done 30% plus CAGR over the last 5 years and an average of 15-20% over the last 15-20 years. If one is aspiring to become a full-time investor ( to manage his own money ), this should be the benchmark and not the NIFTY indexes.
But Nifty’s 15 yr CAGR itself is 18.5% (17%+1.5% dividend yield). Does it mean the experts are not competent enough to beat index by 4% to get > 23% ?
Fund managers do have following constraints:
- huge Asset Under Management (AUM)
- Higher amount of inflow and outflow during bull and bear market respectively which is against value investing principle.
- need for liquidity due to redemption pressure.
Hence PF of these experts hold mostly index stocks,of course, at a different weightage. But we, the retail investors, are not vulnerable to these constraints and should be able to beat their fund, if one has adequate temperament and basic financial knowledge.
The ability of these experts are impeccable and their personal portfolio may be fetching 30%+ returns for long period but that’s not applicable to the bulk fund they manage.
I dont think its a hobby @sandeep17
And good stock pickers are not born, they are created. If you know what i mean.
That is what I was thinking.
Only people who have invested in these mutual funds can tell us the real returns i.e. after tax, after entry/exit load and after any other management fees.
From what I have read and heard, real returns from investing in NIFTY ETF are more than real returns from any MF for the same period!
Well, I used the word hobby for lack of a better word.
More importantly, I am saying this in the context of someone trying to become a stock picker at the expense of a regular income. In my opinion, that’s a huge expense. This expense would need to be offset by the alpha you generate over the returns from any of top fund managers. To that extent, I am saying this may not be possible for most of us. Again, I am saying this in the context of individuals managing their own money ( without an alternative income ).
I am not belittling individual stock picking here. I have built my own portfolio as well over the last 2 years. My allocation at this point of time is ( 40% mutual funds - 30% individual stocks - 30% cash ). What I am seeing right now is my own portfolio returns are in line with my mutual fund returns ( mid-cap funds). But then I do know that we have been going through a purple patch. In-spite of having a decent portfolio ( which is what i think I have ), I am not outperforming the funds I am invested in. For me, its fulfilling though since I am paying myself huge fees ( in the form of a salary ) to do so. Without the fees, I am not so sure it would be worth it.
Money cannot be the only consideration in this regard. One needs to consider the following too:
- Joy of doing what you really like
- No email/meeting/“ask for permission” stress
Eventually it will be about; how much price can be put on spending the day with the kid every day the kids has holiday/vacation at school. How much price can be put on being able to attend your favorite cousins wedding that was arranged on a Wednesday in a different town. How much price can be put on going on a vacation with your kid for the full month during the summer holidays. How much price can be put on not having to to ask for permission for every single day off that needs to be taken from work? How much price can be put on not having to commute to work? How much price can be put on getting hot freshly prepared lunch with chappatis coming from the tava.
So while opportunity cost of a lost salary one of the points, many other things also need to be considered.
Personally for me it is not about beating the returns of 4 guys that you mentioned. It is not about beating the NIFTY. All I want from my investments is my post tax salary. If I can make as much money from my investments that I made from my post tax salary then I am already a winner!
Listening to the song or Music and Singing or Playing one self… Both has its own importance for different Human beings.
Within that for the one who feels having born to Sing or Play Instruments and can also earn from that and make it a Financial Resource Fountain, He/She is Blessed!
If one is not beating nifty and is making FD return from equity investment, he should be terribly disappointed and is actually destroying wealth. Then how can he enjoy the process of self investment? Do u mean if his fd return > Salary is good result?I guess “Think about thought iprocess but not result” is misquoted here. If process is good, in long term, one does succeed (in line with or outperform nifty).lf process is bad, in long term, one does fail(underperform nifty) and should be mentally stressed.
Also the thread is about becoming full time investor who can beat index and avg of say, top 50 mutual funds.
Someone very closely known to me made 35+% CAGR, from Aug 2011 till Aug 2014. He got comfortable and voluntarily retired from a senior position in Dec 2014. From Aug 14, till now, he made ~30% CAGR in the last 3 years despite his dabbling with loss making startups. He never regretted leaving his high pressure job and is relaxing traveling/enjoying fine arts. Considering best of the MFs not able to make 30% in last 3 years, I think he took the right decision and did financially well.
beautifully articulated ,speaks about your passion for “writing” -thanks for sharing ,takes lot of courage
If i can add to the discussion.
I has been working on this as my full time investor criteria.
Dividend earning > expense + cash for reinvesting
There is few more thing to be added to this.
-In my case it more about freedom to follow passion. My passion so happen to be equity.
-If you can prove your passion, your can build your reputation and make a source of passive income as teaching or blogs and stuff.
what was his net-worth when he retired… broad range… Net-worth is an important variable here (ofcourse along with expenses, CAGR etc)
Not sure of his net worth. But in stocks, may be more than USD 2 million. He is high expense person and spends much more than dividend.