I have been actively participating in public stock markets for about 13 years and have been (mostly) passive member of this forum since it was founded. Several times I have picked up a pen to chronicle my investments and related learning journey to share with VP and learn in the process. However something or other made me pause, more on that later.
I hope in this thread I can share how I evolved as an investor, different phases of learning / thinking and reflections on them with the benefit of hindsight. In hope this starts a productive discussion which helps me improve as an investor and may be also useful for others on this forum.
Before I start, I want to express heartfelt gratitude and sincere thanks to @Donald , @ayushmit, @hitesh2710 and other folks who created and nurtured this platform which filled a much needed vacuum in India for like minded people.
As I look back, I see four distinct phases of my journey as an Investor so far.
- Novice - It’s Easy !
- Explore - I don’t know what works - Confused Investor
- Comfortable - I know what works for “me”
- Open - New dimensions of investing
Novice - It’s Easy !
I graduated in 2004 from one of the famous engineering colleges in India. I come from a family with a business background with many of my relatives invested in public stocks (in the hindsight mostly gambled on broker’s tips) and grew with that context around me. When I graduated, strong desire to be financially independent led my choices and after a lot of introspection I did what I found to be only two respectable, reasonable (and legal) ways to achieving financial independence:
A) Co-founded an internet startup
B) Invested in stock markets
(We did the startup for about 3 years before it was folded up, with many valuable lessons learnt on the way).
I distinctly remember the first stock I bought was Bajaj Auto in ~2006 (back then it was a single entity, all currently listed business came out of that). I had just started reading Warren Buffet letters and one of the things he talked about was buying high quality businesses during temporary problems. There were rumors of issues among the Bajaj brother to split the business and it seemed to fit the definition of great business. The stock had corrected due to these issues and I bought some. It went down another~20% after I bought. I was scared and sold the stock when it came close to my buying price. How I wish, I would have held that but learned a lesson ( about conviction) which I appreciated much later.
Those were the heady days of stocks hitting upper circuits for weeks on mere mention (or rumors) of new orders, announcement or just whispered tips. It was too tempting when people around you are doubling the money in months. With the little money I had saved so far (“little” was a blessing in disguise) I bought several of those names - KEI Industries, Gremach Infrastructure, Bartronics, Sanghvi Movers, Aegis Logistics, Hanung Toys etc. It was “exciting” to see your stocks to move so fast. But as those who have been around back then know, these stocks came back and close to zero even faster. I lost most of money as tuition fees to the markets but since I had small corpus, it was a “value education”.
What I read: Some Warren Buffet letters - leaving me feel confident about easy money making from stock markets. Business newspapers, Online equity forums looking for the stock which is about to start the upper circuits
Mistakes I made: Almost textbook style of losing money. Impatient. Confident. Looking for tips. Buying fancy stories without business analysis. Make short term stock price movement dictate my actions
I still had faith in equity but those two early years forced me to look for the right way to analyze companies and approach equity investing.
To be continued in next post …
Topics for future posts:
- Rest of investment journey
- Musings on Portfolio construction
- Styles of investing: Momentum or Value or Growth or XYZ
- More on current portfolio (I hold Biocon, Borosil Glass, Mahindra Logistics, Piramal Enterprises, Shemaroo Entertainment, Zee Learn, Couple of speculative/nano caps, US stocks, US Cash)