Dear Investor Friend, welcome to my blog! I present here my story; how I started as a day-trader and ended up as a value investor. It is my exciting value investing journey. I present it so that learn from my mistakes and get financial freedom first and eventually create significant wealth and riches.
I was born in a creative family of painters, writers, and musicians. Maybe this is why I have the urge to share my investing journey with you. I was born and brought up in Chennai, one of the four metropolitan cities and the intellectual capital of India.
I am a science graduate and a Chartered Accountant ( the equivalent of a CPA in the US). I qualified in the year 1985 and for the past three decades have been consulting the areas of corporate finance and mergers and acquisitions, in the small and medium enterprises space.
I am a value investor following in the footsteps of Warren Buffet and this is what gives me the courage to write this blog.
I like to travel to remote places where usually the road ends. One day I intend to start a travel blog, precisely with the name, “Where the Road Ends”.
I used to an avid reader of books. James A. Michener’s “Poland”, Margaret Mitchell’s “Gone with the Wind” and Thomas Hardy’s “Jude the Obscure” are a few that had left s strong impression. Today, unfortunately, I don’t find enough time to read books and my reading is restricted to books and material related to and helping my work and spiritual stuff. Benjamin Graham’s “The Intelligent Investor” of course changed my life. In this blog, I will often urge you to read this masterpiece. I am sure it will change your life too!
I am a spiritual seeker, too. My materialistic pursuit is a serious impediment on the spiritual journey, but I am struggling to balance both. The former invariably dominates, of course.
My Investing Journey
I started my relationship with the stock market as a day trader.
Being a chartered accountant by qualification, I stupidly presumed that I knew everything about companies, shares, and finance and therefore I was the most suited to play the stock market. I had set a goal to earn Rs.2500 (US$ 40) a day. This is somewhat about 20 years back.
Most of the days I used to lose small sums – a couple hundred. Some days I used to end up with small profits – again a hundred or two, but occasionally five hundred or a thousand a day.
As a day trader, you need to constantly watch the market. The anxiety, fear of loss and greed had impacted my health. I developed hypertension.
One day, suddenly the BSE Sensex crashed about 400, one of the biggest crashes in those days.
All my bets backfired.
I lost almost all my life’s savings, and I vowed never to think about the stock market again in my life.
A few years passed without any incident, and I kept my vow.
The Intelligent Investor Book
One eventful day, while my family was shopping in a busy local market, I was occupying myself browsing through books being sold on the pavement. Suddenly, out of the blue, my gaze fell on a book titled, “The Intelligent Investor”.
Having already realized by now that I certainly was a dumb investor, I started wondering how an intelligent investor could be different.
My curiosity swelled, but my inner voice sternly warned me about the vow not to dabble in stocks ever again in my life. My mind reasoned with me that there was no harm in just reading, and the vow pertained only to the actual and physical action of dealing in stocks.
My strong curiosity eventually won the battle and I bought the book.
I read it. It awed and overwhelmed me.
And It changed my life!
Benjamin Graham, who taught at Columbia University, wrote the book. Warren Buffett had studied and apprenticed under Graham. Incidentally, for that particular edition, Buffett had written the foreword.
I resumed my relationship with the stock market, but under a totally new avatar; a value investor.
2008: Lehman Brothers Event
I started regular investing; the period was somewhere between 2006–2008.
Then the great crash, post-Lehman Brothers, happened.
There was slaughter everywhere.
But it was a great opportunity for value investors.
I used to invest without fear, only to see my investment depreciate as much as 25% in a few days. I used to buy more – without fear – for I knew the shares were worth much more and are available at throwaway prices.
Warren Buffet had made a huge investment in Bank of America.
I think the BSE Sensex plunged from 20,827 to below 8000 – a crash of over 60%!
Unfortunately, I had no big corpus to invest at that time. You remember I had lost almost all my savings as a day-trader.
By about March 2009, the Sensex had recovered to 15000 levels.
While the market was fast recovering on the back of a globally coordinated stimulus program, I was worried that the recovery was not a sustainable one and could crash again.
I was not yet a seasoned value investor. While I had mastered the art of buying I had not mastered when to sell. Even today I am still not on a firm ground when it comes to selling stocks. And very little wisdom is available in the public domain. Even Buffett has not spoken elaborately about selling stocks. His quote that he and Chalie Mungar have realized that dancing in and out of stocks was not the best strategy, perhaps suggests that one should simply hold on to the investments.
Anyway, unwittingly I sold my entire portfolio at one stroke. I had made about 250–300% profit.
On hindsight, it was a terrible mistake for the market galloped and I was thrown out of the market for many years.
My Third Love Affair with the Stock Market
I could re-enter the market only after a few years.
In the mean time, I had started the value investing blog “Wealth Vidya”.
In February 2015 I created the academic portfolio, “Portfolio 2K15” for teaching purposes.
Over this period, of course, I have been making regular investments into this portfolio of about Rs.20000 per month.
The results of this particular portfolio as of April 20, 2017, are as follows:
Money Invested: About Rs.5,50,000/-
Dividends Received: About Rs.40000/-
Market Value: About Rs.8,00,000/-
Unrealised gains: About 45% in about two years.
I intend to update the real returns of this educational ‘Portfolio2K15’, so that my
To conclude I am on the exciting journey; on the sure and safe path to wealth and riches. My passive incomes of dividend and interest are growing.
Of course, I have not reached the goal post, yet.
But, is there a finish-line? Has Warren Buffett reached the finish-line? Has he stopped investing?
It is the journey that matters the most and not the destination – is it not?