_*A dash of poetry on Need & Expectations*_

😀

_I need the safety of a Govt Guarantee_
_But I expect the returns to be of an Equity_

_I need the Liquidity of Cash_
_But I expect the returns to be of an equity_

_I need a linear Positive Upward Sloping performance_
_But I can't digest any ups & downs on the path of this line_

_I need the Cash Flows as in an Annuity_
_But I can't lock-in the money for life_

_I need the best available Tax Efficiency_
_But I am not willing to sacrifice on many other variables for this efficiency_

_I need the tangibility of a Real Estate_
_But I always choose this asset to be over 90% of my net-worth_

_I need the emotional comfort of Gold_
_But I never look forward to liquidate it_

_I need a flight to safety, Now_
_But I expect to see equity returns in my portfolio when there is a turnaround_

_I need *Tips, Bits & Bytes* of Inside News to make a killing_
_But I feel quite uncomfortable when *Sane Advice* comes my way_

_*I need*, is what I Need to lead a comfortable life_
_But I'm he'll bent of complicating it perpetually_

*This is the truth for majority*

*The minority ofcourse are in minority*

😀

_*Endurance, Equities & Enriching*_

_Marathons are run on Endurance_

Needs tremendous preparation, training, skill, vision, strength etc...

Equity investing is not a 100m dash, it's a marathon (an old cliched statement)

An Equity investor needs to have certain basic qualities before venturing out, like a marathon runner....

*Mental Ability* .... Ability to take a decision that; *Yes, I have the mindset and lifeset to get into equity investing*

*Vision* ...an ability to look beyond the common sight with the larger purpose on *WHY equity for me*, *WHERE am I going with it?*

*Faith* ... In what's getting invested into, in the plan & in the future end result.

*Strength* .... to withstand the real & unanticipated hardships while the journey is on

*Discipline* ...to stay the course while training & to stay the course on the investing time frame, what so ever might be happening in & around

*Trust* .... having the belief in oneself & equities that, *Yes.... we'll finish the marathon*

Investing into equities is quite *enriching* both during the journey phase & at the finish line aswell, but only if one has the *endurance* to take it along.

*If one can't bear the pain of the journey or the pain of a never ending marathon run, it's better not to get into it*

Endure the pain in equity investing

Enriching gain at the end of the marathon (the probability is very high)

The damage is immense if one starts with running a marathon in the mind but then keeps  counting how many seconds have lapsed (as for a 100m dash).....it's the most dangerous thing to do.

100m speed can't be run for a marathon....faster one realises this, the better.

But yes....sometimes equities run those 100m dashes 😀, bit we don't know when. If one misses those phases, the average time to finish the race only goes up 🤷🏼‍♂

Long, Short & Holding Tenor

1991 till yesterday...data of 3 main indices

This is what long term, means

The pain of the last 18 months is not even visible

This is how the last 18 months looks, for the same 3 indices

The patience of 28 years Vs the Irritation of 18 months or maybe even the last 3 to 5 years...... 

The choice is not too difficult to choose from, but the control on one's emotions is quite a task in itself

Bears, Attacks & Markets

A bear swipes its paw downwards to attack it's prey.
A bear market swipes the market downwards to attack it's investors.

Can we escape the bear's paw & grip as an investor?

Yes & No

Yes..... a couple of times in a lifetime if there is that much of a knowhow coupled with intense luck (definitely not because of one's future reading of the economy or the market)

No.....most / majority times (there is no escaping this paw, unless one is not invested)

Indian equity bear market timeline...

1990 - 91
1992 - 93
1994 - 98
2000 - 01
2008 - 09
2010 - 11
2015 - 16
2018 - (mid & small cap indices)

Is there an escape route for bear attacks?

• Real Bear Attacks - 

• try to know (understand) the bear
• stay clam and do not ever run
• lie dead, if needed
• stay away from 'kill sites' / carcasses
• carry a bear pepper spray
• give the bear an escape route to pass off
• if the bear is getting aggressive become aggressive (make lot of noise and stand on the ground)

• Market Bear Attacks -

• try to understand on the 'why' of this bear market scenario
• stay calm, stay the course to your goal & definitely do not panic, run or sell off in the worst possible phase
• just don't do anything; lie dead
• stay away investing from "killing stocks (momentum ones) and the fallen angel kinds (perceptive angels)
• carry a mindmap on where your ultimate goal is. keep spraying the 'sell off now thoughts', with the mind spray
• the bear phase will leave, ultimately. just stand the ground
• if the bear fall is aggressive, get aggressive in your buying. Invest more (have liquidity to invest, though)

Bear attacks can be fatal if not wisely handled.

Real bear attacks might not cause as much harm as Market related bear attacks.

What to do?

• Know the bear
• Handle the bear
• Let the bear pass off
• The big bull will return one day
• Until then, hold tight 🙂

_*Stocks, Loss & Appetite*_

Individual stocks....yes one can & probably should invest

But be ready for something like this as well before one goes ahead

Yes Bank

20 Aug 2018 - Rs. 404/-

20 Aug 2019 - Rs. 71.35/-

An erosion of 82.33% in the stock holder value 🤷🏼‍♂

What would happen if 50% of stocks in one's portfolio go this way 🤔

Long Term Holding might actually turn into a Long Term Realised Loss 🙂 or......will there be a turnaround somewhere?

I don't know

*Individual stock's behaviour = Individual Human's behaviour*

Both are quite *individualistic*

_*Real Estate Allocation, Headline Allocation or Asset Allocation*_

This early morning, a good friend of mine forwarded an article from a leading daily..... The headline of the article said - *Real Estate maybe a safer bet than equities*

The catch.... Data base studies done from 1870 & in 16 developed / advanced countries (India was not in the data) and we don't know how advanced were these 16 counties for over a century from 1870 to 1970 😂

Btw....some of these countries didn't even exit in 1870 as we know them today.

And then, the article goes onto say... *India might be a bit different* 😂, but is in tune to the other credit cycles in the economy. Well, every asset is linked to credit cycles in someway or the other.

Poor researches...they fundamentally missed on *the most important variable* that drives the real estate market in India 🤔

_When Equities are down.....headlines focus on Real Estate_

_When Real Estate is down.....headlines focus on Equities_

_When both are down.....headlines focus on Fixed Deposits / Govt Saving Schemes_

_When Fixed Income is down....headlines focus on Cash is King_

_When all asset classes are going down...headlines focus on gold_

_When gold goes down....headlines focus on the Intrinsic Value of gold_

When everything is going down...headlines focus on *we're doomed & there is no future for humankind*

When everything is going Up....headlines focus on *there is never going to be a downside in our lives*

Is Real Estate the best investment?
Is Equity the best investment?
Is Fixed Income the best Investment?
If Gold the best Investment?
Is Cash the best holding?

or

Is Asset Allocation which is in tune to one's needs, aspirations and future secure is the best way forward?

But for all the Asset Allocation to work......we need to give it *Time & Patience* 🤷🏼‍♂

_*Daily Media Headlines, Markets & Us*_

A very old post of mine; but upgraded now...... because -

Market movements repeat, again.
Media headlines repeat, again.
Time to refresh our memory, again. 🙂

Media Headlines have always been fascinating but if we follow the history, they are also so repetitive that we get seriously bored of reading / listening to the words, language or content being used....

So, what are some of these words / phrases which might get used during *the Good, the Bad & the Ugly* times.

Here is how it might possibly go around....

_*During Bear grips*_

*Manic* Monday (only sellers)

*Terrible* Tuesday (blood bath)

*Wobbling* Wednesday (chaotic & directionless)

*Tears* Thursday (to some investors aka speculators)

*Frightening* Friday (all doomed for the future)

_*During Bull grips*_

*Moving* Monday (great moves)

*Terrific* Tuesday (super performance)

*Wheezing* Wednesday (unstoppable)

*Tall* Thursday (new highs)

*Future* Friday (all rosy, nothing to worry)

Thank god, Saturday & Sunday are non trading days.

If they were trading days, we'll end up with the below....

*In bears*

*Sickening* Saturday (after a painful week)

*Solitary* Sunday (none, one or very few investors left in the markets)

*In bulls*

*Super* Saturday (great weekend)

*Sunny* Sunday (brightness ahead for the coming week)

😂

*We as Investors* should ignore these *Medotions* 😀 (a new word 🤔) - _*Media with or for Emotions*_

_Investing decisions based on these headlines will ensure a sure shot *regret, for & in life*_🙂

_Emotions from our heart_

_Medotions from media_

Embrace or Ignore 🤷🏼‍♂

_*Equity, Crashes & Life*_

Money invested into equity markets / fixed income / currency / real estate / commodities etc.

A *biggest one in a century crash happens on a day*(capital markets).....

*DOES THAT EVENT IMPACT YOUR LIFE FOR THE NEXT 5 YEARS?*

*Have you thought about this?*

*Are you prepared for it?*

The largest falls in % terms in global equity markets which happened in *one trading day*

1989 - Colombo Stock Market for -61.7%

2019 - Argentina (S&P Merval Index) -48%

2002 - Argentina (S&P Merval Index) -45.2%

2002 - Kazakhstan Stock Index for -38.6%

2004 - Mongolia Stock Exchange for -35.4%

(Source - Bloomberg)

So..........

Should we stop investing into Equities & Capital Markets?

Should we stop investing into Fixed Income Markets?

Should we just put all our money into Govt Bonds and schemes?...... Btw... Governments can go bankrupt & default as well - *pls check on Wikipedia on the # of countries and the # of times these defaults have happened over the last century or more* (including USA, China, India, Spain, France, Sweden, Denmark, Austria, Germany, Portugal, UK, Argentina, Brazil, Canada, Chile, Colombia and many more)

Now.....

Should we stop investing 🤔

If so, where do we hold the money 🤔

Gold?
Cash?
Bitcoin?
Land?

Any ideas???

*No phase in life or investing lasts forever*

But, *good / bad / ugly events do happen repeatedly*

_*We'll have to go through these phases again and again over a life time*_

Is there any other way out?
I'm willing to learn, if there is so 🙂

_*Satisfaction, Spending & Investing*_

_Today's satisfaction in Spending is tomorrow's Misery_

_Today's pain in Saving & Investing is tomorrow's Satisfaction_

_One who understands this has a bright future ahead, but the one who ignores this need not ever carry a purse_ 😀

_*Wealth, Control & Sharing*_

An extract from Sri. Adi Sankara's, _Bhajagovindam_...

____________________

'Wealth is calamitous', thus reflect constantly: the truth is that we can get No Happiness from it.

To the rich, there is fear even from his own progeny. This is the way with wealth, everywhere.
____________________

🙂 yes, whether it was Sri. Adi Sankaracharya or Benjamin Franklin -

*Wealth stinks, if not shared / passed on & is left in one's full control*

For the Wealth one accumulates...one has the right to reflect & share as one wants it to.

But, for the Wealth that is *inherited*, he / she has to reflect as a *true trustee* to that wealth &  pass it onto the next generation but, along with the *values that protect, grow & share it*.

If one can't pass on the  *wealth value system* down the generations, how much ever wealth is *created & protected*, it is bound to get ultimately *destroyed & not shared*.

Create Wealth

Protect Wealth

Share Wealth

Pass it on in a *Value based healthy wealthy way* 🙂

_*Capital Markets, Behaviour & Kids*_

It doesn't *behave as*, the way we want it to behave as.

It doesn't *listen to*, the way we want it to listen to.

It doesn't *grow up*, the way we want it to grow up.

It doesn't *deliver results*, the way we want it to deliver results.

It doesn't *manage itself*, the way we want it to mange itself.

It tests our *Patience & Temperement*, to the possible limit 😬

Oh...this is NO CHILD or a TEENAGER 🤣

This is called a *Capital Market* (Equity or Fixed Income)

Btw....managing kids or capital market investments is the same 🙂. Same set of fundamental rules, apply.

*They just don't grow, we'll have to make them grow with _time & patience_*

_*Sale, Stocks & Investing*_

A fund manager used to always say this statement....

_When I need money to buy stocks for the scheme, I never get it; but when I don't want money, I get it_

I always agreed with him.

That's how majority of investors' work.

Invest, when markets go up 🙂

Don't invest, when markets keep going down 🤷🏼‍♂

_Shouldn't it be working the other way around?_

*How many take the faith plunge on equities, especially when the stocks are getting beaten ?*

Flipkart sale is beginning

Amazon freedom sale is also round the corner

*Stock Market sale is nicely on, now 🤔*

_*Thought process, Asset Allocation & Investing*_

*Why is Asset Allocation so important*...... __because it's the simplest tool to manage risk, liquidity & returns_

Else, we'll end up thinking as below -

During *bull markets* - portfolio comparison is done to the *equity markets*...... Why the miss in making these stellar returns?

During *bear markets* - portfolio is comparison is done to the *base fixed deposit rate*...... Why did we not make atleast a fixed deposit return?

A well thought out *asset allocation* ring fences us from these not so sane thoughts.

For that, we need to be clear on...

*Why have we invested?*

*How long is the tenor of our holding?*

*Do we need any cash from these long term invested assets?*

If the investments made do not match with the true responses to the stated questions..... _*there is trouble for sure*_

Waxing and Waning of a celestial object like *moon* happens every 15 days... _will it not happen in life, physical or financial assets 🤷🏼‍♂?_ *It Will* & *We need to have the strength to withstand these phases*

Savings & Debt Vs Taxes & Interest

Save and Invest - end up with Taxes

Borrow and Spend - end up with Interest Payments

What's a better option ?

_*Brands, Stocks & Returns*_

*Friend:* I always buy stocks of good brands & well known companies. I have a very good stock portfolio 😊

*Me:* Have you made money?

*Friend:*: Yes, Yes

*Me:* I'm happy 😃. What's the return you made? CAGR or Total Return, since you ran the portfolio?

*Friend:* (99% scenario): It's good, but I don't know the #. Let me revert 😐

A conversation mostly goes this way and surely ends the way, as above.

_Popular / well known / perceived good companies *do not equal* good stock returns_

Need some data?

Check the below table 😎

_*Markets, Markets & Markets_*

The 18 month carnage

*The Red Sea*....not inbetween Asia and Africa but in the Indian Equity markets

The impact of it seen in 3, 5 and 10 yr returns as well

Is this going to stay this way, bleeding at a slow pace and forever 😔

So.... SIP s did well 👇

The regular portfolio I keep talking about which I run for myself since Jan 2016... that's about 3 years and 7 months - *CAGR of 1.94%*

12 schemes with

1 equity hybrid,
3 multicaps,
1 focused fund,
2 mid caps, 
1 value fund,
1 small cap
2 large caps &
1 thematic

All the schemes have been purchased at random periods (when the market went down by some %) and via SIPs....

Am I stopping now?
NO

Do I continue to keep buying?
YES

Will this carnage continue?
I DON'T KNOW

Will this carnage continue forever?
DEFINITELY NOT

Can I hold onto my investments without a liquidity / cash flow worry?
YES

Does it hurt that the Hyderabad real estate market gave a phenomenal return in the last couple of years and I've not out a penny into it?
NO

Am I clear about the *Purpose and Why* I am investing?
YES

😊

_*Great Expectations vs The Big Reality*_

Investor starts investing with Rs.100/- and then....... *The Classic Thought Process*

_One acts when one is NOT SUPPOSED to act_

_One doesn't act when one is SUPPOSED to act_

Buy Right…Sell Wrong - happens

Buy Wrong...Sell Wrong - always happens

Buy Wrong....Sell Right - 樂樂樂

Buy Right....Sell Right - a few good humans get it

_*Value(s), Money & Life*_

*Value* -

The importance or usefulness of something

Principles or standards or behaviour, one's judgement on what is important in life

An estimate of monetary worth

Considered (someone or something) to be important or beneficial; have a high opinion of

*Price* -

The amount of money expected, given or required in payment for something

An unwelcome experience or action in achieving a specific objective

*Value* is perceived
*Price* is the reality

*Value*....in investing, is what we think it is worth.
*Price*....in investing, is what we actually pay to acquire the asset

*Value*....can be very deceptive
*Price*....is not an illusion

But...........

*Values*.... _in life_, *are not relative* to ones circumstances, situations, financial or monetary considerations, life stage, relationships etc.

*Values are Principles*… that one sticks to, in every breath.

*Price is the Experience*...that one has to undergo (good, bad or ugly), for sticking to those underlying values.

*Investing or in Life*, if we can't differentiate between the *value(s) & price*.....both turn out to be an expensive affair🤷🏼‍♂