Thursday, January 15, 2015

My six month long investment journey...

My stock market investment journey started 6 months back when I was introduced to value investing by a few friends, although I have been in stock market since 2012 acting more as a speculator. The concept of value investing completely changed my perspective towards share market which I used to think more of a 'casino' where I could bet for and against a script and hope for some gains. Now the stock market is a tool for me to create long term wealth creation tool. 
So before I dwell into how did I start and what all I did, isn't it better to define the term Investment? Here we go:   

Benjamin Graham, along with David Dodd defines investment as an operation which, upon thorough analysis, promises safety of principle and satisfactory return

This definition has stood test of the times and helped me decipher the world of investing. Now the question comes why do one need to invest at all - isn't it better to earn and spend all to live a luxurious life. I think its a fair thought - you slog all day so you could go out with friends for couple of drinks in the evening, go shopping with your girlfriend, travel to foreign locations and have all the luxuries of live. Well, the problem with this thought is 'uncertainty' - uncertainty of job, health, life, markets and what not. You need to build buffer to manage this uncertainty in life through investing. 

Now hopefully you would be convinced on why do you need to invest. The next question would be - where to invest? There are so many asset classes and sub-asset classes which could confuse any of us who proudly claim to understand basic economics and finance. I wouldn't focus on real estate or gold or bonds or other asset classes but tell you the reason why I chose equity markets for investing. Well, I like the idea of leveraging other's ability to run a business and create wealth for me in long run. If I could find great businesses and stay invested for long times, I could take break for years and rest at home !

Not good enough reasons for you consider equity market? You might be worried about volatility in short run or may be doubting your ability to find great businesses. Why not train yourself to address these issues? Let me share how I did it:

1. Read, Read and Read: "You are what you read" - let me confess I have not read as many books in three years before, as I did in last 6 months ! 

My reading list and what I learnt:

 One Up On Wallstreet
A Peter Lynch classic ! One of the best book for starters. The language is lucid and captivating which could motivate anybody to give serious look to investing in good businesses
Investment biker
Jim Rogers traveled across the world and wrote this beautiful travelogue which also throws light on his investment philosophies. 
Warren Buffet has not written any book - this book comes close to explaining his thought process. 
Common Stocks and Uncommon Profits
Philp A. Fisher classic helped me to understand the concept of 'Scuttlebutt'. This book helped me to appreciate how important it is to talk to stakeholders of the company including current & ex. management and customers.    
Thoughtful Investor
Basant Maheshwari explains his philosophy to find multi-beggars on regular basis in Indian markets.
The Guru Investor
This one book introduces one to the filtering criteria used by greatest investors of all times. 
Super Stocks
Kenneth Fisher explains how he is different from his father - Philip Fisher and introduces the great idea of Price Sales Ratio 
Security Analysis
Still reading this classic book

These books helped create a framework to buy great businesses for a long-long time. You see there are no shortcuts - you need to put in efforts to become a successful investor. 

2. Network: First thing which I did was to join a whatsapp group of investors. I've got great ideas from fellow members and got convinced of these great businesses. I don't mind cloning other's ideas but always ensure I back these ideas with my conviction. If you just copy you are bound to fail. So go out meet people, join whatsapp groups or google groups or any other platform and learn more! 

That's it ! Yeah guys, that's it ! You don't need to have astounding intellect to be a successful investor or learn to run those complicated excel sheets. 

I hope to hear from you guys on your investment journey.  



  1. Hi Vikrant,
    Nice artcle. I have been associated with stock investing since 2002 but recently I started going thrpugh value investing books. Yes as you said we nees to read alot to become indepedent stock trader