Wednesday, March 26, 2014

What keeps me ticking ?

Two decades is a long time in an investing career. Investing is believed to be the business which creates the most burn-outs and stock investors are prone to breakdown and bankruptcy. While i know that it can happen to anyone , i learnt that it is within my means to ensure that I dont get there. And , i have enjoyed my investing right through the two decades and this experience has been priceless. No , my saying this has nothing to do with wealth.I never sought to be a wealth creator. Actually, i never saw myself as one. But, there is no denying that the core of my work is centered around wealth and the outcome has resulted in wealth creation.

This bring us to the subject of this piece.

What keeps me ticking ?

Who you are and why you are doing something are core questions for every one of us .

if you are a brilliant techie , then the question of what keeps you passionate about your work does not arise . It is assumed that you get a kick in doing new things with technology. The fact that you are highly paid is mostly viewed as some kind of consequence of your professional excellence. Society sees your work as of greater consequence than your rewards.

If you are a great painter , then the fact that your paintings sell for crores of rupees is not the focal point of society. Society celebrates your personality and the body of your work and finds the value of your work as something incidental.

Society appreciates the skill, craft and excellence that several vocations demand . Musicians , painters , writers , scientists , techies are all seen as practitioners of an art or science and money is the outcome of their proficiency.

Society has always given primacy to proficiency over earning power and we were always taught to think that way. Money was secondary to skill and the middle class celebrated skill and took great pride in it.

So, when your profession involves the management of money , society does not view it as a vocation which involves superior intellectual proficiency and thinking skills of a high order. The management of money is somehow not given its due and viewed as something which is mechanically carried out by people who have understood numbers adequately. Managing money is seen as process involving number crunching and mechanical decision making involving limited intellectual skills. Somehow ,money is thought to be acquired by means not entirely intellectual.

The truth cant be farther than that. Investing which is the principal activity in money management is no less creative as a process than any of the other disciplines like art , music , science or writing . Ideation forms the core of investing and one must visualize the future clearly . An intuitive bent of mind and a sharp ability to develop future perspectives are critical to intelligent investing.

Then why does society dumb-down investing as a discipline ? One possible reason could be that society is innately indifferent to the attributes of intelligent investing. Most of the investing that happens around us involves the treatment of money as `idiot money'. `Idiot money' always follows the Pied Piper of the day everywhere and gets lost in the sea of losses. We see millions of people follow stereotypes for years together hoping that the stereotypes will work. Yet, for every Warren Buffett , there are millions of losers.

Stereotypes rarely result in show-stopping performance or extraordinary outcome , right ? This works no differently with managing money . So we end up conveniently attributing our lack of results to luck or blaming the unknown for our performance ( or the lack of it ).

In a world where soft skills reign supreme , the realization that money management is as much a soft skill as any intellectual vocation is yet to happen. Most people undermine the discipline of investment research.

Investment research is the constant quest for understanding businesses , their demographic relevance to society and the envisioning of their future potential It is a combination of these that makes successful wealth management happen. This has to be adequately supported by adequate understanding of human behaviour and the ability to do the math of future performance.

It is the dynamic challenge thrown by these complex inter disciplinary studies that keeps investors like me fired up and ticking. The constant demands of learning and unlearning keep the mind on an even keel and there is no time or opportunity to feel secure that you know what it takes to win. What it takes to get your act right is dynamic and evolving. You need to be in an evolving- learning mode as long as you want to be an investor.

Jim rohn's words ` Formal education will make you a living. self education will make you a fortune ' sums up the process of investing aptly.

Footnote :
The interesting thing about this note was that i penned it on a day when stocks fell 545 points on the BSE and the mood is absolutely glum and desolate. People do not even want to talk stocks . The time to put one's learning to work is now.



I wrote this in 2008 and it stayed in draft mode for a good six years. I am publishing this without a correction. It is very interesting to write & validate one's thoughts after long intervals of time.

Khambatta said...

Enlightening thoughts again. Thanks for sharing.

kolkata said...


Although we could not meet in Mumbai when you came only for a day, what I read here further fuels my desire to meet you sooner than later.

As you rightly say, 20 years is a long time to survive in this profession. And to consider the objective of wealth creation as a bye product of the occupation needs a particular mind set which is indeed rare.

Thanks for sharing !

Snehal Dani.