Hope you are doing well.
Recently, I was asked by the team of Money9 to share my journey of stock investing and I am glad to share with you that they have published it at the following – LINK
It was a pleasure to be writing about my journey as it gave me an opportunity to look back at my investing career and hopefully share small nuggets of wisdom for the benefit of all.
To be frank, I was quite lucky to have been exposed to an environment of equity investing at a very young age and based on both the good and bad experiences of my father, knew well that if done properly, it can be hugely rewarding.
I personally started investing in Nov’08 at the age of 20 and with extremely small sums, probably just around Rs 1,000 as my first investment. Nov’08 was the peak of the global financial crisis, the markets were down in the dumps and having some knowledge of the cyclical nature of the markets, I was quite ready to invest in stocks.
One of the advantages of investing in stocks is that one can start with very small sums. While there are other asset classes and avenues of wealth creation, it would have been virtually impossible to participate in say real estate with a measly sum of Rs 1,000.
Luck favored me again in Apr’09. While I was still pursuing B. Tech, I got an opportunity to do research on small cap stocks for a research outfit and also got paid for the same. This helped me increase my savings and investments in equities to around 5,000-10,000 per month which was around 50% of what I was earning then.
I am passionate about stock research and identifying good investment opportunities and therefore unlike for many, I got a kick out of saving and investing.
In 2011, I started my own equity research firm.
As Charlie Munger says “the first rule of compounding is to never interrupt it unnecessarily”, In 12+ years since I started investing, I have almost never taken out money from my trading account and let the stocks do their work.
Equity investing isn’t a smooth linear ride to the top. In fact, it’s a roller-coaster ride; however, focusing on long term while continuously improving processes helps.
I have made quite a few mistakes in terms of stock selection; however, the best part about investing in stocks is that gains are virtually limitless, while the losses are capped.
Stocks like Cera, Symphony, DFM Foods, Control Print, Suven Pharma, Vaibhav Global, Amara Raja, Acrysil, Kanpur Plastipack, etc have done quite well for me.
I look at financial independence as something when you don’t really have to work for the money. Fortunately for me, despite a relatively small journey of around 12 years, dividends from stocks are able to take care of significant portion of my expenses.
The most important learning for me has been to start saving and investing early. In the initial days the amounts involved are small while the learning are big. Also, the most important variable in the compounding equation is t, i.e., time as it has an exponential effect.
Disclosure: I am a SEBI Registered Research Analyst and hold the following stocks from the names mentioned above: Control Print, Suven Pharma, Vaibhav Global, Acrysil and Kanpur Plastipack.