hope you are all smiles. This post is in a slightly holiday mood and takes inspiration from some lessons I learnt from Hindi film songs. This is Part one of the post and a sequel will follow. For the benefit of some of my dear followers who are not from India and do not understand hindi/Bollywood songs, I will make up with financial stock talk in my next update. Enjoy this post in a lighter moment and do share your feedback. Here goes:
When I was a kid and would go to the hills for vacations with my dad, he would sit out in the sun with a glass of beer and listen to songs that epitomized hilly vacations to me. While some of the music was “jazz” and “western classical”, both of which made no sense to a child as they rarely had lyrics, some hindi songs of Kishore Kumar, Lata Mangeshkar, Asha Bhonse, RD Burman and other legends still made some “music” sense to me. For one they symbolized that my dad was in a good mood and two as he would unwind to these songs, I could continue playing cricket or other games with friends and cousins without my mom yelling out that it was lunch time or whatever.
On a recent drive up to the hills, I took a chance of playing some of the songs I had heard as a kid once I hit the hill drive. My idea was to replicate the mood of my childhood. I was almost certain the words would send goose bumps and remind me of those wonderful long breaks. However little did I realize I was now an investor too and to my surprise I found words of wisdom in many songs. This is my account of some of the interpretations:
1. I do buy Illiquid stocks too if I find them cheap, with good ethical promoters and usually dividend yields. Given SEBI’s recent ruling on Auction trading, I know very well some of these scrips won’t pay be instant gratification. Well actually that’s not true. One or two of such companies are up almost 3x for the year. I do have to factor in liquidity worries in case I need to sell out but then I remind myself of my long term goal of creating wealth and not short term income goal. The song that conjures in my mind is:
“BAHON MEIN CHALE AAO, HUM SE ILLIQUID SCRIP JI KA PARDA, YEH AAJ NA NAHIN MILAN, YEH SANG HAI LONG TERM INVESTING KA”.
The song inspires me to remain patient and to buy in small SIPs.
2. Every now and then, some new stock idea does come to my mind. When I have a reasonably balanced portfolio, I do have concerns particularly when I cannot replace a scrip and need to put in fresh money that also changes my “winning or wishful” portfolio and the allocation of the winners. I then make a small prayer to new scrip jee with this song:
“CHURA LIYA HAI TUMNE JO DIL KO, NAZAR SE NAHIN JAANA SANAM, BADAL KE MERE PORTFOLIO KE STRUCTURE KO, KAHIN FUNDAMENTALLY BADAL NA JAANA SANAM. TUMKO LENE KE BAAD STOCK JI, MERE RETURNS KO KHOOB BEHLANA SANAM.”
3. Like many investors, I remain in the quest of consistent companies. The idea of compounding is mind blogging. Compounders form part of my core portfolio and I hope they do consistently well. The song that inspires me here is:
‘DIYE JALTE HAIN, PHOOL KHILTE HAIN, BADI MUSHKIL SE LEKIN, LONG TERM COMPOUNDERS MILTE HAIN. JAB JIS WAQT MARKET KA FALL HOTA HAI, KUCH NA POOCHO YAARON, INVESTORS KA HAAL BURA HOTA HAI“….at that time these compounders are my safe havens.
4. Everyone wants a new idea. That’s fine. Many tweet/email/sms/call me immediately after a scrip moves up even slightly to ask for a new recommendation. I tell them I still like the old ones and many feel bad. It’s almost as if its fashionable only to buy what is new. My song sung in my own croaky voice to answer them:
‘GUM HAI KISSI KI TALAASH MEIN, YEH DIL AUR DIMAAG SUBAH SHAAM. PAR TUMHEIN HAR WAQT LIKH NAHIN PAON, MEIN USKA NAAM, HAYE RAAM, HAYE RAAM”.
5.On diversification: I think the world has changed a lot post globalization. Even Mr. Buffett now owns over 90 cos in his portfolio. Legend that he is, he wants to own the entire company. Legend that I am not, I want to still make a start. In my portfolio, some stocks zoom. Some zoom later. Some bloom, some gloom. My song:
” IS MOD SE JAATE HAIN, KUCH SUST KADAM COMPOUNDERS, KUCH TEZ KADAM RISERS. IN RESHMI RAHON MEIN, EK RAAH TO WOH HOGI, RETURNS TAK JO PAHUCHTI HAI, IS MOD SE JAATE HAIN….”
6. I am surprised at the fact that despite 2 ears and one mouth, we speak more and listen less. I particularly. Everyone wants to give advise. Fair enough. However it’s your choice who’s advise you take. I have found a few value investors and mentors who I value and consult. Not on scrips only but other issues in life. When I get negative views on what I like or positive views on what I dislike, I factor in who is giving the opinion. The song I dedicate to my decisions:
“KUCH TO LOG KAHENGE, LOGON KA KAAM HAI KEHNA, CHHODO BEKAR KI BAATON MEIN, KAHIN REH NA JAYE GEHNA”.
7. There are always scrips that win. Some don’t. Don’t penalize your mind with losers. I was once told this by a fantastic fund manager: It doesn’t matter if you win or lose. What matters is when you get it right, how right you are. And when you are wrong, how wrong you were. I try my best not to bet high on companies where I do not have full conviction but do have some conviction. Like new sectors. Like cos subjected to external risks like globalization. When a scrip disappoints me (like Arshiya and Den did, disclosure: I exited both with a loss in Arshiya but no loss in Den), my song for these bad eggs post selling is:
“MERI BHEEGI BHEEGI SI, PALKON PE REH GAYE, JAISE MERE SAPNE BIKHAR KR, JAALE MAN TERA BHI, BUYER KE MILAN KO, ANAAMIKA TU BHI TARSE…..TUJHE BIN JAANE, BIN PEHCHAANE, MAINE PORTFOLIO SE LAGAYA, PAR MERE PYAR KE BADLE MEIN, TU NE MUJHEY NEGATIVE RETURN DILAYA. JAISE BIRKHA KI RUT MEIN KAATE TADAP KE AAHEIN BHAR BHAR KE, JAALE MAN TERA BHI BUYER KE MILAN KO, ANAAMIKA TU BHI TARSE…”
8. The best time to buy stocks remains when the interest is low. The best time to sell is when fundamentals run ahead of valuation. There are times I buy companies at lows in depressed and disinterested markets and wait for the markets to turn positive and buoyant. My song then:
“SASTI VALUATION SE MERE PORTFOLIO MEIN TUM AAYE, AUR PORTFOLIO KA PART BANE, RALLY MEIN TUM JAB BHAAGE, BAKI INVESTORS KI AAKHON KA TAJ BAANE”.
9. Nothing is more gratifying than returns. I am grateful to my portfolio stocks for great returns in 2013 and look forward to an eventful, bullish and good return 2014. My tribute of thank you for the winners:
“TUM JO BADD GAYE HO, TO RETURN AA GAYA HAI, INVESTING KI TUM SE WAJAH MIL GAYI HAI, BADI BEH WAJAH MARKET JA RAHI THI.
KAHAN SE CHALE, KAHAN KE LIYE, YEH KHABAR NAHIN THI MAGAR, KOI SIR PHIRA RETURN MILA, WAHIN TUM MILOGEY, KE HUM TAK TUMHARI DUA AA RAHI HAI….”
10. I don’t do daily trading. It’s not my forte or my fondness. I have tried these things in the past. Long term money beats everything. I also don’t have too much intellectual regard for those who give these daily calls as investors. May be they don’t have regard for me. That’s fine as I am happy with what works and has always worked. My song for these daily guys who seem to flirt more than any man:
“YEH JO DAILY CALLS HAIN, YEH UNKA HAI KAAM, STOCK KA JO, LETE HI NAAM, BADAL JAAYEIN, MUDD JAAYEIN, HO JAAYEIN ANJAAM, REHNE DO CHHODO, JAANE DO YAAR, HUM NA KAREINGE GUESS WORK”.
11. Celebrate when the going is good. Like now. My song:
“YEH BULLISH MARKET MASTAANI, MADHOSH KIYE JAAYE, MUJHEY DOOR KOI KHEECHEY NEW HIGH KI TARAF LIYE JAAYE”.
12. Finally the parting thought for now. Never never never be complacent. In anything. Markets are very humbling. My song:
“HUZOOR IS KADAR BHI NA ITRA KE CHALIYE, KISSI BHI MARKET MEIN COMPLACENT HO KE NA CHALIYE. KOI MANCHALA BLACK SWAN JO PAKAD LE GA AANCHAL, ZARA SOCHIYE AAP KYA JIYE GA. LAGAA DE AGAR BADD KE ZULFON MEIN WHITE BAAL, TO KYA AAPNI ZULFON TO KATA AAP DENGE….”
Happy investing, catch you soon.