Vishal Khandelwal

Life 2.0: What You Need to Achieve Greatness (It’s NOT Talent!)

January 30, 2017

What does it take to be the best? The best manager, the best website designer, the best boxer, the best marketer, or the best investor?

The off-the-cuff answer is 10,000 hours, popularized by the Malcolm Gladwell book Outliers As per Gladwell, 10,000 hours is what you need to become a renowned concert violinist, a brilliant mathematician, a chess grandmaster, a Pulitzer-winning novelist.

In other words, that’s 20 hours a week (or 3 hours a day) for 10 years. Well, you may look at this in one of two ways. You might get depressed looking at the 10,000 hours number and re-consider trying to be great in what you aspire to be. Or you may decide to sit down and start working away those hours.

But there are some serious problems with both of those approaches.

The problem with the first approach i.e., giving up, is that it assumes there’s nothing to be gained between hour 1 and hour 10,000.

“I will be nothing until I’ve mastered greatness,” you might say to yourself, “And the road is too hard and long, so what’s the point?”

The problem with the second approach i.e., settling in to grind the hours out, is that it matters ‘a lot’ what kind of practice you put in for 10,000 hours.

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InvestorInsights: Jatin Khemani

January 20, 2017

Jatin Khemani is Founder & CEO at Stalwart Advisors, a SEBI Registered Investment Adviser. He has seven years of experience in investment analysis and portfolio management. In his last stint with a Delhi-based brokerage house he was solely responsible for the research activities of the organisation right from picking new ideas to tracking the existing portfolio thereby assisting the directors in managing the proprietary book. He is a CFA (US) Charter holder, earned his MBA in Finance from Christ University, Bangalore and graduation in Commerce from Delhi University. Thanks to his admiration for Peter Lynch & Philip Fisher, Jatin has over the years become proficient in scuttlebutt, a primary research method to find out truth about a company or an industry. On weekends, he teaches finance to MBA students and is an active volunteer with The Art of Living since 2006, where he leads state level fund-raising campaigns.

Safal Niveshak (SN): Could you tell us a little about your background, how you got interested in value investing?

Jatin Khemani (JK): I had a decent exposure to how businesses operate since a very young age. My family used to run a manufacturing setup which I often visited, and later on I studied commerce in high school and graduation. But my perception towards equity markets was bad then. I had seen my father trade and lose money. The lesson that got passed on to me was that individuals do not stand a chance in this market, which is manipulated by ‘operators’, dominated by institutional investors, and its nothing less than gambling.

However, that completely changed during my MBA days, when I met my mentor Mr. SG Raja Sekharan. He was a very senior IT professional who had left his fancy job as soon as he became financially independent and started following his passion of teaching and helping others get financially independent. He could do that by smartly investing in real estate as well as great businesses like HDFC Bank, Asian Paints, Pidilite etc. and holding on to them for years, and in some cases decades.

The nirvana moment for me was when I read ‘One Up On Wall Street’ by Peter Lynch and later on was introduced to the writings of legends like Warren Buffett, Charlie Munger and Philip Fisher. That’s when I decided to pursue investing as a career and enrolled myself for CFA (USA), which I eventually cleared in the first attempt and was awarded the charter. I worked two jobs, first at an independent investment research firm, and second as an analyst and later head of research at a Delhi-based brokerage house.

BookWorm: Anything You Want

January 15, 2017

Business and life lessons from a musician who accidentally became an entrepreneur when he found himself running a multi-million dollars business.

Derek Sivers was a full-time musician in 1998 making a comfortable living. One day he decided to sell his music CDs online and found that there was no way for a small-time musician to sell online. So, he learnt to program and built a website to sell his CDs. Very soon his friends started requesting him to list their CDs on the website. That’s how CD Baby was born and 10 years later it was doing $100 million in sales. In 2008 Sivers sold CDBaby.com and gave away the proceeds ($22 million) to a charitable trust.

Sivers never wanted to start a business and when he was running CD Baby, he intentionally wanted to restrict the growth so that he could run it the way he wanted. Ironically, those self-imposed constraints became the trigger for CD Baby’s growth.

Selling my friends’ CDs was starting to take up a lot of my time. I realized I had accidentally started a business. But I didn’t want to start a business! I was already living my dream life as a full-time musician. I didn’t want anything to distract me from that. So, I thought that by taking an unrealistically utopian approach, I could keep the business from growing too much. Instead of trying to make it big, I was going to make it small. It was the opposite of ambition, so I had to think in a way that was the opposite of ambitious.

“The key point is that I wasn’t trying to make a big business. I was just daydreaming about how one little thing would look in a perfect world. When you make a business, you get to make a little universe where you control all the laws. This is your utopia. When you make it a dream come true for yourself, it’ll be a dream come true for someone else, too.

Sivers is the best example of what they call ‘an accidental entrepreneur’ and Anything You Want is the account of his entrepreneurial journey and the lessons he learnt. I found that a lot of these lessons can be extended for investing success too.

So here are my favourite ideas from the book.

If It’s Not a Hit, Switch

Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting different results.”
[Read more…] about BookWorm: Anything You Want

Behaviouronomics: The Spotlight Effect

January 10, 2017

When you go wrong about something and you feel the spotlight is on you because you blabbered about it in the past, it’s very painful to change your mind even when a significant part of your wealth is at stake.

In a survey, people were asked about their greatest fear. Can you guess what was the number one fear for most people? It wasn’t fear of death.

Fear of public speaking topped the list. Death was second. My guess is that the third one on the list would be a combination i.e. ‘dying while public speaking’. Jokes apart, the act of standing up in front of a crowd and saying something meaningful, for most people, is terrifying.

I remember my first experience. The moment I stood up on the stage, my legs started shaking uncontrollably. Within few seconds my throat went dry as the desert and I was sweating like a pig. I could barely utter a single syllable. I behaved like a deer who suddenly finds itself in front of a hungry and ferocious lion.

The underlying cause of this fear is our intense urge to not look like a stupid. A man would do everything to avoid being in embarrassing situations. This tendency comes from the basic human need to belong to a group, to fit in and not stand out like an odd man out. Social proof is an important behavioural bias which explains why we behave irrationally.

Spotlight: An Investors’ Disease Called Rhinophobia

January 5, 2017

A lot of us suffer from the temptation of buying stocks or mutual funds as soon as we have some cash in the bank. Beware! It could be a symptom of a contagious disease called Rhinophobia.

“All of the humanity’s problems stem from man’s inability to sit quietly in a room alone.” ~ Blaise Pascal

“There is an itch to do things, particularly when you haven’t done anything in a while.” ~ Warren Buffett

“Dude! These bank guys have suddenly started giving me too much attention,” my friend told me. He recently had a cash windfall when his startup was acquired by one of India’s leading e-commerce company.

“Of course they would. You are a rich client for them now,” I told him.

“Earlier I had to run from pillar to post to get even the basic account details updated. But now they are after me like anything. Quite a few people from different departments in the bank have approached me and offered their advice for investing my money,” he complained.

“It’s better to stay away from these advisors. They’re the agents of Rhinophobia,” I warned.

“Rhinophobia? Never heard of it before. Sounds like a disease,” he looked at me with furrowed brow.

“It’s an investor’s disease meaning the dread of ever having any cash. These so called expert advisors will convince you that having un-invested cash in the bank is the biggest sin an investor can make,” I explained.

“Sounds interesting. You should write about it in your Value Investing Almanack,” he suggested. I haven’t been in touch with him since some time so I don’t really know if he heeded to my warning about staying away from his bank’s advisors. However, I took his advice seriously. So here I am sharing my thoughts on Rhinophobia.