The One Percent Almanack

Wit and Wisdom on Investing, Business, and Life

Investor Insights: Priyank J. Sanghavi

Priyank is a BE in Electronics and Communication Engineering and has worked in the IT industry in India and the US. He is currently the Vice President, Research at 5Y where he has been managing family funds since 2009. He has a total investment experience of 17 years and has done exceptionally well, with his 10-year audited return until June 2018 at 34% CAGR, as against 13% for NSE-Nifty.

The core of his investment style is long term, typically 5 years and more, and simplicity. He worked with Prof. Sanjay Bakshi at Tactica Capital Management from 2012 to 2013. He lives in Bhavnagar, Gujarat. Very rarely, when he feels he has something important to write, he blogs here. In this interview, Priyank shares his thoughts on investing, his process, and the key lessons he has learned over more than a decade of being an investor.

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Special Report: A Few Thoughts on Reading and Retaining

A Safal Niveshak reader (let’s call him Mr. V) recently asked me a question. I am paraphrasing his words for brevity.

Hi Anshul,

In last few years, I have read more than 50 books and 300 blog posts on investing. I am very structured in my reading process. I don’t rush while reading. I diligently take notes. Plus, I record everything I read. Please see the excel that I attached. [He had kept a meticulous record of every book and blog post along with dates and remarks for each]

While I can comfortably recall the contents of a book, it’s not the same with blogs and articles. Looking back I was surprised that I don’t remember the contents of many of the older read blogs. I don’t even faintly remember. Hasn’t all the effort in reading these 300 articles gone waste if I am not able to use such readings when needed?  [Read more…] about Special Report: A Few Thoughts on Reading and Retaining

The Tyranny of Screening Tests: From Medicine to Investing

A few months back I had written a post on Benford’s Law. It’s a fraud detection method to estimate if a given financial statement could be fake. In other words, it tells you if the numbers in a document are cooked up or real. When I first learned about Benford’s Law, I was like a kid with a new toy. I wanted to play with it immediately. Being a programmer, I wrote a small piece of code to extract the numbers from an annual report and test those numbers against Benford’s rule.

The next logical thought was to use my code and run it on the annual reports of all the publicly listed companies. This way, I could immediately identify all the companies which could be faking numbers. Wouldn’t that be cool? For some time, I even dreamed of floating a startup with this killer fraud detection product. I was going to be rich.

Now, instead of building my million dollar startup, I am writing this post. That should already give you a hint how that story turned out.
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Behaviouronomics: Reciprocal Concessions

Imagine you are walking down the street. As you wait for the traffic light to turn red so that you can cross the busy intersection, you feel a gentle tug on your shirt from behind. You turn around to find a ten-year-old boy smiling at you.

“Hey buddy!” you greet him while trying to match his elated body language.

“My name is Krish,” he replies while maintaining his ear-to-ear smile.

“How can I help you, Krish?”

“Do you see the tall apartment over there?” he points towards a multistoried building across the street, “I stay there. Our apartment society is organizing a play for social awareness. The show is on Saturday night. And I am selling tickets for the same. It’s ₹250. Would you like to contribute?”
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Bookworm: The Pleasure of Finding Things Out

If I were asked to summarize the essence of behavioural finance into one sentence, it would be this –

The first rule is that you must never fool yourself. Second is that it’s very easy to fool yourself.

This quote comes from Richard Feynman who without an iota of doubt, was past century’s most brilliant theoretical physicists and original thinker. Winning a Nobel Prize and finding the root cause of Space Shuttle Challenger disaster were just some of the less exciting feats of his career. To communicate complex scientific ideas to his audience at all levels — that was his gift.

He wasn’t just a passionate teacher but an inscrutable prankster. Because of his transcendent passion for science and a robust appetite for jokes, he was described as “half genius and half buffoon” by his peer Freeman Dyson.
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