total earning minus total expense = total saving

This simple rule is easy to read and hard to implement.

today most of people will sharply focus on total earnings as this is what our educational system and societies teaches and hardly on total saving management and placing them into right assets so it can compound.

total earning = how much is your gross earning

total expense = how much you spend ( expense which has to be done like education for family / medical expenses / living expenses and your lifestyle spending behavior)

total saving = how much you save for your family future living expenses and to maintain the same level of lifestyle in case their is turbulence in gross earnings or incase their is emergency where there is need of quick liquid funds to deal with it. 

total expense management should always be learned in early stage of life so that this habit compound with time.

today the major contribution of expense are linked with the way we approach our living management.

living management is directly linked with lifestyle spending behavior.

we all need to upgrade our living management so it gives us better experiences and time if we do it wisely it will surely bring value.

the goal should be to move living management directionally towards simplified living approach which is directly proportional to total saving.

once you achieve this or are in this direction you will observe saving automatically  gets increased.

saving management = what needs to be done with it ? 

it should be a  habit + it need to be re-invested into assets like real estate / financial instruments / learning new skills  / family future goals etc.

financial instruments is the area which is never taught in basic educational system or by societies which it should hopefully this change will come with time in a similar way as we are taught today by society to invest in real estate / gold

the way we upgrade our living management with time ( this is by default )

we also need to upgrade our investment management ( this is not by default it has to be build )

how to upgrade investment management ?

today world is open source so self learning is best way to learn it just need to invest some time to it.

If the focus is moved from total earning to total saving

investment management starts getting build with time.

   

Value of networking

knowledge / skills / getting broad view whether its personal living or workspace can only compound either if the person keeps investing in this area for life long or if not then other way is to always network with people.

If you go back and analyze the structure of education system across world its design in a way so people gather in a place where knowledge is shared among group and this group of people can network with each other.

If you go back and evaluate different people's communities and societies across world its design and build in a way where people can network with each other and stay connected.

the real problem is once human move out from their educational system entering into real life experiences they forget the value of networking and hence it isolate them in the closed circle which never let their mind to open up.

An empty / lazy / closed mind can only be active and open for life long when they become part of networking which helps to learn real life experiences in a speedy way rather than with ageing.

today their are different ways to network via social meetup / bonding with frnds / family / communications with world via social networking site and many more.

another problem is lack of experimental view among people the more we do experiments automatically the networking gets build.

networking helps to keep your thinking always ahead of your age and it should never be used for personal gain else this network get destroyed with time. 

finding investment opportunity / methods / ideas in equity market it helps a lot when we value networking hence an effort should be put to be part of it also share our knowledge and experiences to the network.

in this new era where the world is moving towards remote work it will harm networking hence its important to be in a hybrid model which helps to continue build the network as well as save time which should be re-invested in other aspects of life.

Portfolio review start of H2 2022

 

                                Note: new / exit position was build during the period of H1 2022

personality matters a lot in stock market investing

 what kind of personality you have and what you want out of stock market should be in sync 

if you have mismatch between the two outcome will not be same or close to what you thought it should be.

maximum amount of investors in stock market look for massive gain in a short period of time as this approach has more demand so the popularity of products of trading / derivatives / short term bets  / momentum investing is more talk.

Ideally stock market investment is for investor personality who invest money for long duration of time frame like 5 / 10 /15/ 20 year based on foresight of teams rather forecast of earnings.

 investing based on fore sighting people's  ability / skills / core values is underrated but when you do find this people take the risk and bet them for long as they will take you on a journey which will outshine rest of the methods of investment approach and your portfolio providing you freedom of time and independence in life.

once you achieve independence then you need to learn value of time and where it needs to be invested so the growth in life keeps happening with new learning and experiments and ability to take risk irrespective of fear of failure.

its very important to have courage / patience / ability to overcome fear / acknowledging mistakes / discipline / ability to burn your hands with practical experiences rather just theory to get collateral learnings.

just reading investment books / thread following on twitter / YouTube videos will not help you to build this attributes as this are spoon feeding and influence based investing methods which only work for a short duration of time. Less people use this methods as key to unlock their mind and build individual processes.

What happens when this supports are not available are you able to generate ideas / approach what to do and where to invest ?

if you cant visualize yourself where and what you want to be become in next 5 / 10 / 15 / 20 year of your life you will not be able to do this for companies you are investing and end up losing patience and exit early ( this is most ignorant factor which no one think about ) 

having a curious mind helps learning new things not just in investing but outside of it which adds a lot of skillset and its directly proportional where and how you are investing.

ability to learn how human behave in different situation will give you ability to build more refine method when investing in stock market. 

do you have the edge to do self assessment for improvements and find what mistake was done both in life and investing  ?

A person who keeps jumping at every moment and reacting on every bit of rise and fall in their portfolio will not be able to generate long term patience to hold the winners or remove looser.

A person who doesn't do experiments in various aspects of life will not able to take high risk calculated bets in investing.

A person who is dependent on others for various aspects of life will not able to generate own ideas and own thought process nor ability to visualize themselves which direction their life is moving towards and their investment portfolio

A person who live in the past will not be able to adapt to change and live in present freely their mind will not be able to take decision which is rational their decision will be influenced with past experiences good or bad.

A person who doesn't have discipline in various aspects of life will not be able maintain the discipline investment approach

A person who cant eat the same set of food every day which keeps their health of body and mind in good shape and need new taste each day will not be able to hold the winner bcoz they wont be able to visualize whether their health is good or bad  based on which set of food combination so do their health of investment portfolio which combination of companies will keep the growth of portfolio

A person who is not able to document each stage of various aspects of life will not be able to understand where / how they were in the past compare to present nor ability to know which direction their life and investment journey is moving towards.

A person who is not able to connect the dots will not be able to detect any changes happening around them which can be use to build ideas and thoughts to do investment based on it.

A person who is not able to plan their journey of life will not be able to plan their investment approach by themselves.

A person who doesn't keep hope and fight to overcome down phase in their journey of life will not be able to hold the winners when there is down phase of companies.

A person who doesn't simplify their journey of life will not be able to simplify their investment approach

A person who believe in talks and not actions will not be able to smell the actions and will be influenced with management talks

A person who doesn't know how to use their power of influence / money / thought process will get trap in their own illusion and will not able to know what is happening in their investment journey and life

A person who doesn't learn new things in journey of  life will not be able to learn new area of investment which has high probability of growth

A person who is less optimistic and more critic and conservative  will not be able to see the optimistic approach of any other person   

its important to build enhance learn each individual personality attributes to apply in investment approach

Portfolio review start of H1 2022

 

                        Note: new / exit position was build during the period of H2 2021 

new age businesses on digital platform

with the growing euphoria where new age business are going public below are my thoughts on it

its a great respect for this entrepreneurs and their team who have taken there organization to this level and made it public. I would say they have accomplished their journey from 0 to 1. 

This guys have created a great eco system to new generation to chase their dream irrespective of various challenges in India with community ideology /  education systems etc .

now they need to take a journey from 1 to 10 many of them sure will involve from here on this journey...

we all have to observer them in this journey our  forecast industry will not be able to understand this entrepreneurs and vice versa even this new age entrepreneurs will not understand the question raised by forecast industry and they need to learn to deal with them.

Note: our forecast industry itself has not involve much no new algorithm to analyze data patterns / human psychology / global changes /  technology changes  etc same old questions when will you make profit / how much margin  / can your business sustain in longer duration / can you explain  your business model blah blah blah......  how many analyst out there can forecast what food will be made at their home for dinner today without asking anyone at home ? so simple question ?  the forecast industry in India need a change I am sure someone will come and turn the table in this industry with technology + simple common sense for analysis.

how many forecast analyst ask question to explain how your product works not in terms of making money but in terms of its functionality ? if you dont know how the product workflow work how will you analysis how this product make money ? most of them are analyzing from user usage prospective which I think is not correct. 

Forecast industry doesn't have the edge to foresight people's ability and skills where its moving towards hence they hardly adapt and visualize the change at very early stage. 

if this entrepreneurs think about this question all the time I don't think developed country like US which you see now would ever have reached to this point where its called developed economy.

companies chasing dream / learning / adapting in public eco space is hard and life itself is hard so why not to do the hard job rather going easy. What will happen more than just a failure its also a lesson to learn and grow again.

many of this companies has given a fair deal of exit to existing investors via IPO as they have being with the organization to support them for so long and its healthy to give fair deal of exit.

beware some companies are well aware their growth will get saturated hence better to cash out from IPO. 

lot of public investors feel its not fair for them to invest with such a high valuation. This are the same groups of public investors who are complaining who made a lot of money via IPO listing so my question is what's unfair valuation which is for all the IPO's not just 1 or 2 or your greed which didn't get fulfilled ?

so its simple stay away and wait when you are comfortable with fair valuation keep observing this companies how they take decisions growth model executions in upcoming years if you see patterns of changes which you  are comfortable then take your decision based on it rather having a herd mentality.

my thoughts and observation on Vijay Shekhar Sharma and their team(Paytm) this are the guys who dreams connect adapt learn from failures their brains works like a child which is always curious hence you will observer their answers to analyst questions will be different than the normal executive as child speak from their heart full of emotions not manipulated brain and sure they will handle it better in upcoming days.

 when such a team learn and adapt the growth goes unmatchable for rest of the industry to reach to that level in the same space and other companies start partnering in their growth(this is early pattern which is key to look out for ) but when such team don't learn and adapt then it falls under below category. 

 Many will not survive in long run for growth and profitability example nykaa / policy bazaar / car trade/ zomato and many upcoming which are in singular segment either they will get killed slowly in next 5 to 10 yrs  unless they keep it upgrading ahead of market making it local to global  and I dont see that hunger in their management team for growth or some large player will buy them out.( patterns to recognize for down fall  looking for aggressive acquisitions / equity dilutions very often / investing in other startup / partnering  outside their domain of businesses and many others which can be recognized in upcoming annual meetings and conference calls through their psychological behavior and talks)

I have not put paytm in the list of survival for growth and profitability for now ?

part A) paytm has a huge user / customer base and its rapidly increasing to all smartphone devices this gives the customer / user a trust relationship factor which get build earlier then rest of the players - this is their current key MOAT. How many analyst will consider this as MOAT ?

any new digital services launched by other players paytm has an opportunity to explore and copy the same model of services on its platform to this huge customer / user base this gives them an add on advantage for fast scalability for the same compare to rest of the players in this space of super app /payment/finance  or upcoming services. It hard for a customer / user to switch out to other app just for few cashback or reward points or extra margin gain unless there is any new player to burn cash for next 10 years and keep better offering.

also note paytm need to be very quick in copying  or launching any new digital service on its platform upcoming in market.

it also need to maintain the same trust relationship with its customer / user  keep it compounding without any greed - there will be many allegations / stories created by other player to break this trust MOAT in this journey.

example : UPI services 

it was last in the league to provide UPI services but the add on advantage made them to reach in top 3 in a short duration of time.

Part B) paytm is not the only fintech solution available there are  many and you need 4 to 5 players to do the all the data point collection for each individual users to a central point which can be shared to each credit providers to design a better credit products also while validating new credit offering to borrowers and reduce bad loans and its happening across the global this will also support to move toward cashless/cardless system to move currency into the system digitally and reduce the cost of capital.

part C) we just cant be dependent on NPCI as a monopoly for transaction solution and settlements there is need to have 4 to 5 players which can build similar solutions and reduce the dependency on single largest players like NPCI.

while moving toward digital movement what happens when NPCI solutions goes down for 2/3 hours the whole of system gets hold if we are in a complete digital mode hence here as well fintech solution can be build which will provide complete robust transactions solutions and settlements 

part D) there is a generation which operate in cash , there is generation which operate in cheque there is generation which operate in net banking and there is generation which now operate only via mobile 

as a billion users where avg age of person is between 25-28  there is need to serve this new generation with this new medium called digital bank this will also support to reduce the cost of capital

We still don't know whether paytm will be one of them or not only time can answer it

there should be  4 / 5 player to service this generation as digital bank so competition will give them an edge to grow and provide better services to its customers as well as better credit products and collection methods.

this data points should already be on the table of regulators to allow private players for payments settlements solution similar to NPCI for robust digital economy and to have  digital banks as well for full fetch financial services.

once regulatory policy and license are build this should give such fintech to know in which direction to move and which experiment to stop giving them a clear direction where their business should move towards.

disclosure : haven't invested in any of this companies will wait to see some patterns out only then I will bring them in my portfolio and my thoughts can also be wrong or different from yours.

The valuation of success

my view how to value success 

I don't value success in term of money fame winning here are my thought on it. 

money fame winning are the materials which fate away with course of time its temporary protective tool to live life in society but to live a life with a improvement and learning everyday I find it as success as this give enormous fulfillment and satisfaction.

money is needed to meet the basic requirements like house, food, medical expense, travel, security from uncertainty, academic education for families. If you are struggling to make this then you need to make this achievement first. But the problem start when we human start chasing things which is beyond this and don't know how to balance out the extra back to human betterment.

more money is used to gain more money and more.... but we forget the more which we get more we need to make it back to human betterment who are struggling out there and not so privilege in terms of basic necessity, knowledge, skills.

we don't need to make them slaves of our funds but its important to build a package with our knowledge skills money in such a way which will make people independent from their struggle to meet basic necessity. 

The way we learn how to ride a bicycle we also need to learn this else the materials achievement will not get compounded so your method of valuation of success as well.

most human communities are build which reward us as successful when it see money fame winning else not hence its important to be detached from such community rewards to learn more to improve our thought process.

It could be many people in our family or community were struggling to meet basic necessity which they were able to overcome by chasing money and it was by default available to us when we were born in this community. So we need to understand why our community rewards tag of success only to this components. This understanding will help us shape better how to interact and react on certain thought process and action we perform living with the community.

The more success feeling we get attached with the more fragile we become hence its important to cherish each moment of setback and failures this are tools which build us more and more stronger as its a reward from nature to make you antifragile so acknowledge it and move forward rather than feeling sad and disappointed during those time.

I am witnessing there is change happening in the collective thought process in our communities regarding valuation of success and we will see an evolution of change with this which is beyond my imagination what change outcome will happen but sure it will be better than today giving upcoming generation a better backbone to chase their dreams.

never give advice to upcoming generation what to do in their life or how to live  let them make  their achievements and value failures just give them the tools which are needed to build a learning and adaptive mindset.