EveryFin's founder Vignesh Ramesh presents on 'How to invest in order to generate long term wealth' - Backtesting, algorithmic trading and fundamental investing.

1. HOW TO INVEST
TO CREATE LONG-TERM
WEALTH ?
EVERYDAY FINANCE FOR EVERYBODY

2. ABOUTME
I’m Vignesh, Chief Thinker at EveryFin.in

3. QUIZTIME!

4. YOU ARE LOOKING
TO GET INTO THE
FOOD BUSINESS.
WHICH OF THESE
RESTAURANTS
WOULD YOU MAKE
AN OFFER TO BUY?
40 SEATER
RS.500/MEAL
ASKING PRICE
RS.50 LAKHS
ASKING PRICE
RS.70 LAKHS
60 SEATER
RS.600/MEAL
CAR PARK
OUTDOOR
SEATING
MODERN,
RENOVATED
OLDER,
CHARACTER

5. THE MBA DILEMMA
You are currently employed with a company which pays you Rs.3 Lakhs/annum.
And you are considering doing an MBA which costs Rs.7 Lakhs/annum (incl. all expenses)
Once you pass out, you expect to earn Rs.7 Lakhs/year.
How many years (from the time you graduate) would it take for you to recover
your total investment on the MBA and breakeven?
*Assume no salary increment and no interest rates on any student loans

6. A FASCINATING DRAMA ON INVESTING
IN 3 SCENES

7. 10YEARS AGO…
DAD
“Beta” Fixed
Deposit! Best way to
secure your future.
PRASHANTH JAIN
CIO,HDFC AMC
HDFC TOP 100 Mutual fund!
Our RSI indicator suggests….well lots of
intelligent things ;)
“Putthar”
buy GOLD!
MOM
You have Rs. 1 Lakh in savings that you want to invest.
SCENE
1

8. 10YEARS LATER…
Turns out,
mum was right.
But isn’t she
always?

9. THIS IS THE POWER OF
SAVING
&
INVESTING

10. 10YEARS BACKAGAIN…
DAD
“Beta” stick to
Fixed Deposit!
PRASHANTH JAIN
CIO,HDFC AMC
HDFC TOP 100 Mutual fund!
Because….something about the stock
markets using Greek alphabets – Alpha, Beta type of thing“Putthar” GOLD
Khareedo!
MOM
On the 1st of every month, you take Rs.10,000 out of your salary to invest.
Let’s take advice from the same 3 people again?
SCENE
2

11. A DECADE LATER…WHO WAS RIGHT?
MUM WINS AGAIN!

12. THIS IS THE POWER OF
SAVING,
INVESTING
& LETTING THAT INVESTMENT
COMPOUND

13. 25
50
75
100
125
150
Day 1 Day 2 Day 3
₹110
₹130
₹100
LET’S“UP”YOURFINANCEGAME!
HAVEYOUHEARDOF DRAWDOWNS?

14. This is drawdown, the reduction in value of your portfolio from
the peak value that it reached expressed in % terms.
And in this case your portfolio has suffered a 15.4% drawdown
(20/130).
DRAWDOWN

15. DRAWDOWNSMUTUAL FUND
2010-2020

16. DRAWDOWNSGOLD
2010-2020

17. 10YEARS BACKAGAIN…
Gold
25%
FD
25%
Mutual Funds
50%
SCENE
3
Instead of investing all the Rs.10,000 each month into only one of
MF or gold or FD, you decide to diversify.

18. 10YEARS ON…HOW DIDTHATGO?
2
Your blended
portfolio has
landed you the
second spot in
terms of total
returns!
You have done better
than Prashant Jain,
CIO of HDFC AMC!
AND IT GETS
BETTER….

19. The drawdown on your blended portfolio is significantly less than
the MF only portfolio.
DON’T BELIEVE IT?

20. You did not lose sleep nearly as much as Prashant Jain did!
Note: All charts are drawn to same scale.

21. SAVE
INVEST
DIVERSIFY
So, if you want to create wealth, here is what you need to do…
COMPOUND

22. SHORT-TERM
OR
LONG-TERM?
More intuition building

23. MEET
“MEETA”
Let’s find out using a popular strategy called the EMA crossover trading…

25. 40 SEATER
RS.500/MEAL
ASKING PRICE
RS.50 LAKHS
ASKING PRICE
RS.70 LAKHS
60 SEATER
RS.600/MEAL
CAR PARK
OUTDOOR
SEATING
MODERN,
RENOVATED
OLDER,
CHARACTER
TO WHICH OF THOSE
RESTAURANTS
Did you make an offer?
ANSWERTO QUIZ
NEITHER.
YOU SHOULD HAVE BOUGHT
THATVADA PAAV STAND

26. SO,HOW DOES ONE IDENTIFY
GOOD INVESTMENTS?
REVENUE UP 34X
PROFITS UP 90X
LOOKING BACK AT THE LAST DECADE
2010-2020
AVANTI FEEDS
320 BAGGER

27. REVENUE UP 28X
PROFITS UP 46X
LOOKING BACK AT THE LAST DECADE
2010-2020
BAJAJ FINANCE
160 BAGGER
SO,HOW DOES ONE IDENTIFY
GOOD INVESTMENTS?

28. REVENUE UP 11X
PROFITS UP 24X
LOOKING BACK AT THE LAST DECADE
2010-2020
BHARAT RASAYAN
133 BAGGER
SO,HOW DOES ONE IDENTIFY
GOOD INVESTMENTS?

29. REVENUE UP 9X
PROFITS UP 8X
LOOKING BACK AT THE LAST DECADE
2010-2020
ASTRAL POLY TECHNIK
122 BAGGER
SO,HOW DOES ONE IDENTIFY
GOOD INVESTMENTS?

30. §
Image Source: Armin Van Buuren song
WE COULD GO ON,BUTTHE POINTIS…

31. GOODBUSINESSES
ATGOODPRICES
AREGOODINVESTMENTS

32. THE DECADE AHEAD
IDENTIFY RAPIDLY GROWING MARKET OPPORTUNITIES
India, China, South Korea, Vietnam, Taiwan, USA
IDENTIFY INDUSTRIES WITH FAVOURABLE TAILWINDS
Renewable energy, Electric Vehicles, Technology, Healthcare, Asset Mgmt, Others?
IDENTIFY GOOD BUSINESSES
Build conviction, buy right and sit tight.

33. HOW MANY YEARS
Before you recover your MBA investment?
Life without MBA
0
3
Year 1 Year 2 Year 3 rest of your life
TOTAL COST OF MBA?
Rs.20 Lakhs
NET NEW BENEFIT FROM MBA?
Rs.4 Lakhs/year
BREAKEVEN PERIOD?
5 years
ANSWERTO QUIZ
INVEST IN YOURSELF!
Those are the best investments you will ever make!
7
0
-7
0
3
Life with MBA

34. ?EVERYDAY FINANCE FOR EVERYBODY

35. THANK YOU!
EVERYDAY FINANCE FOR EVERYBODY