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Presentation on Investing for Beginners
Amit Kumar Gupta has over a decade of experience in investment analysis and portfolio management. He has worked as a business consultant for leading companies and currently acts as a fund manager. The presentation discusses different types of market players like entertainment seekers, casino players, and investors. It emphasizes the importance of saving before investing, understanding compounding, avoiding leverage and media reports, focusing on asset allocation, and creating one's own investment framework. The key message is that investing requires a long-term mindset and discipline.
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Presentation on Investing for Beginners
- 1. 1 Amit Kumar Gupta 22-Oct-2020 Investingfor Beginners FORE Economic and Finance Forum (FEFF)
- 2. Amit Kumar Gupta 2 . @amitgupta0310 •Worked as a business consultant with leading MNCs and start-ups over diverse fields of Healthcare, Education and Retail. • Over a decade experience in investment analysis and portfolio management. • Responsible for setting up the research desk at Adroit Financial across asset classes of equity, currency and commodity • Currently acts as a fund manager for PMS. • Engineering graduate of Delhi University and earned his MBA in Finance & Strategy from QUT, Brisbane Amit Kumar Gupta amitgupta0310
- 3. 3 Standard Disclaimer • Anystocks discussed during this presentation is not investment advice. It is done purely for illustrative purposes and not a recommendation to buy and sell. Please consider a financial advisor before making any investment decision. • My employer, Adroit financial services Pvt. Ltd is both a SEBI registered Research analyst and Portfolio manager.
- 4. 4 Scope of thepresentation • Types of market players • Various Approaches to Markets • For this presentation – Limit to investing • Discuss Facets of Investing “Some problems are so complex that you have to be highly intelligent and well informed just to be undecided about them.” —Laurence J. Peter Investing is one of those problem…
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- 6. Reference : DirtyPicture (2011) 6 Entertainment seekers Seek some kick, sense of adventure Deploy miniscule (usually less than 2%) of their networth in equity markets. Winning or loosing will not make any difference to their lifestyle Most active during bull phase and least active during bear phase Returns – usually less than bank deposits or even less
- 7. 7 Casino Players… Reference :Sacred Games (Netflix) Buying equity is like buying lottery ticket Allocate fixed amount to equities in the hope of hitting jackpot one day Mostly bet on penny or low value stocks Understand the risks associated but still take the punt Usually end up losing 50-100% of the capital which obviously they don’t mind
- 8. 8 Investors… Buying equities meansbuying underlying business, feel like business owners Substantial exposure to equity investments as compared to their net worth Usually end up making wealth from equities Usually tend to be miniscule % of the actual investors
- 9. 9 Warren Buffet Biography Childhoodtill 2010s – How to approach investing? Buffet – the investor vs Buffet the person. No Distinction! Behavioural investing more important than skill and knowledge Never forget the importance of luck!
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- 11. HOW MONEY WORKS BecomeEmployed • Someone pays you to work for them. • You exchange your time and effort for an income. • You don’t work – you do not get paid. Simple. Start Business or Invest in them • You take your money and you save or invest it. • You become an owner of something that you hope increases in value over time. When you need your money back, you sell it, hoping someone else will pay you more for it.
- 12. 12 Money doesn’t growon trees… • At 20, won Olympic Gold in Athens in 2004 • Between 2004-16, won 11 more O-Medals • Doping suspensions put out of game • Living “out of means”, debt piled
- 13. 13 Money needs tobe nurtured… • Phenomenal player in the late 80s & Early 90s • Won 49 titles in total • 6 Grand Slams • An Olympic Gold • $25mn in just prize money • Still got “historic” debt • Auctioned trophies to pay off debt
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- 15. 15 Compounding uninterrupted… • Diedin 2014, aged 92 •Left 8mn$ in total •No Inheritance, No lottery • Saved and invested!
- 16. 16 Compounding works inreverse too •Richard Fuscone - Well paid executive •Harvard Educated, Merill Lynch •Borrowed heavily •GFC happened! • Filed for bankruptcy in 2010 • By 2014, Sold assets to pay off debts •Greed overcome basic financial sense!
- 17. 17 Compounding – longterm in nature • To make money grow faster, compounding critical! • Negative compounding like CC interest • Longer the time frame, larger is the returns • Time frame linked with goals!
- 18. 18 Rule of 72 •Ruleof 72! • Time to double the money •Not exact, but works most of the times •Fails only if interest rates are too high >20%
- 19. 19 Read, Read &Read • Read Indian context books • Understanding how great business franchise are built • Why certain companies score over others? • Drastic Changes in Indian economy – in past 5 years
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- 21. AVOIDING- RULEBOOK Minimal exposureto the media should be a guiding principle for someone involved in decision making under uncertainty — including all participants in financial markets. ~ Nassim Taleb Media Analyst Reports
- 22. Leveraging "IT'S NOT HOWMUCH MONEY YOU MAKE, BUT HOW MUCH MONEY YOU KEEP, HOW HARD IT WORKS FOR YOU, AND HOW MANY GENERATIONS YOU KEEP IT FOR." - ROBERT KIYOSAKI Avoid F&O till… • F&O consider weapons of mass destruction! • With higher margins, lower value accounts will wipe out in a short time frame • Trade with discipline • Start F&O with paper trading!
- 23. Timing the Market “FARMORE MONEY HAS BEEN LOST BY INVESTORS TRYING TO ANTICIPATE CORRECTIONS, THAN LOST IN THE CORRECTIONS THEMSELVES.” PETER LYNCH Timing matter less in CORE stocks for example : FMCG, IT Timing matter more in cyclical stocks for example : Cement, Metals, Commodity stocks Timing matter the MOST in special situation stocks – case specific
- 24. 24 Focus on AssetAllocation • Not a single asset class is consistently performing in the markets • Diversification across asset classes - Equities, Gold, RE • Debt adds stability to the overall portfolio • Invest more when valuations are low, Invest less when valuations are high
- 25. 25 Investment is whatyou are…
- 26. 26 Perform at criticaltimes Take calculated risks Perform under pressure What if decisions don’t go as per planned? Calmness and preparedness! Reference : Sully (Amazon Prime)
- 27. 27 Create your ownframework..
- 28. 28 Find your ownpath… अलग-अलग पथ बतलाते सब पर मैं यह बतलाता हूँ 'राह पकड़ तू एक चला चल, पा जाएगा मधुशाला।
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