Investing without tears!

Yesterday I met the grand old man of stock trading at a club in Shimla.

On finding him alone, I asked whether I could have a cup of coffee with him.

He obliged.

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"What are you doing these days?", he asked.

"I am itching to get into fundamental side of trading, Sir! Till now I was so focused on technicals that fundamental part got totally ignored. I am trying to make up for that!" I revealed frankly.

"So, how are you entering this sea of fundamentals!", he smiled!

"Well, I have got my hand on a few good books of stock fundamentals. I am burning my midnight oil to get the head and tail of balancesheets and Profit & Loss accounts and ratios....etc." I shared, albeit with a sigh of exhaustion.

He was listening quite attentively but didn't speak.

"It is a big big syllabi and I'm afraid I am already tired!" I admitted.

"But why are you getting into all this junk?" he said.

I was rather shocked at his question.

Everyone knew that this guy was a gem of an investor. His opinion about potential multi-baggers was famous in the Shimla circle.

"Sorry, I didn't get you!", I said.

"I am asking why are you mugging all this financial stuff?", he clarified.

"But why not, uncle!" I got involved!

"Afterall, how can I be a fundamentals-based investor without being a master of all this technical stuff?", I retorted.

"Look, Mr.Singh. You don't have to be an Chartered Accountant or M.Com or MBA (Finance) to be a good fundamental investor.

Rather, the more you entangle yourself in this jargon the more you will be vulnerable to being befooled by the army of financial special-effect experts of the corporate world.

You just can't think of beating them!", he explained.

"To be a good fundamental-investor you need to be good at psychology and common-sense!"
he continued.

"What!", I couldn't help reacting.

"Yes, you heard it right!", he calmed me down.

"All you need to focus on are these two things

1) The future of the business

2) The man behind the controls.

That's all I look for when I commit my money to a stock!"

"Sounds very interesting!" I was surely amused.

"So long as a budding Anand Mahindra or a Rattan Tata or a Sunil Mittal or a Kiran Majumdar or a Y.C.Deveshwar is at the helm of affairs....how can I be worried."

"When I am taking these names I don't mean I invest only in these bluechips or their new ventures.Rather, I have a big chunk of my investment portfolio into small caps and mid caps. And I must share that I regularly keep coming across tomorrow's Ratan Tatas and Anand Mahindras and Mittals..!"

"When I see common-sense business opportunities picked by able unstoppable men, I know I have found my investment opportunity!"

"So, all I am interested to know is

- what's the business opportunity

- who's heading, and

- what's in his head!

..............Period!

why should I bother about the fundamentals when I am sure "my" man-in-charge and his team is competent enough to manage it quite well for me?

His or her track record, the fire in their belly, passion in their body language, promise in their eyes............these all reveal it all!

If the fundamentals are not good, my man (or woman)-friday and his team will set it right for me.

Rather a situation where good team inherits a good business with marred fundamentals is a fantastic investing opportunity as the stock will be available at peanuts!!!

I know I can never be expert enough to be able to sniff-out the rat or cat in a cleverly dressed balancesheet, statements and ratios! So why bang my head into these?

Besides, what's the guarantee that a good balance sheet and P&L account will stay good?

Only a great team headed by a great leader can do that!

So, I should rather put my senses and energies to know about the guy (or guys) at the helm of affairs besides some common-sense gaze into the future of the business!

Once I am sure that the business potential is huge

Once I believe in the ability, integrity and intentions of the captain, I relax and let him and his team sufficient time to deliver results!!!

So, all I do to pick a stock for investment is

- look for emerging business opportunities

- read hell lot of interviews and anecdotes and stories about budding businessmen."

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"I hope I have not bored you dear, you haven't finished your coffee!" he said.

I was awe-struck!

I just got rid of a mountain of books!!!