The life motto of Pankaj is to Live, Love Laugh, Eat, Travel, and Motivate. He has been passionately observing the Indian Markets since 1992. He is a brain tumor survivor who is retired from the rat race and helping everyone win. He shares his thoughts through his twitter handle @AnyBodyCanFly.
Let’s get some insights about his investing journey.
Dhruv Girdhar, RichifyMeClub: Hello Pankaj! First of all, I am really thankful to you for penning down your thoughts. Behind the Curtains is an initiative by RichifyMeClub to share the insights of the investing journeys of Mentors, Investors and Role Models. Undoubtedly, our readers will acquire a lot of wisdom after reading your story. Please tell us something about your investing journey.
Pankaj Singhal, AnyBodyCanFly: Thank you, Dhruv. I am grateful to you for this opportunity to share my investing journey with your readers.
My investment curiosity towards stock market started during my school days. Those were the times of Harshad Mehta days in 1992. It was fascinating to see the way stock prices used to move within the span of a short duration of time. I started reading the business newspaper, Economic Times, in order to understand what Finance, Economics and Stock Market is all about. I started going to a broker next door to see how people used to trade and react based on volatility.
I must mention that those were the days when there was a real euphoria, which I am yet to see it again. People used to buy stocks as if the stock market was going to vanish sometime soon and prices would not have any limit to fly. Without knowing anything about the fundamentals, every individual had turned into an investor while buying anything coming on their way.
I have kept reading and learning on my own while shuttling from school to college and then to earning days. I invested a negligible amount as I never used to have any spare money to invest. Since then, the market has evolved considerably in a way that:
1. SEBI has been formed that has streamlined many processes and is still working continuously to safeguard small investors as best as possible.
2. Availability of information is in abundance today.
3. Individual economies have moved on to connect with other well-established players around the globe. This has made the global economy an important subject to study and analyze.
4. A few domestic and international crashes have happened in the stock market. This has turned an investor more cautious than ever.
During this period, I had developed a deep passion towards the stock market. It became my default hobby to read and research as and when I had some spare time. The downsides in the market helped me understand the importance of Behavioral Science and Psychology.
After a while, when I had some money to take risks, I finally started practicing the real investing. A year later, when I reviewed myself, I found that I had done extremely well with my investments. I immediately decided to quit the job and pursue my passion as my career. I became a full-time investor. Since then, I have never looked back and achieved amazing returns for myself. As of today, I can say that I am financially independent in every aspect.
I call myself a value investor because I give utmost importance to the valuations while picking stocks. The factors that helped me in generating excellent returns are:
1. Entry timing / Luck
2. Deep experience in Reading & Research
3. Matured mind in terms of Behavioral Psychology
4. Giving macros a priority rather than an individual economy
5. A dynamic & flexible approach towards maintaining a portfolio
Dhruv Girdhar, RichifyMeClub: That’s amazing, Pankaj. I am pretty sure that the investing philosophy that you have shared will help our readers immensely. Moving on, what have been your key learnings while practicing?
Pankaj Singhal, AnyBodyCanFly: Since the day I had started investing, my learnings have been innumerable. And I am still learning as I feel that investing is a never-ending process wherein we keep adding to our learnings while we add to our experience.
When it comes to my core learnings, I would like to share a few of them:
1. Markets have become extremely dynamic. We must be highly flexible in our approach towards the stock picking process during our investment journey.
2. Individually, any country is no longer carrying enough weight these days because of globalization. We need to study macros, especially a few of the largest economies, to help in strategizing our investment process over time.
3. Living in history doesn’t help anyone.
4. Stay away from the noise and negativity. Be an optimist and independent.
5. Never try to learn equity investments through books. Books create a foundation however Investing is an experience which gets refined with time. Get your hands dirty & stay put.
6. Investing is easy but the associated process/journey is not.
7. To reap the best gains through Investing in stocks, we need to have Knowledge, Courage, Patience, and Discipline. It’s a journey with no shortcuts.
Dhruv Girdhar, RichifyMeClub: You have said it right that investing is a never-ending process. Moving ahead, you are a renowned face on social media. What is the best piece of advice that you have for our readers?
Pankaj Singhal, AnyBodyCanFly: Well, we build our career by gaining knowledge through education and experience. On similar lines, we need to build our investment journey through our own knowledge. We need to work hard to build the right knowledge. While practicing the investment process, we need to be patient and disciplined at every step.
Respect yourself and have a firm belief in your abilities. Never mock anyone. Social media is a place where everyone tries to be as perfect as possible. This is taking away the learning purpose.
Dhruv Girdhar, RichifyMeClub: That’s correct. Besides, you are a keen observer of India’s growth story. Which sectors do you believe are going to drive the growth of our country going forward?
Pankaj Singhal, AnyBodyCanFly: When the country is in developing stage, its growth is always driven by manufacturing and infrastructure sectors. However, these sectors are good for investments or not, that’s a different subject of discussion altogether. From an investment point of view, I like those sectors and stocks that are linked to foods, eateries, and consumption. Consumption is a wide word that may contain many sub-sectors in itself.
Dhruv Girdhar, RichifyMeClub: Having said that, I am sure that our readers will be able to pick the stock ideas from the themes that you have discussed. What else earns your attention? What is it that you love doing apart from investing as a subject?
Pankaj Singhal, AnyBodyCanFly: I love to travel and wish to see most of the world in the next 2 years. Over a period of time, I feel, it’s only the memories that remain with us. Rest all goes away. Besides traveling, I try to help people grow I am surrounded with in whatever way I can.
Dhruv Girdhar, RichifyMeClub: That’s wonderful, Pankaj. I wish you all the luck in achieving your goal. Since you are retired from the rat race, how do you think that one can achieve financial independence? Please share your experience.
Pankaj Singhal, AnyBodyCanFly: To achieve financial independence, it needs a lot of hard work to start with. Knowledge and Experience build the ongoing foundation; while patience, courage and discipline support the journey to stay put.
Beyond a certain point, I believe that financial independence, as a concept, is purely psychological. For some, One Million might be enough to survive; while at the same time, One Billion may not be enough for someone else.
If someone really wishes to achieve financial independence, below are my thoughts that I would like to share with your readers:
1. Review yourself in terms of current earnings
2. And if you stay in the same kind of environment, speculate in terms of how much can you earn over the next 5-10-15 years
3. Understand your current expenses and extrapolate judiciously to forecast your expenses over the next 10-15-20 years
4. Accordingly, identify the means to add an extra income through the investments
5. Besides, either learn yourself or get associated with the right person during the journey
Dhruv Girdhar, RichifyMeClub: Thank you Pankaj for sharing some deep insights on how to achieve financial freedom. Glad that you have shared them candidly with our readers. Moving ahead, from the plethora of companies available in the market, how do you pick your companies that are worth investing?
Pankaj Singhal, AnyBodyCanFly: Stock picking is an art and a highly important step to start with the investments. However, it’s the overall portfolio strategy that matters once we move ahead progressively.
A few of the key parameters that I consider while picking an individual stock are:
1. A visible business potential
2. Fundamentals in place
3. Valuation comfort – a very dynamic parameter
I prefer to give a lot of importance to the published results. I keep picking names as dark horses which become great investment ideas over time.
Dhruv Girdhar, RichifyMeClub: That’s really nice. Many of us during our journey commit some mistakes. What mistakes made you realize that you really needed to change the way you invested?
Pankaj Singhal, AnyBodyCanFly: Committing mistakes is a part of an investment journey. I myself made many in the past and am sure that I’ll keep committing them in future too.
We just need to review ourselves, act wisely, learn and move on to become a better investor. Few of the key mistakes that I would like to highlight are:
1. Investing with borrowed money or through leverage. Leverage can be a key mistake which usually happens either when we get carried away in euphoria or try to find shortcuts during the initial stage of our journey. Even if you need to take leverage, it should be based on your net worth and risk profile
2. Selling too early just because it has run up too fast. Till the time there is a visibility of business potential and the company’s growth path, one should ride the growth as maximum as possible
3. Buying too late because of unfiltered noise and fear of missing out. Never ignore the valuations, business potential, and company fundamentals while acting on any suggestions. Always do your own due diligence
4. Building a big position too early and then selling while the patience is being tested. It usually happens whenever we pick a new stock to invest. Always build the position towards its upside. Parallely, build the conviction when you see a visible growth in numbers
5. The decision to buy a stock which is based on borrowed ideas. When the markets decline, we tend to exit even at loss from all the borrowed ideas. But once you build a conviction through your own research, it has got no comparisons
6. Acting in upward euphoria or downside panic. These are the momentum phases when valuations go beyond realistic levels & deserve a price as well as time correction. Buying in upward euphoria or selling in panic during downsides is not advisable
7. Running after people who keep selling their own ideas. Rather, listen to your own thought process and do the brainstorming sessions on it. Try to be in the company of people who listen, respect & motivate you in discussions. Tricky but extremely useful
8. We should exit out as soon as we realize that we are wrong with our stock pick. Learn to take losses quickly. Don’t expect to be right all the time. Learn from your mistakes, review yourself and just move on
9. Over-analysis in trying to find a perfect stock may make us miss many opportunities on the way. The more we think we know, the more closed-minded we’ll be. Over-thinking, over-analysis, over-research…may do more harm than good. Keep It Simple
10. Over-confidence made me start predicting the things for which I was not too experienced. And it made me skip my own basic investment rules. Learning is to stay balanced in thoughts so as to not get carried away by own success. Stay humble to stay focused with a purpose
11. Underconfidence made me start doubting my own research and conviction. We cannot outperform every single time. And wherever we have thoroughly done our own research, there is no point to search outside for negative views. Patience & Discipline are highly important
12. Ignoring business potential while reacting with panic in weak markets can make us sell at lows and buy at highs. You need to stay away from the noise to stay focused on your own convictions. Opportunities are plenty at any point of time
13. Tracking stock prices too closely may tempt you to shuffle from conviction to momentum. In the process, you may end up buying at highs and selling at lows. Sooner or later, momentum comes in every stock and hence it gives entry/exit opportunity
14. The stock market may not respect us if we do not respect the valuations of our stocks. Follow a strict valuations framework in order to keep doing well in all kind of market sentiments. Some stocks may be expensive at 10 PE while some may be cheap at 50. Study well to plan well
Dhruv Girdhar, RichifyMeClub: That’s something which our readers surely love reading. You have been observing the market for the last many years. A lot has happened in the meantime. What do you think has been the most impactful event that raised the Bulls to new heights?
Pankaj Singhal, AnyBodyCanFly: Dhruv, there are multiple parameters, global and domestic, that have created a long-lasting impact. The bulls may keep attaining new heights with time and space. Key parameters that I would list here are:
1. The USA is giving all kinds of benefits to corporates. Corporates are the only entities that run the economy. As a consequence, the country grows on a right growth path. The USA is adding huge value to the global economy in absolute terms and hence it is having a long-lasting impact triggering the bulls (local to US & global) to attain newer heights.
2. China is building itself as well as many countries in terms of infrastructure. This is having a long-lasting impact on multiple sectors as well as the earnings potential of individuals in these countries.
3. India is trying to work hard to build as much infrastructure as possible even though we are a complex and complicated country
4. USA and China are the world’s largest economies which are moving fast ahead on a bigger scale and hence driving the global growth by adding most to the global economy in absolute terms.
In addition, I would like to mention the key risks to India story are:
1. Petty politics over Caste, Religion, and Creed
2. Frauds who never oblige in paying taxes to the Govt. As a result, the growth story hampers
3. The ones who don’t respect the opinions of others
Dhruv Girdhar, RichifyMeClub: Wonderful, Pankaj! Thanks a lot for sharing your investing journey so candidly with all of us. I am certain that our readers will benefit immensely from your rich experience. I wish you all the luck in your future endeavors. Keep guiding and sharing your learnings.
Pankaj Singhal, AnyBodyCanFly: Thank you, Dhruv for giving me an opportunity to share my thoughts. I thoroughly enjoyed reading your conversations with Amit – Midcap Mantra, Fundamental Investor, and Ravi – Stocks and Ladder. And I am pretty sure that going forward, I’ll get to read many more interesting stories through this amazing interview series. Thanks a lot once again.
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