What kind of returns can I expect by investing directly in the stock market? I got almost 58% in one year and then 107% in the second year. So almost 150% in two years.
How much money have you made last year? I think last year I made around 1.1 CR. I made a lot of money in one sector which was the defense sector and the railway sector. So I bought it at that point. It went up by 70-80% in a year.
Famous book written by Peter Lynch, One upon Wall Street. And he talks a lot about things that you can see in your immediate surroundings. Of course. Which sort of helps you make better decisions of investing in the stocks.
Yeah, so this is called Scuttlebutt Investing. See, if I had to look at this place as such, I would look at, okay, what wires are you using? First of all, because there are only four big players in this space.
Right, so I'm like, okay, these wires are being used a lot in Mumbai. That means if Mumbai is growing, then this wire company will grow. And if this wire company grows, then I can predict...
that the stock price might go up a little bit. The US election is going on. How can I look at this from a stock market investing point of view? Have you heard of this term called de-dollarization?
Yeah. I think that would trigger one of the biggest financial meltdowns in the future. How can a war eventually lead to a stock price going up or going down?
Okay, so whenever there's a war happens, there is a... Assume that I have no degree in finance. How do I get started? I honestly believe that people overcomplicate investing.
So out of 6,000 stocks, if you had to give me a mental working... model as to how do I sort of filter out the stocks that I need to invest in. What is that step-by-step methodology? Okay. So first thing I'll tell you is.
Hey bro. What's up? What's up?
How are you doing? Long time no see. You're always traveling, you're always in the US and all.
Yeah, man. Traveling has become a little hectic now. But thank you. Thank you so much for agreeing to do this finally. I think your son is going to be watching this video in the future.
So let us let him understand. Yeah. How much money have you made last year?
I think last year I made around 1.1 CR. This is in the stock market? In the stock market.
Yeah, I think around 28 lakhs in equity market and around 88 in F&O. Okay. So around 1.1 total net profit was what I'd made after charges, taxes and all of that. And you're still worried about your son's future? Of course, of course, because I feel it's not enough.
I feel there's a lot more to be done. And for me, the game is capital. So I'm only focusing on that. So 1.1 crore profit. Yeah.
The next question I want to ask is what is the capital that you started off with? Because a lot of people might assume that, okay, probably he had 50, 60 lakhs. Yeah.
Right. Which he already had. And then it's easy to make it 1.1 CR. So can you tell us a little bit about how you started investing?
Okay. So. Yeah, so I told you, right? I love numbers all the time, right?
So when I was 25, 26, 27, I worked in investment banking. I understood what it meant by understanding investing in markets, increasing capital. So I understood very early on that money makes money, right?
Instead of me focusing on getting 80%, 90% return, I was like, let me increase my capital as fast as possible because I want that compounding play to happen, right? Investing 10,000 rupees... So you were saving a lot of money.
I was saving an insane amount of money because if I invest 10,000 rupees and I'm right, and I get 100% returns even in two years, I make 10,000. So that's not going to change my life overnight. So I said, okay, let me work hard. Let me keep investing and keep putting it into this capital and making it grow. So I think by the time I reached 28, 29 years of age, I had around 30 lakhs of capital.
And that was perfect because... In five years, you saved up 30 lakhs. Yeah, in five years, 30 lakhs I saved up. I mean, I don't have any real estate. I was staying with my parents.
At that point, I had not bought any real estate. I'm staying on rent. You were not married. We were not married. And I just started the creator journey at that point.
So that was the boom of the influencer era that started. So good money came at that point as well, right? Good bets, good money came in.
Now, obviously, there was two options. Either take that money, blow it away. But I also knew that the money that we were getting at that point for doing reels and all of that, very new.
I knew that's not going to last because I called it stupid money. So if someone's giving it, please take it. So I took it at that point. And I started investing it because I know this is not sustaining me.
It'll never sustain me. But what will sustain me is... my goal of investing in the market so that's when it started so 30 lakhs is what i started you mentioned that you were saving a lot of money yeah so what were you doing what was your job so initially i was working as an investment banker made good money there what was what was your salary back then it was in 2016 i think my first salary was 50 000 rupees 50 000 per month and how much were you saving at that point i could save around 12 500 rupees a month approximately it was nothing great okay uh but at that point i used to also invest in crypto so i made a lot of money there okay and then i got it back that time it was still legal to get it so it's 2016 this was 2016 this was when there was something called as an uh there was a boom happening in the crypto market so i was investing in ethereum at eight dollars and all of that i sold it for a very stupid amount 24 i sold it today it's at three thousand dollars i should have kept it but yeah i made good money there also so we took all of that then i started a company called avalon then didn't make a lot of money at that point because it was a startup uh eventually made a lot of money then through my creator journey i made the most amount of money okay so that was when the most savings came up in uh finfluencer era so you got 30 lakhs of capital yeah and then you started investing in the market then i started investing yeah because i think when i got the capital then it started becoming a little easier right and i didn't stop working that is something i would never do because i want to grow that capital from 30 to 50 to 70 to 100 yeah i think that is the mistake that people make yeah that they feel like uh if they learn how to invest yeah then they can you know just make money by investing money yes but what they forget is that you're fastest way of becoming rich is still going to be your income.
Yeah. Right? You should never stop that inflow of money.
So never, don't think that, okay, I'll learn investing, I'll learn trading, then I can just quit my job and retire. That's not the way, right? Because if you can get a 50% hike or double your income by switching jobs, what better way to make money than that? Yes. So I keep telling people like focus on your job, get an increment, increase the income to savings ratio, I call it, right?
Yeah. How much income you get versus how much you can save. So what is your savings rate? I went up to 50% at one point.
So my expenses were barely anything. I did most of the work myself. So I had this income to savings ratio where I could save around 50% of the returns.
And that started compounding faster than the market returns that I was getting. So capital helped me a lot. What does that mean?
So every month I could invest maybe 3-4 lakhs in the market. Now that 3-4 lakhs every month would calculate to almost 36-40 lakhs in a year. And on top of that, this was exactly at the point of the post-COVID bull run phase. So both of that together triggered my massive rally.
Got it. So 1.1 CR profit you made just last year. Just last year. Just last year. Now, when somebody is watching this video, they might think that, okay, it's very simple.
I'll make 30 lakhs of savings and then I'll start investing and then I start making crores. Is it that easy? No, man, definitely not easy. I'll tell you the biggest problem when it comes to investing. First of all, everyone's clueless, including me.
When I started with 30 lakhs or even before that, I would be honest, I joined telegram groups, mainly these bank nifty, nifty call option groups. lost a lot of money there. I could never make money in that. Lost a lot of money.
Then started following a lot of people to understand swing trading. You know, just following blindly. Okay, he bought it, so I will also buy.
Basically stock tips. Just stock tips. And I paid for some.
I looked at free stuff. I was on Twitter all the time looking at, you know, just my search query was CMP, current market price. So then you used to get all the people recommending. I lost a lot of money there. How much did you lose?
I would say if I had to calculate wasted money, easily 1 lakh. I would have wasted. just wasted on all these things right okay because the more premium it is you assume that it will be a better stock tip so it was useless then i said okay i'm not that dumb i have some knowledge like can i learn it by myself it's not you studied finance also yeah i studied finance so why am i listening to someone right so let me figure it out myself so then i started doing my own technical analysis i was a fundamental guy i was zero in technicals so then i started learning technicals from scratch looked at a lot of videos on youtube uh understood everything about technical analysis and then took bets with my own money I didn't do paper trading.
I jumped straight into it because I wanted to burn my hands and get that pinch. Then I realized, okay, this is not very easy, right? But there is a way to make money.
And then I realized it's not about technical. It's not about fundamental. It's about risk management.
And it's about you fighting with yourself in the market. So that came up a lot after a point. So eventually after a point, it was like, great, I was making 4-5% returns on each trade.
Now do I exit or does my greed take over? So whenever my greed took over, I lost money. Whenever I said enough, I'll find another trade to make 2-3%, I'm happy. So I play like that now. So I just come in, get out quickly, come in quickly.
3%, 4%, I'm very happy. Go to the next trade. And if I lose, not more than 1-2%. In fact, the stats say that out of all the people who invest in the markets, 90% are loss making. I'm talking about traders.
90% are loss making. Another 9% are just able to beat the FD return, which is 5-6%. And only 1% of the people are able to beat FD and make the alpha.
I'll tell you why. Because as I said, most of them are clueless, right? Most of them are following traders. So obviously you're bound to lose when you're following a trader because he's going to win more than you.
Obvious, right? Why? Why is a trader going to lose?
Because he's already taking a position and then he's informing you about that position and he's not going to tell you when he's exiting the position. It's not live. And even if it goes up by 3%, a lot of people do this in the market.
They say, see, it went up by 3%. I'm great. I'm God.
Right? But the point is it falls down. You don't know when to exit because he can never tell you that.
Right? Why? Why? Because if he tells you exit at 3% and if it goes up another 5%, then he can't brag about that. So if you look at all the tips today, everyone talks about 3%, 5%.
See, I spoke about this multibagger three years ago. But nobody tells you what to do when it falls, your risk management, your fear when it goes down 20%. Normal retail investor sells. Even I would sell if I look at my portfolio red. So that is where the retail investor loses a lot.
That guidance of handholding, I mean, you should never depend on guidance and handholding. you do it yourself you find it yourself you understand what is your profit you understand what is your happiness and then you're happy with that so shashank can you for the audience here can you break down all the different ways of investing in the stock market because everybody just thinks it's fno trading yeah but there's a multiple categories of investing the stock market multiple kinds of skill sets yeah that people have yeah so can you just break down all the different types okay so i'll just tell you uh i'll talk about my strategies okay so i've tried everything i do equity Then I started doing F&O. Now in F&O, there is a breakdown.
Can you tell the difference between equity and F&O? Yeah. So equity is like on the safer side where there's no leverage.
It's cash on cash buying. If the equity, the stock goes up 5%, you make 5%. In F&O, let's say you buy the same stock, right?
And if the stock goes up by 5% because you have 3x leverage, you would have made 15%. But similarly, if the stock goes down by 5%, you're losing 15% of your capital. So that is F&O.
That is futures and options. It is basically taking leverage to play in the same market. When you mean leverage, you mean taking like a loan.
Yeah, the broker itself gives you that margin. Gives you extra margin to play. So if I have 1 lakh, I can buy 3 lakh worth of shares in the F&O market. Whereas if I have 1 lakh in the equity market, I can only buy for 1 lakh.
So this is sort of like taking a bet, a gamble. Yeah, it's like doubling down. It's like in poker where you just double or in blackjack, you double down.
So that's risky, definitely. So that is the second thing. That is the second thing.
In F&O... this is equity buying in F&O. Then there is the intraday, which you buy index options, that is the most riskiest because it's very volatile. And every week you lose money.
If you win, you win every week or you lose every week. What is that intraday index? Can you just break it down? Like, imagine you're talking to your son who has just turned 10 years old.
So don't do it if I ask you. So we have Bank Nifty and Nifty options. Okay, these are indexes. Bank Nifty is the banking index.
Nifty is our Indian index. So every week. For the audience here, bank index is all the bank companies of India combined in one index. Nifty 50 is all the top 50 companies of India combined in one index. These are the most popular indexes in India.
Most traded indexes, we had two at one point. So think of it like a mutual fund which has all of these companies in one. That is what an index is.
That is what an index is. Now what the rule is that every month they'll have four option expiries. And I'll explain what this is.
So what this is, nifty is let's say at 28. 3000 24000 today. The next option is you have to bet or guess in the next week, what will nifty be? Can you do it?
So nifty is 24000 today. Next week, I have Thursday, what will it be? I have to guess guess will it be about 24000 below 24000 or at 24000?
This is the game that is the game in short I'm explaining. So if I say that nifty is going to be about 24000, then I buy a 24000 call option today. And if it goes up by 200 points, I make 200 points profit.
Okay, but if it goes down, I lose. Now till the last day of that week, you don't know what is going to happen. Some war happens, falls down, you're finished. Oh, okay. So yeah, that is why it's a little riskier.
Whereas in stocks, it's not like that. Stocks, you have one month to play the game. So in stocks, they say today, if one stock is at 100 rupees, what will it be at the end of the month?
So you have four weeks for that game to play out. So it can go down, it can come up, right? Those things happen. So in indices like Bank Nifty and Nifty 50?
Yeah. I have a one week time to play this guesswork. Yes. Whether it will go above this number or below this number or same number.
Yes. Whereas in individual stocks, if I'm doing for Reliance or ITC or whatever, then I have one month. Monthly contracts they call.
So, Nifty also has one week, two week, three week, four week. But most of them play one week because that's the highest chance of return you can get. Okay.
So, that is why most people lose money which is the intraday buying and selling because it's too volatile. If it goes down, it'll go down today. Right? Budget date fell down, screwed, right?
Have you lost money? I have lost money. I've lost money.
In fact, on the budget day, I lost money. How much did you lose? I think in 15 minutes, I lost 6 lakhs.
Okay. Can you walk us through what happened? I'll tell you. I had lost 5% of my capital that day. So I'd invested a good amount.
And this was late in the night. I was in US at that point. And I said, budget is usually an opportunity day because it's very volatile.
It goes up and goes down a lot. So I remember the market fell, fell, fell, fell on the... Sorry, this was election day, not budget day. Election day, my bad. So election day, the market fell, fell, fell.
It fell to a point where I said, now it can't fall more. Let me buy. Now I'm guessing that it'll go up. So I bought the option and saying it'll go up in a positive note.
It fell more. Now, obviously I'm in loss, but I didn't cut it. I bought more. So it'll go up from here.
I bought more. I bought more. It kept going down. Okay. Now, obviously next day it went up, but by then I was minus six lakhs.
Now the... Now it's the mindset. Now the mindset. Now, do I take a minus six lakh loss and say, dude, I'm done.
Let's cut it. Or do I play the next day? But if it goes down again next day, this minus 6 would have been minus 10. Obviously, I don't have that kind of guts.
I was down 5% on my capital, which is very bad because you're always down max 1-2%. Correct. So that is where greed took over my logic. And it happens even now, right? So you exited?
I exited. I took 6 lakh loss and exited. But next day, it actually went up. Yeah, but I would have recovered 6 lakhs only.
I would have not made money. But because my risk management was at fault, if I had cut my position at 1-2 lakhs, it would have not affected me. I would have slept peacefully.
That whole night, I slept in a very bad way. 6 lakhs lost in one day it took me one month to recover that that money it took me one month to recover that because after election it was little slow and then I got so scared that I just started doing equity buying normal equity buying no leverage and it took me one month to recover 5% no actually there is a saying let's say you have 100 rupees and let's say you have a 50% loss 100 rupees become 50 rupees now to make 50 rupees back to 100 rupees it's not 50% growth it's a 100% growth exactly So it's much harder to recover money than to lose money. Losing money is very easy.
That's why capital becomes a problem after a point, right? When I had 30 lakhs, it was easier to take decisions. Now when I have, let's say 1 crore or 2 crore of capital, I'm very scared to invest too much. So automatically you become a very conservative investor. Now I can't go all in, you know, take huge positions because I'll be wiped out tomorrow.
So in the market, I always believe that you should last. Yeah. So you lose today, live to fight another day. Market will give you hundreds of opportunities in life. Don't go all in today.
You can't become a crorepati tomorrow, overnight. It is not possible. You will lose it also in the same speed. So now that we've covered the dark side, now let's talk about the positives.
Okay. Tell me what has been your, some of your best investments in the stock market, which has given you multi-bagger return. In the past? Yeah, in the past.
Okay. So I'll tell you. So last year, I made a lot of money in one sector, which was the defense sector.
and the railway sector this is something i picked up much earlier so i do this thing where i read a lot okay so i was reading the manifesto you do this thing called read a lot yeah i do this thing called reading a lot by the way it will be shocked because most people don't read in the market they follow people and they invest according to that so i'm saying i actually do the grunt work right now i started reading the manifestos of the parties which is something that people don't do so i read the bjp manifesto what is what is manifesto so when they come into power Like when BJP came into power, they actually give you a manifesto that if I come into power, these are the things I will do. Okay. So I always track smart money. Where is the money going?
Where is the money flowing? Okay. So BJP was very vocally saying money is going to go into these three, four sectors. I'll give you an example.
Right. I think last to last year, we had a massive budget. Let's say we had 100 rupees of budget in defense.
They said out of 100 rupees, I think 80 rupees would go just in marine and air, which was two companies. I don't want to name the companies. But. 80% of the defense budget was just going into these two things. Now, there was only two companies in this space, which have to win.
So, obviously, the day this news came out, the market went up, these stocks went up by 5%. But it's not over. So, I bought it at that point. It went up by 70-80% in a year. Wow.
Right? Because I don't believe you're too late to the party. In one year, it went 70-80%.
Much more, it's gone. I exited at that point. I think defense alone grew by 160%. Yes, it went up much more.
But I said, no, I don't like greed too much. If it goes up too much, I start... trimming my positions. Valuations did get a little messy at that point, right? Public sector companies going up so much was too much.
The second company I made money was actually a food startup. I think this is something that everyone would know. But in hindsight, it was a food startup.
So I don't invest in that. You mean like a food delivery startup? Food delivery startup. So I have a rule that I never invest in IPOs because in IPO, it's a greed market. So I wait for the IPOs to get over, let the greedy guys go out, sell their listing day gains, let it fall down a little bit.
If it doesn't fall, great. But if it falls down, even better. So I waited, I tracked it, it fell, fell, fell, fell, fell. And then I started looking at a lot of interviews of that person, the CEO of that company.
And he said, next quarter, we're going to be profitable. Now, obviously, I don't believe what people say, because startup founders sometimes are true and false. I waited.
The next quarter, he gave a very small result, but it was positive. I said, okay, now this guy's on a mission. Because sometimes startup founders, when they go like that, they just do it, right?
I agree to that. I said, okay, let me take a bet. So I invested in that company. That gave me approximately 80% returns in the last one year.
80% returns. Even today, I keep investing in that company. Okay. Yeah, because he increased the fees. So I see this every quarter, he's adding something in the top line, which increases both the revenue and the profit.
So even now he added something called platform fees. Now that's automatically going to come in the next revenue. It's so obvious. So people were crying in the mug.
Everyone was crying about them increasing it by six rupees. I was like six rupees into last three months, into number of orders, into order growth equals to... wow, free revenue coming in the next quarter. So now I automatically know if the price is now overvalued or undervalued.
That's the power of, you know, once you become a monopoly or a duopoly in a certain thing, then you just control the market. And then you just, you know, add whatever kinds of revenues you want easily because it's become a platform. Everybody's using it. Everybody's addicted to it. And now you just can mint money.
You can just add two rupees, screw you fees and the market will go up. That's how it is. That's the beauty of it. So Shashank, now that you've given these two examples, now this is in hindsight.
Yes. Now for the people watching here, there are almost more than 6,000 stocks, 6,000, 7,000 stocks in the Indian market. Now, how many stocks are in your portfolio? 15. 50 stocks.
1,5, 1,5. 1,5 stocks in your portfolio, 15. So out of 6,000 stocks, if you had to give me a mental working model as to how do I sort of filter out the stocks that I need to invest in? Yeah.
What is that step-by-step methodology? Okay. So first thing I'll tell you is don't try to catch every rocket in the market.
Every day something is going up, you cannot catch everything. So that is the first realization. Because I've seen a lot of people when they invest in 10-15 stocks, then they'll be like, I'll take that also. I'll take that also.
By the time you realize what you have done, you have 50-70 stocks in your portfolio and you're diversified a lot. Now, how I choose my 15 stocks is I dissect them into inevitable sectors. I call this inevitable sectors.
Inevitable sectors. Inevitable sectors. What does that mean? What does this mean that whatever happens tomorrow, this is going to happen.
This will happen. For example. Will we move from 5G to 6G to 7G?
Has to happen. Will we move to green energy? Has to happen. Electric vehicles? Have to happen.
Electric vehicles I've been talking about since 2021 before Tata came out with their thing, right? I said, today or tomorrow, it has to happen. So why not play it?
A data center today. Has to happen. It's not a big theme today, but it will happen in the future.
AI also has to happen. AI has started now, right? And you see big IT companies coming into this AI workforce. So I look at first inevitable sectors.
Then I look at who is going to win in these inevitable sectors. right so this does not depend on government at all This only depends on the future of ecosystem, of the world. Macro. Complete macro. Global market forces.
Global market forces. So I said, okay, let's go. Now, if I look at that, okay, who's going to win in this space? So let's say, take data center, for example. I've listed out eight companies in the data centers that can do really well.
Now I have to cut the bullshit. How many will actually do well versus how many will not do well. Every industry after a point gets consolidated to two, three major players. any industry you take right every industry two to three major two to three major players give me some examples so if you look at paints industry there was one major player you had all the others right narrow lag berger and all of that but they're very small but one guy held the monopoly now that monopolies yeah asian paints now other players are coming and breaking the monopoly look at telecom sector there's airtel and geo and there's vodafone at a very small level now bsnl might come so you take a food delivery you have two companies again playing.
But banks is an exception. Banks is an exception. Many are there.
Even if you look at banks, HDFC has the biggest pie. HDFC and ICICI are the winners. The bigger pie, like I'm saying two, three big players will take over the entire chunk. Now, even if you look at Green Energy, if you look at Tata and JSW who are betting and Adani, three companies, right?
They're taking most of the big orders. And even if government orders are coming, they're taking it. Now, there are small players.
I'm not saying no. But they're so small that they get stuck after a point. The ceiling is capped for them.
This is a very interesting learning for me because a lot of people would look at investing like I'll invest in a smaller company. Yeah. Which can become a very big company. Yeah. This is a very different way of looking at it that once a company has established its foothold and has built very deep moats for itself.
Yes. It'll just keep getting bigger and bigger. Yes. So I'll tell you when that theory comes into correct perspective, right?
When I buy a small company, it will become a big company. That has to be a completely new player in a new sector, in a new environment completely. Like a food delivery startup.
Like a food delivery. It was never there. But a random guy came, two people came, and more than two people were there.
Food Panda also was there at one point. Uber Eats was there. Uber Eats was there.
They killed everything and only two survived. Now that bet is hard. So if you look at the stock market today and say, I have identified 10 players that can become multi-baggers tomorrow.
Out of that, only one might actually do it. Because tomorrow, if there is enough money in the game, in that game, Reliance will usually come. Adani will come or somebody will come and take over the entire space and then you are gone. So let's say okay I understood this so step one identify inevitable sectors. Yes.
In that sector you look at eight to ten companies which stand to win. Yes. And now you are also making this bet that not bet based on historical performance you are noticing that in every industry one or two companies take away majority of the market share.
Yes. Now your job is to identify from those eight or ten companies which are those one or two companies which will win and take majority of the market share. Exactly.
Now, can you go deep dive into this? Yes. Now, I'll give you an example, right?
So, let's say the energy sector. I don't want to go too deep into names, but I'll talk about surface level. Now, energy, I feel is inevitable. Today, if you look at the data, we are heavily a coal dependent nation. Almost 50% of our power comes from thermal energy and coal.
And India hates that because you have to import coal, there's a lot of cost. So, we're going into green energy. Plus, India has a goal of becoming 50% green energy by 2030. Yes.
So, it has to be inevitable. And... 2047 they're saying was almost correct so one of the companies came out and one of the major players right the two big players one of them came out and said by 2047 we will have only green energy renewable energy sources we will not have coal thermal and all we're shutting everything down because in green energy your margins are almost 30% EBITDA whereas in thermal it was 6-7% EBITDA what is EBITDA? your earnings before interest tax and depreciation means margins are more so basically for simplicity it's profits profits are more if profits are more cash is more if cash is more stock price goes up faster okay simple right so what i did was i understood this basic logic okay this company is going to win but what are they now doing to win are they passive or are they active then you start going into investor reports and you start looking at interviews of the ceos what are the ceos saying so ceo was like we are putting 2000 crores for expansion we are putting 5000 crores in the next three years for they made a seven-year roadmap i'm like okay this is a legit company seven-year roadmap Now, obviously, everything is possible, probable, right?
But if it happens, then my map is ready to win. So I start taking a position right now for seven years, not two, three years. But in seven years, that compounded would be crazy.
Because when the theme kicks in, when those margins kick in, the profit goes up, share price goes up, everything goes up. And it becomes a beautiful company. So this is one energy company that you're talking about. One energy company, for example, right?
But a lot of companies can make this announcement, I'll become green energy by this year. but how do you know that? They do it even today. There are small companies, big companies all doing it.
So this is where the founder's worth comes into it. As I said, I look at the interviews of the founder, I understand. So this is a group company and if it's a group company, it's even better. For example, there's Tata Group, Adani Group and JSW Group. Group means they're a conglomerate.
Conglomerate. Meaning they have a big parent company and multiple subsidiaries. Yes.
So for them, face is more important. They cannot come and lie to you on their face saying, I will give you 2000 crore investment. I'm going to do 2000 crore and tomorrow they can't come and say sorry.
Yes. So you know it's going to happen. Mariyade will go.
Mariyade will go. And analysts in the market will belt you. Right?
So if you have a group backing company, either Apollo Group or this group or Murgappa Group, that's why you see group companies tend to do predominantly well. And these group companies also expand everywhere. Correct. Even if you see Reliance, they've expanded everywhere.
Adani has gone everywhere. Tata has gone everywhere. And wherever they see money, they're going and putting a hand in it. And plus if one of the small companies doesn't do well, the group can support it. Support it.
Yes. They fund it, support it and do it. Yeah.
So. When you ask me, I'm looking at a multi-bagger today, okay? I have invested in that multi-bagger, which I feel is a 15-year play, not a 5-10-year play, inevitable 15-year play.
After 15 years, this will give returns, but it's a very kutty company today. But it is a group-holded company. So you have that kind of an investment right now? It's a micro cap. It's not even a small cap.
This is one of your 15 stocks? One of my 15 stocks that I'm investing for my son. Hopefully when he's 15, he should get a lot of money from this.
Or else I'm screwed. This is like your future HDFC kind of an investment? Yes. For me, I look at it as an inevitable sector in the future.
I see that would I be doing something like this in the future? I said yes, I would. I asked a few guys.
They all said they would. So that is a sector that would be inevitable. And it has group backing.
And that group, I'm tracking it. They're putting money into this company and saying we're investing 600 crores, 800 crores, 1000 crores that way. Plus you also have access to people, smart people who can also give you some advice.
I ask people, I track the private markets, I track the public markets. Moreover, I track US markets and I track a lot of China markets as well. So Chinese news is very difficult to come. So I read a lot of Bloomberg Asia. I look at some Chinese local news also to understand what's happening there.
Japan also is something that I track. Why? Because... what is happening there eventually cascades to the entire earth right i mean it goes to us it goes to india it goes everywhere for example in china they've moved away from lithium-ion battery which we're still so widely saying lithium-ion they've gone to something else only they made it much efficient much better and all of that eventually it'll come here what is that something else i think it's cadmium now they've gone to something else i don't know exactly but i know that they've gone to something else which gives a higher efficiency i recently read a news where the battery outlasts even a tesla battery so it's that good So they have come up with some better technology.
Some better technology, some better utilization of resources, right? Not lithium-ion. They've gone ahead of that.
Obviously, it has to be the same. So if that comes to India, somebody will do it. Some entrepreneur will get up and do it.
So you understand who's doing it here in this market. Buy that and sit down. So you're studying global markets and what's happening in these other developed economies to kind of predict the future for India itself. Yes.
Yes, I always do that. I don't believe in buying in FOMO and buying right now for this. I always keep a...
futuristic logic of three four years even when i do momentum and swing trades right uh which is heavily dependent on let's say this government like defense as i told you before that can you list the uh can you list the um the news channels or sources that you go through yeah for keeping yourself updated about the markets yeah so uh one is definitely bloomberg uh bloomberg asia is what i look at is that paid bloomberg asia is paid there's a hack if you want me to tell you a hack i can tell you how to get legal legally legally without uh any problems. So you can go to the Canada website of Bloomberg and paste the same thing. You get it for free because Canada there has a tie up with Bloomberg saying we cannot do paid stuff in Canada. So the exact same link just paste it in Google and write Canada Bloomberg.
You get the same link completely open. Okay. How much are you saving by doing this hack? Thousands of dollars bro.
I think almost 5-10 thousand rupees I would save by just doing this. Every year? Every year. I don't take the subscription.
So I just go there and get it out from there. So this is Bloomberg. Bloomberg for Asian news.
right wall street journal for us you read that i read wall street journal it's economist and wall street journal are amazing okay when it comes to macroeconomics i look very closely at what's happening with special situations like war i always look at things like who's gonna win like who's gonna win as in why is this happening there's always money involved so if russia ukraine is going on for so long something is playing out there right so it was for the red sea and there's a lot of other things there so i look at special situations like that in india i look at a lot of economic times money control live mint only these three rest of the things goes into other crap stuff but these things i do a lot and then i look at some tools also i have some paid tools normal tools where i do research so i have a very interesting question because we briefly touched upon geopolitical issues yeah so can you tell me the linkages because you know one thing that's very interesting for me is that how can a war eventually lead to a stock price getting going up or going down right so can you just connect the dots I know this is a very popular theme that you keep saying, you know, connect the dots. So can you connect the dots from a global geopolitical issue? Take any example, whether it is the US elections or the war that is happening and connect it to a stock's performance, any individual stock performance. Just connect those dots for me. So I'll give you a very nice example.
Okay, so whenever there's a war happens, there is an imbalance that is created. Okay, what is that imbalance? It's a demand supply imbalance that happens in something.
We don't know what that is. Let's say Russia, Ukraine, what happened? First thing you need to do is go look at what is Ukraine's major export.
Number one. Okay. Let's say Ukraine is exporting some material.
Now automatically that material supply is going to be affected in the market. So that has to be someone else to give that material. Then you look at who are the other top players in the space who can supply to this. So you look at China, you look at India, right?
In India, who are the players? You will automatically see this picking up. I'll give you another example.
When COVID happened. and China was banned from a lot of places, India became the next hub to come. So automatically, you are in India.
For manufacturing. And mainly pharma, right? Because at that point, they needed APIs to be created in India. All of them came to India and said, guys, do this.
So you know what is going to happen. If I tell you about Ukraine itself, the whole Red Sea issue, ceramic companies in India started having an issue because most of the raw materials for making ceramics in India was coming from Ukraine. Okay.
The particular material of soil. So they got affected here. So basically during the war, Ukraine was not able to manufacture as much as it can. Of course.
Because the focus is on the war. Yes. So because of that, their exports went down. Or basically they could not meet the demand that India needed.
Anyone needed. The world. World, okay. The world, not India.
So if I am exporting something as a net exporter and something happens in my country, the substitutes will come in every country, right? You find out who are the substitutes. If 80% of the substitute is China and 20% in India, that's enough. Because 20% Indian companies now you find. Who are the substitutes for copper or metal?
So basically earlier, Ukraine was the cheapest supplier of this material. Now because Ukraine cannot send it anymore, this next cheapest supplier will have to provide it. Correct. So during, like, just continue that ceramic example for me. During the, in the Ukraine war, Ukraine is not able to manufacture enough ceramic.
So India is one of the countries which is... Buying ceramic from Ukraine? Not ceramic. It was a raw material that is used in ceramics.
Some part of raw material that was used there, which used to be exported around the world, was suddenly affected. Because of that, the Indian guy got affected because now he had to procure it from somewhere else. The raw material cost was higher.
So somebody came in as a substitute to sell. Who is that somebody? Some other country. I don't know. He didn't do it by himself for sure.
So he had to get it from somewhere. So raw materials went up. Raw materials went up. The margin of that company got affected. Net profit of that company got affected.
Stock price fell down. You predicted this? Yeah, I understood that instantly.
So whenever there's a war, first thing you look at, what is export? Of that country's export. Of that country.
What about Russia is also in war. No, Russia is not getting affected. Russia is not affected at all. So when Russia did get affected, actually, that was beautiful.
Why? Because when the whole Russia-Ukraine war happened, a lot of sanctions came on Russia. Their currency fell down and the oil prices got affected a lot.
If you remember, right? Yeah. When oil fluctuations happen, paints companies get affected a lot in India because raw material of all paint companies are oil. Petrochemicals. They got affected.
Then immediately Russia was smart enough. They did a tie up with India. They did a tie up with Saudi and started selling their oil at a cheaper rate, which India bought.
But then we thought India bought, but then it was basically Reliance and all who actually bought the oil. And then they sold it to the West at a premium. So when they sold it to the West, automatically Reliance profit starts going up. Wait, wait, wait.
So the West did not want to buy from Russia. They couldn't buy from Russia because of the sanctions. So they swirled it to India at a cheaper rate.
India obviously took it. But India did not have the sanctions on it to buy from Russia. Why will India have sanctions? They did cry about it.
We said get lost. I'll give you another example that might happen very soon. China, Taiwan is on the brink of something happening. What is Taiwan's net exporter? What is it?
Semiconductors. Okay. Imagine a semiconductor shortage in this world. Because if China goes and takes over Taiwan, you need substitutes, which is not there. TMSE is one of the biggest players there, right?
If there's a semiconductor problem, all your auto stocks are going to go down because they can never fulfill the demand. So somebody else has to come. That is why India is so bullish on semiconductor, semiconductor, semiconductor. That's why they're giving a lot of subsidies for manufacturing semiconductors in India.
We need it fast. Because the demand is too much and the supply is predominantly coming from one side. Most of it. And if Taiwan gets affected, you're in a big problem. All the auto stocks will fall.
All the auto stocks will fall. So that's how you link everything. So can we talk a little bit about the future? So now the US election is going on.
How can I look at this from a stock market investing point of view? I think so. I'll give you some ideas, right?
So you have to understand again, what is Trump favorable on? First of all, he's pro crypto. So I think that we will see definitely some movement happening.
Second, knowing his relations with India and Russia, I think the war is definitely going to go down. I mean, in fact, I would say it would stop. In fact, that's already happening right now.
If you see Zelensky, he's already spoken to Russia and said, let's talk about peace. Because without Biden, he's not going to get funding to continue the war. And that is going to start happening. So everything will mellow down.
Everything will come back to normalcy. So why wouldn't Trump not support Ukraine? It's a waste of money. First of all, Trump doesn't want to support... Right now, Biden is supporting Ukraine for the war against Russia.
It's not Biden. It's the war companies behind Biden that are actually supplying arms and ammunitions. There are two, three big companies.
Their stocks went up by 150% in the last few years. They are supplying arms... to Ukraine for billions and billions of dollars.
And they're also giving aid and aid and aid. And Russia is fighting back. So Trump has clearly come and said, if I come, this guy's not getting any money, you can do peace talks.
And they will do peace talks and they'll settle down. So that is what is going to happen. So good, no?
Very good. Because stability comes back into the market. Gold prices will start coming back to normalcy.
Gold is almost at an all-time high and now it fell because of the duty change. Correct. But that is also happening.
hmm so a lot of if you ask me another question about the future what else might happen if you have you heard of this term called de-dollarization yeah yeah so that is going to be i think might trigger the next financial meltdown i think that would trigger one of the biggest financial meltdowns in the future can you just break it down for sure so now everything happens on the dollar even we hate dollar but we're pegged to it. Everyone hates dollars because they can just print as much as they want. How did we get to this point?
Like how, why is the whole world dependent on the US dollars? So a long time ago, someone made a genius decision that everything in the world would be pegged to US dollar because they are one of the most stable currencies in the world. And we all agreed.
Everyone agreed. Why? Because that time they were the superpower. Okay.
So that was that time. Russia was not that, USSR broke. This is the 90s and 80s.
Much before that. Okay. So dollar was considered like the, single most peg for everybody then the problem what happened is you keep printing money it's a problem because you trigger inflation hyperinflation but if there's demand for that money you have no problem so that's what they're doing world demand is there for dollars so you keep printing right now the problem is if we do de-dollarization which is russia so that is how the u.s can keep printing money because there is demand everywhere yeah so you keep printing money and dollar keeps going up how is that possible somebody is buying that dollars right correct So your war is being funded in dollars. When you mean dollar is going up, you mean the $1 is now 84 rupees.
Let's keep going up. Yes, because the value of dollar is going up because you want to buy more and more dollars. So somebody is buying dollars from the market. So if there's a Ukraine-Russia war, it is funded by, let's say, US dollars. So Ukraine has to buy ammunitions in dollars.
So you go buy in the open market and give me dollars. So you can print as much as you want and it goes up. So the beauty of this strategy, what de-dollarization is, what we call it, Is that the Southeast Asian countries or the Eastern countries like Russia, China, Korea, India and UAE are saying we don't want to use dollar anymore. We'll trade in local currency. We'll trade INR, rubles, AED or whatever.
So we'll go as much away from dollars as possible. Now imagine half of the world is away from dollars. What happens to your dollar? They'll implode because the debt is at an all time high.
How will you pay now? So this is the strategy that you screw yourself by printing. You print it too much. Everyone knows you printed too much. So you have shot yourself in the foot.
But because we are buying it, you're not getting affected. The day we stop using dollar, you are finished. You will implode.
Hyper inflation kicks in. So how do I know if a country is printing too much money? Because everybody is, you know, finally understanding how bad inflation is.
Yeah. You know, until now, inflation has always been like this hypothetical thing, right? Yeah. Yeah. I know the price of good is increasing.
Yeah. But I can't really see it. So who cares? Yeah.
But in the last one or two years, we've all actually felt it happen, right? The price of goods have increased. Yeah. And people ask, you know, why is the price of goods increasing? It's because of this phenomenon.
Yes. When the government is printing more money. And it's... Earlier, if there was 100 notes in the country, divided across 100 people.
Now, if the government all of a sudden prints more 100 notes... The first set of people who had the 100 notes, their value becomes half. Correct.
Because there is two times more supply in the entire market. So that's how inflation works. Yeah. So how do I sort of know if a country is printing too much money?
So have you heard of this term called there's too much liquidity in the market? Yes. You might have heard of this, right?
Yeah. So usually the Fed chairman, which is US Fed Powell, or if you look at our RBI, they come and give these talks once in a while, right? So they talk about inflation.
They talk about money. They talk about the liquidity in the market. They talk about interest rates and all of that. So whenever too much liquidity is in the market, everyone starts spending more.
Now it's not like the government of India will take money and be like, Shahran, take this money, put it in your pocket. No, they give it to the banks. They fund the banks with a big amount of money. So the RBI will print and give it? Print and use it to the banks.
They have a mechanism where they, I'm giving you a simple version, right? They have a mechanism where they fund the banks to distribute their money. They print some money and give it to the banks. Yes.
So they give it to the banks. Banks start, banks are the medium to... spread it across whether in terms of loan or whatever it is they spread it across eventually it falls down so they give more loans to companies right companies will do better right if companies do better they'll employ more people if they employ more people everyone makes more money so that liquidity is in the market and interest rates usually come down at that point so to fuel more growth so if your interest rate is at eight percent nine percent you can take interest and grow your business faster if it's at 14 you can't do that so when a liquidity fused run all companies start doing well and we saw that in the last three years, all companies did well. Companies will hire more people. Everyone's standard of living goes up.
If everyone's standard of living goes up, what happens? Everyone can afford an iPhone. If everyone can afford an iPhone, what happens? Inflation kicks in, cost of iPhone goes up. So that's when the government starts getting scared.
Saying, oh, we've funded too much into the system. So printing more money is good, but it has to be done in a very sensible manner. It's like a tap. It is required.
So when you open the tap, growth is started. But when too much growth happens, inflation is a... automatic byproduct of it.
Everyone has too much money. Now you have to start switching off that tap. How do you switch off the tap? You say now interest rates are higher. FD becomes more attractive.
Suddenly FD rates will become 8%, 9%. When COVID happened, what is the FD rate? 6%. What is the home loan interest rate? Barely 6.5%, 7%.
Everyone went and bought a home. At such a low rate, you'll never get in your life. Now it's come back to 8.4, 8.5 is what SBI is giving.
It'll eventually go to 9. If it goes to 9, who's going to buy a house? 9, 10. Doesn't make sense. Where will I go invest?
Back to FDs, back to your safe assets. It's like a tap. Interesting.
So Shashank, tell me this, you've spoken about so many things, like it's a information overload over here. But let's say now, if I had to speak from the perspective of somebody who is just getting started investing, and this need not just be an 18 year old, 20 year old college kid, it could also be like a 30, 35 year old middle aged person who was sort of thinking, okay, I missed out on this entire investing journey, I've just kept all my money in FDs my entire life. maybe I have put little bit in mutual funds and all of that but I want to become like Shashank I want to start investing in the stocks yeah first tell me what kind of returns can I expect by investing directly in the stock market okay so I think in the last few years people have got a little unrealistic with expectations what is your returns I mean I got almost 58% in one year and then 107 in the second year so almost 150% in two years okay but that was again not because I'm some massive genius or whatever it's because of the market also was up so much right market went up i had a slightly better edge over the market great it was good because anything you touch today so that's like a 60 65 percent cag yes and i would also say it's because anything you touch is turning to gold so it's all about what you touch today but in the bear market if i do well then you tell me okay shashank this is a good thing so only once the bear market comes is when half the guys will get reality check right so realistically what to expect i think if you take a five to ten year horizon i think 18 percent 16 to 18% is great. 16 to 18% CHE. It means you're doing very well if you're doing direct equity stock investing.
It means you have to beat Nifty, which is around 12 average. Get 15, 16, great. Keep that kind of an expectation.
And Warren Buffett gets around 19, 20%. Yeah. He gets 20, 22 sometimes, right?
And what? You grow your money. Every three years, four years, your money is doubling.
Now do that math. Every four years, my money will double. And I'm working hard to increase my income to savings ratio. And I'm investing in that. And I'm constantly keeping and finding good stocks and continuing the 17, 18 average.
And then you have this weird bull market that comes once in a blue moon where you can double your money in two months, two years, which is what is happening with most of the people. You make a lot of money at that point. Clearly. Yeah.
You become a crorepati. But then don't take that money and put it in an immovable asset, right? A lot of people do that huge mistake. I have enough money to buy a house.
I have told my wife and my kid also, if you ask me, I'll be like, not now. Only when I'm, my target is 2030. What? To buy a house.
My own house where I'm going to stay. I look at it as a, not an asset, as a liability, right? Because I'm staying in it. It's not giving me rent.
It's not giving me anything. Only expense is going out. Correct.
So 2030 is when I would think of buying a house. After, I hit a capital target of 8 to 10 crores. Okay.
After that, I want my... What does that mean? Capital target?
So today, I have a capital of 2 crores. Okay. Right? I want to keep growing this investing.
I have 6-7 years to do it. I should reach a... My goal is to reach 10 crores when I'm 40. So I have 8 years to do it. I'll get there. Just by compounding, I'll get there.
So I don't have to do something crazy. If I reach a 10 crore capital of my own, then just from interest, I can make a nice house. Again, I won't go over and beyond my luxury. I'll maybe put 1-2 crore down payment.
And with the remaining 8 crores, I'm still growing in the market. So I recently went to Bangalore last week. And as soon as you land in the airport, you know, you see all those new properties which are coming up.
Very interesting thing in Whitefield where you get these villas. Villa projects. In the vicinity of a jungle. And I saw some 12 crore property. Very, very...
4-5 crores has become normal now. 4-5 crores has become normal. 12 crores is ultra luxury. If I have 100 crores, I would definitely buy a 12 crore house. But if I have 15 crores, I would not buy a 12 crore house.
You would spend like 2-3 crores. Yeah, I would put down payment of 2-3 crores, take everything on interest. And see, that's what the beauty is, right?
Interest is what? 8.4% is housing interest. Market is giving more. In fact, gold is giving more than interest.
Leave market. Market is also giving more. Why would I lock myself with interest today when market is giving more? There will be a point where market doesn't give me a lot. That is when I start buying this because if market is down and we're in a bad state like a recession, housing property prices have to come down.
So you've made your chunk here and now all the guys are selling at distress sale. That's when you pick up. So we talked about expectations in the market. You said that the expectation is around 18 to 20% returns. But how do I get started?
Assume that I have no degree in finance. I'm not a CA. I'm not a CFA. I'm not an MBA degree.
How do I get started? So I think that's a myth also. So I'm not a CA, I'm not a CFA. I just like numbers. I learned it.
I, undergraduation was in finance, but I would say I'm not even close to a CA's knowledge with respect to accounting, right? But I honestly believe that people overcomplicate investing. It is not that difficult. It is more with common sense and logic, but I can make it sound very complicated to look smart. As simple, I'm a quant doing this alpha, beta, gamma, market neutral.
I can also talk about all that. At the end of the day, you're buying something, selling something with the hope that it'll do well, with the logic it'll do well. So if you ask me, if someone wants to start off, definitely start reading a lot about one sector.
Pick one sector, become the king of that one sector. I started this. I had a goal.
Every year, one sector, I become the king. So anything happens in that sector, I will know at the back of my head, I don't even have to open the company. So that was, I took IT sector as my first target.
IT is very big. But how do you start? Like, let's say I have no degree, nothing, no finance. I only have this Google in front of me or chat GPT or whatever it is.
What do I type? So go to a website called screener.in, free website. Okay. Go look at all the top IT companies.
There's TCS, Infosys, HCL, all the top guys. They all release something called investor presentations. That's your first way to go. Okay.
First thing to read investor presentation. It's a PPT. you have to read a ppt read the ppt understand what tcs is doing understand what is the growth part what are they investing in what are they doing second it is more tedious they have something called conference call okay every investor does a conference call it's a 16 page document read it or upload it to chat gpt or claude and say give me a summary of this it'll give you a nice summary you do that i do that i just put it up and it gives me a summary i read that third thing what i do is after understanding the sector understanding this i do it for into 10 into 20 companies it takes time Third thing, there's a website called Value Picker.
Again, completely free. It's a forum of people just talking about stocks, individual stocks. So you search, let's say TCS, you go and everyone, now everyone smart guys in one room talking about everything, good and bad, unbiased.
So I would say there's no shortcut. You have to read. You have to become knowledgeable.
Every person in the market who's become rich, whether you take Rakesh, Anjurwala, Ashish, Warren, everyone has a common thread that we have read. Okay. Correct.
Once you read, you understand patterns. Once you understand patterns, you are more give me an example so one year let's say i picked a sector you're not ecs let's say it sector you're a king now one year i studied all i did all of these things that you said yes i went through the investor presentation yes i went through the con call transcripts yeah i will also go to value picker and see what people are talking about these stocks i do this for one year yes and i become very knowledgeable yes then you mentioned understanding patterns can you give me an example of that how do you what do you mean by that i'll tell you now very simple actually ai became a new trend We realized AI is going to become inevitable. Again, AI is inevitable, right? If AI is going to become the next big thing, what do you need to fuel AI?
Chips. Okay. So what was the only chip manufacturing company in the IT world? NVIDIA. NVIDIA and AMD.
Both. So you have only two options. Intel is, I would not count Intel in the race.
NVIDIA and AMD. If you take a bet on both, when the AI gen started, you would have made money. Correct.
Someone has to win. The same applies to India. You come back to India and say, if I'm looking at... How much NVIDIA shot up? Since the AI boom happened?
I think almost 4-5x easily. Actually more 10x-12x or something it went up. I know people who joined with ESOPs who have become millionaires now.
Okay. But it's very simple. It was common sense.
If AI has to do well, computing power is going to increase. Now I'll tell you the second step. With AI coming into the picture, data is going to become more and more important.
And data is inevitable. So you have to have data centers. So now if you have data centers, somebody has to provide technology to data centers.
Now you are Sharan who's done entire research about the IT space. Now you know exactly which company is now planning to enter the data center with a product. You're going to make money now.
Now is it going to happen today? The data center will come after three years. It's because I've already read some investor presentation of a company, of a data center company. Not data center, IT company who's saying we are now making a product to supply to data centers. Okay, again.
Backward integration. Yes. Got it. So data center has to use some tech.
And you have read Concord, so much you've read. And the CEOs only are telling you that data center theme is picking up. And we're currently talking to a customer in the data center space to build a product for them. That's your cue. Interesting.
Give me another example of pattern recognition. Okay, cement industry. Okay. Very interesting.
Okay. This is something that a lot of people are talking about. So if you look at cement industry, first thing you look at, little macro. what is happening adani went and bought two companies ambuja and acc now he bought another pinar industries order three companies he's bought ultra tech cement which is the other player has done the biggest capital expenditure means manufacturing plant biggest till date so this guy is doing it following him all the cement companies are now doing huge capital expenditure now you might say this is crazy because so much cement will come more revenue more growth etc but also this has to be funded exactly with the growth of the nation infrastructure demand So if the infrastructure demand has gone up by 20% and the supply has, demand has gone up by 20%, supply has gone up by 20%. So it normalizes.
But what if the demand doesn't go up tomorrow? What if the road projects get delayed? This guy's made a huge capex and he's sitting. So he's going to underutilize his factory. Then what will happen?
He will start selling at lower prices because it's commoditized. So margins can get affected. So now automatically, you know, that was, this is risky, right? If this theme doesn't play out, then cement companies will start losing money because they have to now have price war. because everyone has inventory.
They have to sell the inventory somehow. If this comes up by 20%, this should support it by 20%. This is ready.
If this fluctuates, so tomorrow if they increase the allocation in the next budget, then this will rise. It's the same. They have not increased that much. The infrastructure budget has not gone up so much. Defense has got the most.
4 lakh something crores it's got. Okay. So this is ready.
We knew this information. So companies got ready for this information. But tomorrow if something goes wrong and this falls down, I would start shorting these companies.
How do you short? What do you mean by short? Shorting means, and again in the futures, as I told you, I would take a short position on it. You are betting that the company stocks will go down?
Yeah. And the next one month. So that. Or I would not touch that company.
If I have any positions, exit it as a normal investor, buy some other company. So one question I have Shashank is that, why should I research about all these things? Why should I keep myself updated about, you know, the individual company's performance?
Why should I read about the macroeconomic changes in the world? When I can just give my money to an expert fund manager, like a mutual fund company. Like why should I put in all of this effort?
Because you said it takes a lot of hours and research to do all of this. Why should I do all of this? If I can just give my money to a mutual fund manager.
So I would say it's not wrong. What you're saying is also completely right. I know so many people who have become rich by focusing on their job, getting huge bonuses, huge salaries, and the bonuses goes into the mutual funds. And they have made good amount of money in the last few years.
The people who want to make 2-3% extra and you believe you are smart enough to beat a mutual fund manager, then those guys should come into this. But the problem when you come into this is you have to give time. So if you ask me, I work Monday to Friday in a job and then Saturday, Sunday, is when I do my full research. So two days, I spend almost three, three hours each day.
Okay. And I do research. Randomly, my favorite website is ScreenHud. I simply go, check what's happening. I look at all the stocks.
That's like scrolling through Instagram for you. That's my scrolling to Instagram. Okay. So it should become that enjoyable.
Yes. And even the people I follow, I mean, not follow, but my Twitter feed is only stock related. So I understand the pulse of the market.
So I look at what's happening, what theme. I look at my friends on YouTube. What are they posting?
I look at their videos also. In... In India, people always look at competition, right?
I look at not competition. I'm like, okay, he's identified something that I might have not seen. So I'm going to make money out of him. Thank you for identifying this theme.
I'm going to watch your video and I'm going to make my own brain and put my money and make money. So I look at all of these things. So yeah, reading, watching comes a lot. So two hours every weekend.
Sorry, two hours, two hours, four hours every weekend. So in a month, you're spending almost 16 to 20 hours. Easily. Researching about the market.
So if you are somebody who can commit this kind of a time. Only then you should venture into the markets. Or else mutual fund is fine. There's nothing wrong with it.
Mutual fund is completely fine. Again, but also in mutual fund, I would say you have to give time. You have to look at your mutual funds. Are they performing?
But you wouldn't give 20 hours a week. You would maybe, a month you would maybe give seven, eight hours a month. But time is given.
It's your money, right? So that's how it is. So now, Shashank, I want to go a little bit into the microeconomics, right?
Let me go into the financials of a company, right? Because you talked about the surface level the top level analysis yeah like that's a top-down approach yeah now let's zoom in into one particular company because as soon as you open the pnl it's all numbers yeah right and might be very overwhelming and confusing for a large number of people it is and people will be like i'm not c i'm not going to look at this yeah right yeah number one what exactly should i look in the company's financials to you know like some very important things that i need to look at in the company's financials and number two even if i have no no understanding of, you know, if I don't have any degree in finance, what can I do? Can I even do this or not?
Yeah. So this is something I tell my students as well. Right. So I'll give you a very simple example. Look at this mug.
Okay. So if I'm a company that manufactures this mug, what I look at in the P&L is last year sales versus this year should be higher. Common sense.
Okay. The profit I've made on this should be higher. Common sense.
If it is lower, I'm not touching this company. Something is wrong. Meaning that expenses have gone up, but something is wrong. expenses have gone up but sales have not gone up subsequently or sales have gone up but their employee cost has gone up so their profit has gone down so I want a company for a company to be good and grow that means the company has to make more and more revenue and more and more profit right I can't be like a startup who doesn't make profit so if the company makes more profit automatically the share price will go up now second thing I look at so in the P&L what I look at I'll tell you sales growth last five years sales growth last five years operating profit growth means all the expenses that are cut operating profit growth and net profit growth final after tax how much am i getting if five years this trend is upwards already you have half the winner ready okay okay second half i go to the balance sheet balance sheet i only look at two things one is how much loan he has on the books and how much cash he has in the bank if my loan is 500 crores and my cash in bank is 100 crores run away run away okay yeah or else he will go to london so either or right one of this is happening so if the loan is more than my reserves i would be very careful Okay. Right.
Unless it's like a power company or a bank company where loan is important. Normal company making manufacturing like this loan should not be so high. So there's a debt to equity ratio. So I would want the debt to equity ratio to be less than one. That is great.
Okay. Third thing I look at cash flow positive. Every year, the company should be investing some amount of money to grow his fixed assets.
If a company is growing his fixed assets every year, What does that mean, fixed assets? Plant and machinery, manufacturing facility, building a bigger office. That means more sales is coming in.
Basically investing for making more money. More money, exactly. Not investing to lose money. So he is investing in the right places where he is buying fixed assets of the company.
So if the assets of the company go up, then the logic is the revenue should start going up as well. so if all of this is there these three things in the pnl balance sheet and cash flow it is great last fourth thing which is situational if the promoter or a founder is buying more and more of his own company it's amazing because he knows more than you obvious yeah so if you are buying your own share that means i know that this is going to do well or else i'm not an idiot yeah so that is a positive trigger but if i'm now selling my shares at this rate i know something is coming in the next two three quarters that might not be great right so it depends on how much also So all of these four things I look at. And can you talk about some non-conventional things that people do to get some insider information about that stocks? Man, I mean, insider, not in an illegal way.
Things that I can see while you're in the open. Like there is this famous book written by Peter Lynch. Yes. One upon Wall Street.
And he talks about a lot about things that you can see in your immediate surroundings. Of course. Which sort of helps you make better decisions of investing in the stocks. Yes. While opening the, you know, the company's financials is the brainy way of doing it.
Yeah. There is also the street smart way of looking at it. Yes. So can you give some examples like that?
Yeah. So this is called scuttlebutt investing. Scuttlebutt. Scuttlebutt. You go and do like groundwork research, right?
Funds do this a lot because they have access. A fund will call a company and say, I want to come see your factory. They'll be like, yes, sir, please come. Because funds have a lot of money.
Funds have money. If I come and say, I want to see your factory, it'll be like, get lost, right? So I'll tell you an example, okay? Last week, I went to a data center in Navi, Mumbai.
There's a very big data center in Navi, Mumbai. Because I'm a customer there. So I said, I want to see it. they don't know my company's AI is there in that servers so I said I want to come and see when I went there I asked him questions like that diesel generator what is the name of the company he told me it's a listed company great I said thank you sir then I went I said okay what is this electrical equipment he said this is the company I'm like oh any other company yeah we use that also okay so both were listed companies then I went blast chiller you need blast chiller great water management Great. I made a complete list, made a post on YouTube about it and put on the group as well.
And I said, this is what I've seen. Right. But now all the companies are overvalued.
So I can't invest in them. But this is how I start doing things. So everything I see, it's become a sad thing, actually.
Everything I see, I'm like, what are you seeing here? Here, I would see if I had to look at this place as such, I would look at, OK, what wires are you using? First of all, because there's only four big players in the space.
So I'm like, okay, these wires are being used a lot in Mumbai. That means if Mumbai is growing, then this wire company will grow. And if this wire company grows, then I can predict that the stock price might go up a little bit.
Might, not saying it will. So that is what I would do. So your mind is always connecting the dots. You're always like that.
Sadly, yeah. It's fun also. After a point, it gets irritating also because I'm on vacation with my wife and I keep looking at, oh, this airplane. So many people are taking Indigo today. Very interesting.
That actually also does a lot. So if you look at the air traffic data, it gives you a lot of insight into what is happening. Yeah. yeah air traffic data is given out monthly airports footfall is given out monthly so with that data you can predict a lot of trends as well so shashank now tell me about the future like what are you thinking like you seem like somebody who's like a walking uh you know stock genius if i may put it that way right you just understand you just understand everything and you're able to connect the dots like you're just you can just look at something and you can figure out what's happening yeah But are you going to do something with the superpower?
Are you like planning something big? Yeah, I mean, I have a lot of friends who are also HNI's who have come up to me and said, boss, I'll give you money, please manage it. I said, boss, I don't have any license. You know, Sebi will catch me and screw me. Currently, I'm enjoying with my own money.
No liabilities, no tension. But a lot of my friends are pushing me to get this done. So I am in the process of getting an RA, RA license. And eventually next year, I think I'll start my own PMS, Portfolio Management Service to start.
investing my friend's money. That minimum 50 lakh investment. 50 lakh investment for that.
And with RA, I can do small case. I'll give one check. Thank you. More than 50 lakhs.
More than 50 lakhs. Yeah. With RA, I can do small case, which is more like helping the retail investor because there you can price it lower.
But eventual goal is that I just want to do full-time stocks. Right now, I'm not doing full-time stocks. But in the next nine months, I think I should...
You want to quit your job and do full-time. Yeah. I love it.
I love it. I think you should do what you love. And I love it.
And I would say I'm fairly good at it. Not great at it. because I want to test myself in the bear market.
If I do well in the bear market, I'll come back for the podcast and say, I'm very good at what I do. And if somebody wants to, you know, learn from you for like, you know, live learning from you, what should they do? So I have this thing that I do with 1% Club. This company?
This company, yeah. It's a damn good company. Yeah. This one, yeah, yeah. So we do a masterclass every week.
I think the link we can share. So we do a masterclass every week where I teach them how to understand fundamental analysis, how to look at companies, how to connect the dots. And how to find multi-bagger companies. So if you guys are interested, I think people can definitely come and watch.
So I can ask you like questions and all here? Yeah, of course. You can ask me questions. It's very interactive.
It's me. Okay. You come and teach.
Not just that. Apart from this masterclass, I think every week on Saturday or Sunday for one, one and a half hours, I sit with my students and we talk every single week live. This is inside the 1%?
This is inside the 1% club. That's very exclusive. That's only for people who are... So that's again, you weekly analyzing what has happened. Like this, whatever we discussed today.
Yes. Like that you're going to analyze on a weekly basis. So I do four hours every week. And I ensure they get one, one and a half hours every week.
And I give them a lot of documents, PPTs, fact sheets for them to look at and learn. So basically earlier we said that to be a serious investor in the stock market, you need to come at like four hours every week. But you sort of also share your learnings with your community members.
I cut it down by two hours for them. So it becomes very, at least get a direction. The problem is you go on YouTube, there's 50,000 things. So you're going to invest everywhere. So I give them a direction that this is how the market is going.
this is how you should be thinking these are good sectors these are bad sectors be smart about your money cool Sushant any last words for people who watched till so long I think you guys should look at the market now I think next 3-4 years we will be very bullish going forward we are still going to be bullish yes till 2029 we should be bullish or till 2028 at least so if you are planning to make money be smart you will make money who is not planning to make money yeah so be smart make money after that you will see the bad side Then we will not make a dip. Yeah, 100%. We will have a dip. So prepare now for that dip.
Also guys, he also has his own Instagram and YouTube channel. Shashank Gudupa. Please hit him a follow.
Because he, like how many videos are you posting? I do four lives every week. And I post around four videos every month. Perfect.
So four lives every month, four videos every month. Follow him there as well. And thank you so much guys for watching so far.
It was an incredible learning session for me. You know, I'm not somebody who is an expert in this field. And that's why I have friends like Shashank to help me understand this incredible world of the stock market.
Thank you, guys. Thank you, guys. And I'll see you in the next one.