The last two weeks have been sensational to say the least. There were multiple days when the portfolio was up more than 3% in a day, which made up for almost 15% jump in two weeks. I wanted to shout out loud but restrained myself for a silent Yessss!
I must confess I’m a big, big believer in the RJ model of investing. A young man with nothing can come to the markets and make it big, very, very big on his own. The legend has done it and deserves all the respect we run over each other to shower on Buffett, Munger and Lynches of the world. He is and along with RK Damani, the real hero for millions like me.
So why did I mention RJ today. Well, I’ve a lot to thank him for. None too much than the multiple interviews he gave over these years, narrating his journey from 5000rs to $5B. One of which stand out for me. It was Madhu Dandvate budget, when his networth went 10x in a matter of days, ofcourse due to massive levered trades he set out on. This line has been engraved in my mind everysince the first time I heard it, sometime in 2019.
I used to live in Imphal then, living alone in a sleepy town with nothing much to do. So after I was done with work and working out, I devoted sufficient time reading investing books. Then I stumbled upon YouTube videos of many a legends, inter alia Peter Lynch, Seth Klarman, Howard Marks, Ramdeo Agarwal and ofcourse RJ. As I didn’t have much company, I used to play these videos in background and hit the bed. So they all basically talked me to sleep for almost an year.
Some, if not all of the words remained in my head subconsciously and when COVID crash happened, I realised I was prepared to take the plunge. Seth Klarman’s legendary line was my guiding force- ” we don’t think the world is ending, we couldn’t think how people could think that the world is ending, the world doesn’t end that easily.” This was Klarman narrating how he invested almost half a billion dollars every week for three months back in 2008 Lehman crash.
Similarly, when the bull market picked up, I was reminded of how Raj’s networth shot up multifold in less than a year, back in 1980s and also how he made the biggest killing of his life in 2002-07 bull market, by being fully invested in the dumps of the bear mania.
All of this has given me the vision that being a successful investor requires the vision to buy and patience to hold through thick and thin of a stock. TaMo has just conquered Mt. 500 after 4 years but it isn’t even the beginning of what it can be five years from now. Like I have recently wrote, how Nick Sleep has held Amazon all the way from $20s to $3600s, it’s not about how much you make when a stock goes up, it’s also about how much do you leave on the table after succumbing to the temptation of profit booking.
If a stock goes up 100x in 15 years, and you sell it even after first 5x, you’ve left 95% of the money on the table, after doing all the hard work and just by being less patient.
In an investing career spanning thirty years, if you can find ten 10baggers, ie ten stocks which you own which goes up 10x in price, you’d be very, very rich by the end of it. If you’re lucky, and even two of them turn out to be 100 baggers, you’re bound to be sipping champagne on a private yacht by the time you’re 50.
So hold on for the vision takes years, if not decades to unfold. You might be having a portfolio of 5lakhs today. But, if you stay put, it will be worth 5cr someday. Don’t hurry up to sell out. Give yourself a chance to be seriously rich. Markets will take care of everything else.
Life is all about Compounding! 