I’ll be very honest here. If you really had the skills to 3.5x your portfolio in 3 years, starting in 11th grade, then you’re already far smarter than the average investor that you’re gonna find on this forum. So my advice will not be on how to invest, but more on what to do to maximize your wealth creation:
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Increase your allocated capital: 3.5L, while an impressive figure, is still too small. The good news is, you’re very young, and I presume you haven’t entered the workforce yet. Get a decent job. Try every trick in the book for saving as much as you can from that job. Build cash reserves. In the immortal words of Charlie Munger “The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do – if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.” In short, get to 50-60L of capital and see the magic happen from there.
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Understand that the stock market isn’t the only means towards wealth creation: I don’t know about your financial situation, so take this piece of advice with a grain of salt. Everyone in the markets is out to make money, and that’s perfectly fine. But only knowing capital allocation as a skill puts you at a significant disadvantage compared to technologists, entrepreneurs, scientists and even atheletes. I’ll give you an example: I was invested in MCX for a while when it had dropped down to 1600 levels and the Q1 FY23 concall was held. MCX, for the longest time was trying to move over to a new trading platform, after having demerged from 63 Moons (long history there, but you don’t need to know most of it). However, this shift was constantly delayed due to the platform not having completed the requisite software testing and auditing. On the concall, almost all of the capital allocators were from a financial background and were asking questions on how much work had been done on writing test-cases for the trading platform. Even the management (all financial folks, since the CTO had recently resigned), were quoting the numbers that their software vendor had probably given them (which was about 95% in their own words). To a capital allocator, a 95% test case completion sounds like “only 5% work is remaining and the platform shift should happen soon, perhaps before the next concall”. However, any decent software engineer knows that the last 5% of the test cases in any software production environment are usually the hardest (and humans, predictably, tend to cater to them at the very end, because everyone wants to do easy stuff first). I was able to pull out of the stock based on my intuition as a software engineer while I believe the market still kept the stock bouyant at 1550s till the next quarterly results. When the results came the following quarter and the shift had still not happened, the stock dropped to 1350-ish, at which I entered. The stock has now done very well, though I exited after making a 2x on it. In short, my training as a software engineer allowed me to see things that a lot of the seasoned financial people in the market were not able to see. You should try and learn these niche skills, and exploit them when the right opportunity comes to you.
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Have a clear understanding of what you want from the market: If you’re looking to increase your capital to a few lakhs, you’re much better off just doing a job and saving money from it than looking at capital allocation. If you wish to make a few crores and then retire, do a job, save from it, and then intelligently invest in opportunities that present themselves to you. If you wish to make hundreds of crores, realistically, your best bet is doing all of the above and running your own business. In the end, there’s only three types of people that become ultra wealthy: Entrepreneurs (most numerous), Elite Capital Allocators (rare), and Virtuosos (extremely rare). A virtuoso would be someone who’s literally one-of-a-kind like Virat Kohli in cricket, Tom Cruise in acting or Jim Simons in mathematics.
Just some things to think about.
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