In physics escape velocity is the minimum speed needed for a free object to escape from the gravitational influence of a massive body. The gravitational influence in my case was my salary and career goodwill that I would leave behind. As Naseem Taleb says, “the three most harmful addictions are heroin, carbohydrates and a monthly salary.”
It took a lot of effort and circumstances for me to escape from the gravitational pull of my “salaried” planet. By all external parameters I was a success. I was doing extremely well with a reputed PE fund and was soon to be made country head for India. And that’s the point I chose to walk away to move to public equity investing. There was something within me that told me that this was the right move. But this was a very difficult phase in my investing career.
The right time is whenever you decide
Once the pull of the gravity and structured and protected environment was no longer there, I was free to float like an astronaut in outer space in an unstructured and boundaryless world. I had to build my Career v2.0. While it was liberating, it also scared me. I had to first understand what building blocks were available to me and which were the ones I didn’t have.
I had all the necessary foundation – a good educational back ground (Rank holding CA and MBA from ISB), experience of having worked with the best investors and seen the best of the bull run between 2003-08 and then saw the Great Financial Crisis of 2008-09 up close and personal. I had navigated, thrived and survived these events.
However, I still didn’t have my own investing philosophy which was suitable for my personality. I used the unstructured time to conduct research on all styles of investing and trading. I had to do this in real time. I had to pay the bills and experiment with my capital.
Same goal, different roads
“Learn everything that is good from others, but being it in, and in your own way absorb it; do not become others” – Swami Vivekananda
Among the 150+ books that I read the most influential for me was Market Wizards series by Jack Schwager. Every market wizard had their own path to reach success. Each one of them had some commonalities but the specifics of their journey were different. The goal was the same. Success as an investor or trader. The message from each one of them was the same: There is no one path in the market. But there are certain common principles that one can follow to build one’s own guiding philosophy.
Simple insight, deep impact
After a couple of years of experimenting the plan in my head started getting crystallized. But execution in real time was not an easy task.
I had an epiphany when I analyzed my own portfolio from the day I started investing in 1999 to the year 2011. And some simple risk management was all that was missing. As a fundamental investor I had a good record of identifying and buying stocks that did well. But I had no idea when to sell either winners or losers. And that was the big lacunae in my investing tool box. I needed some frame work to address this issue. I researched on the various methods each market wizard had described and ultimate through trial and error and back-testing I found one which was suitable for my investing style and personality.
One big idea
Once I had done my research and covered the wide breadth of what was out there, it was time to start chipping away and drop what was not important. Like a sculptor, I carved out my investing philosophy and execution plan from the block that I had made and after four years emerged QED Capital and our flagship investing program – AlphaBets.
The idea was simple: build a like minded group of investors who understood and believed in my investment philosophy. All my planning and decision making is now centered around this one idea.
So I would tell those wanting to start their own venture, it is not easy but if so many before us have done it, so can we. Have a mentor or guide and a philosophy which will be your guiding light. There are major lows and times of loneliness, but when you succeed all that is forgotten. Always remember this too shall pass.
So apart from the above my key learnings which I go back to time and again are:
- Everyone’s journey will be different but the problems that one encounters are similar. If they got past that, so will you.
- Have one big idea and then execute with discipline around it. Nothing that is worthwhile is ever easy. Whenever, I feel distracted with some other big idea, I come back to this thought. What was my one big idea and is this taking me towards that?
- Practice equanimity: Try to treat success and failure the same. They both don’t last.
- Have a hobby and practice it regularly: Work tends to become an identity for most of us. However, it is important not to be unidimensional.
- Spend time with family: Every successful investor I have met or read about has stressed on this point. Work is part of your life and not life itself. Don’t ignore your family or friends
- Have a supportive peer group: Surround yourself with people whom you respect professionally and/or personally and use them as a sounding board.
- Attitude: You can’t control what happens to you, but you can control how you react to it.
So, to paraphrase Rudyard Kipling, if you can keep your balance and equanimity in good times and bad, that will stand you in good stead in life.
About the Author
As the Managing Partner of QED Capital Advisors LLP, Anish Teli is a Chartered Accountant and an MBA from the Indian School of Business, Hyderabad. He has been associated with ICICI Venture and Morgan Stanley Private Equity Asia in the past managing senior level position.