Presentation on Investing for Beginners by Mr. Amit Kumar Gupta, Fund manager for Adroit PMS

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Amit Kumar Gupta
22-Oct-2020
Investing for
Beginners
FORE Economic
and Finance
Forum (FEFF)

2. Amit Kumar Gupta
2
.
@amitgupta0310
• Worked as a business consultant with leading MNCs and start-ups over
diverse fields of Healthcare, Education and Retail.
• Over a decade experience in investment analysis and portfolio
management.
• Responsible for setting up the research desk at Adroit Financial across
asset classes of equity, currency and commodity
• Currently acts as a fund manager for PMS.
• Engineering graduate of Delhi University and earned his MBA in
Finance & Strategy from QUT, Brisbane
Amit Kumar Gupta
amitgupta0310

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Standard Disclaimer
• Any stocks discussed during this presentation is not investment advice. It is done purely for
illustrative purposes and not a recommendation to buy and sell. Please consider a financial
advisor before making any investment decision.
• My employer, Adroit financial services Pvt. Ltd is both a SEBI registered Research analyst
and Portfolio manager.

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Scope of the presentation
• Types of market players
• Various Approaches to Markets
• For this presentation – Limit to investing
• Discuss Facets of Investing
“Some problems are so complex that you have to be highly intelligent and well
informed just to be undecided about them.” —Laurence J. Peter
Investing is one of those problem…

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Types of market
players

6. Reference : Dirty Picture (2011)
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Entertainment seekers
Seek some kick, sense of adventure
Deploy miniscule (usually less than 2%) of their
networth in equity markets.
Winning or loosing will not make any difference to
their lifestyle
Most active during bull phase and least active during
bear phase
Returns – usually less than bank deposits or even less

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Casino Players…
Reference : Sacred Games (Netflix)
Buying equity is like buying lottery ticket
Allocate fixed amount to equities in the hope of
hitting jackpot one day
Mostly bet on penny or low value stocks
Understand the risks associated but still take the punt
Usually end up losing 50-100% of the capital which
obviously they don’t mind

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Investors…
Buying equities means buying underlying
business, feel like business owners
Substantial exposure to equity investments as
compared to their net worth
Usually end up making wealth from equities
Usually tend to be miniscule % of the actual
investors

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Warren Buffet Biography
Childhood till 2010s – How to approach
investing?
Buffet – the investor vs Buffet the person. No
Distinction!
Behavioural investing more important than skill and
knowledge
Never forget the importance of luck!

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Save before
invest?

11. HOW MONEY WORKS
Become Employed
• Someone pays you to work for them.
• You exchange your time and effort for an income.
• You don’t work – you do not get paid. Simple.
Start Business or Invest in them
• You take your money and you save or invest it.
• You become an owner of something that you hope
increases in value over time. When you need your
money back, you sell it, hoping someone else will
pay you more for it.

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Money doesn’t grow on trees…
• At 20, won Olympic Gold in Athens in 2004
• Between 2004-16, won 11 more O-Medals
• Doping suspensions put out of game
• Living “out of means”, debt piled

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Money needs to be nurtured…
• Phenomenal player in the late 80s & Early 90s
• Won 49 titles in total
• 6 Grand Slams
• An Olympic Gold
• $25mn in just prize money
• Still got “historic” debt
• Auctioned trophies to pay off debt

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Understanding
Compounding

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Compounding uninterrupted…
• Died in 2014, aged 92
•Left 8mn$ in total
•No Inheritance, No lottery
• Saved and invested!

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Compounding works in reverse too
•Richard Fuscone - Well paid executive
•Harvard Educated, Merill Lynch
•Borrowed heavily
•GFC happened!
• Filed for bankruptcy in 2010
• By 2014, Sold assets to pay off debts
•Greed overcome basic financial sense!

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Compounding – long term in nature
• To make money grow faster, compounding critical!
• Negative compounding like CC interest
• Longer the time frame, larger is the returns
• Time frame linked with goals!

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Rule of 72
•Rule of 72!
• Time to double the money
•Not exact, but works most of the times
•Fails only if interest rates are too high >20%

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Read, Read & Read
• Read Indian context books
• Understanding how great business franchise are built
• Why certain companies score over others?
• Drastic Changes in Indian economy – in past 5 years

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Investing
Pointers

21. AVOIDING- RULEBOOK
Minimal exposure to the media should be a guiding principle for someone involved in decision making under
uncertainty — including all participants in financial markets. ~ Nassim Taleb
Media Analyst Reports

22. Leveraging
"IT'S NOT HOW MUCH MONEY YOU MAKE, BUT HOW MUCH MONEY YOU KEEP, HOW HARD IT WORKS FOR YOU, AND HOW MANY GENERATIONS YOU
KEEP IT FOR." - ROBERT KIYOSAKI
Avoid F&O till…
• F&O consider weapons of mass destruction!
• With higher margins, lower value accounts will
wipe out in a short time frame
• Trade with discipline
• Start F&O with paper trading!

23. Timing the Market
“FAR MORE MONEY HAS BEEN LOST BY INVESTORS TRYING TO ANTICIPATE CORRECTIONS, THAN LOST IN THE CORRECTIONS THEMSELVES.”
PETER LYNCH
Timing matter less in CORE stocks
for example : FMCG, IT
Timing matter more in cyclical
stocks for example : Cement, Metals,
Commodity stocks
Timing matter the MOST in special
situation stocks – case specific

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Focus on Asset Allocation
• Not a single asset class is consistently
performing in the markets
• Diversification across asset classes - Equities,
Gold, RE
• Debt adds stability to the overall portfolio
• Invest more when valuations are low, Invest less
when valuations are high

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Investment is what you are…

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Perform at critical times
Take calculated risks
Perform under pressure
What if decisions don’t go as per
planned?
Calmness and preparedness!
Reference : Sully (Amazon Prime)

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Create your own framework..

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Find your own path…
अलग-अलग पथ बतलाते सब पर मैं यह बतलाता हूँ
'राह पकड़ तू एक चला चल, पा जाएगा मधुशाला।

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Thank You!