Vishal Khandelwal - Founder of SafalNiveshak.com

Vishal Khandelwal - Founder of SafalNiveshak.com

My guest for today is Vishal Khandelwal. Vishal is the founder of SafalNiveshak.com, an initiative to help people learn the art of value investing and behavioral finance to be able to make better investment decisions. The site, which he started in 2011, is subscribed by more than 90,000 readers and has been ranked among the best value investing blogs worldwide. Vishal is also the author of The Sketchbook of Wisdom, which is packed with 50 timeless ideas from the wisest people who have walked this Earth. Vishal calls it a manual on virtue, happiness, and the pursuit of wealth and good life.

 

This episode is brought to you by multipie.co where we believe Investing is an ignored life skill. Multipie is building up a platform where people can form communities and learn, share , collaborate on growing their wealth using the right tools. We want your hard earned money to work for you

Show notes:

0:00 - Intro

1:32 - Vishal’s journey with Safal Niveshak

8:45 - The story behind “The One Percent Show”

11:19 - What made Vishal write “The Sketchbook of Wisdom”

13:55 - How and when Vishal found his Ikigai

16:25 - Writing on behavioral finance v/s stock ideas

17:43 - Why Vishal does not like writing about stocks

19:48 - Simplifying personal finance

23:30 - Approaching insurance planning

26:20 - What is the need for financial education

28:42 - Understanding the “Robinhood generation of investors”

30:40 - How should you navigate bipolar markets?

32:58 - Have markets become short-term on an average?

35:48 - How can one avoid the trap of short-term investing?

39:20 - Becoming an investment Buddha

42:48 - How can you navigate market cycles?

47:13 - Vishal’s lessons from his podcasts

50:40 - Strategically copying investment styles

51:37 - Who has impacted Vishal’s investing strategy?

53:30- Why Vishal loves being an educator

54:08 - How has meditation helped Vishal?

57:52 - An investing stereotype Vishal wants you to break

1:01:30 - Understanding our complicated relationship with money

1:02:47 - Resolving the gender divide in finance

1:07:22 - How does Vishal read & journal?

1:10:20 - Vishal’s advice to a 20 year old today

1:12:40 - Advice to a young parent

1:13:48 - Vishal’s views on Crypto

 

Books referenced

Transcript

Raj: Hello listeners. My name is Raj Singal and welcome to another episode of breaking investment stereotypes. This episode is brought to you by multipie.co, where we believe that investing is an ignored life skill. Our mission is to create a platform where people can come learn, share, and collaborate through the right tools.

 

Ultimately, we want your heart and money to work for you. Here at breaking investment stereotypes. My job is to deconstruct world-class investors or wealth managers and deep dive into their investing journey professionally, personally, or both. I want to give a little guidance on how to use the shows. None of the following should be treated as investment advice.

 

Please see multipie.co/disclosures for more information. My guest for today is Vishal Khandelwal. Vishal is the founder of SafalNiveshak.com, an initiative to help people learn the art of value investing and behavioral finance, to be able to make better investment decisions. The site which he started in 2011 is subscribed by more than 90,000 readers and has been ranked among the best value investing blocks worldwide. Vishal is also the author of The Sketchbook of Wisdom, which is packed with 50 timeless ideas from the wisest people who have walked this earth. Vishal calls it a manual on virtue, happiness, and the pursuit of wealth and good life. The book is just a treat.

 

I've read it and found it very valuable. And I've asked my two daughters who are 22 and 17 to read it as well. So without further ado, please welcome. Vishal Khandelwal. Hi Vishal, thank you for being on the show.

 

Vishal: Hi Raj, thanks for this opportunity. 

 

Raj: So, first of all, many congratulations on Safal Niveshak completing 10 years. You’ve really built up a strong platform in 10 years where you've been giving back most of your learning.

 

So I want to start with this dialogue, which you have referenced in one of your talks. You know, this is from the movie Anand. Where in the end, Rajesh Khanna says to Amitabh Bacchan, “Babumoshai zindagi badi honi chahiye, lambi nahi. Maut ke dar se mein jeena kyun chod doon. Jab tak mein zinda hoon, mein mara nahi. Asur jab mein mar gaya, toh mein zinda nahi.To phir dar kis baat ka?”

 

You seem to have come to a conclusion about this very early in your life. What made you think like this, especially in the context of the whole genesis of Safal Niveshak, and how you see this 10 years, what was it like? What are your top three learnings? What keeps you going? 

 

Vishal: So Safal Niveshak completed 10 years just yesterday. And it seems like quite a journey that I've been through in these last 10 years.

 

In hindsight, they looked great, but like foresight 10 years back, it was a, it actually looked like a scary journey because I had some basic idea about what I wanted to do in terms of going out and telling people, or teach people how not to lose their money in stock markets investing. Because I had been an analyst in an independent research company for the previous eight years before I started Safal Niveshak.

 

And I'd seen a lot of people, family, distant relatives, a lot of people who took advice and a lot of friends, brokers, right? Lose a lot of money in the 2008 crash. So that was actually a turning point for me, as far as the mindset of being an investor analyst or the teacher's concerned. So that taught me a lot of lessons that we as analysts are not masters of the universe that we claim to be right, especially in bull markets. 

 

And there has to be a better way of earning your living, then just recommending stocks to unknown people. 

 

So that got really, really got me thinking that actually was the genesis of the idea of Safal Niveshak that was in 2008. But I've talked about this on my blog as well. I had a financial liability of home loan, so I had to repay that off because I couldn’t have decided to quit my job with the financial liability on my head and with a family to take care of.

 

That was like late 2010 when I all my savings, investments. Thanks to 2008, I completely paid off my liability. And the day I paid off my last bit of a liability in terms of rupees, I just, offered my resignation. As I mentioned, I knew that, I had to go out and teach people how not to lose their hard earned money.

 

But, there was no clarity in terms of what exactly was that that I wanted to do. How would I be able to earn money? Why would people pay me to teach them how not to lose their money? When everyone wants to understand the secrets of making money in stock market sites. And also because there are more takers for advice on trading than on long-term slow, value investing.

 

So I remember there were not many people who are writing on value investing. They were like a few of them and not very active. So I thought that was an opportunity to really go out, to meet people or teach people like me, how not to lose your money. So that is the genesis of Safal Niveshak. In terms of learnings of the last 10 years there have been multiple learnings, but then there are a few which actually stand out and that have really helped me in crossing this 10 year barrier.

 

The first is that people are kind. So as I mentioned, I had no clear idea about how I would earn my bread? How would I take care of my family as far as finances are concerned? Right? I remember when, when I quit my job and just immediately after that our son was born, he was premature and we had to spend a lot of money, almost like 25, 30% of my savings were gone into hospitalization, and all the expenses. 

 

So there was a momentary thought of going back, but then I decided there was no plan B. This is it that I wanted to do in life, or, or we'll think of something else in the future. But I have to give Safal Niveshak some time, right? So I completely put my faith on the universe and just went out completely.

 

And people came out to be very kind or kinder than what I would have thought. So I remember when I started monetizing Safal Niveshak for the first time, that was in 2012. So almost a year after I started Safal Niveshak, when I was completely writing blogs which were all free on the website. In 2012, I started with my workshops, initially workshops, and they were priced at 0 to 5,000.

 

So I had no fixed price on them. I thought that since this is the first time I'm going out, I don't like taking money from people, let them decide what they want to pay me, rather than me fixing a price. And to my surprise, I managed to cover the cost of my workshops. Tho I played very cheap that time in terms of cheap locations, not cheap in the sense of bad location, but yeah, someone, a friend offered me a place to conduct my workshops. They offered free food, as well or subsidized food as well. But the people who attended the workshops helped me, pay up the cost and make some, make some tiny profits. So people are kind over the last 10 years. I realized I've received so many positive feedback for the kind of work that I'm doing, right? People have subscribed to premium services. They paid money to learn value investing. They have paid for the book as well, which I thought, I'm not sure how many people would pay up. So yeah, people are kind. I trusted them and they responded well. So that's the one big lesson.

 

I think the second big lesson that has come out is that I never wanted to work for any prestige or status or money or approval, right? So of course, if it comes, it makes you happy, right, momentary, but that's all momentary happiness. My idea was to just do my work, just put my head down and do work well, then that's exactly what I've done for the last 10 years. In fact, a few years back, I, also, uncopyrighted Safal Niveshak, which was the idea that I took from Aaron Schwartz who was very vociferous about uncopywriting stuff internationally, who had to commit suicide because someone put a blame on him because he was actually trying to make free a lot of information, which should have been in the public domain. So I uncopyrighted Safal Niveshak, which means anyone can take up any content that I've written and create services, paid services out of that, of course credit is appreciated, but it's not really required. So that's something that I've learned that, yeah, doing your work is enough.

 

And, and third thing, statistics tell you that most of these startups or most of business fail within the first five years in today's world and 10 years, very few businesses or very few, initiators actually move on for 10 years, which are also able to sustain the person who started it.

 

Anything worthwhile takes a time. I see people from unknown fields these days talking about stock advice and how to do investing when they have no experience and no background, right. In terms of doing that. And they have, they've gotten to like millions and millions subscribers, but that's perfectly fine.

 

Right? I, 90,000, so subscribers after 10 years may look like a big number, but compared to what others are doing, this is not really a big number and I am perfectly fine with that because I believe in the kind of work that I'm doing. And I think the journey is more enjoyable for me than just for me than any statistics or any success Safal Niveshak can achieve.

 

Raj: Anybody who reads your book and clearly understand, and, you know, clearly our listeners should be able to make out and they will discover you while our talk as well. You're a very evolved person. You are a very conscious person, so you know what you're doing and what you're saying, very few people can actually do and say it.

 

Vishal: I think that's the biggest perk of being free or feeling liberated is that you decide, as I mentioned in the repost yesterday as well, that liberation is not just about doing what you want, but also not doing what you don't want to do. Absolutely. I think that's the biggest perk of doing it all alone. Yeah.

 

Raj: I think you also mentioned in your book, right? I mean, your life is all about journey. There's no destination. So just enjoy the journey. 

 

You recently started your podcast and it's been amazing. It's called the 1% show and you're getting some great names, right. You know, like Manish Chokhani, Vinod Sethi, Radhika Gupta, Mohnish Pabrai. What's the logic behind the name? 

 

Vishal: Okay. So the story of 1%, a lot of people have this misconception, that 1% means that you're not talking about the 1% people in the society or it's meant for those kinds of people. That's, that's the concept 1% globally, but for me, 1% means daily, incremental, small change that can help you become better over a period of time.

 

So James Clear has this wonderful book called Atomic Habits where he's talked about the secret. And of course, this is not a secret it's been known for many, many years and decades. That if you just try to improve 1% every day, right over, and you start from, say 1. And you grew 1% every day, by the end of 365 days or one year you have like 37, 38 times better compared to the starting point.

 

Right? Of course it's very difficult to change or improve 1% every day, but that's yeah, the idea, right? So the idea 1% podcast is to deep, deeper into the minds of the wisest people around or the achievers who who've struggled in their lives, who achieved some kind of a name fame due to their hard work over years, not really shortcuts, but over the years. Right? So get into the minds of those people, learn from them, how they have worked with their lives, work through their careers and the lessons that they have, or they want to share with the, with the younger new generation, right? Because there's so much noise around. Amidst this if you can really find out those pearls of wisdom from people who have seen lives actually live lives right over decades.

 

So I think that was the idea that, which I started, I would attribute a lot of this to luck. Right. So, and also to my initial discussion with, say Manish Chokhani. Manish actually has been instrumental in helping me say, getting connected with Vinod and he's quite been a supporter of this initiative, but yeah, again, it's a new journey which has started.

 

I'm not sure how far it will go, but as far it goes, it is good. I'm going to enjoy it. 

 

Raj: No, I think it's a great one. And, you know, frankly, the people you're getting is really amazing. So I really love your podcast. So as I mentioned, and I've read your book, the sketchbook of wisdom and really found it very insightful.

 

Normally I don't read, and I don't know how many people read the foreword, but I normally don't read the foreword. But this time actually I did also because you were coming on our podcast. Both Manish and Sanjay Bakshi, have loads of praises for you. So Manish, , mentioned your book in the same level as other legends, like, you know, Pool Charlie's Almanack, Maubossin’s Think Twice, Nassim Taleb’s Black Swan. Morgan Housel, who is actually going to be a guest on your podcast as well. 

 

After reading the book, I realized why he said that, but, you know, I, I would like to hear from you, what made you write the book?

 

Vishal: So the thoughts and ideas that I've written in the sketch book of wisdom are those ideas, which have actually helped me learn about my life, the lessons from some of the wisest people I have written about in the book have actually helped me through my darkest hours.

 

And they've enabled me to walk on this journey even before I started . And especially after I started on this uncertain journey of doing work on my own. Right. And they have helped me through my periods of anxieties and sorrows and worries, and when I got greedy sometimes, and when I was envious, but that's the reason I have dedicated one page per idea in this book, right?

 

Of course you can write a paper on a specific topic, but I'm not that kind of a person. I am. I live life in bite size pieces, right. One day at a time. So that's the reason the idea was to write one idea per page and a, to include the most important ideas that could really pass on the message to anyone who reads the book. About what life is really about how the wisest people have explained it. Right? So nothing in the book as, as, as you know, is original, right. Though I reference a lot of people that have put in some of my experiences, but those experiences, I found words to communicate those experiences because I have, as Newton said, I've walked on the shoulders of giants.

 

Another reason is that it's also a book, which I, which I would have personally wanted to read when I was 20 years old, there are so many other books, which I would want to give to my daughter and son as they grew up. But, this book, I wanted to be a compendium or a concise version of all the important lessons, but probably the most important lessons that I would want my daughter and my son, or any kid around to start their career, start their life with.

 

So, since I did not find a book that could have been done in an illustrative way, someone actually gave me a feedback: This is one handsome book written for adults. This is one beautiful illustrated book written for others that you don't really find. We find illustrations or illustrated books written for children.

 

But, that was the idea. And the idea of illustration actually came from my son because I used to make an illustration on Safal Niveshak explaining investing concepts. So, he said, why don't you write a book, which is illustrated. So the idea came from there, but yeah, it was a book that I wanted to read in my life.

 

And that is what I've shared with others. 

 

Raj: Thanks for doing for us and thanks for doing for our next generation. Right. I wish our next generation benefits from it. And once they read it, I'm sure they're going to become more of an adult, what they would have otherwise become. Sanjay Bakshi said very interesting thing in the foreword, right?

 

He said, In your book, you will find a synthesis between a stoic philosopher and Upanishad. And he says, while reading the transcript, he couldn't help, but smile and think Vishal has truly found his ikigai. You also mentioned ikigai in chapter or page, whatever you call that, number 74, under, live your life’s desire. So, you know, as you mentioned, I'm just repeating what you have written, ikigai happens when you do your work, you love and are good at, and that work, the world also needs and will pay for it. Why don't you help us understand how, and when you found your ikigai?

 

Vishal: I'm still searching for it. As I mentioned, I think life is about a daily struggle and, and on a daily, a chance of making yourself better in some way or the other, whether it's in relationships, whether it's in your learning habits, whether it's in investing for, for example, right.

 

Of course the kind of work that I do and that I've been doing for the past 10 years is a sort of an ikigai for me. Right. Because this is a work, which I, which I love doing each day is the work that the people also like, and they are willing to pay for. Right. So, and I can do it from anywhere and I don't really, I can choose the people I want to work with on this.

 

Right. So, so truly that magic combination, I think that happened for me when I started Safal Niveshak. Again, that was a period of uncertainty. I will not call that. That was an instant moment of ikigai for me. I, of course, knew what I wanted to do. I love writing everyday, but whether people would pay for it, I was not so sure.

 

Right. But when that thing happened, when people trusted me with my work and they really started to pay me for the kind of work that I was doing, I think it has been a slow journey. The idea of finding my ikigai or finding my happiness or that sweet spot, which is a win-win for me and for people who get to spend their time reading my stuff.

 

I think so that win-win combination has happened over a period of time. But I look for ways of finding more joy, greater joy in my work every day. And that keeps me going. And so that ikigai or the search for ikigai is still is on. I want to make each day even more joyful than the previous one. 

 

Raj: A lot of people talk about financial independence and a lot of these things tie back to financial independence, right?

 

Where the financial independence, basically when you don't need to work for money, right. And you can work for whatever, whoever and wherever you want to. And, In the US, you know, they use the word called FIRE for financial independence and retire early. Somehow, you know, we never liked the word retire, right?

 

Why do you want to retire? You can do it. I mean, you know, you'll never retire, right? You can do whatever you want to do, but retirement has a very different meaning, you know, we were thinking about how to, to look at this. We changed that fire to FIT: financial independence target instead of financial independence and retire early. Moving away, you know, not talk about retirement, but talk about financial independence itself.

 

Let's move on. You know, in the early days of Safal Niveshak, you know, used to write a series called stock talk. And over time that, you know, I see that your writing is becoming more behavioral and by the way, I mean, of course they’re great. Can you please explain the transition and what are your views on writing publicly about your investments or stock ideas?

 

Vishal: So, one thing is clear, Raj, writing about stocks, talking about stocks does not fit into my ikigai, right? That is not something that makes me comfortable, right. That has never made me comfortable. Right. And there has been no transition. In fact, I have always written about behaviors and stuff. So even when I started writing, it was more about behavior.

 

I was not talking about the technical terms of mental models and biases when I started out. Right. Because I'm still learning very, very early in my learning career or most of the stuff that I was writing was about how to behave well as an investor, there has not been a real transition as far as the kind of stuff that I write.

 

I used to write about behavior. I'm still writing about behavior. There were moments where I actually started a service, my newsletter. I started asking people if they want me to write research reports on companies, right. In terms of business analysis and everything, it was very clear that I would research and write on businesses that people request and not out of my choice that most people request I use to float a form.

 

And if more people are requesting for say a business, I will write about a business. Even if I know nothing about it, I'll learn about it a bit and then I'll write about it, whatever I've understood. Right? So those are not very comprehensive. I used to call them stock talk, but, and I used to also mention the, an approximate valuation and all those kinds of things.

 

So the problem that happened over a period of time is that people started taking that as a recommendation. And this is what happens right. When you hear about stocks. I remember in my initial organization as well, when we used to release one research report every week on a company, right? It was either a buy or a sell or a hold.

 

Right. But on the top of the homepage, we would only name the company so that people are enticed to, we can go and buy the service and read the report. Right. But, we will only say that this week's stock is ABC. Right. But, even if it was a sale, just because we were putting that name on the homepage, people thought it was a buy, right.

 

If I had a say written Infosys, even for example, even if Infosys was a sell. Just because I mentioned today, stock ideas is infosys, right? People thought it was a buy and they would buy it. And only later realized that, okay, it was not really a buy. It was a sell recommendation. In my case, I was not giving a recommendation.

 

I never intended to give a recommendation, but actually that turned out to be the case. A lot of people actually sent me emails about, I bought the stock based on your recommendation and stock talk. What should I do now? People actually lost money on a few stocks that actually went down the drain.

 

So that made me more uncomfortable about talking publicly about or researching stocks publicly. I have nothing against people doing that, but what I really realized that that messes up my own thinking, right? , whether it's a stock, which I own, or whether it's a stock, which I don't, right.

 

Especially about my portfolio stocks. I don't talk about them publicly. I don't want to. People ask me what's your CAGr or how can you teach investing in all those kinds of things? I said, I don't need to prove to anyone the kind of returns that I've generated, but all I can say is that the kind of return I generated helped me quit my job and live a life that I want to.

 

And do it comfortably, and still give up 99% of my work for free, right? So that's the kind of return I've generated. Right? I don't want to talk about my stocks publicly or write about stocks publicly because that messes with my brain and my thinking. And, I think Guy Spier also wrote that in his book, Educational Value Investor, and that I completely agree with that you follow with their confirmation bias trap, right?

 

Once you write about stocks, right? It's very difficult for you to change your mind. 

 

Raj: So let's, let's talk about, you know, personal finance, which is near and dear to both of us. And I, you know, I've seen, you know, this tweet, pinned on your profile, which details the way you do your personal finance planning.

 

It's it's great. It's simple. It's common. Um, you also mentioned that, you know, we usually trade common sense for the illusion of knowledge. So tell us how you think so profoundly, but simply, and also about your whole, personal planning.

 

Vishal: Okay. So, I think I'd mentioned in that tweet as well about simplifying personal finances.

 

And I think that works for everyone, right? You don't need to do complex stuff, but you've financial freedom or to create wealth for yourself. Only the thing that you really need to worry about is the time horizon. If you have a long time horizon, you just need to keep things very, very simple. So as I mentioned that, I think I will tweet as well.

 

And, and if that is the tweet, you're talking about where I own less than 15 stocks, and only say three mutual funds, right? All those kinds of things. One insurance policy, one, one medical insurance, one term insurance, all those kinds of stuff, right? No debt. So I think simplicity is an underrated concept in finance, financial planning, or when you're looking at finances, right. Everybody, whether or not most people would rather want to hear complex advice, because I think that you cannot really achieve financial freedom by going or by talking over and by doing simple stuff. Right. The thinking is that everyone knows it.

 

Like why would I benefit from it? Right. But the idea is if. Not everyone is actually doing simple stuff, right? People are mostly doing complex stuff. They are owning stocks and mutual funds, which is beyond their capacity. They are over diversifying, they're holding  multiple insurance policies and then they start doing derivatives.

 

When markets rise, they do all options and futures and all those kinds of things that trade in and out of stocks. You don't actually need to do that actually. Right. My first question, when I ask people who asked me, how should I start trading? Right. But for new, for new investors, my first question is why do we want to trade?

 

I'm trying to differentiate between investing and trading. Why do you want to trade in and out of stock? So the answer is to make money. The question is why do you want to make money to just to enjoy making money? So. If you're trying to find enjoyment through investing. I think that at the wrong place, right, a lot of people have tried to find enjoyment investing and they have been taken to the cleaners right?

 

In the past, you've seen multiple cycles. People think that investing or stock markets is an easy way of making money because they have seen in recent times that people have others have made money and they've also made money. Right. But you have to see at least two or three down cycles to be able to save whether it's easy or difficult.

 

Someone wise that there are old investors and there are bold investors, but there are rarely any old board investors. I think youngsters who are just starting out need to take this advice very clearly that you have to do simple things. You don't have to do complex stuff. Of course you do complex stuff if you're incentivized to do that, if you are paid to do that, you're working in an organization or an investing form or investment form that very, you are paid to do derivatives and all those kinds of things. Or you are, you are a CFO of a company who’s hedging, all this kind of stuff. But as a small retail individual investor, you have to keep it very simple over a longer period of time.

 

You will get what you deserve. 

 

Raj: People usually try to learn and lose a bunch of money, and then they will realize it's good for youngsters that they don't have enough money. They don't have lots of money. So even if they are learning, it's learning or a very small sum of money. So probably better learning, I would say.

 

But yeah, before moving forward, I want to talk about, you know, this whole psychology of loss or loss aversion, which you wrote about in a book. And, and you said that, you know, pain of loss is two times greater than joy of gain. We used to say, you know, and I've traded all my life that, you know, while trading profit taking is a price bound and stop loss is time bound.

 

And we have seen it time and time again. You mentioned the reason we overinsure. Yeah. Again, picking up from your book itself is that, you know, insurance agents are able to demonstrate the costly losses. I just want to pick up on this insurance part. How do you see both, you know, how does one see both life and medical insurance?

 

And because that's a bit part of the financial planning.

Vishal: I've mentioned it a number of times in terms of a simple financial plan, right, and as far as the insurance part goes, two of the big key insurance that you should have is medical insurance, which is health insurance. 

 

And the second one is up your life term insurance, right? Medical insurance is a must given the rising healthcare cost and given the rising cost of hospitalizations, we recently saw during COVID times where people stay in COVID in hospitals and private hospitals would have cost them like six lacs or seven lacs, even 10 lacs somewhere.

 

Right? So the cost of hospitalization has increased multifold over the last few years. And that is the reason. And also because people are living the wrong kind of lifestyle. So the chances of getting hospitalized, you may think that you are invincible, but as you grow old, right, you realize that chances of getting hospitalized due to any injury or an illness actually increases.

 

Right? So, and also with the rising hospitalization costs. So that's the reason medical insurance is something that. Um, I would advise anyone or anyone who is starting his career, his career to actually take, um, now also advise people who work on jobs and their employers provide medical insurance.

 

I would ask them to take their own personal insurance as well because the insurance with the employer is only till you are employed with that firm, right in the future. If we want to do something of our own, right. And if you want to take your own medical insurance, the premium would have risen because you are higher in age.

 

Now that is one thing, very important. Pure term, life insurance, another thing which I talk about, and I myself have insured myself for pure insurance again, no, ULIPs, no endowments because they are a waste of money. Right. But the problem, again, it's more about education. Insurance companies and agents don't really teach people about the importance of your life because that doesn't earn them commissions, right.

 

Your life and the, and the, and the, and the buyer of insurance is also doubtful thinking, is that okay if I die, if I don't die, nothing will come. Right. So why should I waste my money? Right? The point is that the amount of premium that you save by putting your money in pure life is so much that if you can invest that money for say 30 years, and you don't die, right.

 

You're going to have a huge Corpus anyway, through your mutual funds or stocks, or what kind of investments that you have made by saving that premium. Yeah. Right that you have that would have paid if you had bought a ULIP or endowment policy. So look at it, that part, right. Rather than trying to mix investment and insurance, which is endowment and ULIP, keep insurance investment separate, keep it simple, one policy or two policies of term insurance.

 

You break that up, right. but pure term life, and one healthcare policy to cover yourself and your entire family. So that's all, I, that's something that I advice and I, and that's something which I practiced because that keeps my life simple as well. 

 

It's also a matter of education in a country like India, right?

 

Financial education has not really reached, forget about small towns and cities, even in larger metros. Right. I see so many friends of mine, so many people, so many peers who I'm, who I've worked with in the stock market space for many years. Right. I see so many people who, despite being in the financial service industry, are either underinsured.

 

I'm not. Taking a lot of insurance, they are either under-insured or they have all these wrong kinds of policies with them. Right. So it's a matter of financial education. People need to understand that it's very important to get educated yourself in simple finance concepts and simple finance ideas rather than running after complex stuff.

 

Raj: There are many places and, you know, including social innovation as well. I mean, you can just go and learn many things that are freely available to all the resources and you can get yourself educated about it. So it's not difficult at all.

 

Let's move on to your view on the current, this T20 style of investing and trading, especially amongst the youngsters. And, you know, we are seeing globally, it's going to be a bigger phenomenon in catching up in India as well, and not just youngsters, right? Even for the seasoned investor as well, how to navigate this whole bipolar market?

 

And then we will, after that, we'll come to long-term investing as well. 

 

Vishal: I think that's a nice topic. Robin hood generation of investors as they call it. Right. So, I joke about this with my friends who asked me, what kind of market is this? And, and, and, I say that this is not a bull market, it is not a bear market.

 

This is a no-nothing market, right? People without experiences, because we have technology to help us. We have a lower zero commission trading to help us, right. We have so many people, teaching about how they made a multi-million dollar amount of returns from their stocks. Any, if you go on YouTube, you need to go on YouTube, right?

 

X entrepreneurs are from the tech field and X comedians, and all those kinds of people are. Teaching people about reading and stock investing and all those kinds of stuff right out of, out of the blue. And, technology is actually, in a way, which has benefited mankind, right? In some ways it's actually destroying the entire fabric of long term thinking, right? Long-term wealth creation as, as if I were to talk about investing. So, and, and as you rightly said, it's not just youngsters, even savvy investors with people out there. Who are trading, who are joining these Robin Hood investors to try to multiply and they have set up wrong, wrong influences for others.

 

And a lot of those people on Twitter and all those kinds of places talk about. And I'm just really worried about so many people sharing their P/Ls at the end of every day, that this is the kind of income that I made from my trade. And this is a kind of investment, which I did this, not sure if this is not going to take people anywhere.

 

And this is so bad for youngsters who are getting into the market, enamored by these kinds of returns that people show off every day to their P and L's and trading charts and all this kind of stuff. I think this is completely madness, right? The question is, how do you play as an investor, this bipolar kind of market?

 

I think my response would be that you need to play your game, right, rather than playing a game, which is set by others, or, or, just to impress others or just to impress, your following or yourself. Okay. There's this trade and this kind of money I made in such a short period of time. I think you need to understand.

 

Why are you investing in a wire in the stock market or investing place? Are you here to speculate then, then I have no advice for you, right? But if you are here for the long term, if you are looking to build wealth, create wealth for yourself and your family for the long term, then I think you need to play your own game.

 

And I just think the most important advice is that there's something which I learned from someone I don't recollect the name of is that to win at any game in the long-term you have to rise above the game, right? , If you play the game that everyone else is playing. If you're playing the game by the rules, which others are setting for you, right?

 

And if you're using the tools and techniques in the wrong way, you are going to go nowhere. It's like a treadmill. You are just running, running, running, and you're thinking they're going to reach Nirvana, reach somewhere, but you're not going to get anywhere. In fact, you'll be thrown off after some point of time, based on your risk return profile, based on your time horizon.

 

I think you play the game that way. There's no other way. There's no other advice that I can think I can give to someone who wants to play it on this market or with his, or her way to this market. 

 

Raj: You know, this is all part of the cycle as well. Right? Most of the people, when they start, they all start as a thing that trading is easy and you can make easy money because, you know, that's what you read about.

 

And not even understanding that people are writing those things probably don't even have the skin in the game. They may be just bluffing progress into a long term investor that I have gone through that you know, I'm sure a lot of people go through that, you know, when you start small money, you know, and when you're young, you're small money, it's still okay. You know, probably your losses may not be big because you don't have much to bet on, and hopefully you will progress to become, you know, more evolved and a long-term investor. 

 

You know, you recently spoke about long-term investing in the age of, you know, short attention span and just picking on what we're discussing so far.

 

And you mentioned that, you know, we have a, as a human being, we have an attention span of about eight seconds, which is probably lower than goldfish, I guess. Can you talk a bit more about this whole way one can look at long term investing? So, yeah, I remember some statistics from the New York, New York stock exchange, which releases a fact book.

 

Right. And I don't have new data on that, but the last data that I had was, from them was that in 1960, an average holding period for a stock was around 100 months which is almost like eight years. That's what average holding is. By 1990, that came down to 26 months, which was slightly above two years and 2010, that was 6 months. That was the last statistic I had. In 2020, I am sure that's less than three months. But the kind of average holding with the multitude of investors or new people who are actually trading in and out of stocks, derivatives and all those kinds of stuff. Right. I'm sure it must be less than three months.

 

Right. So, um, and, and this is stocks. If you look at statistics from Indian mutual funds as well, the last thing which i saw maybe six months or eight months back, is that the majority of people don't even own mutual funds for more than six months. Majority of the people are not just trading in stocks, they are also trading in mutual funds.

 

I see a lot of people making that mistake, as you mentioned that, okay, money is less savings, less, so I'm not going to lose much more. Right. But the habit formed right. Happens early. And there are very few people who actually change the way that they think, and they invest over a period of time either.

 

They'll start with trading derivatives and everything, they lose out on money, right? They'll come out of the market. They'll probably enter the market at the wrong time and they'll come out after losing everything. And they'll say, this is a casino. I'm not going to come back. And then again, in the next peak of this next cycle peak, they'll again come at that point of time.

 

And again, they lose money and they'll say, this is a casino. I'm not going to come back. And probably the second time they are not going to come back. The second generation of investors are people who lose money, some money and they realize their mistake. They, they sit down to think what kind of mistake that.

 

And they actually maybe turn towards something which is much more sensible, something which is much more stress-free right. I'm not saying that everyone should start with value investing. Everyone should do long-term buy and hold and forget the stem. Of course there's no forgetting. Even in long-term investing, you need to buy and hold and review.

 

Well after it, every regular frequency, maybe six months, once in a year, the idea is, and the statistics and the numbers prove over the last a hundred years for the U S markets. And last 30 years for the Indian markets, the longer your time horizon, the greater is your probability of earning decent returns, or at least market are slightly higher than market returns from, from the, from the market or from the investment that you've made, we haven't, as, as you mentioned, rightly we have an attention span, which is less than a goldfish eight seconds. Again, this is old data. Now I think that it should have reduced even further with all the social media out there. Eight seconds. I think people can move from Instagram to Twitter, to Facebook.

 

And so you have three different things and they would also make a decision of which stock to buy next in those eight seconds. The only way or one of the most powerful ways, which I have found, and which is not advice that you can give to someone who is actually, who has a short attention span, because that person is not going to pay attention to advice as well.

 

For me personally and for anyone who's willing to listen, then, adhere to, I think cutting out noise from your life, cutting out all the unnecessary information overload that you receive day in and day out as, as Talib says via negative, right? You need to remove everything, which is a hindrance to your growth. Right. And everything that you remain with is going to help you grow. If you remove newspapers, right? If you remove television channels, which tell you about business news, and of course, it's very good, too. It's very important to read about businesses and know about businesses, but you can always read them through the annual reports through company websites.

 

You don’t need to read daily newspapers. You don't need to watch business channels to understand what the business is doing, right? Because then you're also going to be fed a lot of garbage stuff saying no to news saying no to noise, right? Saying no to what others are saying. Avoiding say, WhatsApp groups. Avoiding Looking at your stock prices daily.

 

These are ways. So basically no noise. If you can live a life like that. I think you are not going to miss anything. First thing, you will have a lot of time to think carefully about what you're doing. You'll have a lot of time to understand, analyze businesses or the direction that your investment career is going to take.

 

And you have a lot of time to do things outside investing. 

 

Raj: You know, one thing I personally struggle and, you know, probably it's because of my upbringing as a, you know, as I mentioned, right, I've been a trader all my life. And you know, when you trade for a bank book , you're trading day in, day out. You're making markets, for, for the clients as well. And you mentioned that I don't look at the prices on a daily basis, but you know, that's a habit that’s tough to give. And especially for people like me, I mean, you know, I invariably I end up checking, I know that I'm not going to do anything, but invariably you end up checking like couple of times in a day, you know, where the market is in, you know, your portfolio is doing, and especially when you're, when the market is doing good, when a market is negative, probably you don't look at that. And, and, you know, it really impacts your thinking. It's very important not to look that I'm very clear. But how to achieve that is what I'm struggling with.

 

Vishal: It's difficult. So even for example, you may not have a newspaper getting delivered to your place.

 

You may shut off all newspaper applications. You may not watch television, but, you are still going there checking emails. So you, you have that business open another window and log into your stock trading or account or a portfolio tracker and go and check your the thing. Right? So, and that's the reason I advise people and I do that myself to maintain your stock portfolio in an Excel sheet, rather than an Excel sheet, which gets updated like a Google sheet, you can do that.

 

That's, that's, that's the worst version of an Excel sheet. But an excel sheet is something where the price doesn't get updated automatically. Right. It's a difficult thing to do, but it's always, as I mentioned, it pays to try it. Right. When I say that I don't look at stock prices on a daily basis. There are some days when I look at stock prices, when the markets, when I, when I come to know maybe on Twitter, that the markets have fallen a lot. Right. Or they have risen a lot. It always is enticing to go and look at a portfolio and see, okay. Which are the stocks that have, may have corrected from your portfolio that you can buy, right. Or which stocks have really jumped up. So two that give you that momentary happiness. Okay. I made some kind of money in the stock market, which is very difficult to give up once it's formed.

 

But yeah, the idea is to minimize the idea not to eliminate it because it is very difficult to do that for the kind of brain that we have, but the idea is to minimize those things so that you minimize the mistakes. 

 

Raj: Yeah. You know, I love your becoming an investing Buddha and the iron rules around that.

 

Do you want to talk, elaborate, especially on the mental models? 

 

Vishal In fact, that was an idea. I was, again, going through my Twitter feed and Prof Sanjay Bakshi had shared a slide from his presentation from a conference, which I could not attend, where he had a slide, which was titled me, M E. So he was talking about his own investment practice or the key rules that he follows in terms of margin of safety in terms of no leverage.

 

Right. In terms of having cash as an option, right. In terms of not doing derivatives in terms of long-term thinking in terms of satisfaction, that you are satisfied with the kind of returns, which are adequate for you to make based on that, I created that Investing Buddha kind of illustration, but just to showcase the kind of investing that I do for myself or that may work for most people. Again, it may, or it may not work, but again, like the stuff that I've written in the book, The Sketchbook of Wisdom, these are the ideas that have worked for ages, right? These are the things, our lessons, which have worked for ages. And a lot of people have actually proven through that, that in my limited career, as an investor for the past, like 16, 17 years, almost 19 years, right.

 

I had practiced such kinds of things, in terms of no leverage in terms of margin of safety, in terms of not going outside my circle of competence, right. Almost all the time. Luckily for me, I never started from that reading mentality or never was a trader. I started from long-term thinking and came across Buffet later, but then I have always been risk averse.

 

I never liked putting my money into things, which I have never understood. Right? Neither borrowing money from people, right to trade or to do anything else. It's the nature of the individual that defines the kind of career path that he or she is going to be. Of course there are circumstances that force you, maybe a job loss, you have been investing your money and suddenly you lose your job and you have to cut short, your long-term positions that you thought that you would hold on for 20, 30 years. And suddenly you have to start everything because you take care of your family. So outside those circumstances, which are outside their control, I think, um, these are the kinds of models which have really helped me. For example, in 2008, then 2010, I sold almost all of my stocks, 2008, January and 2007 December at the peak of the stock market. And before the crash, I almost sold all my stocks. Was I insightful? No. Was I completely lucky? Yes, because I had that idea of quitting my job and paying for my housing. And also because of the promise that I had made to my wife, that within five years, I'm going to pay off this housing loan and probably quit the job and live our own life, right.

 

To pay off my housing loan. I sold all, almost all my stocks and started building that portfolio again in 2009. So I've been lucky in those aspects. A lot of. But then, in, in general times, right when, I would not really not those times which actually define your career, right? In normal times I have used these mental models or marginal safety circle of competence, staying invested for the long-term, right. Looking at the businesses, which are good capital allocators, not looking at stock prices while making investment decisions, not being overconfident, right? So I've not been a confident person ever in my life. The only thing, probably a thing of confidence, which I have done was to quit my job and start Safal Niveshak.

 

Apart from that, I've been very risk averse. I've been a very, quite laid back kind of a lazy kind of a person. And that has helped me in investing, being lazy and laid back has helped me generate adequate returns from the stock market over the last 19 years.

 

Raj: So Vishal, on a, you know, picking up on this, long-term investing one thing. I have, I have struggled myself and I've seen people. How to navigate all the cycles, right? I mean, let me take an example. Let's take Indian, the small and mid cap stocks, which went through gutter, you know, post like 2017, 18, and you know, for probably about three years, They just ran down drastically and now they're doing well again, while talking about and thinking through the whole long-term investing, how should one navigate all that?

 

Vishal: I think for me the best way that I have navigated to the cycles of the past 19 years. And they'd be like multiple and like we've seen two or three deep cycles, deep down cycles. Right. sharp up moves right. Is to stay invested. Right, of course I'm not really talking here about investing in cyclical stocks or industry specific ideas where you have to really time the cycle well, to make money, but the kind of businesses which are sustainable over long periods of time, over multi decades, the kind of businesses where capital allocation has been good throughout and it does not really depend on an industry. And those kinds of businesses if you’re invested over there, I think the idea of navigating cycles is to stay invested. Of course, you have to be cautious when you hear a lot of noise on the streets, or you see those kinds of near-peaks kind of situations where everyone is talking about stocks, right? Everyone is asking about stock advice. And a lot of IPOs are coming in just to give an indication of a period like now, today, you have to be very cautious in such kind of situations. What I have done in the past is incrementally reduce my, or reduce my incremental investment to stock markets, rather than pulling out money or cashing in, into the kind of business that I've already owned, I have used incremental investment in the stock markets, maybe held onto cash in the past. To wait for the opportunities that I am looking at, but not available at appropriate valuations. So that is one way that I have dealt with broader cycles in the past. 

 

Of course, no one can say when the cycle is going to turn up or turn down? Right. We have to be participative in the long journey. If you really want to compound wealth for a long period of time. And again, to repeat, this is not for people who are investing in cyclical industries, but more long-term sustainable businesses. So I think the best way is to participate in those cycles.

 

Be cautious when you realize that this is going too much over the top and be prepared with cash when you think that this is or start deploying cash more cash when you think that this is like all gone for the cleaners, and then now people are talking negatively. Of course you can still go even further down. And investing is like catching, falling knives, right?

 

In a, in a beer market, in a bad market, you're going to get hurt. You invest after the stock is dying down 50%. And probably it may go down another 50% that may, and that will happen. Right. But if you own businesses with long-term right, Buffett and Munger, tell us so much time, but it is very difficult to say in very difficult, very easy to say, and difficult to practice that you have to think like business owners, right?

 

Imagine if you're a business owner and you are here for the long term, right? You are not worried about cycles. You will be taking care of your house even in a good time. And even in bad times, you are kind of creating a business as a business owner that really has the capacity to suffer bad times. Right? If you're investing in businesses, which have the capacity to suffer bad times and also have a long run. Right. Just put your faith and money in those businesses and ride them right. Rather than worrying about when it's going to rise and fall and worrying about market volatility. Right. But be cautious when everyone is talking, that's a thumb rule about stocks and everyone is making a lot of money in stocks. And you see you also making money very easily in stocks, that’s a time to be cautious.

 

So Peter Lynch has that cocktail party today, I'm not going to repeat it here, but Peter Lynch cocktail party theory is a great way of navigating cycles. You realize that everyone who has been seeking your advice in the past is now offering you their advice of what stocks to buy. That is the peak that is.

 

They don't move out of the stock markets, but you'll be very cautious about it. 

 

Raj: They used to say right now, I don't know because of COVID people may not be visiting the paan wala, but when he starts giving you advice about stocks that's near to the peak. 

 

Vishal: The paan wala will apply to IPO because he has the power of technology. He understands how to make payments online. So it's easier for them to apply. 

 

Raj: So, you know, you've interviewed many stalwarts from both Indian and the global investing ecosystem. Can you pick any of your top favorite talks and takeaways that stayed with you? 

 

Vishal: Difficult to pick up top three talks or any talks because everything, everyone who's who's who might, I got a chance to interview, they have, they have it, their short story to tell, right?

 

So no stories good or bad compared to others, but yeah, multiple lessons, which I've learned. And I think the common theme which has come out is that, as far as investing is concerned, there is no one way to build wealth. Right. People have done cyclicals. People have invested in simple core long-term sustainable businesses. People have tried sometimes to try to mix some kind of trading with some kind of long-term investing. Right. So, which is a rare thing to do and also find success. Right. But, this is one thing that I've learned, across all these interviews, which I've done with the investors, successful people in the last few years that there's no one way to build wealth.

 

But yes, almost everyone has a root. And that is something that I've learned is that the chance of a positive outcome increases the longer the horizon. Almost everyone who might ever got a chance to talk to. This is one underlying thing that the longer you invest in good quality businesses, the greater is the probability that you're going to create wealth for yourself.

 

All your shareholders or your clients and all those kinds of things. The second lesson, which has come out very clear, is that you have to be a lifelong student of businesses, right? If you have to be an investor, right, rather than looking at stock prices, right? Rather than indulging in derivatives, you have to be a student of businesses.

 

You have to learn how businesses are run. You need to understand what, what makes them tick, right? You need to understand, you need to be able to differentiate between good capital, allocators and others. Right? Most of the people out there who are running business out there, I would say 99%. If you remove the 99% who have not really allocated capital well over multiple cycles, you remain with those top 1% or 2% of capital allocators, whom you need to bet your money on from a long period of time.

 

I need to also understand the risks involved. These are important things that almost every investor who's done well in the long-term has done for himself and his or her clients. And the third thing is that, people who achieve some kind of success in long-term investing over 20, 30 years, right? They are great learning machines. They are humble. And that's a lesson for everyone starting new. Because if you think, or the day you think that you've arrived as an investor, I think that's the start of your downfall. Right? We never arrive anywhere. Least of it in investing, right. There is a new reason to learn every day. There's a new thing, right?

Businesses change, the dynamics change, the environment changes, behavior changes and investing is all about behavior, right? So you have to be a learning machine. So all these guys actually show how they have been learning machines and how they've benefited from that, learning how they've implemented that learning. And have actually become so good at what they are doing. 

 

So yeah, these are the few lessons that I've learned from these people.

 

Raj: You know, because you've mentioned, right, investing is a lot about behavior and because it is not about behavior, there is no one way about investing, but there is your own way of investing.

 

You have to understand yourself first. And I think you've, you're right about that new book as well, that you have to understand you also. So that you can learn about, you know, your own way or style of investing, where you're comfortable with. And that is the way don't start looking at, you know, what this guy is doing. You start copying people who have different styles of investing, you will make a mess off what you are doing. 

 

Vishal: So you talked about copying people. I think that is also a good strategy for something that if you understand what you're copying and pasting it, yes. You have to apply your own brain.

 

Right. I'm going to talk to Mohnish Pabrai. And he has been publicly vocal about how he's built his career largely by cloning Buffett and his trades and all those kinds of things, but you see the smart things Pabrai has done, the kind of wisdom that he's accumulated, he's been a learning machine, right.

 

And he's talked about all of those learning and wisdom, and he's shared them with people. So cloning is fine. Copying is fine, but when you are copying, you also need to apply your brains that you're pasting it fine. Based on your own research and profile, rather than simply saying, okay, this look, this person, or this respected or big investor has bought this stock so let me go and buy. He cannot be wrong. Of course, people can be wrong. Even the successful ones can be wrong. You want to participate in their mistakes or not, that you need to decide.

 

Raj: Even Pabrai just says that he copies the buffet. He doesn't say that I copied five people. You can't mix up five minutes to make a cocktail. 

 

Any particular person who has profoundly impacted your investing style?

 

Vishal: I've been too vocal about it. I think. It's obvious it's Warren Buffett and Charlie Munger. Right? So Buffett about how to think about businesses and Charlie Munger, about how to think. I would probably rate Charlie Munger slightly higher than Buffett in terms of shaping up my thinking over the past many years, probably more than a decade ever since I started learning about them. Though I start with Warren Buffett first? Because he's more out there in the media and out there in terms of publications and sharing his learnings, Charlie Munger has taken that learning to a different level altogether in terms of how to lead a good life. How do you learn to think? Well, generally, right? Not just in investing, which Buffett has also talked about. Finding your ikigai, working on things that you desire, right? So that you wake up everyday and you tap dance to work. These are lessons from Warren Buffett, teaching people about money and planting that tree is a lesson from Warren Buffett.

 

Not doing things or doing or not doing things or avoiding things that can kill you. Staying in your circle of competence. Not venturing out of it is a lesson from Charlie Munger. So I think, there could be no one else than these two people who personally, for me, who've actually defined the kind of investing and thinking that I am able to do today compared to say 15 years back.

 

Raj: My favorite is, tell me where I will die and I will never go there. 

 

Vishal: That's one of the most prominent mental models that I use in my life as well. That is the reason I said, avoid news, avoid IPO's and avoid businesses that can kill you. Right.

 

Inversion is a great tool. Our mind does not allow us to think in terms of inversion. Right. But I think that's one of the most brilliant tools or brilliant ways of thinking, right. By knowing what can kill you. 

 

Raj: No, that's a great tool. I agree. And I've been trying to use that off late now. I really find that it really clears up your mind once you start thinking that way.

So you've been an investment analyst and you know, you're, now you're an educator now, which one do you relate with more?

 

Vishal: Hands down the educator. I am driven by this quote again from Charlie Munger, that the best thing a human being can do is to help another human being know more.

 

Nothing else drives me more when I wake up in the morning to come to my computer and write stuff or write something that really helps one human being become better at what he or she is thinking that day. I am nervous about talking publicly, but I don't want to miss out on an opportunity to talk to youngsters or talk to people and tell them what they should not be doing as far as investing or their life is concerned. The kind of mistakes that I've made, or the kind of mistakes that I've learned that others have made, they should not be doing that. 

 

Raj: How has meditation impacted you personally? And as an investor, you mentioned meditation on our mortality as well. The different way of thinking through that, but can you talk about meditation in particular? 

 

Vishal: Oh, so I have not been a regular at meditation, but over the past few years I've practiced it. I would say if I were to just break it down to weekly time, I would practice meditation three or four days a week. Not everyday meditation. For me, it means in simple terms just to observe my thinking. And just let things pass through whatever passes through passes through. Over a period of time, I've tried to calm that mind down that radio, that the chatter that goes inside my mind, right? It's very difficult. And that's the reason, most people are not able to sustain that meditation, because it's very difficult to calm your mind. 

 

As far as their decision-making and investing is concerned. This is what I think meditation has helped me. It has helped me become, I think, more equanimous and be at peace, whatever the markets are handing me with or whatever, what is happening, whatever is happening around me as far as investing is concerned. But as far as decision making is concerned, once you've made a decision, right from starting Safal Niveshak, as I mentioned, I decided to start and I started writing articles and publishing on my website. It was my idea of sending my creation into the universe without bothering about whether somebody is going to catch it. Someone who's going to read it or not. Of course, people started reading. But if you have done your work, ignore the outcome. We just forget about the outcome because that's not in your control.

 

So equanimity is something, that, that meditation has really helped me a bit to be much more calm, um, et cetera. And that's the reason, 2020 did not cause even an inch of stress, when the markets were all shaking and falling down. I will not say 2008 because I was too young at that point of time and not really started meditating.

 

But yeah, situations like these don't really bother me at all. And also it helps you deal. Meditation helps you deal with reality. I think, and it, and this is a benefit that happens over a period of time. You cannot really start meditating and the next day you think I'm equanimous and I can handle reality and I can face the world and I'm not going to get angry or sad or anything. You still get sad. You still get angry, you still get perturbed, right? So you get sad or angry much less compared to what you were 10 years back. 

So it's an evolving journey. Again, this is also a journey, right? Of self-improvement of introspection. It takes time, but I think that's a journey in the right direction.

 

So I would say meditation is the best way of improving yourself 1%. 

 

Raj: You were mentioning about, you know, getting angry. So the Buddhist way of meditation doesn't tell you that you should not fight against those emotions. Let the emotion come. And then you will understand that emotion will come and subside. That's the whole part of meditation, right? That's what you're trying to achieve. Not react to the emotion. 

 

Vishal: You mind waivers off even when you are meditating or, or you're, you're living your life, right. In those moments, when there's turmoil, your mind just moves on and you get involved with that turmoil. Right. But then you suddenly remember, okay, this is not something that I should be thinking. This is not something I need to get back. I need to get back right. And move back. Right. 

 

So I was reading Krishnamurti. He says, no one can teach you how to meditate. You have to learn it on your own. You have to sit quietly or to let your thoughts pass through. Once you've tried to do that for some time. Then you look at the world in the same way. So you are not meditating only after a certain point in time. Only when you are sitting down and closing your eyes and breathing. After some point of time, even when you're looking at a tree or you're looking at a person, or you even, even looking at a stock price chart that becomes meditation because you're focused on one particular thing.

 

You're not focused on where things are going to go about where they've come from. Right? And you're trying to analyze each and every situation you are just there looking at that thing at that moment, that is the real benefit of meditation. When it allows you, or it leads you to live your life in that moment, there's no other benefit of meditation.

 

Of course, by breathing techniques, you can help your circulatory system, right? You can help your immunity and all those kinds of things. That is what people aim for when they start in meditation or you become much calmer. But I think the idea of meditation is to make you meditative each and every second of your waking life.

 

Raj: Very well said since our show is called breaking investments. Any investment stereotypes or biases, and I'm sure you have many of them, you would like to break. 

 

Vishal: Oh yeah. I think not as specific to investing, but yeah, since you talk about investing, I think everyone talks about the power of compounding, right? People talk about compounding wealth over a long period of time and saving, being frugal and saving all that kind of thing. Right? Compounding wealth is not the be all and end all of investing. That's I think the stereotype that I want to break, right? I'm not saying that you shouldn't be frugal. You don't save money and you should not be compounding. Of course, you should be doing that. Whereas as far as investing is concerned, compounding your money and creating wealth for yourself is not the end of it. It's important to appreciate the learning that happens along the way, much more important than that is to understand how much.

 

I think we all want to create huge wealth for ourselves. Right? The problem, I think Daniel Kanheman talked about, is that we cannot imagine ourselves in the future. If I were to ask you to imagine yourselves 30 years down the line, you are not going to do that. And that is the reason we don't take long-term decisions, right? Because we are not able to imagine ourselves 30 years down the lane that's lying. That's the reason we are not able to how, what investments can help us become what we want to become 30 years down the line. 

 

So that is one aspect. But the important aspect that I want to talk about as I mentioned is that I would advise people not to become full-time investors, unless, or until you actually really want to become a full-time investor, I would advise people that they are much bigger chances to life than investing and compounding your wealth. Right? Of course, you need to take care of your future, as well as build your finances. You have to take care of your health and everything in the future, your family. Look at investing just as a byproduct of your learning journey. Your learning about businesses. Your learning about human behavior and also understand that there is a place where you need to stop, right? I'm not saying stop working at all or stop bringing your money that is going to happen automatically.

 

But you have to say, how much is enough for you, right? Since we don't have a finish line, we keep on running, running, running, right? We have, we want to earn a 25% CAGR or a 30% CAGR, or we want to copy Warren Bufett. And, and we want to copy that 20 year old guy who became a millionaire 30 year old, that is not investing.

 

It's a learning journey. It's a journey of becoming a better person, right by empathizing with managers, for example, by not being arrogant by getting over all your, like, for example, envy, right? By understanding that we are all envious all the time. Right. But that is a sin that really does not give us enjoyment as Charlie Munger says.

 

Investing teaches you a lot more than compounding. So we need to focus on the bigger aspects of life, right? Buffett says that I'm a better investor because I'm a better businessman, a better businessman, because I'm a better investor. I would say I'm a better human being because I've been a better investor, because being an investor, learning from the likes of Buffett, Munger, and so many other people have helped me become better at being a human being.

 

Like I would rather lead people or youngsters to focus on the self-improvement that takes place rather than only compounding that. So that's one stereotype. If you were to call it that I want to break.

 

Raj: Our relationship with one money is very weird because we don't know how much is enough. We accumulate a lot. And when you accumulate a lot, you know, in the end either you will try and donate 90%, 95% to it, or you will leave for your children, and I read a beautiful line in which I tell many people that the amount of bank balance you have when you die is the amount of extra work you've done. 

 

Vishal: It's a sad thing when you die. Of course you will leave some money for your kids or your family to take care of. That's one part of it. But if it's more than their needs, I think it's a sad thing. That marshmallow thing I've written about in a book as well. Right? People talk about that marshmallow experiment and delayed gratification, right?

 

You need to delay gratification, but not all of it. Don't leave all your money to compound in the future. Use that money to enjoy any present, take your kids to a park or a Disney land or, or a foreign trip or somewhere where you will have to spend some money and they will enjoy the experiences. I'm not saying buy them stuff with them, enjoy the experiences in their growing up years, spend some money with it if you have that money. But I think those things are so important for us to understand. So if you have 10 marshmallows, and this is how I conclude my chapter on that thing as well, if you have 10 marshmallows, you say five or six for the future, but eat those four now, right? Enjoy those four right away. 

 

Raj: You know, we've seen that, mostly men in the world of investing, right. We both have spent a decent amount of time in that and at least see them talking about it and you're going to have Radhika Gupta on your podcast and she's very vocal about it. Rightly so. And this is one subject very near and dear to me. 

 

What's your thoughts? 

 

Vishal: It's ironic that two men are talking about  there are not more women in investing, but I, I don't have any clear answer for it. I'm sure Radhika is going to give better insights on this, but I sincerely hope that we see more women investing or handling the finances, whether at home and home or work. Right. I'm sure. I'm pretty sure that the women are better at managing money, though they have not proven it, or nobody probably it's the conditioning of, let's say environment over the past many, many decades or years, or probably centuries as well, where, where the man in the house has actually taken the lead and the woman has probably taken a backseat or has been forced to take a backseat as far as money management is concerned.

 

So I think I was reading this article by Jason Zweig in the Wall Street Journal. He wrote that in 2009, just after the crash, that all those people who thought themselves as masters of the universe, were right. And there were the men who actually caused the financial crisis. He also mentioned that a woman would be better investors and would have better managers.

 

One thing is that they are not willing to take overdue risks and they are not really overly arrogant or overconfident as far as things are concerned or decision making concern. They're much more like calmed down, toned down compared to men who often behave rashly, right? So they will be better at handling money.

 

So I hope so. I have no clear answer why there are not many women in investing or finance, but I sincerely hope that the more women take up finance as careers, not just careers, even more forthcoming, much more open to manage money at home as well. And listen, I advise, , not just for women but also for men.

 

So when I think so many times we've heard that if you educate a woman, you educate the entire society. Forget about educating men in financial matters. If every man in the household, if he understands what it is to manage finances, and if the woman does not understand, I think it's the responsibility of the man to teach the woman about taking control of the financial part of it, part control.

 

And I'm not saying give up control. 50-50, you have, it's like, you have to run together. You have to take care of the family money together. Right. So, and it's ironic where most of the men would save a lot of money. So they're, their dependents are not worried about money when they die. Right. And the people who are going to benefit from that money, do not have any idea about what they need to do about the money. If the woman is knowledgeable about money and finances, she should teach the man, if the man is knowledgeable about money, finances, he should teach the woman. 

 

Raj: You know, you spoke about wall street, right? And then you mentioned what that, in that, that you said that in 2009, it took wall street about 13 years. And in 2021, you know, there was a first time. And a big wall street firm, like a Citi Bank has got a woman as the CEO. So it changed, but it took longer, hopefully a good change. And you know, probably, , we'll see many more at, at that level taking charge of such a large organism.

 

Vishal: It's also a matter of how the woman is raised or the girl is raised with a family. I would find myself as a culprit as well. Right here. I have a daughter and a son. Right. So when you talk to a girl, right, or when you want your girl to do something right, you, you would always ask her to be very careful, right, right. Or should I help you? You'll offer your help and all those kinds of things, because we think that they're afraid. Yeah. Compared to a guy who is bindaas, go out and do this and yeah, you can do it and you can do all those kinds of things. So we had actually passed on the wrong kind of message that a girl is a fragile person and a boy is not right. It could be the other way around. We need to balance out. We need to equate them together from the very early years of their upbringing. If we really wanted those women or the girl in your house or women in your house to actually go and take, take charge and lead, the business world or the finance world  in the future. So it all starts from the house. You cannot really blame that women have to take responsibilities in managing the household when they grow old or when they have kids. It all starts with how we raise our daughters. 

 

Raj: We all are culprit of that. 

 

You seem to have read tons of books very clearly. And you know, I counted at least 92 books mentioned in reference in your book, The Sketchbook of Wisdom, you also wrote in your book that, you know, read not for information, but to reflect, ask questions, and discuss. Most of us, including myself, you know, we read for information more so that, you know, we can sound smarter than the next party. You see it very differently. So what's your book reading style? What's your journaling style? What books are you reading currently or any recommendations you want to throw up?

 

Vishal: 2019, I didn't buy a single. No single book, no new book for me. 2020 as well, despite the fact that we were in a lock down and there was so much more time to read, I would have bought maybe a couple of books or three books, right. Or maybe two or three. It would have been gifted by friends and everything.

 

So over a period of time, I realized that incremental knowledge of wisdom that you receive by reading new books. So I have gone back to reading or rereading those old books, the classics, I started investing, human behavior, wisdom is concerned, Krishnamurthy, or Ben Graham, or Charlie Munger or lessons from Warren Buffett, Howard Marks, Bhagavad Gita.  So all those kinds of books are something which I have been rereading for the past two to three years. And they were also one of the reasons when I buy, I wrote the sketchbook of wisdom, because that was a way of funnel for me to transform or transform the idea in my words, and actually share with the world in a much more simpler manner, a concise version of what I have been reading and learning from these super texts.

 

As far as new books are concerned. So recently I have been reading this book called Noise by Daniel Kahneman. Which recently came out. So no major lesson, which I could share as of now. So Noise is something, but I started liking that book again. I got a recommendation from my conversation with Vinod Sethi, Yoga Vashishth 

 

So Yoga Vashisht is the notes of the lessons Vashishth gave to Lord Rama. We've all heard about the message or the training or the lessons that God has given to the world. Now, here is a message, which was given to Lord Rama himself, right? So there could be nothing better than that.

 

So that's also a book that is something which I've started liking. As I'm reading it, it's a dense book. It's not an easy read, but yeah that's the reason you have to read just one page per day. So that's something which I'm doing. 

 

And, I recently got gifted a book, Richer, Wiser, Happier by William Green. So that's something which is something which I highly recommend. It's a wonderful book, which profiles a lot of super achievers as far as investing is concerned, very wise investors and, , what they have done in their lives. It's not about investing about the characters, about how they've grown up, how, how they practice investing, the long term thinking that they do, the simplicity with which they invest.

 

So William Green has actually done a great job in terms of providing these investors and bringing their most important lessons. Most of these investors that not many people would have heard of. Right. But a wonderful lesson. So yeah, these are the three books which I'm reading as of now really are more of rereading them, new reading.

 

Raj: All our bookshelves are full of books. We have never read that's that's that's, that's it? 

 

You know, so we are coming to the end of our conversation and this is something, you know, we ask all our guests, what would be your advice to your 20 year old Vishal who's just starting his own investment journey or even, you know, starting his career itself?

 

And also one piece of advice to a young parent.

 

Vishal: So 20 year old Vishal, who's surrounded by Bitcoin and cryptocurrencies and blockchain, and options is not going to listen to the 40 year old Vishal talk about long-term investing in saying, I don't understand this, which means you should not be also doing all this kind of stuff.

 

Right. So, but yeah, I will still try. I would, I would still probably advise Vishal for example, or if I were to talk about my daughter she's 17. So assuming that she's 20, I would advise her to make small, again, incremental daily changes. Right. That is one thing, but also to take big leaps when the opportunities come.

 

So, life is not just about 1%. It's sometimes also about 50% that you have to take a 50% leap, right? A leap of faith where you think it's a win-win for you and the society at large, I would not say just, bet everything on a reckless adventure. But I would say that if it's a win-win for you and the society at large, you take those leaps, like, like I very much like Talib’s barbell strategy, you do something which is very safe at one end and you do something which is a leap, which is slightly risky n the other hand, and in the middle you do nothing. 

 

So that's the kind of approach I would advise to my daughter. Right. I will also probably ask them to stay true to what they really believe in. Right. Rather than a living by someone else's scorecard. Right? So this is one lesson. This is one of the most critical lessons that I've learned from Buffett and, and from all the people who might care to listen, who people who have aged well, who've been very wise that it's very important to listen to others, but it's very important to listen to your inner scorecard and see what it is telling you that nothing else in life matters, nothing else matters, except what you yourself is telling you.

 

All right. So be truthful and listen to your inner scorecard, right? Change for the better daily, right? In, in small steps, but also leap when you have the opportunity. And I think that should take care of you by the time you reach 40. So I think that should, that should have been advised that I, I would want to give the other person care to listen.

 

Raj: For a young parent, specifically asked by one of my colleagues?

 

Vishal: So yeah, it's, it's an on the job training. So I would not be, it's not something which I, I I've just been into parenting for the past 17 years, but, one advice from a one lesson, which I've learned is that, your child is not going to listen to what you say. She's only going to see what you are doing.

 

Right. So it's important for us parents to act our part. Well, rather than just saying, do this, do that. It's for us to show them how we act so that they get inspired and they see what is right. And what is wrong. So I think, doing the right thing to teach your kids is better than saying the right things.

 

So that is one lesson, which I am trying to practice. I'm not sure what kind of results it's going to give, but I think that sounds good. I think that, that, that works better. That works better. Yeah. 

 

Raj: You know, since you mentioned crypto, I'm very tempted to ask you this. Now, since I said that was the last question, probably this is the last question now. And you talked about the barbell strategy as well, do risky and do the same on the other side. So what's your thought on, where does crypto stand?

 

Vishal: I think it's too hard a basket as Buffett would say. In fact, my son, my 10 year old son has started watching a few videos to understand blockchain's too young for him.

 

So he's starting those kids' videos and sitting with him. But my understanding is probably lesser than what he understands as far as blockchain is concerned. But I think that's too hard for me as, as at this point of time, I would rather, I would probably spend some time on that later, but not now, not now.

 

Raj: So, you know, Gary Gensler was the SEC chairman and taught a course at MIT, which is there in open, about blockchain. 

 

Vishal: I think Patrick Shawnessy also has a couple of podcasts too, which expand blockchains and Bitcoins very well. I've been through half of them, but yeah. Tough for me. 

 

Raj: So yeah, he's got good guys like Vitalik, you know, even Tim Ferriss got Vitalik who was the originator for Ethereum, of course Balaji, who is the cheerleader for the whole crypto thing, but it's very fascinating. You know, people like us find it very difficult to understand this, but, I always believe that, you know, if so many, so many smart people in the world  are involved in this and looking at it, it is at least worth your time to even look at it. Don't shoo it away.

 

Vishal: No, I'm sure. I think it's very difficult to change your mind. Right. And, with the kind of conditioning that we have had with the past 20, 25 years, long-term investing, value investing or stocks and bonds are the two kinds of investments, real estate at best, right. For us, I think this is typical of any new asset class or any new thing that we look at. We first, we first start with denial. This is not going to work. This is for the youngsters, or this is speculating. All those kinds of things they may be. And I'm sure, in cryptocurrency, especially, there's a lot of speculation that does happen.

 

The kind of TikTok videos and the advisor that you see on Twitter, right. People making billions overnight and then losing everything right, in a Bitcoin crash. It's definitely a dangerous game to play, but with education and the right kind of understanding of the underlying technology, which is blockchain, I'm sure it is quite a fascinating world out there. And a lot of, lot to learn for us to change our minds and look at those things with a new, new pair of specs, probably a new way of looking at the world. So mental models, another mental model, right? How do you, how do you look at new things? How do you change your mind with changing facts?

 

Raj: You know, my only problem with that is, you know, this, this, this blockchain is meant for, they call it like a trustless system. And I believe that without trust, there is no society, so I'm not able to comprehend both of them together. You know, how can you have something for a trustless society when you won’t have the society itself.

 

Vishal: How do you trust the fiat currency as well? The question is, how do you trust fiat as well? Right? People are printing money, like crazy. And you have bubbles, which are acid bubbles. Right? So how do you trust them, but yeah, because they are regulated by the government. You trust them more. In the future, if there are more regulations, which favor blockchains, people are going to trust them more as well. Right. So it's always important for us to evolve and learn. I think that's the only way there's no other option. There's another option. All you simply say, okay, I don't want to learn anything. And I just want to focus on stocks and everything. That's perfectly fine. That's perfectly fine. 

Raj: Now, Vishal, I think it has been a very great conversation. I think this is the longest podcast we have recorded so far. So that speaks about it. That, you know, is interesting. Thank you so much. Thanks for being an educator. You've done an incredible amount of work. Once again, congratulations on 10 years and you know, cheers to many more decades of Safal Niveshak.