Hare and the Tortoise Retold

Here is a story of two different investors – who just happen to be real clients of mine. Since I cannot name them I need to give them pseudonyms. One investor is Mr. Kachua. As this is a derived name, you can guess his basic nature – he is cool and slow. Understands the importance of investing through SIP, choosing a good fund house and has traveled with me on my journey as a financial advisor and have been well served— by the knowledge and experience I have gained over the past three decades.

The second investor is Mr. and Mrs. Kharghosh. Met them for the first time after 2008. The Kachuas are your classic affluent Indian couple. They are in their late 40’s; both are working professionals who have one kid who is in school and will finished college in 7 years time. Mr. Kachua is a professor with a handsome six-figure income, an indexed pension, lifetime healthcare, and he has decided to work till he is 70, health permitting. Mrs. Kachua is a medical professional working with a big hospital and also does some teaching assignments. She has her own retirement plan, the customary PPF account, and is sure she will work till she drops dead! However she is not averse to taking longish vacations – twice a year when her husband has a vacation from his college. He was the son of a businessman and had inherited a nice big house in a prime location of Mumbai and continues to live in it. However there was not too much of cash or other assets inherited.

His wealth has been created by SIPs – over the past 9 plus years. The fund chosen are Hdfc top 200, Hdfc Prudence, Icici Prudential Discovery, Hdfc Equity, Franklin India Blue Chip, Franklin India Prima Fund. The skill has been in not flinching over long periods of under performance – especially in Franklin Prima.

The Kharghoshs are the other couple. Mr. Kharghosh’s father sold off a big business and gave him a nice amount of money – running into 8 figures in the late ‘90s. A friend had helped them in their taxation and was referred to me after their ‘own’ internet based investment adventure. Clearly Mr. Kharghosh was the typical Alpha male – comparative success was far more important and success parameters were self defined. One could hardly encounter Mr. Kharghosh without hearing of a hugely profitable recent trade. In fact, I guess his portfolio had at least doubled at one point. For a new entrant in the equity field, things seemed very good to these inexperienced investors. Their main advisors were the ‘net’ and of course their equity broker – who was another aggressive sub-broker to a big brand.