‘Subra if we break the wall….you will get another 10 sq ft’. I remember the Interior decorator telling me. I asked him ‘how does an extra 10 sft impact my life’. He had no answer.

When we are given a choice we struggle to choose. The capitalist assumption is that a bigger car, a bigger house, more chocolates give us more happiness than less chocolates….which is a wrong assumption. When we are in a comparing mode we think a better fund will give us more happiness. Actually on a net worth of say Rs. 10 crore if a person is trying to invest Rs. 1L does it really matter whether a 22% return will make a difference or a 23% return make a difference? Or take it to a level where a person with Rs. 20L is trying to start a new SIP worth Rs. 4000 – will the choice really matter?

Well at the choosing stage we THINK we are comparing equals (ELSS?) but while investing your Franklin Templeton ELSS could be a large cap fund vs Axis a Mid cap fund. So event the BASIS OF COMPARISON (ELSS) IS wrong!

If you have read De Bono’s Six Thinking Hats, that is the way to evaluate a product. Wear each of the six hats – white, red, black….and evaluate a fund. Then move on to the next fund. Then the third fund.

We are not capable of finding out the difference between say a Hdfc Top 200 and a Kotak K 30 fund. We just cannot.

I remember Mr. Munjal (Senior) once telling us “all 2 wheeler companies will do well”. That was really brilliant. I bought Hero Honda, held on to Bajaj Auto, and bought TVS Suzuki. All 3 boomed. I realized that if I had bought only 1 of them I may have missed out on some of the growth curve. That really set me thinking about my ability to do a HH vs BAL comparison. As an analyst I was encouraged to do that. Sounds foolish now. It is how the media works, but my money works differently, right? It made no sense to do a HH vs BAL vs Suzuki – and I did not know that BEFORE I met Mr. Munjal.

I hate comparisons like who is a better singer ‘Kishore’ or ‘Rafi’. Honestly it does not matter – I love both. Who is a better batsman ‘Sachin’ or ‘Lara’. Well you are here to enjoy good cricket, right?

Similarly when picking funds, realize that YOU (WE?) ARE incompetent to make those comparisons. So pick a few funds after doing research. If it has a good track record, stability of fund manager, reasonable charges, good fund house, impeachable integrity, practical ethics, corporate governance – just invest. Surely in the long run you will get good returns. What that number will be is a guess.

It is as good a guess as your 2 year old daughter or 2 year old grand daughter!!