Nostalgia. It is the mind/brain’s ability to remember things the way you wish things had happened!

Our mind has an amazing capacity to remove bad experiences and keep the good ones. In investing too if you have had good experiences in the beginning of your investing career you look at investing far more fondly.

I got into serious trading/investing in 1979 (class XII, aged 17, about 18 years late according to Buffett). I met a ‘broker’ who is now my friend, philosopher, and guide. Needless to say he is still my broker and we talk almost every day. Whether I do a transaction everyday is a different question, but we do talk everyday.

My experience was good, and there was a bull market which gave us a lot of opportunity to trade. Transactions would be worth Rs. 1500 to Rs. 2000, and I do think it rarely went beyond this amount…but human memory is frail. I had already got my dad to invest in the Fera dilution of 1977 (George Fernandez!) which meant his portfolio had Colgate, Hul, Nestle, Siemens, Cummins, PnG, Kodak, Cadbury ….not sure if I am forgetting something..I do not think so. He was an early investor who had bought shares like Hindalco, Larsen, Warner Hindustan, etc. In 1977 he had added Reliance, and in 1980 I added Hdfc, Tata Steel, Ta Mo, etc.

This is not so much about the family portfolio. Remember, this portfolio was not expected to pay for the food. It was meant for some major expense. It was more a wealth creation mode and not a “providing for a goal”. So like Buffett says the holding period was “forever” and is has been forever.

Of course we have had investing nightmares – the Nath group of Hyderabad (and the subsequent ostracisation of Hyd from my portfolio), PSU (initial Ipo made money), United Group, Videocon (luckily not much), etc. Also amazing experiences like Coromandel International, Carborundum Universal, Eid Parry, Sundaram, Infy, Bajaj auto, TaMo, ….and a long list.

Now if I had started investing in 1924 in the USA, I would have seen my portfolio drop 90% in 1929. I have no clue how I would have behaved in 1930. In 1950, I may have kicked myself for not staying on in the fund/ shares but I had to tackle my brain of 1930 in 1930. I doubt whether anybody had the ability to stay calm when there was a flood of blood on the streets. Theory is different from what is happening in your stomach right now!

Take the case of a man who retired in 1991 and decided to invest in the markets at the peak. If he had bought Mazda Industires and its ilk…he would have been wiped out. I got lucky…I had just converted some of the shares like 3M into buying an office (clear luck, not skill).

So my formative years 1979 what all went in my favor:

Finding a great broker who is also a great human being (sheer luck, and geography – he was staying near my house!!)

Father’s nice salary cheque – in case the portfolio went to zero, it would not have mattered

Love for markets, balance sheets, Business India (magazine), a non-screaming Economic Times, …etc.

A bull run (trading profits make you feel like staying on in the markets, and dividends reinforce the decision to stay on)

Nothing else to do – so class 12, Bcom, CA ….and a few other exams.

Largely bad times in the market happened later on – say post Harshad scam. By that time I had gone through becoming a sub-broker, a main broker, and had enough dividend income to contemplate retiring. The strength of the portfolio created from 1986 (gsfc, cholamandalam, coro, eid parry….were the new stars, the old stars still remain) allowed me to weather a close bankruptcy call in 1993 or 1994 (funny loss aversion says I should remember it!). Well it allowed me to retire in 1999/2000. Age 38.

Fairly obviously, if I had started in 1992 (I shudder to think) I may have wiped out my dad’s provident fund money (he retired in 1990)..or done something foolish – and for the rest of my life blamed Harshad (personally Ashwin is one of the best research guys, but that is for a one- on- one talk). I have vague memories of the interaction, but have fond memories unlike most of the others!