To be a successful investor you need a full time job. What I mean is you need to be fully (or  at least partially) busy with something interesting. This is because Investing is a full time occupation with tons of free time. Time for sitting silently doing nothing. Doing nothing means listening to podcasts, reading books, playing sudoku, talking to research people, reading balance sheets – all non market activities. This is not really easy.

What is the similarity between doing business and investing? Or between doing business and stock picking? Both are similar – you need to be different from the crowd. If you are just trying to manage your money, Indexing will work. However, if you are trying to pick stocks you need to be interested in the process of stock picking. No, every investor need not be interested in the stock picking process. Today I do not do any stock picking by myself. I am happy to do development work on stocks that somebody else has already picked.

In a business you need to do something far more innovative than others to make real big money. Like Tesla for example. Or Airbnb. Or Amazon. All of them have leveraged technology, and have been very young when they started this. However, in business you also see older people doing very well – and this is because of experience. They see the world around them and incrementally produce better products. Like big hotels, hospitals, software, etc. etc.

I would put stock picking in the second category. Being qualified as an accountant, trained as a lawyer, having been a broker, and being an investor have all helped me in my stock picking. Of course it has also helped in my training, but I feel I am a better stock picker today than what I was say in 1990. Sheer experience of understanding promoter speak and accounting. I have not met a promoter for a very long time, and I do think that promoter meetings are over-rated, unless of course you are a venture capitalist.

I do think that even Elton Musk would have become a better businessman with age. Howard Marks, Warren Buffett, Charlie Munger – all of them worked for very long time in obscurity. Non publicity seeking Indian investors like Chetan Parikh (Jeetay investments) and Vallabh Bhansali also got better known in the 40s and 50s. Like in business, you need to do something different from others if you want a result different from others. I still reiterate that stock picking is fun, but you should do it ONLY if you enjoy the process. You can index your portfolio and be much better off with say a 70%Equity and 30% Debt mutual fund. Or Index fund + PPF.

Take your pick. To be a successful businessman or a successful investor you need to be passionate about what you do. If you are interested in ONLY the clerical part of investing – which fund, what asset allocation, goal calculation…you can do it. However, that is not investing. That is clerical work of investing. Some people confuse that for investing. That is like looking at the admin and accounts department of a business. The real innovation happens in the markets, not in excel sheets. However for 99% of the population that is enough.

Go ahead, take your pick.