The last decade of investing was very easy. I mean 2008 to 2018, and that has led to this story!

When I was in school 3 things fascinated me – getting a medal, writing a book, getting a PhD and being called Dr. Subramanyam. This had to be a PhD because i had opted out of medical education long ago.

As I grew up I got no medal. Ok, make not mistake I must have participated in about 50 half marathons, and I technically should have 50 medals. Where are my medals? well, I never collected most of the medals. I lost respect for the medals the minute I knew that these were not ‘success medals’ but participation medals. All you have to do to ‘win’ a medal today is to fill a form, and preferably show up at an event. Even if you walk or run or do not finish…you will get the medal. If you finish properly you will get it at the event itself…otherwise it will be mailed to you.

Coming to writing a book. When I wrote Retire Rich – Invest Rs. 40 a day – obviously about 10 years ago I was younger and I still had hopes of changing the world. Today book writing has become much simpler and many people are doing it, so the loss of exclusivity is gone, and so has the incentive!

Coming to the relevance of both of this to the current market scenario. The idea of participation trophies made me think of today’s prolonged market cycle. I mean from 2008 to 2018. I wonder how much of the current cycle’s gains were “earned” versus provided. With interest rates pegged at 0% and almost all central banks buying trillions of assets, all most investors needed to do was show up, buy an index fund, and receive extremely generous returns on their capital. For almost a decade, relentless asset inflation has consistently reinforced investor behavior and decision making – yes, you are a good investor, yes, you are a talented investor, here’s your trophy (above average returns with below average risk). Don’t forget to sign up for next season! And if we do not do well for a couple of seasons, do not worry. Do your sip. In the long run, we will all be right. I, the fund manager today have a net worth exceeding Rs. 100 crores thanks to the SIP that YOU are doing in my fund. Thank you dear investor.

In my view, the days of unlimited investor participation trophies is over. Going forward there will be clear winners and losers. The winner may not take all like in a boxing fight – but the gap maybe much wider. There will be a few old large cap shares which will still do well and some which will croak, under pressure.  – going forward. In fact, we have seen this with shares, and not much in bonds because our great regulators have not developed a good retail bond market.