Create your Serendipity as an investor

Many of us downplay the role of “luck”, “chance”, “karma” in our careers, our investing, our personal lives.

Where there is choice, there can be conflict created by the choices. To invest now when the Nifty is at all time highs or not to invest, to marry this person or not to marry…to quit this great job and go for my own start up or not to….And there is a choice in everything.

Now, while we all have a free will and an intellect to discriminate and take calculated risks and go ahead with a decision, there are hundreds of factors our intellects cannot see or consider in any deliberation. Yet we go ahead with a course of action. What differentiates a calculated risk from a wild risk is this deliberation. Yet, there is risk, always, of not getting a desired outcome.

Often, we see that our planned course of action, our investment succeeds and sometimes there is wild success, despite hundreds of things we could not see while deliberating. Wise folk recognize the role played by “luck”/“chance”/ “karma”.

I recently heard a very interesting conversation between two brilliant and successful men – Mr. V Shankar, Founder CAMS and Mr. G V Ravishankar, Managing Director at Sequoia Capital, in which Mr. VS asked Mr. GVR to speak about something the latter had written in the context of venture capital investing – “Create your Serendipity”. (Serendipity is translated as Chance, Fate, Destiny, Luck). In short – how to create conditions favourable for you to get lucky!!!

The response from a very successful man struck me and was insightful and in short was as below:

Depending solely on chance for success to come in your choices is like trying to win a lottery. One can create the conditions for Lady Luck to visit and one can “manage serendipity”. This is said in the context of his VC business.

1. Be there, always. Be committed, have passion and be there to take decisions.
2. Make yourself heard – to let potential entrepreneurs know that you are there to evaluate a venture of theirs. Let folk know what you do and that you are there.
3. Give time! You cannot be impatient. Give time for the seed to become a tree.

When all the three are there, the chances of success are higher.

Now, let’s look at this in the context of investing – to get financial freedom.

All investing is forecasting. We want a particular outcome but there are hundreds of factors we cannot see. 2020 is a great example of things turning upside down and life being disrupted in a way we did not think possible. So, how does one create conditions favourable for success in reaching financial goals and getting success in investing.

My take:

1    Be committed. 

     Be committed to a savings plan, to sticking to your process and staying the course. I have seen that those who impulsively deviate from their planned investing process, allocation invariably get a sub optimal result. Have seen actual instances of folk impulsively sell off in March at the lowest of low points and disturb their equity allocation, instead of following process. Just sticking on would have meant being in gains now. One did not know how the future would unfold but deviations from asset allocation hurt. Those who stuck to their SIPs, were there (Be there- be committed) have gained. Those who stuck to allocation and moved funds into equity did even better and created their serendipity. One may say that this is said in hindsight, but do check out previous instances in your own investing lives and note them down.

2.       Be open: Be open-minded to:

• Check out all products and not derisively dismiss anything. I find folk on twitter dismissing various products just because they are from AMCs. You alone lose if you do not know about a product and way it can help you. I have been served through out life by making an attempt to get insights about how various investment instruments work.

• Seek advice if you think you will be better served along your journey with advice. Obstinate refusal to take help will keep you away from learning much and gaining much.

3.       Give time: Be patient:

Results take time to fructify. Patience is required to sit out volatility. Patience is required to allow time for the investment to give results. Patience would mean you are invested in that one good year which will make a big difference to your investment outcome.

 I'm never tired of looking at this graph of the Nifty in 2020. Serendipity through patience, in a graph :)

NIFTY 50 YEAR TO DATE

So, if you are committed, you are open-minded and patient, you will often be creating your serendipity. Do save this, try it and in time let me know how Lady Luck has blessed you. Follow me on twitter.

DISCLAIMERS:

I am an AMFI-Registered Mutual Fund Distributor.

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