Lessons from my investing journey 2019-2024

My journey into the world of investing truly began in 2019. Before that, I was just an occasional visitor to the stock markets, with perceptions largely shaped by my stint at SEBI. There, it was a common belief that individual investors could only make money in the markets through insider trading or price manipulation. However, a series of transformative reads completely changed my perspective. Books like The Intelligent Investor, Security Analysis, The Tao of Charlie Munger, Common Stocks and Uncommon Profits, Value Investing and Behavioural Finance, The Warren Buffet Way, Coffee Can Investing, and The Unusual Billionaires introduced me to an entirely different dimension of investing—one rooted in research, discipline, and a long-term mindset. Inspired by these works, I started investing seriously in 2019, focusing on thorough research and a structured approach

I began my investing journey by parking my initial corpus in a mix of blue-chip stocks and a single mutual fund—one that I still invest in today without ever considering others. My first real test in the markets came in 2020 during the COVID-19 crash. As the markets nosedived, so did my investments. However, this period also presented incredible opportunities. I lapped up shares of a conglomerate that had long been a source of memes on social media, as well as a private sector NBFC. Additionally, I started buying into two Hyderabad-based CDMO companies, which were relatively under-the-radar back then but today are quite popular on social media.

There were also lessons learned from missed opportunities and missteps. One notable mistake was passing on a hospital chain stock that was undergoing operating deleverage at the time, making it incredibly cheap. To this day, I regret not buying it. Another error was investing in an insurance company stock based on the recommendation of a well-known investor—this investment has delivered abysmal single-digit returns. Despite these missteps, my overall portfolio, including dividends, has decently outperformed Nifty. However its still early days for me and I believe may be the next 7-8 years will define me as an investor.

From this initial phase, I’ve distilled six key lessons that I believe are crucial for successful investing which I would like to share with my readers-

• First, wealth creation isn’t just about identifying multibaggers—it’s equally about allocating the right quantum to those stocks. To create any meaningful impact on your net worth, you need to allocate at least 8-10% of it to a stock. A ₹1 lakh allocation to a 10-bagger will yield ₹10 lakhs, but a ₹10 lakh allocation to even a 5-bagger will yield ₹50 lakhs. This underscores the importance of conviction-driven allocation and proper sizing of investments.

• Second, entry valuations are crucial. Even for fast-growing companies with robust fundamentals, high entry valuations often lead to subpar returns. It’s much like a Test match analogy: chasing deliveries on seaming and bouncy pitches outside off-stump may look tempting but often leads to getting out cheaply. Similarly, patience and discipline in valuation are indispensable for long-term success.

• Third, never chase popular names. The key is to identify stocks or sectors before they become market darlings. Focus on areas that are currently out of favor but run by quality management teams. For example, well-run private financials are out of favor today, but I believe they hold tremendous potential for alpha generation in the future. The ability to identify and be convinced on an opportunity before others is what differentiates good investing from great investing.

• Fourth, good investors are not just excellent analysts or stock pickers—they are outstanding eliminators. One must have a clear return aspiration in mind and ruthlessly eliminate investment opportunities that don’t meet that benchmark. Never spread your fund allocation too thin across a lot of names. Spraying and praying never helps in wealth creation, whether in direct equity investing or through mutual funds.

• Fifth, markets will always present opportunities. Whether the markets are at all-time highs or lows, regardless of macroeconomic fundamentals or the political party in power, opportunities are always present. The key is to continuously search, analyze, and expand your universe of stocks.

• Finally, regrets are part of the journey. Missed opportunities, early exits, or late exits—they’re inevitable. The key is to leave those behind and keep moving forward. Investing is a continuous learning process, and every regret carries a lesson that contributes to future decisions

Investing, to me, is strikingly similar to batting in a Test match. For a batsman, the goal is to stay in the game for as long as possible and play out as many sessions to score big. This requires respecting the bowlers, leaving deliveries that are too risky, and patiently waiting for the right phases to capitalize. Similarly, in investing, there are periods where the market demands patience—phases where you must observe, analyze, and refrain from impulsive decisions. But when the right opportunities present themselves, it’s crucial to act decisively and act big . Just like Test cricket rewards patience and spending time on the crease, investing is all about maintaining the same disciplined mindset to create wealth.