Three bucket framework to Investing

For Value Investing Almanack, Anshul Khare asked me the following question: “Being a value investing disciple and also working in a company which is at the bleeding edge of technological disruption, how has your investing style evolved in last five years?”. Click here to read the rest.

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5 thoughts on “Three bucket framework to Investing

  1. Great post again. Kindly elaborate on “buying S&P in 1999 and making no gains till 2009” part. Also , do you think this indexing philosophy will work with sensex/nifty?

    • Thanks, Sanjay.

      S&P 500 Index Level:

      31-Dec-1999: 1469
      20-Mar-2009; 769

      If one has invested all the capital on 31-Dec-1999, then after a decade he wouldn’t have made a dime. Not only that his initial capital would have shrunk by 48 percent. But the same person experience would be different if he had been dollar cost averaging the index.

      Sensex/Nifty is not representative of the Indian market. It has 30/50 stocks. Also, it has a lot of PSUs in the index. Majority of the mutual funds have beat the index handsomely over the long run. One would well by SIP on mutual funds instead of indexes.

      In future if we have a representative index and with more active competition things can mean revert. Who knows only time will tell.

      Regards,
      Jana

    • Thanks, Kris.

      Sensex/Nifty is not representative of the Indian market. It has 30/50 stocks. Also, it has a lot of PSUs in the index. Majority of the mutual funds have beat the index handsomely over the long run. One would well by SIP on mutual funds instead of indexes.

      In future if we have a representative index and with more active competition things can mean revert. Who knows only time will tell.

      Regards,
      Jana

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