How do THE RICH Invest? | CEO of Kotak Investment Ep 4
Published: 2023-05-23
Status:
Available
|
Analyzed
Published: 2023-05-23
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker focuses her investment portfolio more on midcap companies that have the potential to become large cap companies in the future, likening them to emerging stars.
"my portfolio has falr more around those aishman kranas who have the potentials to become big bees."
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The speaker is comfortable taking on more risk with midcap companies due to her age and life stage, prioritizing potential long-term gains over short-term performance.
"for me it's not that I don't like large cap companies but I am okay to take that risk at my age and stage in life to be able to be gaining possibly that extra I might not really make it in the next one 2 years but who cares I won this money for the next 10 15 years when I may not work"
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The speaker explains the tax benefit of indexation for debt mutual funds, where the taxable gain is calculated based on inflation-adjusted cost, reducing the overall tax liability.
"indexation which is that if I own something at 100 and at the end of say 3 years I made 120 rupees so effectively you will say that your gains on on which you have to pay capital gains taxes 20 rupes which is correct but in mutual fund this is true for Bank fixed deposits and now true for mutual funds earlier what used to happen is that this 100 was not 100 because there was this concept of inflation indexation so 100 became 105 at the end of year 1 110 year 2 and 115 year three notionally"
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The speaker notes the removal of indexation benefits for debt mutual funds by the Ministry of Finance.
"now the Ministry of Finance says that that indexation benefit is not available for debt mutual funds which means but why did they do that"
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Despite debt mutual funds becoming less attractive due to tax changes, they will continue to coexist with other investment options, requiring investors to adapt.
"mutual funds have become less attractive it doesn't mean that you will disown mutual funds because if that were to be the case then people will always drive by car to go to say lunala which is a hill station in Mumbai you know 150 km from Mumbai they'll always they will never look at other means of Transport but if everything is coexisting okay that tells you that it's all about getting used to something"
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The speaker acknowledges that the change in taxation for debt mutual funds will likely lead to some migration of investments towards fixed deposits offered by banks.
"yes you are absolutely correct and in some sense therefore a little bit of cannibalization by the banking industry to the mutual fund industry is inevitable"
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An individual's financial investment decisions should be based on their personal risk tolerance, considering how much financial 'kick' their portfolio can withstand.
"it's all about knowing your risk profile understanding how much much of um uh kick your body can fathom in this case how much of kick your financial portfolio can fathom is up to you and completely your prerogative"
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Empathy is identified as a crucial leadership quality, emphasizing the importance of understanding situations from others' perspectives.
"two most important things I think is very important to get you to where you are one is empathy I think that's top of the mind so every time you cannot not say how do I perceive it it's always about how the other person may perceive it I think very very important"
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Leaders should foster a fun environment and be easily accessible to their team, regardless of their position or age.
"and have a lot of fun okay I mean I I truly believe in one thing it doesn't matter at what age what stage what profile you are you have to be easily accessible so I am literally available for my entire team"
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Humility is highlighted as the most important underrated quality that differentiates good individuals from great ones.
"what makes you good to Great is humility humility humility I think it's so important the most underrated quality I would say that uh humility is what sets you apart"
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There is a fine line between conviction and foolhardiness; success can lead individuals to mistake their conviction for foolhardiness.
"conviction doesn't become fool hardiness so there's a very very thin line of uh difference I iation and what happens is that when success gets to your head U it's quite natural that you believe it's conviction but willingly it has actually mored itself into fool hardiness"
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Even with strong conviction in a particular sector like public sector banks, if it consistently underperforms for an extended period, it's crucial to recognize when to cut losses, indicating a potential shift from conviction to foolhardiness.
"I took a call as a money manager that I am going to buy these bonds or buy these stocks and they are going to be the best performing class over the next 3 years it's not worked 3 years the fourth year it doesn't work the fifth year it doesn't work and you are convinced you keep telling yourself not realizing that it's time to cut your losses"
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Women generally possess a higher EQ (Emotional Quotient) in addition to IQ, and in the male-dominated financial services sector, this can be leveraged as an advantage.
"advantage that women have generally apart from having IQ is EQ right ... and in the financial services sector the the female gender is in the minority right"
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The speaker prioritizes passion and a 'burning desire to excel' over traditional qualifications like job timings or Ivy League education when hiring.
"if somebody ask me what are my job timings cross doesn't matter you might be from an IV League institution dude you're not there so that's a complete cross I'm gender agnostic so for me it doesn't matter who it is somebody has to demonstrate the passion I have to see that burning desire in him or her to excel"
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The speaker favors investing in midcap companies with the potential to grow into large-cap giants, comparing them to emerging actors like Ayushmann Khurrana.
"My portfolio has falr more around those aishman kranas who have the potentials to become big bees."
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The speaker prefers Exchange Traded Funds (ETFs) for their large-cap investments due to their low cost.
"My large cap funds are all in ETFs I do predominantly ETFs because that's very lowc cost for me"
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The speaker emphasizes discipline by investing a fixed amount monthly through a Systematic Investment Plan (SIP) into mutual funds.
"my entire mutual fund Investments whatever I have done so far is everything through uh systematic investment plan so I get a monthly income and I have allocated x amount and I say that that will go into a monthly um systematic investment plan and that's my discipline"
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The speaker advocates for a shift in financial mindset from 'income minus expenditure' to 'income minus savings/investment equals expenditure'.
"the math today is income minus your savings or your investment is equal to expenditure for me that time 25 years back for me it was income minus everything expended equal to nothing so I'm saying that mindset has to change"
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While acknowledging that debt mutual funds are less attractive after tax changes, the speaker suggests they should not be entirely abandoned as they offer different benefits like diversification compared to other options.
"mutual funds have become less attractive it doesn't mean that you will disown mutual funds because if that were to be the case then people will always drive by car to go to say lunala"
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Humility is identified as the most crucial and underrated quality that differentiates good individuals from great ones.
"what makes you good to Great is humility humility humility I think it's so important the most underrated quality"
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Conviction in investments can turn into foolhardiness when an investor becomes unwilling to accept that they might be wrong, even when evidence suggests otherwise.
"conviction has actually formed or transformed itself into fool hardiness that you are led to believe that whatever you're doing is only going to be right"
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The speaker suggests that women possess an advantage in Emotional Quotient (EQ) which can be leveraged as an opportunity, particularly in fields like finance where they are a minority.
"advantage that women have generally apart from having IQ is EQ right... for you that is an opportunity I look at it as an opportunity"
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Passion and a demonstrated desire to excel are crucial hiring criteria. Candidates must also show they have researched the firm they are applying to.
"somebody has to demonstrate the passion I have to see that burning desire in him or her to excel I ask you three questions about the firm you've come to me to meet me for an interview if you don't even know the basic things about my firm cross"
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Jobs should be treated with the same long-term commitment as marriage, emphasizing longevity and dedication to a professional path.
"you need to treat your job like marriage only lucky people get married twice... your job like your marriage if you're not married then your parents marriage or whoever marriage as an institution which is for long it is for Keeps"
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The speaker's personal investment strategy involves allocating 90% of their portfolio to equities.
"bulk of my money is in equities in the stock market... in my portfolio 90% 90% Equity"
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Artificial intelligence should be viewed as a tool to aid investment decisions, not as a replacement for the human decision-making process.
"artificial intelligence has to be used as an enabler to the decision making it cannot substitute the decision making process"
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Direct investment in bonds is recommended only for individuals who understand financial statements and balance sheets; otherwise, mutual funds are a safer alternative.
"bond market investing direct bonds is only for those who understand the basic color of the balance sheet if you don't know it please go for mutual funds"
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High-yielding bonds may have hidden risks or complex structures to achieve those returns, similar to how excessive sugar syrup affects a rasgula.
"these double digit yielding bonds now you do not know the extent of sugar syrup that is infused or the amount of coating that's done to give you that return"
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The Indian banking system is robust due to high capital reserves, providing a strong cushion against potential financial anomalies.
"Indian balance sheets or Indian Banks I would say are one of the highest um uh you know sitting on highest poorts of capital which is the monies uh which protects or which is a cushion I call it the suraka Cav"
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Financial independence is defined as understanding one's financial journey, working towards it, and ultimately having the empowerment to manage it as desired.
"understanding that entire Financial journey and working towards it and finally being empowered to do it the way you want I think that's Financial Independence to me"
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A long-term perspective and unwavering discipline are crucial for investing, regardless of market fluctuations or external events.
"longevity and keeping your money for the Long Haul is very important Come Day come night come winter come storm you don't care"
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The speaker prefers midcap companies over large-cap ones because midcaps have greater potential for future growth and higher returns, unlike established large-cap companies with limited growth potential.
"they will have limited Elbow Room to give you return pay return return pay return you know kind of a thing so my focus my portfolio is more around the midcap or the mid-market companies which could be the future large cap"
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Young adults today should aim to invest 15-20% of their income, a shift from past practices where saving was often an afterthought.
"I would say that um dude I need to invest at least 15 20% of it and then so that math or the formula has changed for me today which was not there 25 years back"
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The speaker gauges their financial independence by calculating if their current savings can cover their projected monthly expenses for the next 30 years, even with conservative return estimates.
"for the next 30 years if I do nothing is my kitty enough to take care of 100 bucks that's the way I look at it"
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