This question is popped at me by almost everyone who knows my story. It puzzles those who know me that I should actually start a venture that advises other investors (small and big) in a beaten space like mutual funds. Isn’t it too restricted and repetitive? Would it not be better if I simply stayed put to the proven path in secondary market investing? How will investors understand what we do and appreciate the value of our work? Is there a differentiator? Even if there is one, will we be viewed differently from the herd?
When you are hearing many questions on something, I believe that it indicates that people need greater clarity on the subject. This note is an effort at explaining.
I am basically a secondary market investor. My secondary market investing is based on research and strategy. I rely principally on reading, researching and thinking about the future of businesses. The numbers matter as much as the ideas. My investment style avoids interaction with companies and I rely on my understanding and number crunching skills for decision making.
I have a core investment philosophy which pervades my work. The philosophy guides my thoughts and helps me make my investment choices. While making the right choices is critical for investing success, how we deploy our monies into these ideas is equally critical. The investment strategy does that job. The investment strategy follows the investment philosophy closely and involves managing the right balance between chosen investment bets. My investment strategy is adaptive and dynamic. It factors in events, news, economic data and sentiment while making routine decisions of buying and selling. The strategy gives the much needed calibration to my investing.
This investment approach has helped tide over two gulf wars, the scams of Harshad Mehta & Ketan Parikh , the dotcom bust, the derivatives crisis of 2007 and the current crisis of global central banks. The long term value of investments did not get impaired and returns stayed consistently better than other asset classes.
Over this period, I observed that retail investors who took the mutual fund route had mostly been battered and lost faith in this concept. The powerful idea of mutual funds had not worked for a wider section of investors. I have been a passive observer of this trend and not preferred professional advice despite being qualified to do so for a long time. The crash of 2007 inflicted severe pain and developed abhorrence to mutual funds among the investing public. This made me go deeper into how funds were managed. The months of studying what the funds were doing and why they were not returning monies to investors were an eye opener. The curiosity grew into a challenge as I started trying to develop metrics which could measure the future potential of funds. This process saw a team being assembled and a framework falling in place. The ithought way was born out of this search for answers. I drew on all my experience as a researcher and investor. Gradually, we came to the point where we started viewing the fund like a stock and making portfolios of funds. Even at this point, we were not sure how we could turn our research work into a business model.
Investors were not willing to pay an advisor fees and the funds schemes were being distributed with upfront commissions being paid to agents out of the entry loads taken from the investor’s corpus. SEBI brought about a sweeping change to this system by abolishing entry loads. This event turned the research project into a start up and ithought was born.
I believe that ithought will change the way investors use the mutual fund route. The ithought way will help every investor to make his investing research-based and strategy-driven. Investors can even turnaround their existing investments by adopting the ithought way.
Ithought is a game changer. It has kicked off in a falling market. The next Bull Run will prove its efficacy and team ithought will constantly strive to make the ithought way work for every investor.
Lastly and most importantly, ithought has a strong reason to be. YOU.
and Chief Mentor,