Ep. 27 – Nilesh Shah on Transformation of India, Lifelong Learning, and Importance of Humility in Investing
Sep 14, 2023
auto_awesome
Managing Director of Kotak Mahindra Asset Management Company, Nilesh Shah, discusses the transformation of India, lifelong learning, the importance of humility in investing, spirituality, and more. The podcast explores topics such as equanimity, open-mindedness in investing, separating signal from noise, the role of spirituality, developing rounded edges and maturity, understanding karma and building an optimum portfolio, and instilling life and money skills in daughters.
India's economic transformation is now widely recognized and optimistic, shifting from having to convince people of its growth story to increased belief in its potential.
Financial education is crucial for Indians to become successful investors, as many struggle due to speculative investments, lack of awareness, and falling victim to scams.
Humility, a long-term approach, and a client-first mentality are key factors for successful investing, along with detaching from short-term outcomes and incorporating mindfulness and spirituality.
Deep dives
The Astonishment of India's Economic Growth
The guest, Nilesh, reflects on his long-term bullishness on India's economy, despite doubt from others. He discusses the shift in perception from having to convince people of India's growth story to now witnessing widespread optimism. He also cautions against excessive risk-taking and highlights the need for financial education among Indians.
The Challenges of Indian Investors
Nilesh observes that while Indians are great savers, they often struggle to become successful investors. He mentions various instances where people have lost money due to speculative investments, Ponzi schemes, and lack of financial awareness. He emphasizes the importance of investing wisely, distinguishing between investing and speculation, and following a long-term approach.
Lessons from Nilesh's Journey and Philosophy
Nilesh shares insights from his three-decade-long career in capital markets and fund management. He highlights the significance of humility and being a student of the market. He also discusses the importance of client-first approach, detaching from short-term outcomes, and making informed, fundamental investment decisions. Nilesh also mentions the relevance of mindfulness, meditation, and the role of spirituality in his work.
Importance of Detachment and Long-term Perspective
Nilesh emphasizes the value of detachment from positions and the ability to think long-term in investing. He cites examples from market downturns where fund managers who advised clients to stay invested proved successful. He also emphasizes the need to separate signal from noise, develop a process, and stay within boundaries to avoid being influenced by short-term market movements.
Importance of keeping an open mind and networking
Keeping an open mind and building a network of good quality friends are crucial to avoiding mistakes in the market. Being receptive to new information and feedback from others can help in making better investment decisions. The speaker emphasizes that luck favors those with an open mind, as it allows for learning from others and avoiding potential pitfalls. Networking also plays a significant role in obtaining valuable insights and assessments about companies, helping investors avoid errors.
The importance of company conduct and governance in investment decision-making
The speaker highlights the importance of evaluating the conduct of company management and promoters when researching and selecting investments. Good conduct is demonstrated by spending time in the office and factory rather than appearing more in social events or on Page 3. The speaker also emphasizes the significance of assessing factors such as financial analytics, related party transactions, business structure, and involvement of family members in gauging the overall governance of a firm. Additionally, the speaker emphasizes the need for engaging with promoters to promote a culture of respecting minority shareholders, ultimately benefiting both the company and its investors.
I talk to Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company. Nilesh has over 31 years of experience in capital markets and has managed funds across equity, fixed income and real estate for Indian and global investors. While this is my first interaction with Nilesh, I have looked up to him for the last 20 years, ever since I took my first steps in the investment industry in 2003. In this episode, Nilesh talks about the transformation of India, lifelong learning, importance of humility in investing, spirituality, and much more.
