Ep. 30 – Shyam Sekhar on Mastering the Long Game of Investing
Feb 18, 2024
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Shyam Sekhar discusses the importance of mentors in investing, playing the long game, self-growth, lessons from entrepreneurship, and navigating investment challenges during crises. He also emphasizes the power of mentorship, adapting perspectives in investing, building confidence, and continuous learning.
Importance of mentors in shaping investment philosophy and career path.
Emphasize self-growth, learning, and evolving as an investor.
Avoid frothy markets, focus on sustainable businesses with strong management.
Valuing management, patient approach to valuation, considering macroeconomic factors.
Understand impact of central bank policies on investments, stay vigilant and adapt.
Entrepreneurial mindset benefits investing with a focus on long-term wealth and contentment.
Deep dives
The Importance of Long-Term Thinking and Not Being Outcome Driven
It is crucial to have a long-term perspective and not be solely focused on immediate outcomes. A sustainable investment journey involves weathering both good and bad outcomes. Emphasizing only positive outcomes can lead to an inability to handle negative outcomes.
The Influence of Childhood Experiences and Mentors
Childhood experiences and mentorship play a significant role in shaping one's life. Supportive mentors and parents who allow exploration and provide a belief in one's abilities are essential. Learning from experiences, both successful and unsuccessful, is key to personal growth.
The Evolution of Investing and Lessons Learned
Investing is not always a premeditated career path, and it requires continuous learning. The importance of rigor, discipline, and focusing on the journey rather than quick gains are vital lessons. Adapting to changing times and constantly growing as an investor is crucial for long-term success.
The Significance of Direction and Growing Ahead of Portfolios
Focusing on the right direction rather than speed is vital in both investing and life. Growing oneself ahead of portfolios is essential to handle wealth and success responsibly. Balancing ego and continuously learning are key attributes to sustain and retain success.
Staying Away from Troublesome Areas and Investing for Longevity
Avoiding frothy market sections and staying away from manipulated stocks is crucial. Investing in businesses that are not easily replaceable and have effective capital allocation is important. Assessing management's engagement with stakeholders and the ability to make long-term decisions is essential for sustainable investments.
The Importance of Internal Alignment and Learning from Tough Times
Being internally aligned and embracing lifelong learning is vital to navigate the ups and downs of life, including investing. Lessons from challenging periods and the ability to adapt and grow personally contribute to long-term success.
The Shift towards Longer Investment Horizons and Selective Investing
Experiencing crises like COVID-19 influences a shift towards longer investment horizons. Investing in businesses with enduring qualities and sustainability becomes a priority. Selective disclosure and respecting all stakeholders are key factors in evaluating management. Moreover, valuation requires considering liquidity, central bank policies, and focused research to identify opportunities below market expectations.
Characteristics of Great Businesses for Long-Term Investments
Long-term investments require businesses that are not easily replaceable, demonstrate effective capital allocation, and have strong management. A focus on sustainable competitive advantages, prudent governance, and reliable disclosures contribute to portfolio longevity and successful outcomes.
Valuing Management and Navigating Valuations within Longer Investment Horizons
Valuing management involves examining their treatment of stakeholders, approach to governance, and consistency in disclosures. Assessing valuations demands a patient approach, looking for opportunities where the market may overlook long-term potential. Allowing for a margin of safety and considering macroeconomic factors are crucial for successful long-term investing.
Impact of Central Banks and Business Cycles on Investing
Central banks play a significant role in shaping business cycles and market performance. Investment outcomes are influenced by central bank policies and global economic trends. Investors should remain vigilant, adapt to changing circumstances, and carefully assess the effects of monetary policy on their investment decisions.
Investing and Entrepreneurship: Lessons Learned
The podcast discusses the relationship between investing and entrepreneurship, and how the lessons learned from being an entrepreneur can benefit one's investment strategies. The speaker emphasizes the importance of patience in both entrepreneurship and investing, highlighting that entrepreneurs have a longer-term mindset compared to investors who often focus on quarterly results. They also emphasize the multi-dimensional and multi-disciplinary approach of entrepreneurship compared to the more singular focus on financial returns in investing. The speaker shares personal experiences of investing in a struggling travel company and the importance of thinking like an owner and staying committed even during challenging periods. Overall, the podcast highlights the value of an entrepreneurial mindset in shaping successful investment strategies.
The Significance of Time and Contentment in Investing
This part of the podcast delves into the importance of time and contentment in investing. The speaker emphasizes that focusing on the long-term and compounding wealth over time is crucial, even though it requires patience and the ability to resist constant activity or trading. They stress that the pursuit of wealth should not be driven solely by ego, as it can lead to irrational decision-making and undermine long-term success. The speaker suggests that finding contentment comes from reducing desires and distractions rather than constantly striving for more. They also caution against seeking validation through publicizing stock portfolios, highlighting the importance of staying focused on the investment goals rather than seeking external recognition.
Lessons from an Investment Journey and the Path to Contentment
In this segment, the speaker reflects on their investment journey and shares personal insights. They discuss the importance of being open-minded, seeking diverse perspectives, and avoiding herd mentality in decision-making. They emphasize the value of adapting one's views based on new information and changing circumstances, while cautioning against constant change without strong reasons. The speaker also highlights the significance of being one's own person and not succumbing to external pressures or seeking validation. They discuss the pursuit of contentment beyond financial wealth and share their experiences of finding contentment through helping others improve their financial health and engaging in social activities. Overall, the podcast offers valuable advice on investing, decision-making, and leading a fulfilled life beyond monetary gains.
I talk to Shyam Sekhar, the Chief Ideator and Founder of iThought Financial Consulting, which he founded in 2008 and which provides financial planning and portfolio management services to investors. In this episode, Shyam talks about the importance of getting the right mentors and creating an investment philosophy, playing the long game, self-growth, #investing lessons from #entrepreneurship, and much more.
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