From The Horse’s Mouth: Aswini Bajaj Investor Profile

Aswini Sir has mentored me in Finance through his CFA Lectures. He has a triple crown in Finance, has been training 1000s of students globally. I am an avid reader of his blog, Invest In Yourself  

As you can see, I am very excited about this conversation as he is Graham to my Buffet. Being brief in his interview, he has given to the point advice, that the average investor like me can follow to generate tension-free alpha in markets.

So, without further ado, let us begin.

1. Tell us a little bit about yourself.

I am a commerce graduate from St. Xavier’s College and have completed CA, CS, CFA, FRM, CAIA, CIPM, CCRA, CIRA, CIIB, AIM. I have been training 1000s of students for CFA, FRM, CA, Financial Modelling globally. I am a guest lecturer at colleges and B-schools including the IITs and IIMs. I also do corporate training for companies like Tata, Grasim, etc. I also head Leveraged Growth – a niche finance-based consulting company operating across 4 verticals – Research Advisory, Management Consulting, Training, L&D

2. When did you start investing and what was the first stock you bought?

In 2014, I started investing, seeing my Manager invest. The first stock was NTPC and made a loss. Investing is a full-time job and I cannot beat the returns that Mutual Funds earn, by using MoneyControl during lunch breaks in Office. However, technically the first investment I made would be 2 gold coins in 2012 when I started teaching at home.

3. What are the basic metrics you look at, in a business when you are valuing or looking to invest?

I invest in Large Cap stocks myself, rest I leave it to the Mutual Fund. The firstly I check if there is sufficient demand for the product and if it is sustainable. Secondly, I look for a moat.

4. In your investing journey – one thing you did which you think you did great and one thing you regret doing?

I picked amazing stocks like Bajaj Finance, ABFRL, HDFC, HDFC AMC, Asian Paints, PVR, Avenues Supermart, Page Industries based on their business model or market share in respective sectors but invested a smaller proportion in these.

5. When do you sell a stock? What are the criteria according to your rationale that a stock has reached its life? When do you know it’s time to get out of stock?

I do not trade. I buy only those stocks that I would never want to sell. Even if I am convinced about a short-term opportunity, I don’t take it. If there is a corporate Governance issue, I exit. However, I do have a loss aversion bias along with others. It is important to recognize your own biases and work towards correcting it. Something most investors don’t.

6. Any example where patience has paid off for you? Any examples where you feel it may pay off?

ITC, I hope it pays off. It has been a relatively stagnant counter. I am personally very bullish on ABFRL. Indigo was a bet that paid off, but I exited because I did not want to stay invested in the aviation sector for long.

7. Are you just investing for yourself or do you offer professional services? What services do you offer?

I am investing for myself only (In myself too). Although, my company Leveraged Growth has a Research Advisory vertical catering to clients globally in this space. We do not provide Portfolio Management Services.

8. Sir, please tell us about some of your Favorite books.

The Gita, The Winning, Autobiography of a Yogi, Think and Grow Rich.

9. Can you tell our readers some of your hobbies  

Reading, Traveling.

10. How do you increase your market knowledge?

Reading, very extensive reading.

11. Who is your role model in investing?

Not one in particular. Since I am not a full-time investor. And I buy primarily large-cap stocks at good prices; leave the Mid Cap and Small Cap to ETF and MF.

12. Disruptions – What do you think of them and how do you evaluate if a business you are looking at as a prospective investment won’t get disrupted easily?

I honestly look at them as a buying opportunity, but at the same time, I am a risk-averse investor. I want capital preservation. It is important to acknowledge what investor type one belongs to. If it has a consistent revenue and cash flow base with a moat and without significant regulation, chances of disruption shall be negligible.

13. One advice you would like to give to younger people who have just started earning/saving/investing in the financial freedom journey?

  • Do not trade part-time. One is a Full-Time Professional trader or Gambler. 
  • Understand the effort that mutual funds take in building financial models, going through years of annual reports and con calls, talking to the management directly and updating this regularly.
  • Do not learn the hard way, do not gamble, do not lose your hard-earned money. Remember – the faster you want to make money, the more you lose.     
  • Study a few large scrips, (annual report, con-calls, research reports) learn, understand, follow them and invest at good price points; and for the remaining amount, SIP, Mutual Funds, and ETF. 
  • Invest in Mutual Funds directly and not through an agent or app, you shall save on commission, which gives long term benefits due to compounding.
  • And if you are not a Finance Professional, simply allocate to Debt and Equity(50:50 or 40:60 or 30:70 depending on your risk appetite) and the equity portion I would suggest in ETF for large-cap and 2 mid-cap MF and 3 small-cap MF to reduce cost, optimize risk and diversify. (40:35:25 ratio for large, mid, small). 
  • If you have a short time horizon, allocate more to debt and large-cap.

Better to spend less and save more today, than to be broke tomorrow. You have to earn, save and Invest for your Financial Freedom.

The above is for educational and informational purposes only. It is not an endorsement or a stock recommendation. The author may be holding the securities mentioned above. Do your independent and thorough research before investing.

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