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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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A wonderful note- must read

Posted by Muthu on August 11, 2011

Prashant Jain is one of the names I respect and admire in the fund management industry. 

What someone like me can tell in so many paragraphs; he can articulate it much better in just few lines.

We do not go only by results but try to understand and go by what has been done to achieve the same. 

That’s why I’m not impressed by Donald Trump; instead admire Warren Buffett. 

In 1999, when tech stocks including Infosys were selling at unsustainable valuations, Jain was among the rare breed who sold them. Unless you’ve been in markets in 1999, it is very difficult to understand how tough it would have been sell something whose prices have been increasing almost every day. 

In 2007  bull market, Jain fell out of favour of markets as he refused to chase the momentum by buying real estate stocks which were touching new highs every day.

When we create a portfolio we give lot of importance to such factors and never look for flavour of the season or the top performer for the quarter or the year. We do not chase performance but look for many qualitative attributes which would eventually be rewarding for you.

Despite some of our clients nudging us to invest their money in a particular fund house in 2007, whose funds were phenomenally doing well than everyone else, we did not budge as we were unable to develop conviction with that fund house and their processes.

Now we hear lot of sorry stories how many investors who followed the momentum and invested their money with that fund house have lost over 70% of capital by now.

As Buffett quips only when tide recedes we would know who is swimming naked.

Investing regularly and for long term is the best way to create wealth. But markets do provide opportunities some times for substantial rewards even for lump sum investments.

We believe that if you’ve money which is not needed for atleast another 5 years; this is a good time to invest in equities.

Whether you invest or not, is based on your choice and financial situation.

However I have a request. Please do read the below note from Prashant Jain irrespective of the fact whether you invest or not.

It’s has a good dose of wisdom.



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