How TOP investors measure their investment performance?

Tuesday, 28 August 2018

How TOP investors measure their investment performance?

Greetings from Hitesh! Thanks a ton for your response to my post on – What Kind of Questions you should ASK your ASTROLOGER when you meet him next time? Today we are taking another interesting subject on measuring investment performance of your single asset class or multiple assets.

How NORMAL investors / Mutual Funds talk about their performance?

Normal guys talk about AVERAGE RETURN which includes their hits and misses together. Same why MUTUAL fund guys share their NAV which is also an average of their hits and misses.

The way to look at average rate of return is so much ingrained in normal minds that they get carried away by the same. If average is down, the feel the loss and if average is up they feel the happiness.

There are various reasons for going for average. From the early childhood as a student you have been trained to look at your MARKSHEET average percentage, in the field of medical you have average range of everything be it your Blood pressures or your various blood tests and things like that. In the field of religious and social rituals, you have been told about average standard you are expected to follow. There is so much attachment for following average path that the guy remains average till his death.

The attraction of following average path is that you will never feel the pinch of failure. Most guys want to avoid the feelings of failure in any areas and average helps them to do that. Other advantage is that you are always with MASSES and that gives you the inner feelings that you are on right path!!

How TOP investors look at the World and their Investment Performance?

Shiv Khera always says – “Successful people don’t do different things, they do things differently.” They don’t follow average path. They evaluate their portfolio of 5 to 50 assets or asset classes in their individuality.  

When they see them on individual or standalone basis – they can see their success or failures in minute details. When they see they are succeeding in one asset class – they will increase their focus on them and when they see they are failing in another asset class, they will get out.

I have always shared an example of RAKESH when he was adding TITAN from Rs.40 to Rs.900. Today TITAN accounts for Rs.5500 Crs in his portfolio of Rs.15000 Crs. Had he also looked at TOTAL portfolio, he would have not reached where he is now. He has about 35 companies in his core portfolio. But the best are just 4 and he has focused on them only.

The FACT in life and investments: -

Whether it is your investments, relationships or overall time – there will always be 80:20 principle. 80% of the efforts/relationships will generate 20% success and 20% of the efforts/relationship will generate 80% of success. Elders have always talked about 10 years period in any individual’s life where a guy gets clean filed to fulfil his ambitions. If you look at your age span of 70 years this 10 years is less than 20%.

Those who focus on average will miss their golden period / miss once in a life time investment opportunity or miss the best relationships.

Guys at the top focus only on the best 20% life has to offer to them and they enjoy the 80% resutls out of them.

What NEXT?

Look out the best you have in your life, investments and relationships. Focus on them and you will see miracles in your life.

Wish you great success.

Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.