16,324 hours and counting...

Today is an anniversary of sorts. I have finished 6 years in my current role. In that time I have developed severe acidity, gained 10 kilos, seen my salary multiply several times over and been given the title of Vice President. 6 years = 312 weeks = 1,484 days (6 dayweeks for 2 years + 5 day weeks for 4 years – 30 days holidays a year) = 16,324 hours spent working in the markets and 4,272 hours spent commuting to work and back. That’s a grand total of 20,596 hours that I have dedicated to my job (and this doesn't include the leave sacrificed).

Was it worth it? I don’t know. Unlike most, I didn’t start out as an analyst or as a trader. I started out as a saleswoman for key domestic institutions. Those institutions are still the most sought after for practically every salesperson. I’ve witnessed every circuit in the market and seen crazy crashes and crazier rallies. I’ve seen the Sensex swing 2500 points in a single trading session (and this was in 2006! The base was a lot smaller), I’ve seen the market fall 13% in a day and trading continue, I’ve seen liquidity dry up and later flood the market… sixteen thousand hours covers a lot!

Here are a few things I’ve picked up along the way;

On Markets and Investing

• A mega IPO usually marks the peak of the market – Reliance Petroleum in 2006, Reliance Power in 2008 and Coal India in 2010.
• A full investment banking pipeline always indicates the beginning of a buying frenzy.
• Over a long period of time, trading does not make you big money, investing does. The only people who make money trading are the dedicated traders, and that too only for a limited period of time. It is the investors that make the truly astronomical amounts and the investors who survive downturns.
• Markets will fall. There is no such thing as a perpetual bull run. Everything reverts to the mean. Every business has its cycle.
• Takey our profits off the table. Ideally try and bring your portfolio cost down to zero.
• A falling market has no support and a rising market has no resistance.
• Never trust anyone forcing a tip on you. Chances are they're stuck in a position and want an exit or want company.
• You will never make money on everything that you are invested in. Some will fall, some will be flat and only a small handful will rise. If all are rising, it means the market is overheating and you should exit while you still have the chance.
• There is a HUGE difference between speculation and investment. Decide which one you want and stick with it. Ideally invest the majority of your money and trade with a small portion. Take trading profits off the table and invest them.
• Buy at the point of maximum pessimism. Go contrarian and make a significant bet. Loosely translated it means thumb your nose at your colleagues and Udyan Mukherjee, gather all your money together and buy Buy BUY!!!!!
• No matter what Warren Buffet and his minions say, the market ALWAYS knows. Playthe trend.
• No matter how strong the India story, a global meltdown will wipe out all returns. Therefore diversify your investments out of the equity markets.
• Never trust an emotional call. Numbers don’t lie. Cash doesn’t lie.
• Behavioral Finance is possibly the most underappreciated branch of Finance. Study it.
• Trends can and frequently do change overnight. Don’t fall in love with a trend, it’s not going to stay. Abandon and move on. The financial markets take the laws of survival to a whole new level.
• Read. As much as you can, whenever and wherever you can. The information always helps.
• Remember that whatever happens, the system will always be salvaged.

On Stocks

• Governments lie, managements lie and analysts don’t have all the answers or all necessary information.
• Estimatesfollow the market.
• Valuations are relative. Steady earnings growth and growing order books are extremely important. Always watch the reserves.
• Never average your losses unless you know something everyone else doesn't. Otherwise sell your losers and hold onto your winners. Be disciplined with your stop losses.
• When picking a stock to invest in look at the debt levels, the cash flows, the dividend payment history, the capital expenditure, the return on capital employed and management quality. The party boys never make you any money.
• Bewary of how much you pay.
• Never buy something that has been running up for 3 consecutive days. Price graphs steeper than a 45 degree angle will reverse quickly and viciously.

On Work

• A good boss and a great team are generally mutually exclusive. Get used to it.
• Today’s kings are often tomorrow’s beggars. Be nice to the people around you. It’s not worth it making enemies.
• Weasels always survive, except in fairy tales.
• Don’t try breaking into existing cliques. It usually ends in pain. Be yourself and your clique will find you.
• Reply All is dangerous. Consider the consequences before clicking it.
• Always double check before sending.
• Always carry a notebook into meetings, no matter how irrelevant you think the discussions are.
• Take notes. Important details are often forgotten.
• Make sure all your bosses know that you treat them equally. Be very aware of the political affiliations around you. Treat your colleagues and bosses like your clients.
• Have a life outside the office. Stay in touch with old friends. They keep yougrounded.
• Stay focused and be careful what you sacrifice.