Indians are among the world’s best savers. An average Indian family saves a higher proportion of its income than even the average Chinese household does. Since saving is income not spent, good savers are, by default, intelligent spenders too. But that’s where mastery over money ends. The cycle of good saving and spending is not complete without intelligent investing.
Last year, around the same time, we did a cover story (Cash Them Young) proving how today’s youth had the incentive, opportunity and obligation to complete this cycle—but alas, not many were doing so. We were right and wrong. Soon after we completed that cover story, random profiles of young-yet-intelligent investors started coming to us.
Our rich and ever-expanding database of case studies for the Portfolio Doctor section witnessed an unusual surge in requests for financial health check-up from people less than 25 years old. On contacting them, we found some of them had already made the right investment choices. Further reporting revealed that a small but growing number of youth are indeed turning to intelligent investing, and many had already created impressive wealth.
For instance, 23-year-old Saurish Basu, an MBA student at IIM-Lucknow, has already built an investment corpus of Rs 4 lakh and he finds investing “like doing practicals of the theory lessons”. More instructive than the money these youth have made is their approach to investing. The mapping of their investment behaviour is instructive to all investors. If you have read and heard of grand theories of intelligent investing but wondered how best to practice them, just turn to our cover story.
Markets continue to be on a roller-coaster ride, creating and destroying wealth almost on a daily basis. Sentiment has overtaken fundamentals. Yet, it is by sticking to basics that the best investment opportunities can be found—even in this market. For proof, turn to page 18, our revised and expanded version of Sector Watch.
Some of the best investment options are apparently in one of the most avoided sectors right now—IT. The logic is simple: there are two ways to increase value of a product—improve its quality or reduce its price. The rediscovery of IT stocks by a host of market experts stems from the change of the latter type. Sounds elementary? That’s what sticking to fundamentals is all about.
