I run the risk of losing a few of my existing and prospective clients for Smart Sync Services when I write this. If you agree with what I am going to say now, I may not get any business from you. In fact, I may lose a few of my existing clients. However, I hope that I would earn your trust. And maybe, sometime in the future you would come back to me and give me more business when you reap the rewards of this invaluable advice. Let’s deep dive into one of my most loved investing philosophy: “Survive to Thrive”

“Survive to Thrive” has been a very powerful and motivating thought for me. During tough times, in investing and in personal life, I use it as a tool to get me back on my feet and start working towards my goal. I have written a couple of blogs here and here. Both had a different angle of looking at the investing landscape from the lens of “Survive to Thrive”.

Welcome to the third edition.


The seeds for this blog were germinated when our team at Smart Sync Services was reviewing clients’ performance over the last three years. We noticed an interesting pattern. Clients who signed a mandate with us to commit to investing a fixed amount each month in direct equity or equity based Mutual Funds performed way better than the clients who gave us a lump sum.

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A few points:

  • It did not matter whether the fixed monthly committed amount was 5000, 50,000, or 5,00,000.
  • While the choice of stocks and schemes did influence the magnitude, even an ordinary-looking portfolio of stocks or a bunch of Mutual Funds returned a decent CAGR if it was on an auto SIP mode.
  • A portfolio with even very good MF schemes or high quality businesses did not provide as good a return as the SIP one as a substantial chunk of the invested amount was put into work as a lump sum.

We thought:

  • Maybe, our sampling size is too small,
  • In the last four years, market has been very volatile (Nifty went from 8K to 11k and then back to 8K and currently above 14K. Midcap and small-cap indices have witnessed even more volatility.
  • Maybe, over the long term, this will not sustain.

So we looked back in history and started digging some data. And let me be brutally honest with you. Whatever narrative we may try to project or sell, there is only one benchmark to check whether your investment has done well or not over the long term. And that is Returns.

We took Infosys as an example, to begin with. Any student of the Indian stock market would know about the story of Infosys being valued at an obscene P/E ratio of around 200 times during the dot-com bubble. If you had bought Infosys in 2000 at the height of the Y2K mania and held it until 2008, you would have made zero returns in that period on your investment.

However, if you had allocated a fixed amount, say 5000 on the first day of the month starting from the month in which Infosys made a top, you would have earned a 13% XIRR.

XIRR is a refined form of CAGR. If you do not understand the concept, check out this short video.

Sounds unbelievable?

Download the excel sheet and check for yourself.

OK. You know that Infosys, which was a hot IT stock, in the height of euphoria, is probably an extreme example.

Let’s look at another extreme example where you picked Titan, a not–so–hot stock at that time, and you followed the same SIP rule. And here you get a mindboggling 54% XIRR.

All you had to do was regularly buy them each month on the first trading session.

Both had only one thing in common, their business continued to grow and the revenues and profit growth was clear evidence for you to believe that the business directionally was doing well.

The thinking behind this whole exercise is to challenge the old belief which I have been holding on to for a decade that I’ll have to have a strong grip on the valuation of a business before investing in it.

I am slowly trying to change my view on that. Don’t get me wrong.  I am not saying Valuation doesn’t matter. Neither am I saying that buying and holding obscenely valued companies is the way to riches. Certainly not. I believe focusing on the long-term growth of the business (of course tracking its performance regularly) and getting into a system of buying good and growing businesses on a regular basis will help you counter the valuation problem effectively.

After all my education in finance and experience in stock market investing for over a decade, I only surrender to the fact that Value indeed lies in the eye (read excel models) of the investor.

Nobody knows the real value. We can only guess. And even the best of best investors make big horrible mistakes in valuation.

We, lesser mortals, are probably better off not participating in this contest and hence not trying to base our investment decision based on valuation.

So valuation does matter but let’s not base our decision on it because we get tricked into selling winners early and holding on to losers.

There are many other stocks that do well even when they are highly-priced, to begin with. The main thing to consider for you would be whether the business would continue to remain strong or not. If yes, you should continue your SIP in them. And just like the NIFTY index balancing, you should remove the businesses which are not performing well. A key difference between your personal portfolio rebalancing and NIFTY rebalancing is that NIFTY uses market valuation as a metric to decide, however, you will use the business growth and longevity to decide.


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You might ask why Infy & Titan.

I know no one can unearth and hold multi-baggers like Rakesh Jhunjhunwala.

There is a reason why I took two extreme examples.

Every virtue is a mean between two extremes, each of which is a vice.

Aristotle in the above quote says that moral virtue is to behave in the right manner and that is a mean between extremes of deficiency and excess, which are vices. We learn moral virtue primarily through habit and practice rather than through reasoning and instruction.

From an investing standpoint, we have to be aware that we cannot pick only the Infosys & Titans of 2000. We will be having a few others too. Some would show average performance. A few will fail miserably. And if you have luck and skills on your side, you may get a couple of 10-20x type stocks too. You will also have to replace the losers in your portfolio with new businesses. Businesses that come up in your watchlist and look better than some of the existing businesses in the portfolio.

Having a process of making a systematic investment and committing yourself to that style over the long-run has really great rewards.

So, “Survive to Thrive” is not just a thought to motivate yourself in investing and life in general. “Survive to Thrive” is also a system and a pattern that investors must seek in businesses they want to own. After having done your due-diligence and convinced about an investment idea, just before pulling the trigger to buy, it pays to ask this question:

Will it Survive to Thrive?

You may not be right all the time in answering that question. However, it will embed a condition that will force you to think long-term.

However, let me put a caveat here.

At different points of market volatility, events like March 2020, 2012-2013, 2008, your portfolio returns will look atrocious.

The biggest mistake most of us do is panicking and selling the portfolio during those drawdowns. And this is the biggest risk you have to mitigate as an investor.

SIP in MF or direct stocks will yield a negative result if you buy high and sell low or try to become intelligent and time the market.

You are better off following Charlie Munger’s advice here:

It’s remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

The drawdown of your portfolio value during extreme pessimism makes you fearful. The only way to beat that successfully as a long-term investor is to systematically continue to invest during ups and downs.

Now we all know that most of us have finite capital. How do we consistently invest in the market over the long run? This brings me back to the title of the post.

If you check the title of the post, I promised you a 3-step guide. I also told you that if you follow that religiously, you may not need the service of a financial advisor like me. Here it is:

  1. Invest time and money in skill development in the early part of your carrier to earn well. You may build a business or you may work for someone. Don’t get into the ego battle of which one is better. Trust me, both work well. Check what works well for you.
  2. Save aggressively and invest systematically. Initially, in a few broad index funds or MFs. And gradually as your investible amount increases over time, shift to systematically investing directly into stocks if you can develop the confidence in understanding individual businesses.
  3. Don’t interrupt compounding. Stay the course through ups and downs.

That sounds too simple to believe. Right?

But there are success stories.

I admit. Not too much. But there are for sure.

They are the ones who took the pledge to stay put on the path of systematically investing through ups and downs and never stopped.

In my previous edition of Survive to Thrive, I have shared a few examples too.

Morgan Housel, one of the finest writers and thinkers on investing today, says this in an interview with Safalniveshak’s founder, Vishal Khandelwal:

To me, the evidence is overwhelming that if you spend 10% of your investing energy on picking a portfolio and the other 90% on focusing on keeping your emotions in check, putting market volatility into proper context and doing everything you can to take a long-term view, you’ll end up doing better than the majority of investors.

And let’s admit that most of us know this in theory but fail to follow in practice.

  • You know that junk food is bad but dieticians earn their living by telling you to avoid it.
  • You know that doing physical exercise is good but you hire a physical trainer to be more disciplined.
  • You know that eating well, sleeping well, low mental stress and physical exercise take care of 90% of your health problems, you still seek advice from doctors and psychologists to keep you in order.

Similarly, an investment advisory firm like Smart Sync Services earns its fees by just making sure you are keeping up with your financial health and staying invested for the long term.


Morgan Housel also says this:

How long you stay invested for will likely be the single most important factor determining how well you do at investing.

If I had a chance to ask just one question to Morgan, I would definitely like to hear his views on adding just another factor and rephrase the above quote like this:

How long you stay invested for and how regularly you keep investing in your lifetime are the two most important factors determining how well you do at investing.

If you are reading this and are friends with Morgan, please ask him for his views and share them in the comment section. 🙂

Until then, Survive to Thrive.



Disclaimer: Stocks discussed in this post are for educational purposes. Please do not take it as a recommendation. Please read our terms and conditions.

6 thoughts on “Survive to Thrive Part 3: Follow Just 3 Steps And You May Not Need Professional Investment Advice”

  1. You are a master who has spoken the plain truth, any one who has developed the attitude of the disciple Arjuna as narrated by lord Krishna refer verse as below.

    तद्विद्धि प्रणिपातेन परिप्रश्नेन सेवया |
    उपदेक्ष्यन्ति ते ज्ञानं ज्ञानिनस्तत्त्वदर्शिन: 4/34 Bhagwat Greta.

    “Learn the Truth by approaching the master. Inquire from him with reverence and render service unto him. Such an enlightened master can impart knowledge unto you because he has seen the Truth”.

    If only this much is understood and understood to practice as perfection, that’s the ultimate “Gyan” for becoming a great investor.

    Thanks you “Teacher”

    1. Thank you, Ajit.

      Glad that you liked it so much.

      I enjoyed reading the verse of lord Krishna which you shared.

      Please don’t call me Teacher, we are all students in investing and in life.


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