Prof Sanjay Bakshi, professor and value investor, on Saturday enlightened over 600 participants present at BSE with his scintillating and thought-provoking presentation on what happens after you buy a stock. Moneylife Advisory Services, a SEBI-registered investment adviser and part of the Moneylife group, had organised the talk by Prof Bakshi under the Moneylife Investor Club on 22 April 2017. The event organised at the International Convention Hall, was supported by BSE.
The sixth event of the Club and second such by Prof Sanjay Bakshi was a remarkable presentation on issues related post-ownership related decisions on stocks.
The event was graced by a packed audience of over 600, which was testimony to first, the enormous popularity of Prof Bakshi, second, to so many people being interested in long term investing and third, to the wide reach of Moneylife. Though the event was in Mumbai, people from different parts of the country such as Pune, Hyderabad, Secunderabad, Dehradun, Bangalore, Goa and Chennai had come down to attend.
The session started with Sucheta Dalal, director of Moneylife Advisory Services explaining the planned objectives of Investors Club. The Club promotes long-term investment and encourage participants to think for themselves independently through seminars, workshops and case studies. It will not offer trading and investment tips, she clarified.
Debashis Basu, director of Moneylife Advisory Services, then introduced Prof Bakshi. He sketched out Prof Bakshi's remarkable journey - his personal and professional struggles after he came back from London in 1994, with Rs3 lakh in savings, lots of wisdom, a daughter and a degree from London School of Economics (LSE) after his professional qualification of chartered accountancy in India. Over the next few years Prof Bakshi struggled to find his feet as an investor, making mistakes, making gains but always learning and sharing. Prof Bakshi who now teaches at MDI Gurgaon, also taught at IMI, Fore School, and ICFAI Business School in mid-90s to survive as an investor without working as a salaried employee for anybody. He would teach for three hours in Chattarpur branch of ICFAI and then go to Kirti Nagar branch and deliver the same lecture another 3 hours. Talking for six hours and driving 120 kms in June in Delhi in a non-AC car.
Along the way, Prof Bakshi figured out that if you do good things, you get them back with interest. And if you do bad things, you get them back with interest too. And that explains why he teaches security analysis. He not only teaches his students value investing, but has also influenced them to lead a better life. The unending zeal for learning makes him a 'learning machine'.
Prof Bakshi gave a scintillating talk based on his personal experience of investing over 22 years during which he learned what not to do as a result of painful direct experiences as well as vicarious experiences. Through video clips, images, charts and innumerable stories, and loads of humour, his key message was that we should always try to avoid risk-seeking behaviour.
Prof Bakshi explained with examples on how the investor should ideally respond to new information about a company in which he had already invested. He also spoke about psychological dangers of ownership that one must be aware of, rules which apply to buying a stock, which also apply to holding a stock and how should one approach the sell decision.
His presentation covered insights into human psychology such as overconfidence, anchoring effect, incentives, commitment bias, overconfidence, social proof (others are doing it and getting away with it), deprival super reaction. ('I don't want to miss this chance') combined with the rules of probability.
According to Prof Bakshi we can avoid unnecessary risks by not taking leverage, seeking protection from nature and being wary of false pitches and promotions. He also explained how leverage causes both financial and psychological stress.
The session ended with Prof Bakshi answering questions from diverse areas of investing such as diversification vs concentration, number of stocks in portfolio, investment mistakes, and prospects of the different sectors.
In case, you missed the lecture from Prof Bakshi, you can access the video in few days. Here is the link to access all videos from the Investor Club...