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Is Investing an Art?

Is Investing an Art?
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As a kid, one of my most favourite movies growing up was ‘The Dead Poets Society’ starring Robin Williams. I remember fondly how the movie placed importance on art and passion. How it is for Art and Passion that we yearn to live. And one such quote from the film stood out to me.

“We don’t read and write poetry because it’s cute. We read and write poetry because we are members of the human race. And the human race is filled with passion. And medicine, law, business, engineering, these are noble pursuits and necessary to sustain life. But poetry, beauty, romance, love, these are what we stay alive for.”

Back then, I didn’t think to myself “What about people who love and have passion for Investing?”

Isn’t that quite a valid question? You and I may enjoy painting but ever since I joined smallcase, I found artists who shared a particular passion for investing. Artists who found beauty and joy in the everyday mundane numbers of the market. Artists who create their paintings by securing a financially secure future for you and I.

So today, I’d like to pose an interesting question. Is Investing an Art? And along with it what is it that they enjoy the most about it. To answer this we asked some of our most passionate smallcase Managers to pitch in their two cents on the same.

How would you explain the beauty and joy of what you bring to help investors to a 5 year old?

“Let’s imagine we have a magical piggy bank that loves colourful coins. Each coin represents a different company, and some coins are shiny, some are big and some are small. And we are your coin wizard! We help you decide which coins to put in the piggy bank to make it grow bigger and stronger. We arrange them in a way that tells us a story about how these companies are doing. Just like when you save your coins in your piggy bank to buy something special, we help you build and grow your coins wisely.”
– Arvind Kothari, Founder, Niveshaay
“The Idea is simply to buy what goes up and sell what goes down. By following simple rules and by being disciplined you can allow any retail investor to go towards financial independence in his investing journey and once achieved is a great joy to watch.”
– Alok Jain, Founder, Weekend Investing

What are the different ways that you find beauty in everyday numbers of the market?

“It’s an absolute joy when a father brings his son to us to guide them on investing wisdom, sometimes you get investors trusting you and discussing all their finances with you, sometimes you get army personnel just sharing their military experiences. Helping with financial freedom is a happy feeling and making friends in the process is even more joyful.”
– Divam Sharma, Founder, Green Portfolio

“For us, numbers and data are bread and butter. All the decisions need to be made with the backdrop of numbers. The interesting thing is that every company or industry you go to, you will have to deal with a different set of numbers. So it always keeps you on your toes.”
– Naveen K R, Senior Director, Windmill Capital

And finally, Do you believe Investing is an Art?

“Investing is an art as well as science. Investing requires creativity in strategy, intuition in decision making and adapting to changing situations. It is like creating a beautiful painting on a blank canvas. Just like the arts, investing is very subjective and has no fixed rules. Every investor has their own unique and different style. It is more about understanding the business and building conviction. And as an investor, one needs to have an open mind towards learning and relearning from their experiences.”
– Arvind Kothari, Founder, Niveshaay

“A well researched non discretionary is more of a quantitative model than art but yes the imagination to achieve that end certainly requires some artistic interventions.”
– Alok Jain, Founder, Weekend Investing

“Investing is an Art as well as a Science. There are elements of investing which can be systematized and ones which cannot be. The former elements are part of our Scientific Investing Framework. The latter elements form a part of the Art which comes in taking all of the data and then trying to synthesize all of it and trying to decipher if the investment opportunity potentially offers a significant alpha and what are the possible upside and downside probabilities and associated magnitudes of the same. Further, how the future probabilities correlate with other investment opportunities in the portfolio. The past correlations and probabilities are Science, but the future ones are more Art.
I love bifurcating the Science from the Art and then formulating and updating the Scientific Investing Framework, where more and more of the Art is moved to the Science over time; this itself is an Art. However, the real Art is in the Synthesis step discussed above which is more akin to the Sherlock Holmesian so-called deductive step, but actually which is what is called abductive reasoning requiring more Art than Science.”

– Dr. Vikas Gupta, CEO, Omniscience Capital

“We believe that it’s purely an art for our kind of value and growth investing. You have to keep yourself updated with matters around the company, its industry as well as the macros. You have to read a lot between the lines. It’s a lot of qualitative factors, gut, luck, and hard work to be able to deliver multibaggers.”
– Divam Sharma, Founder, Green Portfolio

“Investing is both an art & science. While most of the things around investing can be explained with numbers, there will always be some aspects which are qualitative in nature and need to be looked at from a different angle.”
– Naveen K R, Senior Director, Windmill Capital

As these financial investment experts say, it is not so simple to differentiate art and science because both involve passion and in passion there lies beauty. We at smallcase would like to believe that Investing is an Art, and making Investing Easy is the Bigger Picture.

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Disclaimer: Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors

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