Thread by @shyamsek

Many people love to #benchmark returns, watermark their portfolio & keep the race to #returns closely monitored like an F1 event.

But, this approach itself won’t help achieve their goal. Indices work quite differently. You must work within it to compare with it. But, do we? 1/5

The highest returns came to my portfolio after years of sideward moves. Thematic investing or sectoral focus is never going to be linear. There will be phases when nothing seems to work. Index when lead by diversified companies or handful of financials will beat us on beta. 2/5

Small cap investing or midcap investing is never going to work smoothly if you start investing near the higher end of the PE band. No matter who your manager is, he is going to wobble and fumble. A manager is as good as the starting opportunity. It applies to every one. 3/5

Consumption oriented themes will go through a few rough years. Their troubles never end in a few quarters. That would be a miracle. They need structural change to reverse their fortunes. This takes time. But, history shows the best time to buy is when things look toughest. 4/5

Investment judgements tend to become fickle prisoners of quarterly performance. When we compare our performance with others, fear simply spikes so much that it takes control of our thinking. One can’t take objective decisions that will work over years when gripped by fear. 5/5