Nikhil Kamath Co-founder, Zerodha, and I discuss markets, luck, greek philosophy, helpers high, renaissance paintings and so much more!
Nikhil Kamath Co-founder, Zerodha, and I discuss markets, luck, greek philosophy, helpers high, renaissance paintings and so much more!
Reach Nikhil on Instagram: @nikhilkamath586
Links to significant resources mentioned in the interaction:
Books:
PS If enough of you buy from these links, Amazon India will treat me with a Thick Chocolate Shake.from Corner House!
Other Resources
Being ethical is long term greedy- Naval Ravikant
Kasparov's classic quote in this NewYorker article
God Friended Me episode.
Investing advise for beginners by Nikhil on Shradha Sharma's Money Matters
Correction: The quote was not by Barkha Dutt, it was by Shoba De, Link to the article
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Hello and welcome. This is Puneeth Suraana, and you are listening to Galata. Today we are joined by somebody who is so multitalented that it should be illegal. He is a bikerand avid chess player, somebody who enjoys poker and pool. He has read over 500 books, but more than anything else what fascinates me is his journey from dropping out of ninth standard and trading to being dia's largest brokerage firm. Zerodha, join me in welcoming the co founder of Zerodha and True Beacon, Nikhil Kamath
Nikhil 2:26
I open it. Thank you.
Puneeth Suraana2:29
The usual first question I ask, most of my guests is what were the conversations around dinner table, especially
when you're growing up.
Nikhil 2:40
Yeah, sure. I think growing up can be allocated to different phases in my life so if you were to talk about age, 10 to 15, which I vividly remember. I think conversations, much like any middle class Brahmin household in India. I think a lot about education, a lot about what you're going to do when you grow up, which career path you would choose. I think that kind of dominated the conversations at that point of time.
Puneeth Suraana4:28
How did you get into chess though I'm curious and we're in pretty competitive at one point.
Nikhil 4:34
Yeah so chess started very early, maybe when I was about five or six. And then, I think it started getting a lot more professional. When I was about 12 or 13. So I would have a coach and I had like a trainer in our travel for competitions and I would play for the, for the nationals and all of those things but I think it got really competitive at about age 13.
Puneeth Suraana5:05
Wow.
I remember you mentioned about the aggression of Garry Kasparov across several interactions. And what about his aggression, we have had for context I had two episodes on aggression and how in business. you've gotten the person in aggression. Digital fighter. I understand your perspective
Nikhil 5:30
here so the thing with chess is it's less about intelligence, but a lot more about memory and reading up on theory. A lot of people misconstrue someone who's a good chess player to be intelligent. Chess is more about learning and game learning middle game or reading up on every game which has ever happened in the past. Knowing all the openings so you have a limited amount of time during a game, and you will have to be able to do things without thinking about it too much. Things which kind of become part of your memory and need something you can recall really quickly. I think Garry Kasparov was one of the few people who was extremely creative and kind of deviated from traditional lines that players had followed in an aggressive manner. I think that kind of inspires you, and also the fact that he didn't care too much about following what was meant to be standard theory up until then, and he created his own lines and chairs. So if you if you had to
Puneeth Suraana6:39
entice somebody about his
approach to chess, what instance was it would you tell them
Nikhil 6:46
about Casper, I would say like, I would call him aggressive but I would call him
knowledgeably aggressive, because even while he was being aggressive I thought I always thought that he knew exactly what he was doing and it was all planned out, maybe not all of us could see ahead, the way he could at that point of time and. And I think he's one of the few chess players who has kind of transcended just being a chess player and he's also extremely successful businessman. So I think one of the rare exceptions in chess because typically a chess player is only a chess player. So many many impressive things about him and a lot to learn from him.
Puneeth Suraana7:30
No, I'm usually on this podcast, we have
had, you're gonna
discover Gary before,
and his tactics of how he would
disrupt with a wish or not and and focus my banging the door, and I could, I could kind of relate to that and understand Hmm, that's an aggressive move, made by him.
Nikhil 7:52
Yeah. Yeah. I think every now and then you have a chess player who comes around who is kind of like changing the status quo, maybe Magnus Carlsen is the one now, but back in the day it was definitely Gary and Bobby Fischer and a bunch of people I think, Bobby Fischer is another great chess player, because he again had a very erratic life outside of chess. I mean, he defected from the country you belong to he fought chess games which were pseudo battles in a way. There are movies about him and he went missing one fine day and then he was never to be found again, up until much later in life. So I think, Bobby Fischer Garry Kasparov, these are one of one of the few heroes of chess. And it's a sport which is not typically a spectator sport. So it's not a sport with a lot of sponsorship and in today's day when people do not have a lot of patience. I would also call it a dying sport at some level, but I think back in the day when it had when it had the kind of folklore that chested during Bobby's time, I think he was exceptionally interesting as a person,
Puneeth Suraana 9:06
during chesses time. Now that attention span is with us.
Nikhil 9:09
Yeah, yeah, totally I think attention spans have reduced, plus the fact that there isn't enough money in chess, I think there aren't many sponsors, because there aren't many spectators. So, I think, a lot has to be done to keep us alive, but it does look like it's dying.
Puneeth Suraana9:27
Isn't the fundamental of a lot of these sports that
these are not really designed as a spectator sport.
Unknown Speaker9:33
Yeah,
Puneeth Suraana9:35
and there's no other way to sustain.
Nikhil 9:36
Yeah, yeah, yeah. It'd be really hard if chess has to become like you know the most watched sport in 10 years or 20 years down the line. I don't think, very high. Yeah,
Puneeth Suraana9:51
it will become like go because now nobody has
heard of Google and
that's a sad future for the next generations because I think for Indians chess has been a fundamental part of our growing up.
Nikhil 10:04
Yeah, I think we had Viswanathan on who kind of made chess popular in India.
Puneeth Suraana10:09
Yeah, but
Nikhil 10:10
also in chess I think only the top, maybe four or five can do well and sustain their livelihoods you know outside of that it's very hard. I know, I knew of many struggling chess players and life was not very easy for them. It would also always be a side thing never The main thing.
Puneeth Suraana10:30
Very interesting.
At that patient of Bobby Fisher's. I didn't realize it until you actually shed. There's a series called God friended me on prime and listeners he got to watch the series. I'm not somebody recommends it he was the only things I've watched but there's an actual episode that I'll probably share with you and the listeners. When we do this adaptation of Bobby Fisher's life. And it's beautifully played.
Fascinating.
How do you
build the analytical skills in chess and transfer that to something like trading.
Nikhil 11:10
I don't think it's very organic I think
what chess teaches you to do is chess has a bunch of rules that you need to follow right, like you know, very simple stuff like control the center. Develop your pieces cost, have you typically try not to deviate too much from the basic inherent logics in chess and I think the same kind of transcends into trading when you have a bunch of core rules, you have a system in place and discipline in trading i think is the biggest factor towards being successful at trading, I think, trading is less about doing miraculous things and being able to call what will happen tomorrow. Because at the end of the day, nobody knows what will happen tomorrow, right. You can make more informed guesses about what might happen tomorrow. But having a system in place and being disciplined and following that system. I think is the most important thing in trading. So that could be a similarity between the two.
Puneeth Suraana12:18
This is something which we keep filtering out, though, I think, trade after theater book after book recommends that somehow has gone to the part of our brains, especially those are investing and trading actively to ignore it.
Nikhil 12:33
Yeah. Yeah, so the markets are like a drug. So typically what happens is, when you enter the markets. There will be a few times that you make money, and the hindsight bias is so strong that just because you made money those few times. Even though you might not have done anything right. It would probably take you 10 times if losing the amount of money that you made in those first few times before you start to think rationally about the markets. I think markets are something that should always be respected. The minute you start to think money comes easily in the markets or if you go after returns like you want to make 50% a year and stuff like that. They generally bounce back and bite you. So I think you have to be very cautious when you go into the markets and go in with realistic expectations, but also a bunch of really cardinal rules in place.
Puneeth Suraana13:38
I'm glad that in the first five minutes, you're actually dissecting and opening up about the rules that you have set up. Have you had these rules that you have built and you stick to
Nikhil 13:51
your family there are there are many rules that one has to stick to. But outside of that there are many things you, which suit your personal investing style, which you kind of have to develop and inculcate with time. Different things work for different people and experience is probably the. The only thing that teaches you these things and you give it the time with time you will learn what suits you. What kind of an investor, you should be. but don't approach the stock markets blindfolded. I think there is plenty of good material out there for one to read and learn from the mistakes others might have made and documented. And I think everybody should do that.
Puneeth Suraana14:36
In fact, as a scoring into my sister yesterday.
So Tony Robbins was writing this massive tome seven laws of seven steps to financial freedom, right, and he. Have you read it, where he went ahead and interviewed 50 of the best traders slash investors across
to find out what are the patterns,
and one of them them was Warren Buffett.
Yeah. And,
interestingly, what happened was with Tony Robbins network. He will. I think he reached out to 50 people to get him to make personal calls but Warren Buffett rejected all of them. And he said something which is quoted in the book is an everything that I wanted to share with people has already been shared on all these letters that I've written right and and that typically means that all the information that's required, especially for the young investor is already out there.
Nikhil 15:42
I agree I mean, Tony Robbins might not be the best person to be interviewing traders I I typically don't like the self help guides that much, but there's another guy jack swagger he writes a book series called market wizards. The good thing about him is he goes back in time and interviews people from many different areas of trading. I think he's probably a better book and a better series to kind of track. But there is plenty to learn from these traders who operated in maybe the 60s or the 70s or the 80s or even in modern day. There are many similarities between good traders and there are many similarities between bad traders, I think, going through these series, typically will have you ever had an end user pick up on some patterns.
Puneeth Suraana16:34
Fascinating. Um, I decided to the initial part because I think, Tony is more focused towards because I read his book, more focus on the psychology, right, and rather than the specifics, but I think somebody like jack swagger is focused towards the specifics. Yeah. And that makes it very much more relevant.
Nikhil 16:51
Yeah. So, trading, I think, to a large extent comes down to psychology.
More than anything else. There are many different ways of analyzing what your system or your trading strategy should be. Warren Buffet like you mentioned for instance is a very fundamental guy so he would go through the company's numbers the P e ratios the debt, the leverage in the company the inherent fundamentals of the company. Somebody like modern day technical analyst which is maybe the flavor of the last 10 years, we'll go through charts and look at patterns in prices which might have occurred in the last 10 years. They might use a method like say Japanese candlestick or Fibonacci series or moving average crossovers or something as simple as that. They're also the kind of investors who are more current paced who would work on methods, we mean regression Petrella via, stuff like that. But one common factor amongst all these different trading strategies is. You have to be able to measure short term sentiment. Because at the end of the day, when you choose to pick which kind of a trading strategy is very important. There are many ways to do this in the market today. I mean, you follow promoted flows you see if a promoter is reducing his stake in the company you see you see what the regulatory long term environment is if the government is Pro, the industry the company and what they're trying to build out in the future. You look at what foreign institutions are doing You follow what the Smart Money is doing. But sentiment is, I think the cardinal part of making any of these strategies work. Because at the end of the day stocks move because people think they will go up or they go down, I don't think they move that much because of the fundamentals, the technicals or the or how much they regress from the main sentiment is something everybody should pay attention to and the psychology of a trader is probably the most important thing to understand when it comes to trading.
Puneeth Suraana19:05
Have you unraveled the psychology of a trader and what are you what are the fundamentals of it. Where does he that was between.
Nikhil 19:14
So one of the, one very intrinsic fact about human beings, not just faders is. If I were to tell you, you have a chance of making you have a 50% chance of making 50 bucks. And you have a 50% chance of losing 50 bucks. You wouldn't take that bet. Fear dominates our psyche a lot more than Greed has to be able to get to a point where you're very clinical about this and you play each transaction you're entering, not by what your subconscious is telling you, but more by what the inherent odds are, are is a part of the evolution of every trader, and I think it takes time to get to be able to remove sentiment remove all kinds of biases from your own mind. But once you get there you start getting less affected by the ups and downs of everyday trading life. If you were to like really get affected by having a good day and a bad day I think you burn out very quickly, it's very hard to continue to be an investor or trader on alone, 1020 pieces, if these things continue to affect you. So,
Puneeth Suraana20:36
what is your first loss like,
and how did you.
Nikhil 20:40
I think the first company I bought was something called mad soft penny stock. When I was 17. I mean, it's a long time ago now it's about seven. Like, that was the first profit, and I bought it at four bucks it went to 10 bucks and I sold it. I remember losing all of what I had made on that on the first derivative transaction which I took right after that. Ah, that there's another big lesson in there somewhere that leverage can kill you very very quickly and as far as it can be avoided, especially naked leverage should be avoided. Yeah.
Puneeth Suraana21:26
How did you take that oh to do.
Nikhil 21:30
So when I was 17, is to also work at a call center so I had a wage coming in. So I was able to replenish my trading account, but it is very disappointing it's fairly disappointing because the first transaction where it made a profit would have told your mind that it's, it's possible to make money that easily. But then when you end up losing it all in the same manner. I think your mind gets a bit confused and wondering what to do. But the memory of the first profit sticks with your mind a lot more than the loss and you keep trying to attempt to do the same thing. Without wondering if it's right or wrong.
Puneeth Suraana22:11
That's a new perspective, a new perspective.
Nikhil 22:17
Yeah, so if you've done 10 transactions and you've lost on eight and you've made money on two. Strangely, your mind will remind you of the two a lot more than the seven, the eight ones, which have gone bad. you tend to block the bad and remember the good or reminisce the code. That's more detrimental to the cause than anything. Especially when you're trying to be a trader or investor.
Puneeth Suraana22:43
I like them. We're just getting into your mind right now starting to have a contrarian view.
Different and I'm happy that you share this.
But then something
around the same time you're 1718 you just stopped schooling.
Nikhil 23:04
Yeah, stop schooling much earlier I think around 15 1415 around that age I got my first job in a call center called 24. Seven. When I was 17. I still remember, you could not actually get a full time job, because you were not 18 but I had friends in the company who were interviewing me, and they kind of allowed me to join it 17 without verifying how old I actually am. Actually, that was the boom for call centers in India that period, I think. Must have been 2000 to 2000, something like that. So when I joined the company it had 400 people or 250 people, and when I quit the company in a couple of years, it had grown to something like 10,000 people. Wow. Yeah.
I did stay there for a couple of years.
by virtue of not been really good or anything but by virtue of the company growing as quickly as it did you tend to get promoted and start making a little bit more money the last year in that company. I spent a significant amount of time in the UK and I used to sell accidental insurance for a company called Stonebridge part of the Aegon group, interesting time though I think it teaches you when you try and sell on the phone all day. So a typical day would be. It was the UK shift. So you would go into work by about 4pm and finish at about 1am, but those eight nine hours would be repetative calls to people in the UK, cold calls traditionally, you just call people they pick up the phone and you try to sell them insurance
Puneeth Suraana24:50
or hang up on
Nikhil 24:52
a product that they don't need. So teaches you a little bit about selling and stuff like that, which is useful.
Puneeth Suraana24:59
But what is it like to a minor for 17 holes just getting started in life, talking about mortality in depth.
Nikhil 25:09
It was really weird because we had to ask them if they had pre existing medical conditions because then they would not qualify. The toughest part of these calls was to get their bank details. I think what was it called, they could either pick. In the UK, you could either pick a credit card or they had something called a sort code but then and for for somebody to give that to somebody else who's calling them from another continent and just over the phone which is a cold call was very different. Very difficult. We had to build trust through the conversation by kind of saying names of companies that they might recognize. So we would say stuff like you know you shop at a certain supermarket around you and then you know try and inculcate trust through the phone call, but very interesting sales process here.
Puneeth Suraana26:04
you know, now they're actually training Indians to
learn the British accent that they do. Yeah. Oh, okay.
Nikhil 26:13
Yeah, big names we didn't even use the actual names. So, they didn't want people to know we're calling from Indian.
Puneeth Suraana26:19
Oh my god.
Nikhil 26:22
Yeah, it's been going on for a long time.
The problem here is how much ever you try and train somebody to sound British in a six month or a three month training period. You're not gonna achieve it so we ended up sounding like this weird cross breed of India and everybody on the other end knew you were not British, even though you tried to fake an accident so
Puneeth Suraana26:49
remember this, Instagram post that you made very early on,
hashtag child labor. Yeah.
Nikhil 26:55
Yeah, I think, things like that did not happen today. Yeah, but I think 17 years ago, things were a little more lacks,
Puneeth Suraana27:03
I'm still curious. I want to dig a little deeper because for a lot of
young minds listening to this.
They have always thought of, you know what, let me drop out and start something and they are sold on this idea of you know and you gotta drop out and build a company in the American dream which is more American than the Indian dream, that's what I call it. But how did you get in a circumstance situation where you opted out of school.
Nikhil 27:30
Yeah, many reasons. I have to say, dropping out of school has become cool now. Yeah, but back then it was something, which was looked down upon people would wonder what is wrong with you so when I dropped out of school I'm sure my parents were petrified and my relatives are wondering what's going on in my life,
couple of factors helped me along the way.
So, even before the call center used to have like a cell phone business and a garment business when I was 1415 I had Marathi friends who kind of like grew up very fast.
That was one of the triggers chess was one of the main triggers.
So, a bunch of these factors allowed for me to quit. But I have to say I got extremely lucky, being in the right place at the right time, many at many many different points in life. I would not recommend it, right, because if you were to like rationally, think about it and very odds of how that might transpire today. I think having a formal education having a full education is something which is really helpful in life and even though things might have gotten well and I might have gotten lucky and all of that. You still wonder you know when your friends talk about college was the best time of their life. They have so many memories they have friendships, all the biggest friendships in life are created in college and later parts of school which I did not do. There is something that you know you feel like you still feel like you've missed out on something, even though things might have gone well in other ways,
Puneeth Suraana29:11
very interesting. Gary's code fresh, I gotta say
it's from his book.
It says the loss of my childhood was the price for becoming the youngest world champion in history. When you have to fight every day from a young age, your soul can be contaminated. I lost my childhood, I never really had it did I have to be careful not to become cruel. Because I became a soldier too early.
Nikhil 29:41
Yeah, totally, totally. I think this is the weird thing is this conversation comes up all the time like you're with a bunch of friends and they start talking about college and all the crazy things they did and all the experiences they had. You will always miss that immaterial of where your life might take you after having dropped out, and you know life is long, there is no hurry to do a certain thing and I don't think there is that much of an advantage starting at x age versus y age that Warren's dropping out, and it's always good to have insurance in life, and having a degree from a great college or having learned a new skill set in a formal manner is always beneficial in the long run.
Puneeth Suraana30:32
A lot of interesting aspects that we're actually discussing right now listeners.
what I like about you already is how differently you look at certain aspects of life, education as insurance, focusing on the first few wins, rather than the losses. Yeah, there's an interesting study apparently which says
negativity or loss
is 17 times more impactful than the good ones. And here I am looking at. Yeah.
There is little shifts about you, which
I think from the bigger part of the Nikhil.
Nikhil 31:34
Yeah, when it comes to education, I think,
a lot has to change our education systems are still programmed, or still derived from the education of the Industrial Revolution in a way. We are educated in the factory assembly lines, kind of manner in the world that we live in today where information is available, very easily online I mean you can google absolutely anything today. Less prevalence. I think has to be paid on being able to regurgitate information or repeat information and more attention towards you know being creative and actually assimilating the information in a manner where you understand what you're studying education systems across the world have to recognize that at some point, because if I have to go back to school and study a bunch of dates and. Right. You know, stuff like that is no longer relevant in a, in a world today where these things can be looked up so quickly, or even a different language for that matter if I see a translation app gets to the point where it does it on a real no it is there
Puneeth Suraana32:51
is a Pakistani movie on this,
where this Chinese guy goes to Pakistan falls in love with a Pakistani girl. Yeah. and all he was born to translate between Chinese and ortho.
Nikhil 33:03
Yeah. Yeah, exactly. So I think education and systems have to change across the world. We have to make it more relevant to what is required today. With the advent of, you know, internet everywhere and people. If I can consume education online like I am able to right now. There is a case to be made as to why should I learn physics from the physics teacher in my high school, versus the best physics teacher in the world. And, even while I'm learning from the best physics teacher in the world why should I learn what that teacher thought 10 years ago or 20 years ago from the syllabus created by a certain government, but not learn about the raking technology of today and how I am able to contribute to it by virtue of being able to you know participate in the process, versus being able to repeat what happened in the past. I think there's plenty that can be changed with education. A lot of people are attempting it. But now, more than ever, because everybody has access to internet and everybody has a smartphone and you could be in a tier three village in India, you can still access it. I think the time is ripe right now to be able to change something there.
Puneeth Suraana34:21
And to all of you listening who are out of the education system. I must admit that nickel may be out but he's a very good student, he's read over 500 books. I it's rare that I meet people who read that many books as much as I do but tell me how.
Nikhil 34:37
Okay, I'll be really candid and honest about this.
Nikhil 34:45
the thing with reading a lot is. So when you drop out of school really early and you know for a fact. Your friends are going to school and they're studying and they're in college and they have a career roadmap set for them. You kind of tend to overcompensate because you feel you know like FOMO like the fear of missing out. And it began with overcompensating for the fact that you're not going to formal education systems, but that trend continues because when you start reading stuff, not because somebody is asking you to read stuff but you pick stuff that you like to read.
It's a more organic process which leads into reading more.
Even for the students of today especially like we were talking about the education systems right now, especially in a country like India, we have very little choice, we have a similar curriculum for everybody. They should definitely be more choices in place much earlier in our life, when we're allowed to pick what we want to study like a kid in the fifth grade if he's really interested in x subject should be allowed to you know focus more of his time on that. I think that's, again, something that education systems need to change. Actually I'm talking about this a lot. Ironically, since I did not go through the process but
Puneeth Suraana36:14
you created your own education system.
Nikhil 36:17
Maybe
Puneeth Suraana36:17
I remember this expense, which is so apt. I had a very very very heated debate in college once where it was getting so hot between the professor and I that we knew one is going to just bust out, and the professor did before I did. And he said something that has changed the way I look at books and education he said Puneeth. If you, he said it he
he's a musician.
He still is all fat children, that's the band he runs. He said something that has really changed the way I look at education, he's like, dude, if you want to get an education, go to the library, right, if you want to get laid come to college.
Nikhil 36:55
Yeah. But if you're talking about Indian colleges I don't doubt how many people leave,
Puneeth Suraana37:02
where they are, in fact, there's research that says that 70% Korean companies target to preteens and teens was the other main customers, it's not the ones who are in the 20s, really. Yeah,
Nikhil 37:14
that's, I might be like out to the world today.
Would you like another green tea. No, I'm
Puneeth Suraana37:21
good. That's about, yeah.
Nikhil 37:27
Yeah, I don't know what is happening in colleges today, but my perception of college from when I remember it back in the day, not by virtue of going there but by looking at people, was it was very traditional and typical and I live in the south of Bangalore which is a very. If not now, 17 years ago is very Brahmin dominated typical middle class South Indian households were forget getting laid, I think, talking to a woman was taboo. Yeah.
Puneeth Suraana38:01
Interestingly, a year ago Barkhha Dutt wrote this article which says that the average Indian girl is losing an virginity at 16.
We're going from training to sex.
Unknown Speaker38:21
What age were you, 21.
Nikhil 38:26
Yeah, something like that for me too I think Yeah, yeah, yeah, like the times are changing.
But kids are more avoided. Now each time I meet a five year old or a 10 year old or even a 15 year old it is.
They are discerning Lee distinctively much more evolved than we were at that age. A 10 year old today is much smarter and much, much better read than a 10 year old version of me and I would say the same for a five year old or a 15 year old.
Puneeth Suraana39:06
Fascinating I remember one of my mentors said it so beautifully. In this seminar for parents and students is blatantly put it out there that parents your kids know more positions than you. Cool children so I totally understand the exposure there. But I think missing a few elements, Nikhil that you and I learned the hard hard way, right, what elements, do you think these are and
Nikhil 39:33
so I interact with many young people. I put them in different buckets, the affluent young are missing a purpose in life. They have, by virtue of who their parents have been have had such a sheltered life that they're not in touch with reality, the way they should have been in a way I think they will find it extremely hard, because they'll find a huge shock you know when they go into the system and try to do something, because they don't really know what is actually going on out there they might be very book smart, but they have no idea of what is happening on the streets in a way that's the affluent portion, and they're very emotionally needy as well. The first world problems like you know their mental state and their happiness quotient and stuff like that will play a much larger role in their lives, versus, say, 15-20 years back when it was all about you know going out there proving yourself or earning a wage and stuff like that. I don't know if it's good or bad, but very, very different. I would bucket that as the afro Indian move today, between the age of 15 to 25 maybe. On the other end of the spectrum. I think there is a lot of hate, I think, even though we might say, you know, education can help you you know cross barriers. Anybody who starts from a can become z the whole American dream. Whatever be it. It is actually very hard for somebody born in a lower middle class household today to do a dream, even in life. And this whole income inequality at the top has them really dismantled in a way. So I think those are the two big differences I see a amongst the affluent who have created new problems for themselves which did not exist. Up until now, and before the not so affluent who are kinda like started hating on you know the income disparities and the fact that they realize is, even though they might be one outlier who you know breaks out and kind of dust off it's quite hard generally. I'm a big believer in cycles in life, and I'm a big fan of history, I read a lot about history and I think what has happened in the past will repeat itself. This income inequality is a really large really big problem. Typically if you were to go back to say, the 15th century the 13th centuries. Think about a time when. Think about a time when Christianity was not the most prevalent thing and we didn't have these model arbitrary moral and moral codes which were set up. When income inequality rose to levels like we are seeing today, they would typically be a coup there would be a king who gets thrown out or there would be a revolution they would be something like that. The owners at some level should fall in the ritual today. Not because they are altruistic and want to do better for the world, or whatever but more because they have to realize that if this continues, they will be a revolution of sorts, they will be people, I mean if one person has as much wealth as 99 people and there are 100 people in the society. It is a matter of time before the 99 people go to him with you know like machetes and stickers and. Yeah, so something has to be done there. In fact,
Puneeth Suraana43:21
this is something that I observe in Marathi community that I
live in, wherein there are few
that live so large that the local community is getting outraged and that could be felt in a lot of action. So I understand from that perspective you scale it at large. Yeah.
Nikhil 43:43
Yeah, totally. I mean these people spending hundreds of crores on their kids weddings when people are dying of starvation next door is bound to cause resentment. You know, I mean there is. Right now it has become palpable across the world right. Especially, I think why something like the corona pandemic which is going on right now are big triggers in the cycle which kind of expedite the process, because you might hate this whole phenomenon in the ecosystem wherein there is so much income inequality that 80 people are hungry and the other 20 people who are around wasting as much food as 200 people might have needed a virus a pandemic a huge economic depression and stuff like this kind of expedites the whole process of the revolution that might come about.
Puneeth Suraana44:40
But I think it's I disagree, Nikhil, you know what happened. It's actually making even more evident right now. If you look at. Interestingly, the rich are getting richer even now
Nikhil 44:52
totally I agree with that point they are getting richer even now, but the the poor or the underprivileged or the people who have not had the opportunity might use times like this, or might be triggered by times like this to act, while they might not have been able to act up until now. By virtue of you know being busy at whatever they were trying to be stalking to some people who are my friends in the local police force and stuff like that. The amount of unemployment this virus has caused is definitely going to have a ripple effect in crime. And it's crime at all levels that could be you know like petty crime and serious crime. It'll be a new world post Corona and it's scary thinking about the new kinds of things you might have to worry about which you didn't have to. Up until now, especially when it comes to crime. I think we all have to be more cautious.
Puneeth Suraana45:55
I think that's the hope with this podcast
somewhere right now. I remember
a friend of mine in fact one of the first person I interviewed chakra he wrote when I was 1617. I was writing this book, he said something that really changed the way I look at you. He said Puneeth you have the biggest problem with India is not China Pakistan. This was back. I think seven eight years now. So in a way, he's like originally drafted this bad early, he's like, our biggest problem is our own youth. If they are
not organized, they're going to turn against each other. Yeah.
and something like
the corona situation is
just the right time to get constructive rather than destructive. And this brings me back to 2010, which was like the worst year for trading, right, and probably this is the worst year for startups.
Nikhil 46:46
Yeah, I mean, I would say 2008 nine was the whole crisis, to a large extent we didn't feel the crises as much as one might have in the West, because India was not as globally connected and we were not as dependent on the western economies as we are today. We started in 2010 it was a very organic process so
through 2003 2000 to three when I started trading.
It was a progression from trading to managing money for some people, to being a sub broker for some other broker. So me and my brother used to do this together and he used to be a sub broker with something called reliance money. I had a sub broker, with a company called way too well. I worked in India with securities for a while. Throughout this time, I would trade for myself and that would be my primary source of income. The biggest problem at this point was the cost, you know, the brokerage cost. So if I were to make five in a month, whatever metric, you would end up spending something like two or three out of that just in costs and commissions,
Puneeth Suraana48:08
we mean 5% and two to 3%.
Nikhil 48:11
Say 5005 rupees let's assume you would end up paying as much as two rupees and just you know brokerage calls and commissions and stuff like that. This continued all the way till 2008 2009, when we kinda like, I mean there was a formally launched in 2010, but for a year or two before that we were kind of like you know, Id ating building the product thinking of what we should be doing around it. The main focus might not necessarily have been to become the largest broker and all of that. One of the big focuses for us was the amount of cost saving we would have by being a broker yourself versus using somebody else and giving them money. I think at the very inception of Zerodha, we were trying to save costs, and we had a bunch of clients whose money we would manage and stuff like that. But ever since Zerodha began. It has grown organically, I think, again, I would, I would put a lot of weight in the success story of zerodha, even the people who are around like the, the team which was with us when we began, but also on luck, you know, I think we began at a time when there were not many people in the broking industry who were trying new things. These were people who had been beaten down by the fall of 2008 and nine and nobody knew it was the beginning of a bull market in a way because the markets rallied for many years, starting from 2009 2010. So many things fell in place, and being it the right being in the right time, the right place at the right time is such a big thing because if we were to try doing exactly what we did back then today I think would be a Herculean task, it would be 100 times odd.
Puneeth Suraana50:08
One thing that I think I have to emphasize to all the listeners is that much before even something zero does started there was a 13 year work around what that meant and and Nick and both of you put in. And I think that somewhere for listeners is important because it gets out of the picture, they still look at the tenure trajectory, but they don't look at it 13 years of groundwork that was laid in terms of just building that network.
Unknown Speaker50:38
That's amazing.
Puneeth Suraana50:43
You've bootstrapped this entire
winter. But more than that, let's focus on how you've, you've reinvented your thinking, because I realized, an interesting YouTube comment led me to this train of thoughts with light. So you made a lot of killing in the derivatives market and now you're talking about being conservative as like interesting Wait, that's less of a criticism and more of how this man is transformed his way of looking at things, right, and someone probing can understand.
Nikhil 51:13
Yeah So ever since I started like 17 years ago, trading focus has been derivatives. But
derivatives.
I have gotten wiser at trading in derivatives, by virtue of all the experiences I've had to these years. If I were to advise somebody starting off today or someone who has been in the market for the last couple of years, would be to not have to go through the process of burning out so many times and having all those ups and downs and stuff like that. A very realistic goal when you enter the markets is a benchmark. The nifty, for instance, has done about 11 12% year compounded over the last 10 years over the last 20 years. And we're at a point in time today when interest rate cycles are falling very quickly. Bank nifty is just not make sense anymore. They barely even beat inflation at the current point, the government does not want you to put money in gold because we don't have any gold as a country and it has a bad impact on our fiscal deficit because we end up importing it, and real estate which has been the primary store of wealth in India has plateaued over the last five or six years. So at this point of time, money has very few avenues left to go to, we foresee I foresee a lot more money coming into the stock markets over the next five to 10 years. And at this juncture, I think if you were to have a balanced portfolio, have some kind of diversification in place, and you're allocating capital to equity markets right now. I don't think it's the hardest thing in the world to be able to make 15% a year over the next you know five to 10 years. And that is incredibly good rate of return. If you make 15% a year you're doubling your money on nine to five years.
Puneeth Suraana53:16
People don't get that. Yeah, I've been studying compound interest for seven to eight years now, and I haven't found a real way to communicate you know what the. This is the power of compounding Yes,
Nikhil 53:27
yeah. Yeah, I think a very useful tool here is something called the rule of 72. If you want to figure out how many years your money will double in divide the rate of return, you're getting by 7200 give you the number of years. I think that kind of makes it a little more legitimate in people's minds when they go with compounding so if you think you're getting a 10% rate of return, you divide 72 by that and you know your money will double in seven years. If you're getting 15% you know double in five years if you're getting 5% you know double in 14 years. So, the power of compounding is incredible. And the real advantages of compounding did not come in the first five years but when you go beyond that. And in a time like today when it looks likely that a lot more money will come into the capital markets. I think it's a great time to, you know, stick to large cap equities stick to companies which will take most advantage of the India growth story. Don't try and do anything too special, and you would still end up being a winner. Whereas if I were to recommend somebody to use leverage and go into the derivative ecosystem right now. There is a 50 50%, or that you would burn out in two years or three years, because you can't time short term cycles in the market. And if you're leveraged five times your capital, you just need a 20% down motivation. That's why I recommend investing versus trading derivatives short term. There are a lot of people out there who go out and say, people on the news who will tell you what will happen at 12 o'clock today or how the markets will close, people who give you tips on different companies, people who tell you this company buy at 50 it will go to 206 months and stuff like that. I can tell you, all of that is rubbish, like absolute bullshit there. Nobody knows what will happen tomorrow, like, forget me or your analyst on TV or somebody who's writing about it in the news. Nobody has any idea with any kind of certainty what will happen, let alone one year down the line but even tomorrow. Just thinking about it if I knew what was happening tomorrow I would not be going out there and screaming about it but I would be using that to make money so nobody really knows. So don't fall for you know tapes, especially on penny stocks and companies which don't have the levels of governance and compliance which a typical company should have.
Don't look at shortcuts when it comes to making money.
Add balance and diversification in your portfolio which will help you tight over times when a certain asset class or a certain industry might not be doing well. Typically if you're affluent investor who has a certain amount of money to be allocated to the stock market and can afford diversification. I typically recommend you know, as a family portfolio, reducing a their real estate exposure from typically what is 70 80% down to 30%. I say, Do 30% Real Estate do another 35% in equity, and the balance is split between fixed income and say a commodity like gold, which fixed income, I mean, not corporate debt but government bank debt with sovereign guarantees like tax free bonds and JSX. If you have a portfolio like that, and investing is not your primary job but it's a place to allocate your savings to. I think you will do significantly well and significantly better than giving your money to an investment advisor or, or following tapes and stuff like that and just stick to like quality companies in all of these asset classes. Another huge detrimental fact detrimental factor here is when you give your money to a fund manager typically he charges you 2% a year. And that's outside of what the distributor makes that's outside of what your exit load might be and what your setup costs might be. And these costs are the biggest detriment to your portfolio over a 10-20 year period. Because, like your gains compound even the fees you pay compound and keep it simple, keep it realistic and at this current juncture in 2020 when so much more money could be coming into the markets is probably the best way to be pleased for the next five or 10 years.
Puneeth Suraana58:26
Fascinating. I'm reading Greek philosophy book and I totally correlate with you,
which is called courage to be disliked.
I know you into Greek. Yeah.
Before point gets
lost and we get into Greek conduct
that's a little deep.
What he's suggesting is to be average have the courage to stay average and not be an outlier or beat
the market.
And there's a lot of wisdom in it. I think is is really brought out sample portfolio for affluent ones if you're a beginner investor I'll link up to Shradha’s interaction with him where he actually does it for a beginner investor on money matters. I think that's a very good resource, so we won't regurgitate that, but we get into the conversation now.
Nikhil 59:19
The thing I like about the Greeks versus, I mean you can read philosophy, originated from many different pockets right many geographies. One of the things I like about the Greek beard. Starting from say a Socrates or his descent, or people who considered a mentor like Plato or whatever. I think their ability to question, and the Curiosity they had about everything be about a god beat about religion is very appealing to me many things, even today in the ecosystem that we live in, might not make sense to person like me or to most people. But we lacked the ability to be curious enough to be able to question it, I think, a large part of why we don't have the Greek gods that we had at one point, like the god of thunder and lightning and all of that is because philosophers of the day had the ability to question, and when things did not I mean sure in their lifetimes they might have, you know, like Socrates was killed by the government incumbents of that day because he questioned religion and people thought he was leading the youth of the day astray by questioning the prevalent religion of their time. When you question everything that is going on in your ecosystem I think the natural progression from questioning is, you kind of like tweak the systems to be better. And I think the Greeks did that before anybody else. Sure they had dystrophies in their future and they screwed up like everybody else in the world at different points of time, but that one factor kind of leads me more towards Greek philosophy than others.
Puneeth Suraana1:01:16
And, and these weren't formal very structured questions guys,
which a lot of us are told to do so.
Yeah, these were very loose loosely worded,
Nikhil 1:01:29
like in. If I were to like derive learnings from there into today's ecosystem, one has to question, if our political systems are right, if I have a big issue with things like you know why don't we have RTI on political donations. Why should our country man not know which cooperation is giving how much money to which political party. I totally, I do not totally agree with the election processes well why shouldn't the politicians of today also have the say,
not just educational qualifications but qualifications of all thought
at play, why shouldn't we have a cap on election spending. If a political party has to spend 50,000 crores to win an election, how does anybody else who might be better and more innovative stand a chance. There is. There is so much that can be questioned today I mean, you can even go back and question if our version of democracy is that the best for the world that we live in today and does it just make us inefficient and maybe it's in the past and maybe we need to look at changing it. So, I have always believed populism is in a way a precursor to socialism and populist leaders of today like more the way Trump and many of Boris Johnson, to a certain extent. Many populist leaders across the world might be leaning the world towards socialism in the future. Something we have tested in the past and we have figured does not work. So, there can be so much that can be changed in many spheres of our life today. And the problem is questioning the status quo which exists now is kind of like looked down upon and people come after you and you do it and stuff like that. I think we need to create a more robust environment wherein people are allowed to say what they think, ask questions about things they do not agree with.
And in the truest form our democracy has to afford that.
Puneeth Suraana1:03:49
Yeah, I, you know, this is, this is one of the reasons you know i
i agree with you and sort
of disagree with.
You would not believe. We as Indians are not really used to questioning, do I love the Greek approach. I mean, I come from the largest Toastmasters club in the country. And you know, across 170 clubs in here and I think about a few thousand across the country, we start our meetings with. Let's not talk about sex religion in politics, we don't want those three to be touched or questioned. Right.
It's hard to change things when
we're so rigid about so many things and question them like questioning somebody's questioning or religion becomes like a personal remark, yeah. Cubby faced it, are people today face it. Yeah, a lot of influencers have gone out and questioned,
Nikhil 1:04:59
Yeah, sure. I think the same kind of translates into companies as well. companies which are very rigid in their preconceived prevalent notions and are not willing to question if what they're doing is right and if they need to. Structurally change from what they are as a company and evolve into something else and I think these are the companies losing out today, and the companies which are doing better are companies who are willing to change change very quickly change not just a small part of what makes them a company but change the very structure of the company itself and the very clientele they might be catering to other very product, they might have in place right now. So if it works for companies and companies which are willing to question and change are doing extremely well. I wonder why the same should not work for the other. The different diasporas that we kind of like have to deal with today,
Puneeth Suraana1:06:01
but a key differentiator would be to question and change before things are broken. Yeah,
not after, because then that's, I think that's what happened back in 2010. Leading up to I think 2013 14 where you're questioning. Essentially, the idea of the brokerage fees,
and today with True beacon.To begin with you're questioning this entire assumption of a flat fee loss. Yeah, yeah, yeah all these hidden costs and then. Yeah.
Nikhil 1:06:39
Yeah. So True Beacon is very new. It takes about a year, year and a half to get the licenses in place. But we've been active as a fund for about nine months now. fund has done exceedingly well we have gotten lucky there again, I think it is outperforming the nifty by about 25%. Our target is only to outperform by about six to 8%, the asset management industry has not changed in 10 years in 20 years. The Pro hype prohibitive fees that I mentioned earlier are all prevalent. You have large asset managers like private banks and the incumbent players in India, who you know sell you a product that they did not create they charge you a fee then the guy who runs the product charges you another fee. There are fees when you set it up their fees when you exit. All of this immaterial of the fact if the end user is making money or not. We're trying to change that but to beacon. We're trying to be the first client aligned asset management company. We don't charge any kind of fees, and no styling fees no setup fees no exit fees, we are completely open ended. No middlemen no distributors, if the client were to put in 100, and he makes 10 bucks, it becomes 110. At the end of the year, we charge one as fee. I think the amount of transparency, we will bring into the model will kind of help prove we can do well as a company and we found lucky a great team. To start the company with the guy who is the CEO of that company happened to be a friend of mine who I met through serendipity serendipity, which is, which happens to be one of his favorite words and he says a lot. He's a 50 year old British guy with a very very interesting background. He was in the British Air Force the RDF for 18 years as a fighter helicopter pilot led a team of helicopters to you know the invasion of Iraq Saddam Hussein was part of the Northern Ireland anti terrorism squad was fighting the war in Kosovo did this for 18 years, quick to effluence the IDF became Chief of Staff for Prince Charles and Buckingham Palace for 10 years, organized Prince William's wedding and try traveled with Prince Charles across the world and meeting presidents and prime ministers, quit that and then joined Standard Chartered as the vice chairman globally as a private bank. I had to convince him for many months to quit his very very senior job at Standard Chartered to start this new thing with me in India and Bangalore.
Puneeth Suraana1:09:44
I do that, I look it. What I've started loving his conversations where
the entrepreneur actually tells how they got their key personnel in
Nikhil 1:09:55
Alcoa alcohol.
Puneeth Suraana1:09:58
We would like.
Nikhil 1:10:01
We would hang out a lot. And we would catch up over the weekends and have a few drinks and stuff like that. So you never drink during the week. Typically cuz I start work very early. So one random Wednesday I think we were at a bar and between me him and Irish real estate guy. We had four bottles of vodka. And somewhere at 3am or 4am, we started talking about this and this new thing that I was doing. And I asked him if he would join. And he said, Yeah, and I held him to it, and he hasn't been able to take it back since and I think we got
Unknown Speaker1:10:43
it Don't blame it on the thing. Yeah.
Nikhil 1:10:45
Yeah. That's how we actually got him, but he's a great guy.
Puneeth Suraana1:10:50
How do you discover somebody like him.
Nikhil 1:10:52
I met him through common friends, initially to begin with. But we were friends for a good six months before you know we either of us, asked each other what do you do professionally and stuff like that. So very interesting chap, so he is leading the true beacon venture. It's right now focused on Ultra HNI’s so minimum ticket size of about $2 million. The reason it is as high as that as we can't afford to service too many people at the cost structure that we have. But we have some great people who have signed on as clients right now.
Puneeth Suraana1:11:31
In fact, I'm telling you, we've got a podcast there. So my goal with this is to get 10 people to be hit 100 crores. Yeah, it's a matter of time that something that through we can get five to 10 clients from Galata gang.
Nikhil 1:11:47
Yeah, definitely. We're looking forward to them,
Puneeth Suraana 1:11:51
give us five to 10 years because I think with all the leverage information we have the time to make a lot of money has reduced, you have to be right. Only once or twice. Yeah, please in the startup space. Yeah, to get things running.
Nikhil 1:12:06
Yeah. Luckily, also with true beacon I think the fact that it's not a venture essentially to make money for me personally, it's more to change. Change the problems I feel when I tried to allocate my money, personal money to somebody like the whole idea was conceived because I had a relationship with a private bank and I was trying to allocate my funds by a bunch of products and they were just like you know ripping me off, left, right, and also to be in the privileged position of having something that has worked already. You can have like a really long runway you know you can run it for the next five years and not think about money. And it helps you do things properly. Right, and not take shortcuts.
Puneeth Suraana1:12:51
You know that's the best thing about staying private that I have noticed, yeah.
From small startups to as big as Koch Industries.
You guys should check up Koch Industries and how they're built as if you don't know the Koch brothers.
Nikhil 1:13:08
Yeah, yeah, they I mean they're very controversial in many ways to say the least. I don't quite agree with
their, their opinions on what their opinions are on climate change their political donation. There are many things. Yeah, many things about dentistry life, but there's things about them to dislike and like.
Puneeth Suraana1:13:37
What I love about them is how they have been able to think in long terms right decades into decades and how does help them over time to make these really far looking bets,
Nikhil 1:13:50
and there they are, they are brilliant, I've.
A few years ago, like I was reading a book about them and they've been buying a
Puneeth Suraana1:13:59
coke land. I don't remember which one
Nikhil 1:14:01
it was but I remember reading that they're buying land with natural springs, and then the one. Yeah, because they realize how water will become a commodity in the future.
Puneeth Suraana1:14:13
You know, one thing that I took from that book was one to stay private be be the one who's behind the scenes. That's why I think I connect with you because you're the background and building things, and two was this magical thinking, a decade or two decades, versus just the next quarter. Yeah,
Nikhil 1:14:31
yeah, yeah. The great thing being private affords you is agility. If you think like our earlier conversation where we were talking about companies which have the ability to change very quickly do well and companies that can question, what might be happening in the ecosystem and how they need to change. When you're private. I think if we have to change something, you don't have to go back to a board of directors and get it approved and have a plan in place, and get a buy in from 10 different people. That allows you to change something in five minutes versus you know five months. And that makes a significant impact in how well a company does over the long run.
Puneeth Suraana1:15:15
It's very true. And when he says, challenging question problems or assumptions, you could be a company of one and do it. Yeah, because that's how I think it started off. Yeah. And over time, people come in more time the space explodes.
I'm happy that I met somebody who's read Koch brothers Yeah, yeah,
Nikhil 1:15:38
they're interesting I mean,
I'm surprised, their political aspirations were not stronger than they have been up until now because they would definitely be the, be a great candidate, not a great candidate but a powerful candidate to be you know leading some kind of in
Puneeth Suraana1:15:58
but I love the way they've built the foundation for 50 years yeah for that political. I don't know, it's like cut quickly but it's mad how the segment of the book just made me go crazy when they stopped. Certain bills to be passed in Congress by Obama and Trump. Yeah, yeah. And,
Nikhil 1:16:19
yeah, the crazy thing about America is corruption is legalized to such an extent that there are probably 10,000 lobbyists in Washington and lobbying is considered legal and very about what in every sense of the word. The same in India would be considered corruption, like essentially our industry personnel in the realm of government trying to influence a decision by
Puneeth Suraana1:16:45
isn't that what's happening right now. don't you think corporates are running the country.
Nikhil 1:16:50
Yeah, I think they are. But I think be masked better than the Americans do but the Americans have the art of having legalized it in a way where it no longer looks like corruption. Right. One thing I would have to give credit to the incumbent government here the Modi government here is maybe the top level has gotten more corrupt, but at the bottom and I think they have done something to curtail corruption. So, a normal man like me going in might face, less corruption, but at the top end when it comes to you know governance and policies there might be more corruption. I think it just went up the ladder. Yeah, much like it has in the West many years ago, we tend to do everything America is doing with a 10 year lag anyway so
Puneeth Suraana1:17:37
that's so true. In fact, I think one of the reasons why zero or to begin is a real flight is because I get to see these really high end financial apps, which do really basic stuff. To start with, but they're not available for India, or in rupees. And I think that with the entire app universe that you've created you somehow trying to solve one problem at a time. Yeah.
Nikhil 1:18:08
Yeah, true. We planning to get into the American markets. Now, the, the funny thing with America is their banking systems were built in the 50s and 60s, and they've had the disadvantage of having to tweak something which is very old to make it relevant to today. The advantage for India is since we began much later in the 90s or the 2000s, our systems are actually not as bad. I mean, they're much better I would say then the American systems like things like UPI and stuff have drastically changed the industry and in many respects, that 10 year lag is kind of dissipating especially in banking. And I would say we are, as evolved, if not more than America is right now. So companies and apps which do well here right now, there is no reason for them not to do well in America. So we are planning to take some of our products there and try and integrate and see how it goes.
Puneeth Suraana1:19:11
Fascinating. The assumption of or the understanding of zero there has always been a tech company. Yeah, which happens to do procreate.
Nikhil 1:19:21
Yeah, yeah, I think I would agree with that. Yeah.
Puneeth Suraana1:19:24
And it's a very different way of looking at brokerage or any industry right now for all the listeners wherein. You've got to be tech, in one way or the other,
because that is the final level right now.
Nikhil 1:19:37
Yeah, yeah. That wasn't always the case. I think we were traders and brokers first, and is the guy who came in like many years ago called Kayla, I think he has kind of transformed it from being a broken company which has debt to being a tech company which does brokerage,
Puneeth Suraana1:19:55
where are we gonna get Kayla because I hear him being mentioned across a lot of interesting platforms. And I'm happy that you do credit, the entire tech revolution to him in the company.
That's the thing.
He's solving. I love it when engineers, or software engineers solve real world problems, and actually create some Galata in the market. Yep. You really stoic, and I understand how you've been able to live, part of the grief loss in that you've been studying.
Nikhil 1:20:32
Yeah, I think I was more stoic.
Growing up, than I am right now. I think I've gotten to that point where life is. It hasn't changed yet, but life is changing, more towards what I want to be doing versus what I had to be doing which was up until now. So now I'm okay to show emotion and okay to kind of like you know like not compartmentalize things which bother me in the way I might have in the past. So I think I'm. I think it's age right like I've lived my life backwards in a way where and what I should have been doing. Now I was doing much earlier so feels like I want to now be doing what I should have been doing and live it backwards.
Puneeth Suraana1:21:28
What would they be like, expand on
Nikhil 1:21:30
it. I don't know, like, you know, do things which kind of more appealing to my soul versus things which are, you know, something focused on a financial gain or whatever. So I would love to you know go spend three months in on a beach feeding or doing yoga or beat whatever. I think I'm not there yet, but I feel like I'm on the path towards it. And maybe in a year or two I would be able to you know do stuff like that,
Puneeth Suraana1:22:05
to get into trading by choice.
Yeah, totally by choice.
Nikhil 1:22:11
I had the advantage of being exposed to it by virtue of my father and stuff like that very very early. But it was a very voluntary choice and I kind of like was first intrigued by it, and then I enjoyed it and then I continued it.
Puneeth Suraana1:22:36
You come across as a person who
doesn't get bored by his own company.
Nikhil 1:22:41
No, no. You would be surprised I, I am as normal as the next guy I get bored all the time. I have a huge fear of missing out I am insecure in many ways I, I do get bored when I have nothing to do I kind of mimic it by staying busy all the time. So, there is this concept, there is this philosopher called nihilism like you think about anything long enough, you will start about thinking of things like you know life has no meaning. What is the point of a what is the point of B and C. What is the point of money What is the point of family, what is the point of living, all of that. He makes a very interesting point that. Do you want your life to be the discovery of the meaning of life, or do you want to have a fun life. If you have, if the intention is to be happy and have fun life. Then find meaning in things that don't necessarily have a meaning. So I spend most of my time staying occupied staying busy doing things which make me happy, so that way I don't have to sit in wonder about all these you know everybody's life has ups and downs and hardships of all kind and insecurities of all kinds, I think the best way to come to that is, you know, staying busy doing things that you enjoy. That way you don't spend too much of your life, worrying about what is the point of something versus living life and enjoying what you're doing in that point.
Puneeth Suraana1:24:21
It's a counter way of looking at what Seneca used to look at.
Yeah. Have you done this piece on time.
Right. He actually talks about
the exact opposite of it when dedicate all your time.
Nikhil 1:24:35
Yeah, Yeah, but I feel like if I were to go the Seneca model way I would like probably lose the plot in the world that we live today, because, especially with COVID I mean you have, you have to wonder like you know, the odds of anybody contracting COVID right now and the odds of what will happen to the world and economies and our barons and all of these things there are so many adversities at play. If I were to sit in allocate time to thinking about what the meaning of all this is I would you know, I would not be the happiest of people to be around or for me to be with myself in that way will be quite tumultuous it wouldn't let me be happy I think the end goal for me is very simple. I think many things in life are better served by keeping things simple, right, my simplistic desire right now is to be happy. And I think I'm looking for different means. By virtue of which I can be happy now.
Puneeth Suraana1:25:37
This is fascinating.
It reminds me of
a conversation that wonderful mentors Mahatria had. So he happened to have a single day address some of the richest people in a particular district, and the evening happened to address the middle class and the lower middle class. And he happened to observe an interesting thing between them is like the rich worried or thinking about how to get happy where your happiness is possible, and poor the middle class are right about whether richness is possible. Yeah.
Nikhil 1:26:18
Yeah, I think another lesson in life has been Money makes you happy to a certain point, right, like, I'm sure nobody wants to be worrying about where their next meal comes from or if they want to buy something that they're not able to afford it or take care of their families and all of that. But beyond that, the incremental effect of money kinda like bears, it kind of goes down. So you have to at different points in life, I think, try and figure out what your next thing has to be does it have to be. I don't mean professionally, but I think personally and emotionally. You have to wonder if the goal of your personal emotional goal in the next three years has to be chasing a versus trying to realize the, the benefits of what you have done up until now and being able to enjoy it and you know allocating more time to different pursuits in life. And there are many right there are so many things one can do in life.
Puneeth Suraana1:27:20
It's reminds me of a podcast that I heard a while back, wherein
I don't know who said it but he said that if you want to set up a goal. It means that you're setting up something that you will be unhappy about for a really little, or a long time. So make sure that you set up all your big goals that are worth being unhappy for so long. Yeah.
Nikhil 1:27:44
Yeah, true. Yeah, that makes a lot of sense.
Puneeth Suraana1:27:59
There's so much more to talk about, and thinking, we continue the Greek.
Nikhil 1:28:05
I hope I'm not coming out very. What is the word for it.
Like a pre Madonna in a way like you know like
we're talking about things which are so evolved, that I have like a little bit of understanding of and things that I think most, if not everyone truly do not understand, right, like you know, nor do I, so we're talking about arbitrary things, I might be right about some of these things I might be wrong about some of these things. But just like this, the opinion of these things at this point is such, and it's constantly evolving. At no point should I think your listeners think I'm right or wrong. I think I'm just expressing my state of mind. At this point in time.
Puneeth Suraana1:28:56
This is a disclaimer.
But you know what, both of us are evolving. Yeah. And, yeah,
listeners already have a notion of I've started doing this, initially what I used to do is, I still have this amazing story in front of me and mine out things and structured and tell it to them in a repeated way, so it gets in their psyche, but now I've started trusting my listeners, intelligence, right and you know what we're gonna have a fun conversation. It's on their owners to extract whatever they can, and that way it is become much more easy for me to have a conversation, and just get somebody comfortable and get talking.
Yeah, because I want to create the space.
Nikhil 1:29:44
Yeah, yeah, much like I was talking about investment in trading life is the same right like we all don't know what will happen like my notions of everything changed constantly like what I believe in today will be completely different from what I believe. maybe 10 days from now. So, I believe in the things that I do right now and I'm saying the things I do right now based on the events that have transpired and maybe the last six months of my life. But based on the events that occur in the next six months of my life, what I think will be completely different. And it's constantly evolving and for everybody, it's very personal to them and they have their own events in their life and nobody's right nobody's wrong. Yeah.
Puneeth Suraana1:30:30
And I don't think we're talking about right and wrong we're just talking about things that were something, you have another thing with individuals like us who read a lot, who have. We're introverts I am thinking you're intuitive I think I am
Nikhil 1:30:46
when people tell me I am so it must be
Puneeth Suraana1:30:48
so we have loud mind. And I think all we are attempting to do right now is just get that loudness from our minds out.
Yeah, yeah this cutie Hello my grandpa.
Nikhil 1:31:00
Yeah, yeah. So, but the constant factor that I have come to realize at different phases in my life is people are not different. I mean, there are thousands of people who are smarter, more able and more hardworking more of so many things, I think, luck and timing is such a big part of all of our lives. I think people don't realize that. Yeah, I mean, if your listener base is the startup ecosystem to some extent. I think one thing to pay heed to is being a market, which is growing immaterial of what your product is and market which has significant room left to grow. That probably increases the odds of how lucky you can get. But most of the people you see today who have gotten lucky and you read about a lot has to do with how lucky they were and at what point they attempted, which product versus how able they might have been as people.
Puneeth Suraana1:32:09
I'm happy that we brought luck, into the conversation because
luck is really beaten down in our, in our Indian ecosystem. Right. I was happy 20 years ago where people, artists, business people would give some greater stars. And when somebody would really pick up the bill like his car is good. Right, but now we have created this entire ecosystem around self made so in so that we have really pushed luck, out of the entire story. Yeah, telling narrative of our conversation. Yeah. Yeah.
Nikhil 1:32:44
Good luck. I mean, if you go back in history as to why, who became a King Baby you were born to the right father maybe your brother died at the right time, maybe,
Puneeth Suraana1:32:55
or you weren't killed. Yeah.
Nikhil 1:32:58
Luck has been prevalent throughout our history, why did Islam do so well and other religions did not why did Christianity do well for so many years, why did we have a renaissance phase Why did we have some artists doing better than different artists, even though there were many able ones are more evil ones. In that time, so much can be attributed to luck it's not even fun. I was reading that book, which is the Michelangelo one. And, which is the one by Unger. Okay, his biography. So, he talks about how many times Michelangelo got lucky in his life and how much he did to go back in history and change his own history because he's one of the few artists who became popular while he was alive, like, much like Einstein is the richest. Yeah,
Puneeth Suraana1:33:55
just to for the listener that that time,
painters were equated to laborers, and he became aristocrat.
Nikhil 1:34:02
Yeah, yeah, even though he came from a family, which was not royalty he kind of managed to go back in history and make it look like he wasn't stoked right to begin with. I think a lot about his life has a lot of the good things which happened in his life happened because of his friendship with the Medicis. But outside of that, like we might look upon Michelangelo as the as the best sculpt paint fresco artist whatever who lived in the 15th century or the 16th century later part of his life, but we failed to realize they were hundreds of people who lived at that time did better work than him. The reason we remember Michelangelo today and do not remember the others is luck. But outside of luck if you have got up to it to anything is how he was a great dr guy you know in many different times in our life ability to self promote and do great PR makes a do so much better than bigger, so strangely uncanny factors lead to people doing better versus the traditional ones like you know intelligence and hard work and stuff like that.
Puneeth Suraana1:35:22
This is, this is so on spot in fact for the year I've been hunting this book down. It's called wealth of Michelangelo. It's such a rare damn piece. And I find it yet, but it actually talks about how he is. This researcher recently very recently I think in 1990s found a rare document that talks about the wealth of Michelangelo, and initially it was believed that he was rich, but nobody knew to what extent, Michelangelo was rich. And to what extent he was an artist to create.
Nikhil 1:36:00
Yeah, I don't think he, he was not born rich because I remember at 14 his father sold him to the master painter who used to run like assembly line workshop. When he was sold for 25 Floridians gold Floridians or something like that which was like, very very nominal wage. And even after Lorenzo the ill Magnifico the medic he died. For many years, he didn't have a patron, nor did he have a workshop. So back in the 15th century people who would create mass paintings like paintings, which were mass produced would have workshops on their own and the great ones have patrons who would be paid for the paintings. And for many years, even though he didn't have a patron. He didn't open up a workshop, he continue to improve his skill and you know, I think that in a way is a testament to the drive that he might have had that he would rather big not earning a wage for 10 years of his life and these guys spent ridiculous amounts of time on each piece that they created right like if it was a sculpture that he created he would have probably spent three years, five years creating every single piece. I think drive and hunger. Like I think we are kind of like shifting the focus of what makes people work and what makes companies work away from hard work and intelligence and being smart to their ability to change with the times hunger luck. I think these factors play a much bigger role as to why something is successful or someone is successful, versus also PR forgot that versus the traditional school of thought which teaches one that you need to be hard working, you need to be smarter, you need to read more. Yeah, so, I think. Yeah, plenty of stuff to learn from history, don't you think,
Puneeth Suraana1:38:02
yeah, we have two history buffs. Yeah, Yeah, we can go on and I'm so happy have started this conversation about Greek philosophy and Michelangelo, and this is gonna get into painting.
Nikhil 1:38:22
I do love the kind of art that I can't afford like Renaissance art and stuff like that. I really like this one Dutch painter called Vermeer, have you
Puneeth Suraana1:38:30
want me okay he only
Nikhil 1:38:32
like 30 or 40 pieces miserable life died without, you know, selling any of his pieces at any kind of, you know, reasonable recognition. But I love his, his whole thing was the use of light, and he did it,
that I really love his paintings, they're very.
He has the ability to tell a story with one frame which very few other painters have and for him for us to only have 30 or 40 of his pieces, what what time frame was when
Puneeth Suraana1:39:05
I was in DaVinci timeframe. No, no, he was not a
Nikhil 1:39:10
one time thing this will mean I'm guessing. He was a renaissance artist, to some extent, so he must have been
Unknown Speaker1:39:18
14th century,
Puneeth Suraana1:39:21
14, Chris. This form of a thought comes a lot in
tension post. Yes, this thought of. Da Vinci. Oh, he's capturing the motion. Yep, yep yeah yeah I was astounded by what Leonardo da Vinci was, this is 500 years. Yeah. And he's been able to capture.
Nikhil 1:39:47
Yeah, this, This world is capturing light the way Yeah.
Your when you look at all the Renaissance paintings.
Unknown Speaker1:40:01
The blue.
Nikhil 1:40:03
I mean, I wouldn't say Vermeer Renaissance but if you were to go back to some of the Renaissance artists, the color blue comes from a stone called Lapis lapis lazuli. It was really expensive to create that blue and that old would only be found in Afghanistan and it had to be imported all the way to Florence and the great Italian painters and all of that, the color blue if you look at any of these Renaissance paintings is only reserved for mother Mary and the important parts of the painting. If you look at any of the paintings from that era, you can just figure out who the important person in the pieces by seeing who's wearing blue. Wow. So I actually went and got over like a 10-kilo piece of that stone is really important and I have that at home. Yeah, it's art is something that I really like. Unfortunately, the kind of art that really appeals to you is so unaffordable they're very few people can actually go out and as an investment to artists, amazing. It's one of the only asset classes which has not seen a downturn in the last maybe 15-20 years it appreciates like 10 12% year on year. And it's not volatile it doesn't go up or down because such a small pocket of investors hold on to art.