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How I Found My 2nd Love with SmallCase | Become a Master Investor
You must have heard stories of how ultra-rich investors like Warren Buffett, Paul Tudor Jones, or Stanley Druckenmiller made most of their wealth by investing in good companies. People think they bought some shares of a company and then got rich by accident. When I started investing in 2010, I heard an advisor say, that Rs10000 invested in Infosys was worth 4.8 crores in 2009.
What people do not know is that these investors got rich by a technique called resource allocation and not just by naked investing. They decided the exact percentage of their capital that should be allotted to the stocks that they were selecting and then simply stuck to that plan.
They also had the wisdom to remove the losers and add on to the winners so that their portfolios kept outperforming the benchmarks. A few decades later, their investments multiplied and they became billionaires, all because their winners compounded.
Mother’s are the best resource allocators we all know. If you give them a monthly budget of 20000, they will split that efficiently on grocery bills, utility bills, dining out expenses, and spare change for miscellaneous expenses. If you alter the budget to 22000 or 18000, they will accommodate that beautifully too.
The same thing is possible in Equity Markets as well, you can decide what percentage of your investments should go to stock ABC, XYZ, or QRS. If you get your allocation right, it will make tons of money.
