Category Archives: ithought

The Legacy of Janet Yellen


Janet Yellen took over as Fed Chair in February 2014 at which point she had already been with the Fed for a decade. Although no new financial crises occurred during her term, the job at hand was no less tricky. Yellen inherited the responsibility of reversing the quantitative easing (QE) program shortly after her predecessor, Ben Bernanke announced to taper it.

To put it simply, the QE program was used to combat the 2008 financial crisis. It injected liquidity into markets by buying debt securities. Effectively, the supply of money increased, and the cost of borrowing fell rates to near zero levels. Low interest rates were meant to stimulate economic growth. However, they had associated costs. Firstly, surplus liquidity could trigger inflation. Next, citizens were earning less from their investments. Lastly, there was a risk of another asset bubble building up, leading to a new crisis.

During her term, Yellen employed a cautious, planned, and calculated approach. Her focus was on bringing unemployment down. She avoided rash interest rate hikes by understanding that surplus liquidity would not result in runaway inflation. Rate hikes were conducted in a phased manner and the economy was prepared for each one. There has been a certain finesse and sense of judgment to these decisions.

It is often believed that a longer tenure would allow central bankers to act in the long-term interests of the economy. Yet, in her single term, Janet Yellen has managed to bring down unemployment to a 17-year low, keep inflation below 2% and economic growth at 3%. This shows promise of continued progress. Her successor, Jerome Powell, is likely to follow a similar approach, even if he entered at the start of a market correction.



Infallible? Think again- ithought’s market wrap.

Investor perception often gives unmistakable hints of things to come. When most investors believe a particular asset class or investment simply do no wrong, it actually would go wrong. Consensus is often the worst tool to make decisions. This is because it takes too much time to reach a consensus and by the time it is reached, it simply would be too late. Let us now evaluate the present investor perception. The consensus view on investing can be summed up like this – investors think there can be no better time to buy home assets; they feel anytime is a good time to buy gold; on equity, investors are still to get over the bad memories of 2008. In fact, investors aren’t even ready to think of equities. When investors don’t even want to rationalize the merits of equity investing, they will be passing over a great opportunity. This makes us believe that equity maybe headed for much better times in 2013. As for the investor favorites – homes and gold, one is treading on thin ice. The risk – reward equation looks loaded against the investors.

 Investment aversion and objectivity are mutually exclusive.

Market turnarounds have a way of surprising you. First, it will appear that everything is wrong with the world of money. The economy will look hopeless. Your currency will look weak. Inflation will be uncontrollable. Interest rates will be close to their highs. Crude prices will be peaking. Headlines will be bleak. No news will be good news. The markets will look like crashing any moment. Then, suddenly, one of the variables will change dramatically. This leads to a chain of events where the other variables start to look up. Gradually, the fear element will leave each domain which it occupied. Crude, commodities, currency, inflation, interest rates and economic data will all sequentially look up. Suddenly, the headlines will change. The stock indices will look up. Money will keep coming into the markets fueling a sequence of positive events. By the time you realize it, the stock markets would have risen significantly. We have described this in a racy way. But, the events have their own way of playing out. One thing is true, every bull market is born out of an extremely pessimistic state. This one will be no different.

Hoard stocks. Unhoard capital from other assets.

Beating the markets. – The ithought way.

At beginning of the year, NIFTY was at 4636. Today it is at 5664, up by nearly 22%. During this period we helped people turn around their existing mutual fund portfolios. If the indices rule higher, there is no need to worry. We can always sell unproductive funds and release cash. This cash can be redeployed in quality funds when the markets fall. We did just that for our clients and brought quality to their investing. Next , we  systematically scaled up their books and they started outperforming the nifty. Opportunity lies in buying when the market is not expensive. Our expertise lies in identifying these opportunities.
Even today, there are funds that are not expensive. Yet, the markets could well correct in the near future. This would be another great opportunity for you to exit unproductive investments and build a productive book that will outperform the market in the upcoming Bull Run.
We have had only 3 Bull Runs since 1990. Missing an opportunity to invest for the upcoming Bull Run would leave us behind by many years. Opportunity has presented itself to us, and  we feel an urgent need to cease this opportunity now.  Even starting with small and regular investments in a disciplined manner will help you create a substantial amount over a long period of time.


I wrote to a close friend in the USA a decade ago that his savings must be in gold and not in dollars. He obviously didn’t like what i said. Mails flew across the Atlantic about how resident Indians did not understand the American way. Now, I am pleading with my friends in India not to buy gold now. I believe there are much more intelligent choices. I am sure this will also receive the same share of rants.

The question really is – Why do we have so much trouble making simple and intelligent choices?

The answer lies in only one thing. The fear of being left out.

So, everybody does what everybody else does. Society gets stereotyped.

Just like everybody has a gym subscription, attends music concerts, has celebrities recognizing them, wants the comfort that a lot of people know them, buy the same mobile phones, drive the same cars, stand outside the same restaurants waiting for their turn ( I really hate this one ), we do our investing too. Salvation is about not getting left out. So, we crowd everywhere and crowd around everything to feel that we belong. The overcrowding itself will ultimately make us feel that we are only on the fringe. We really don’t belong. All our efforts actually meant little and made no difference to the outcome of our lives. And, this is the really tough one. We need to begin all over again and find another road to a new destination. Where do we go then?

There is the road less travelled. Actually there are several of them. You then try to choose one which takes you to your destination. This time you are spaced out, chilled out totally, not expecting too much, just letting things be and accepting what comes your way.

Taking this approach with material things will be disastrous. You must neither be a `Me-too’. Nor must you be a `Chalta Hai’. I have learnt this one lesson early and it helped. Actually, it made me.

But, I allowed myself to be left out to emerge later as one who called right. I still do. So, i believe in tomorrow’s world always and don’t expect today’s world to remain so. It is in this approach of envisioning the future that one can change his own fortunes. Today is all about tomorrow.

Are we on the same page?

Shyam Sekhar.

A note from Shyam sekhar, founder and ideator of ithought.

The genesis of ithought

Hi , I invest in stocks . I study businesses and scout around for good ones to put my money on’. The moment I am introduced I can see different reactions in people. Somehow, the stock market has this unique ability to make people reactive. In 1990, when I chose to become an investor , the reactions were strong.

What ? is that all you do ? Isnt that gambling ?. Those were times when we werent even familiar with business research. So, investment research was a far cry. I hated explaining and would simply smile at their judgement. I would rarely be let off so easily. Free advice will be forthcoming about how this was not the place to be and how one should do something else. Things have changed a bit over the years as people understood that the stock markets may after all be just another place of work, albeit a risky place. The soaring indices have also sexed up the job.

But, let me tell you a truth. The stock market and the organized financial industry wasn’t exactly the right place to work and make a career. In fact, I decided that I would be a misfit if I formally worked in the industry even before I started out. There was a part of the financial world that i disliked intensely and steered clear of it. I steered clear of working for any firm, fund or financial company within the industry. The reasons were strong and i am going to put them bluntly. Integrity was and still is a serious issue in this business. It was all about selling, no matter what the outcome would be.

The financial services industry was all about misselling. They made you put your money in the wrong place just to earn a small commission out of it. They sold you products which you should not have been buying. They never tell you what you should have known about a product before buying it. They sold you a `hot-selling’ product at a time when you should be staying away from it. Investment bankers would price IPO’s so high knowing fully well that investors you stood to lose. To fulfil their interest, they mostly worked against your interest. This simply wasnt agreeable to me. To keep my integrity intact, I simply never worked for anyone. I remained an Investor.

I worked in this environ for 21 years by keeping away from the mob and doing my own thing. So I was independent and doing what I liked. Identifying good businesses and Investing kept me busy. I have no reason to complain. I always could make my choices and there was no room to compromise on anything Growth was personal and always in the private domain. But, something was missing in what I was doing. I needed to find out my next calling. It had to be in the public domain and should be an idea that would make a difference to a lot of people.

I started looking around. The answers came in my interactions with people I met. I was always hearing stories of how people lost money in the stock market. The stories changed with the times but their outcomes were much the same. I knew the problem. Importantly , i knew that this was solvable. So ,I thought the best thing to do was to build something that would help every investor who wants to be helped. So I chose to work in the much beaten domain of financial products like mutual funds, ULIPS etc. There was one thing i decided even before I started. I will Not sell anything. I would buy investments in a judicious way on behalf of anyone who wants them.

That was how ithought was born. I didnt start out with a business model. I went about building a Process. I knew that what made my investing deliver over the years was my investment process. So, I set about building an investment process for financial products. A small team and a dedicated office were luxuries that my earnings afforded me. Friends who knew me and my work thought that i had gone bonkers to stake my money with no clue how we will make it a financially viable. I knew the answers will be found and it was the least of our worries . We were obsessed with the process.The investment process should be knowledge- based and method driven. So we focussed on intensive research of companies and funds and then developed a method to deploy capital systematically and effectively.

The ithought way is the process that evolved from our rigorous work. While we have an intense approach to research and strategy , we chose to keep our business model simple. Clients need to know a few things. And, they need to know them for sure.

1. We will help investors plan.
2. We will take care of decision making and deployment of money.
3. We will review the investment periodically and identify opportunities.
4. We will monitor performance and measure it continuously.

The business model was to be, as we believed, simple – The client will pay a fixed annual fee to us for services rendered.

The ithought way is meant to be experienced to be understood. That is the only way to effectively judge a process which works sincerely and systematically to grow your wealth.

Happy investing!

Shyam Sekhar.

Stepping out of your comfort zone.

You have just finished doing 50 pushups and your trainer being ruthless orders another 50. Drenched in sweat and exhausted you don’t think you can do take one step further, leave alone do more push ups. But your trainer will not take “NO” for an answer. He keeps at it till you get back down on the floor. You manage 1, and then 5, and within a few minutes, you have done 20. Motivated, and feeling good about yourself, you go ahead and complete the 50. You rise with a new sense of confidence, one that you achieved because you stepped out of your comfort zone.

“Move out of your comfort zone. You can only grow if you are willing to feel awkward and uncomfortable when you try something new.” – Brian Tracy

Similarly, when it comes to money matters, we all have our familiar methods of operation. There are some who firmly believe having money tucked away in a bank is the best option, while there might be other who invest in stocks and shares. But, to see how far you can stretch your money, you need to take a chance, take some risk and give it a shot, to reach the goal. The first step will be difficult, but once you cross that and see the results, you will be much more willing to step out of your comfort zone and go further ahead.
For many of you, pushing yourselves into a new territory is second nature, for many it is a nagging thought hovering in their minds, but not put into practice yet.

The 5 golden points of Going beyond your comfort zone-
1. Be open to new ideas and suggestions.
2. Be willing to take risk.
3. Be patient.
4. Learn from mistakes and experiment with alternatives.
5. Have control over your decisions and never go overboard.

Taking stock

Picture an old-school person like your grandfather. Try and reminisce how he dealt with money. Money would be kept in a steel Safe-locker and he always knew exactly how much money he had in it. In the good Old days, bank deposits were the only investments for the middle class. The bank deposits would all be tabulated neatly in the order of their renewal dates. Monitoring would be perfect. Everything worked like clockwork and money would be in a very orderly way. Discipline and caution were the buzz words and things were always kept simple in the way they handled money.

Contrast this with how money is handled in the present. We invest in several products like Stocks, Mutual funds, ULIP’s and bonds besides the traditional bank deposits. On the one hand, we invest in several options for the purpose of saving on taxes. On the other hand we borrow to spend on credit cards. We even buy homes with home loans so that we can save on taxes. Clearly, the way in which we deal with money is far more complicated that they were in the good old days. When we borrow and lend at the same time, we need to balance our finances and constantly keep watch so that they are within limits.

With so many product options and multiple financial goals like life insurance, health insurance, tax savings, home buys and equity investments we have clearly complicated our handling of money. As different times call for different approaches, we are left with limited options but to create a wider basket of financial products. That has given rise to a portfolio. Your portfolio includes all the financial products you have bought and maintain on a running basis.

But, do we really know what we own and manage our portfolio in a methodical way? In the race for time and against it, we hardly find the time to devote to financial matters. We mostly rush to fulfill specific needs at the last hour and forget about them after that. More importantly, we do not have the big picture nor do we routinely tabulate, monitor or review our money matters. The portfolio itself is only in our memory and hardly organized and tabulated. This clearly leads to lapses, oversight and loss of opportunity.

This is where the old school approach of Taking Stock will make a big difference to the way we handle money. If you have a way of arranging your finances, you are actually preparing yourself for bigger things. Wealth creation happens only when we arrange, manage and take stock of our finances periodically. Taking stock of your wealth gives you a deeper understanding of what you assets you need to own, how you need to grow your money and also the risks you are taking to achieve your financial goals.

Today, most of us are simply letting things be. We are hoping for some random decision to work miracles for us. Miracles with money are a rarity. The richest investors are the most systematic people. They constantly take stock of their decisions and finances and tailor them to achieve their goals. While each of us have our own finances and make our own decisions, we should start taking stock regularly. Start tabulating your portfolio and take stock of it regularly. Wealth will soon follow.

Happy investing!

Borrowing to spend

We still want to own our own home but we don’t have the money needed. So, what do we do? Borrow from the bank or from our parents. And then, we spend our lives working, rather toiling away trying to repay the dues. But then, is it worth having a home of our own at such an expense? Now, that is something not many think about. We humans have a tendency to jump into the pool and then worry about not knowing swimming.

Agreed, it is fun to have things we long for, and to live comfortably, but borrowing to spend is just not the right approach. If only it were as simple as walking across the hallway to the neighbor’s house asking for a cup of sugar or some coffee powder. Would you ask them for a few thousands because you have your eyes set on that Swatch Watch or Hyundai i10? That would be crossing the limits. Sit back, let the money accumulate in the kitty and then you can go dip into it.

Today, we notice a change in behaviors. People don’t boast of how much they have borrowed; they are more proud of how much they have paid off. The anti-bank propaganda has hit home. If you are not borrowing you are not giving them the business. And this in turn means less worries, and more happiness. You also know you can go to bed with a smile, knowing there are no evil loan devils knocking on your door the next morning.

Free advice


“You know what, this is not the right track, try this other route, you will reach faster”

“Stop this medication and visit Dr XYZ”

“Are you sure you want to invest in that? I think you should invest in ABC”

How many times have we heard these above statements and sighed in frustration? Well, that is free advice for you. Given when not asked for, offered without consideration to the other person. And well, sometimes it doesn’t make sense at all. Agreed, the person might be talking out of concern or with the genuine intention of helping, but we are not ready for it yet. What do we do?
It is alright if it was related to small stuff, but imagine someone giving free advice on money matters? And if you were follow through with their words. Now that would be dangerous and leave you in hot soup. And anything free comes with a tagline “They are just saying it” “don’t take it seriously”. So, think smart, and act wise, and know when to take and when to reject “Free advice”.



“Procrastination is the art of keeping up with yesterday.” ~Don Marquis

The calendar on the wall is staring at me- there are Red marks against a day, that is less than 24hrs away. I know I should finish the pending task, and that it was are crucial, else I could be in hot soup. It was 31st March, the date to file my taxes. Every day I login to the website, but put it off for later. I have all the details I need and yet I stall. I don’t want to pay the amount reflecting on the calculator as tax. I wish I had listened to my friend and made some investments.. The next morning arises; I once again stare at my laptop and wonder where to start. In this manner, I seem to while away all the time till 31st march threatens to fly out through the window.

Oh gosh, what stress. Why dint I just stick to my plan and finish it ahead of time? Hmm, it was probably because it was something serious and not fun. Agreed, I enjoyed it but still something made me put it off till last minute. Felt like I was back in School, those last minute rushes, the panic and chaos.

I realised we never procrastinate about fun! (Aha! Maybe this was the cure to procrastination? Yes, it could!) How often do you say “Ah, I have to watch TV, but I don’t feel like it right now? I’ll go do some accounting first.”? Wait, don’t tell me! I’ll practice my psychic powers. ………got it! The answer you’re thinking is… “never”! (Spooky, isn’t it?)

How about trying to change our attitude towards this whole thing? Procrastination is no fun, it just makes us lazy and go crazy…