Beyond Narratives

Just yesterday, I was asking myself this question:

Given the middle-east conflict-led-uncertainties and the ripple effects on oil, inflation, economies, markets; am I even remotely considering selling my advisory business?

Absolutely not. The thought has not even crossed my mind. Yes, I will be mindful of managing the costs and the cash flows, to tide through, what could be challenging and eventful times. Incidentally, I have never been more excited about the prospects of my advisory business.

So then, why would I want to sell my ‘portfolio of businesses’ aka my stocks (held directly by me or via equity mutual funds or equity PMS or equity ETFs) ?

Only since I get to see a daily / hourly valuation of my ‘portfolio of businesses’? Say my own business was also listed on an exchange. Will that change my decision to continue to hold my business?

As long as, I have covered myself for my near to medium term expenses and other important cash outflows, and hence, I do not see a need to dip into my portfolio of businesses (except to reshuffle), do I really need to take any action?

Yes, the value can erode. And sharply at that. It might stay down for a while. A Google search tells me that in the Yom Kippur conflict, it took about 4.5 years for markets to get back to the point they were at, before the conflict. Am I covered for this long? If yes, then does it not boil down to holding my nerves* and stay put? It could be even much shorter this time.

Could it be longer ?

Who knows. So long I define a time period and I am covered for the same, am I not better off letting the value of my ‘portfolio of businesses’ run their course?

And utilise my energy and time in focusing on my own business, sharpening my craft, learning new skills …

All I need to be sure is that the management, the leadership teams of my ‘portfolio of businesses’ is in good hands. Folks who are resilient and have been through tough times ..

*I acknowledge it’s not that easy. And if I am getting uncomfortable, it is important to evaluate whether I took a far higher exposure to the equity of these businesses in the first place. And whether a debt-based relationship would suit my risk appetite better?

This is how, over the years, I have come to look at investing. You either invest in yourself, or your own business, or in someone else’s business. And if decisions (to buy/sell/hold) are made keeping this in mind, it should stand us in good stead. I had also written a more detailed note on this – getting to the heart of investing.