Exclusive! Monkey 2 reveals its investment philosophy
Firstpost brings you an exclusive interview with Monkey 2, the one who has often beaten the experts and the indices.
By now, he's become a celebrity in his own right among investors. Monkey 2, the manager of the Monkey portfolio 2, a random selection of 10 stocks from the BSE 500, has captured the investing community's attention with the remarkable way in which his portfolio has held up, especially during bad times for the markets.
His track record has been exemplary, frequently beating his contemporary, Monkey 1, the manager of Monkey portfolio 1 (a random selection of 10 stocks from the BSE 100); the brokers' picks and benchmark indices.
After several telephone calls to his secretary, Ms Simiana, Monkey 2 finally agreed to give Firstpost an exclusive interview at the upmarket Boost Juice Bar in Mumbai. Monkey 2, we learnt, is a fitness freak and abhors junk food, so the interview could only be held at a 'healthy and holistic place'. Why not his office then? Well, as it turns out, Monkey 2 owns Boost Juice Bar and, therefore, that is his office!
The most striking thing about Monkey 2 is how he likes to take charge of things. And as Firstpost spoke to him, he also had a rather unique take on investing.
Here are edited excerpts of the interview:
Firstpost: I heard you got a gift discount voucher for an investment magazine once, which you refused saying "I don't read, only watch". Can you tell us what that means?
Monkey2: It's quite simple really. Humans, quite wrongly, believe that the more they read, the more 'information' they get, because of which they'll make the right decisions. That's nonsense. Most of the time, they read a lot and don't understand what they read. More importantly, they don't know how to read between the lines.
Me, I like to watch, observe. You humans are a fascinating species and I find body language a better indicator of intent than mere words.
FP: Can you elaborate?
M2: Well, for example, I can tell by the way you're holding your pen that you're eager to listen to what I have to say - but are also very skeptical. Your slightly upraised lip, curled into a half-smile, also confirms some disbelief. Yet, you're sitting in front of me, pretending to enjoy what I am saying.
(I am taken aback about how he managed to read me so well. I hurriedly change the subject, trying to lower my slightly upraised lip, of course.)
FP: So tell us, what is your investment philosophy?
M2: Like I said, I like to observe. I can tell from facial expressions whether people actually mean what they're saying or not. And most of the time, the "experts' who appear in TV or magazines are just salesmen, trying to sell a product they don't completely believe in.
Observation has also taught me what works in this country and what doesn't. I have realised that even if your government doesn't always work, your economy keeps chugging along - somehow. That's why I decided to pick my stocks randomly. Some people might call it the 'jugaad' way of investing in the stock market.
FP: I'm told you're a big fan of "Planet of the Apes". Why does a movie on apes dominating humans fascinate you so much?
M2: It's an excellent movie on how easy it is to dominate the weak-willed. Most humans like being followers - they're so afraid of taking their own decisions. Indeed, this country has enormous potential to become an economic superpower, but its citizens, especially the government, seem incapable of taking charge. Something must be done about that.
FP: Finally, what advice would you give to investors?
M2: One, don't listen to everyone's opinion; start forming your own. Two, and this is especially pertinent to humans, learn to understand your species - it's not enough to read books. That will help you see through deception and false convictions. It's a good policy for life and investments.
Three, live and eat healthy - the closer you are to nature, th more you will be able to see what is real.
Four, start exercising - a healthy body promotes a healthy mind. Avoid beer guts, because they divert much-needed blood flow to your brain to other body parts. By the way, we monkeys have it easy here: we hang upside down from trees to get blood flows into our heads. You have to do Shirshasana for the same - not the same thing you know.
And five, don't skip on sleep - your investments are not going to do any better just because you sat up all night worrying about them! Learn to cut investment losses calmly without cutting on sleep.
My fondest hope is that one day humans will tell a story about a monkey who came from the stars and changed their world. Some will say it was just a fairy tale, that it was never real. But, I'll know.
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While the Sensex dropped 3 percent between 19 August and 26 August, our Monkey portfolio 1, comprising 10 randomly-picked BSE 100 stocks, slipped a marginal 0.1 percent. Our Monkey portfolio 2, consisting of 10 randomly selected BSE 500 stocks, shed 2 percent.
2011 has been a rough year for the markets. One of our Monkeys weathered it quite well, but not the other one.
Our randomly-picked Monkey portfolios are struggling to hold their own against the two main indices. But Monkey 1 had a decent run last week.