Saurabh Mukherjea learnt through his personal journey in India, ever since he moved to this country seven years ago from the UK after selling his London-based Institutional equities research franchisee, that the only way to consistently succeed in the Indian market is to work hard and be honest. “There are no guarantees in life but my experience in India has taught me that those who systematically and methodically apply themselves over long periods of time get the right results in a country where there is plenty to play for,” states he. He thought that there was merit in sharing both this journey and the learnings from it with a broader audience especially since the broader perception that exists is that the Indian stock market is a place where corruption and reckless risk taking flourishes. And thus was born his book, “Gurus of Chaos”.
In this book, Mukherjea helps readers understand what it takes to be a successful investor. With over 12 years of experience in the stock market industry, both in India and the U.K., he not only shares his learnings in this book but also interviews the master money managers of India, highlighting their thought process. He also aims to direct all the royalty from the book towards Oditi Foundation, the not-for-profit organisation set up by Ambit for its support staff.
In this interview, he talks to us about his journey as an author, offers some stock market advice and share some notes to aspiring professional authors.
How do you arrive at the title of your book?
In the stock market, and generally in life, what I find fascinating about India is that on the face of it, it comes across as a noisy, chaotic country. And then in the midst of this chaos, you occasionally meet a guru who not only exudes calm but also gives you a worldview, which allows you to make sense of the chaos and see through the chaos. Six months before Gurus of Chaos (GOC) was published I was discussing this worldview with the editor of the book, Arundhuti Dasgupta-Singhal. On hearing my point of view she suggested the title of the book.
If not in the form of a book, how else would you have conveyed your views on this topic?
I write a column for VCCircle and for Wealth Insight. I have occasionally tried to convey this point of view in those columns but there is only so much you can say in 800 words. Hence, the book.
Can you highlight a few lessons that you have learnt during your professional career that has been converted into pages in this book?
Whilst writing the book I could see from the career paths of the gurus that there is really no shortcut to sustained success in the market. You have to spend a decade of intense application to master the job of investing in the Indian market and even after that you cannot compromise on your level of application and intensity. The moment you try to take shortcuts – ethical or intellectual – you begin going down a slippery slope.
All of that being said, one question I could not answer in the book – and a question which kept vexing me – was “Why is it that so few investors are able to stay the course?” After all, since the rewards of reaching “guru” status are so big, you would expect more investors to slog it out and strive for “guru” status.
Once the book was published, I was part of a TV interview (with the gurus) to publicise the book. During the interview, one of the gurus, Sanjoy Bhattacharya, pointed out that the root driver of sustained hard work is humility. It is genuine humility, which allows great investors to tell themselves, even 20 years into their career, that they really don’t know that much. That in turn acts as a spur towards greater effort and more inquiry, which in turn enhances the guru’s skill even further. I wish I had figured this out whilst writing this book!
The format of your book includes interviews with master money managers apart from case studies and set of rules for investing, among other things. How did you arrive at this format and what kind of iterations did it go through before reaching here?
When I arrived in India I really did not know much about the country. So I sought out people who did. Over time some of these guides became my gurus i.e. people who would willingly share big chunks of their evenings and weekends to indulge me in long and intense discussions regarding the functioning of corporate India. I would go home from these discussions feeling that I had learnt more in two hours than most people do in two years. Then, when Arundhuti Dasgupta-Singhal of Business Standard Publications approached me three years ago, I thought I should turn my long chats with the gurus into a book partly to thank the gurus for their wisdom, partly to share the knowledge with a wider audience and partly to raise money for a cause I believe in, The Oditi Foundation (which raises money for a social security fund for blue collar workers and their children).
There are many professionals who aspire to write. However, writing and more importantly, getting it published is a challenge. How did you overcome these issues? What is your advice to all those aspiring professional authors?
It is becoming easier to get published these days partly because several Western publishers are keen to set up shop in India and also because of the rise of self-publishing. It is relatively easy to use the Internet to get the contact details of the prominent Indian and Western publishers. Frame your idea for the book into one page – containing your idea, the likely audience for it, your qualifications to comment on the idea and such – and then send it to the publishers. If you keep at it, you are more likely than not to get a break. In the meantime try blogging and try writing columns for the many dozens of print and Internet publications that exist in India.
In this age of information overload, what is your advice to a beginner in the stock market on the filters he or she needs to use when looking for investment advice, especially for a do-it-yourself investor?
Unless you have lots of spare time or lots of spare money, I would suggest you don’t try to DIY investing. Investing properly takes a lot of time and effort and most of us who have a demanding, full time day job are unlikely to be able to do justice to it. Besides, there are at least half a dozen well-managed mutual fund companies in India who can look after your money well at a very reasonable fee. You can find their names on sites like Value Research.
If you are able to give time and effort to investing then you need to become very comfortable with reading annual reports. To do so you need to have done at least a beginner’s course in accounting. After that, it is a question of reading annual reports, understanding business models and finally identifying that tiny minority of Indian companies which are clean, well managed, have sustainable competitive advantages and have a “margin of safety” baked into their valuations.
What next for Saurabh Mukherjea, the author? Are you planning to write any more books? What would you do differently in your next book?
I have promised my wife that I will not begin writing anything until October 2015. There are a few ideas that I am playing around with in my head which I might have a crack at after that.
Who or what inspired you to write?
No one in particular really. In my day job as an analyst I end up writing a lot of research. So writing a book naturally flowed from that.
How do you deal with writer’s block?
That sort of thing happens to writers who are doing creative writing. Unfortunately, I am not a creative writer. I am what you would call a “business writer”.
What takes longer? Research/introspecting or writing?
Introspecting. I would have read something this weekend and then five months later it will suddenly strike me how this weekend’s reading ties up with, say, Gurus of Chaos.
A fun anecdote while you wrote the book?
I wrote the book over three years on planes, trains and automobiles. I think there was even a boat ride during which I was tapping away on my laptop trying to tidy up the book.
What would you differently in your next book?
I have not been able to figure that out just yet.
If you were to write a fiction book, what would it be on?
India in the 800 years between Ashoka and Chandragupta Maurya. A sort of Indian version of Marquez’s “One hundred years of solitude”.
What did you realise about yourself that you didn’t know before writing the book?
It is hard to write a good book whilst holding down a full time job.
About the author:
He is the CEO of the Institutional Equities business at Ambit and has been leading it since 2010. He is one of the top three analysts in India according to Asiamoney 2013 and is a London School of Economics Alumnus and a CFA charter holder.