I had noted to write something about this a year after I leave my corporate job. That time is now. Exactly a year ago was the last time I got a paycheck.
I wanted to pen down some thoughts on what I would feel after a year out. I told myself that I'll sit down and write an account. Let me try to organize and draft this into a blog post. It may help some of the readers.
I know the concept of FIRE - Financial Independence and Retire Early. I've loved to read some blog posts from authors like Sam. Early retirement is not something that motivated me to leave Enphase (my previous company). But, financial independence was something important to me.
I loved what I did at Enphase; well for 90% of the time :-). There are always some frustrations. But, the happy times were far more than the frustrating times.
Creating business plans and putting them in action, owning a product (and I always felt I owned the most important product in the company - the microinverter), building a great team, and working with engineering & sales folks to tinker on ideas is a dream come true job. On top of that, in 2017, when I joined, the company was in some trouble and it was so much fun traveling to customers, differentiating our products from competitors, and winning back market share! And, growing business! Making it profitable.
OK. I am deviating from what I wanted to write. I know. Let me get back to my story. I've always been passionate about Enphase. But, this blog is not about Enphase. Let me tell you my short story here.
The back story...
Early in my corporate career, I thought I should be financially independent by the time I'm 40. Seeing my father invest and tinker in stocks, I was hooked on the investing bug since my school days.
I had built a portfolio even before my first job (though I realize, it was usually based on momentum). Analyzing companies, and reading their annual report, and quarterly earnings was not new to me. We used to get physical copies of annual reports at home (during the 90s) and I ended up reading them.
My first paycheck in 2004 was for Rs. 9200, and I bought 200 shares of NTPC with that. I took a loan of Rs. 2000 from my father, as the IPO was at Rs. 56/share.
Anyway, doing an MBA sort of muddled my concept of stock picking. It seemed market models, CAPM, etc. were used as proxies for business. I had hoped to get into a finance job but that got quickly squashed as NITIE was not known for finance.
Somehow, passion rarely dies. Investing bug got me to find teachers, and do quite a bit of self-study. I've written about that here.
In 2015-16, I tried to get into fund management when I was in the US. An interaction with one of the partners of Sequoia Fund, Roelof Botha, gave me some ideas. I also realized, that, I'm a misfit in an early-stage VC. My experience as a semiconductor guy was not of much use. But, my interactions gave me the idea of writing my own personal annual investing letters - so that one day - I can create my own investment fund.
So, ever since 2016 - I started writing about how I have performed, in investing my personal assets in the form of an annual letter. I shared my investing letters with a bunch of people who I felt could be my partners a few years down the lane.
During Christmas vacation at year-ends, I spent time reviewing and calculating my annual CAGR and writing a thesis on my investments for the year. I loved writing them. I kept at it till 2021.
Anyway in the meantime - around 2018 - I felt that monetarily - I was doing fine and I could call myself financially independent.
My definition of financial independence was - getting more dividends from my investments than my paycheck. Usually, dividends also grow - so, inflation usually gets taken care of.
I simply felt that it was right for me to come back to India post-2018. There was a strong urge to do something in my country. I felt there would be a level of comfort and a zone of fulfillment here in India - even like building a team or creating an India-based product, etc. was something I looked forward to.
Luckily, my wife was fine with that, and the kids were young enough. Within a year, I gave up my green card (not the best decision financially as I see now) and settled back.
Anyway, by 2021, having spent 3 years here in India, and, feeling that my task at Enphase was now one of safekeeping, rather than growing - the urge to really get into full-time investment was biting me.
At the same time, a mentor (who goes unnamed, actually more than one) stepped forward to help me. He offered to set up an investment vehicle in the US and invest. My annual letters from the past 5 years were at last helpful. Having good-meaning, well-wishers and mentors have been a blessing in my career. Someone, who is ahead of you in terms of life stage can act as a wonderful sounding board from time to time.
I had created an entity in 2018 through which I invested and always felt I could get a SEBI license sometime and scale that up. So, these were my thoughts as I parted ways with Enphase last year. It also helps to be open and tell exactly what you are going to do, to people in the organization. Clarity of thought is important. If you are real, usually people on the other side of the table are real too.
So, with the good wishes of the management team at Enphase, I charted out. That was exactly a year ago.
So, what's happened in the past year?
It's a mixed year. Nothing crazy good or bad. Things move slow when regulators are involved.
As, soon as I left, I applied for a SEBI PMS license. I always felt it would be great to build something in investment management.
After all, in my mind - I had an 8+ year track record (since 2013 audited) of investing with an annual rate of return of 37.1%. I had made money myself, having been financially independent for a few years already. Though, luck is a huge component in investing, I felt an element of skill was present in the numbers. Numbers don't lie - over long periods.
Setting up an entity in the US, an investment partnership is easy. Unless you have $150M of assets under management, SEC (Securities Exchange Commission) does not have too many conditions. It is an entrepreneurial culture. The US loves people starting out new companies in any field!
That, unfortunately, is not the case here in India.
The way you look at anyone is usually with an amount of suspicion in India. The regulators seem to be set in their ways. There might be very legitimate reasons for the same, but over-regulating kills entrepreneurship.
After multiple clarifications, SEBI rejected my PMS application a few months back. I did not officially get a reason for the rejection.
Official requests for an explanation went about with no answer. Letters went unanswered. Unofficially, I was told that my personal track record of experience in investing is not considered "experience". My company checked all other boxes for the PMS, I was sounded out.
I am looking at various alternatives as of today. Partnering with someone, hiring an experienced individual who "checks the box" for SEBI, etc.
So, if you know anyone in this area who could potentially help, or partner with me - feel free to reach me through my blog/email/comments/tweet.
A smart lawyer friend was telling me that I'm an idiot to start anything here. Just relocate to Singapore or Dubai and start-up there. Just route in money as an FPI! I am not ready to give up on India yet - it is better to fight the system to make it a little better than before, instead of moving. Playing long-term games is a kind of passion. I will need to stay at it for longer, a year is too short to decide. So, that's that.
Apart from the frustration of "not going anywhere" on the PMS front, life has been great.
On the home front, it is indeed enjoyable to see kids do well. They are getting enough attention from me as they are growing up, and they love it. My wife is not frustrated that I have late night calls or early morning calls. That is definitely a big plus in the past year. I feel that I am the sharpest I have been in over a decade. At last, I am hitting the gym daily. Trekking, cycling, and, meeting younger people.
I am trying to help some start-ups. That is fun. I have been consulting on a few topics - in solar and semiconductor. I might actually end up starting something in either of the two fields. I am discussing this with a few experienced friends. There is so much potential. It would be so much fun.
Talent is plenty in India. Channeling them in the right direction can do wonders. The West (the US and Western Europe) is basically stagnating. Any growth, on a massive scale, I believe, has to come from emerging markets.
But, then again - ease of doing business is more of a marketing ploy in India. The actual issues, seem to be a hindrance - license, regulation, taxation, approvals, etc.
Our nation seems to be in the clutches of controlling everything. I may pick an area where the regulators are not really knowledgeable enough to regulate.
If you, as a reader are working on something interesting, I look forward to collaborating. Especially in green hydrogen, semiconductor, solar, or cleantech.
For one thing, in the past year, I've never really missed the paycheck.
I always felt that our addiction to paycheck and sugar is legendary. A lot of time would be required for de-addiction! That was my main worry.
Maybe, I overthought that problem for far too long. Yes, dividend checks are infrequent. But, apart from that being a slight irritant, I've not felt a pinch at all.
I guess each one of us has a different set of problems. A different set of goals.
Now, someone was asking me if I missed my job.
Definitely. I always felt great - building something, working on a project, working towards growth. Even preventing a problem, making mistakes, and correcting, was nice. I was passionate about making a difference.
Also, in general, interacting with a set of high-quality people is always fun.
I am still building my network in the field of investing - especially since I am basically unknown. Building a high quality network in a new field takes time.
Literally, I've been super secretive in this field. Fame has no meaning in investing. Being right over the long term is all that matters.
I also feel that people in the field of investment management are too theoretical. Most are really smart, but have little practical knowledge of building and running a business or a product. Not their fault, but they are in the financial field for far too long and sometimes, cannot differentiate between qualitative and quantitative matters.
Analyzing a business is not just "excel modeling" - sometimes, cycles cannot be really modeled. It is understanding the key aspects that can affect the future. How management can build their vision while making the company stronger (financially stronger, building durable, enduring competitive advantages) over a period of time is very important.
You cannot drive forward looking at the rearview mirror. You have to understand the range of possibilities (and probabilities) in the future.
Sadly, running a business, creating a product - building competitive advantages around it, differentiating it, and working with customers, do not count as experience to SEBI. And, that is my frustration today on the PMS front.
Anyway, I am happy that I am trying. The next 20 years will define if charting out on my own was better or not. I am deeply thinking about the future.
"I think the best way to prepare for the future 20 years is to find something you love to do, to have a shot at being one of the best people in the world at it. Build an independent brand around it, with your name". - Naval.
Anyway, this too shall pass.
