Five years at Capitalmind

It's been five years since Capitalmind started its journey. It's been a super-fun ride, going from one set of things to the other.

I started in November 2013 with only one thought - can there be a great site for financial content, data and analytics that people will want to read? And actually pay for it? This wasn't a great time, with the market having just crashed and elections looming large. But within a few months, I found that the response was much better than I thought. So on August 26, 2014, we registered Wizemarkets Analytics Private Limited.

I'd started in various places, eventually settling in an office on the top floor of a building in HSR Layout. The vision was to build a great company that would provide deep insights and great analytics. We thought of it as mix of the US Motley Fool and Bloomberg. Education, Information and Enrichment. We started portfolios with some stocks - and some did very well, with the momentum in the market as well. We built tutorials on options, stories on the macro picture and analysis of stocks. We have had over 1,000 articles for premium members on Capitalmind and they're still accessible to read - and some of them still make sense.

In 2016, Vashistha joined the team and brought in a bunch of enthusiasm around options, massive ops changes and a fresh new look at design. Eventually he learnt a whole lot of front-end programming with buzzwords like React and Firebase and stuff that makes me feel obsolete.

In 2017, we created Capitalmind Wealth - our portfolio management service that was oriented towards a low-cost, allocation and planning based approach. That's blossomed into a fund that now manages close to 100 cr. since. We've had some rough timing as the markets have beaten up a lot of the lesser cap stocks we own, but we continue to believe in the stories we like and will keep a keen eye on the fundamentals for a long term holding period.

Why the PMS is different is because it's quite a bit about asset allocation, about planning, and about a focus on the longer term. Operationally, it has been intense, working with a broker, a custodian that we've had to recently change, and an evolving BSE Star. We found a few mutual funds had some shady exposure and walked away. We allocated part of the capital to a Nasdaq 100 ETF that's done fairly well, giving us a bit of the Amazons and Microsofts of today. We've added the MarketIndex and Momentum portfolios to add different flavours to the equity side of the investing process. We continue to charge 1% or lower - and 0.25% for the Market Index portfolio - giving us room to create a very cost effective service.

We'll do a lot more for the coming year, as we do more on the debt side of things, and keep the equity positioning simple. We even have a very different strategy coming up - where you can choose to keep your money in debt, and only transfer the "gains" onto the equity portion, thus never actually losing money. We'll flesh this out in detail as we go along.

The team now is much larger. Apart from me and Venki, there's Prashanth, Aditya, Akanksha, Anoop, Arnav, Ashish, Balu, Chetan, Dev, Mithun, Nandan, Priyanka, Rohit, Shray, Shreesh, Siddharth and Vashistha. From all of us, thanks a ton for being with us and supporting us in this journey!

What we have today is a brilliant team that's out to help grow the business in any way possible. Our tenets are primarily to be honest, to have the highest levels of integrity and to always admit when we're wrong so we can fix it. In that process, we want to provide a good experience and a long term focus to our investing - and I'm happy to say that all the directors of our company have invested their own capital (including me) in all the portfolios in Wealth.

On the stocks we own - we own a fair lot in the multi-cap portfolio, and with the changeover of the custodian, we have had to slow down changes in the last month. This process is nearly complete and in the next few weeks, we expect more activity.

I noted last time that I would tell you when we thought it would be a good time to invest. This time hasn't yet come, but I now feel it's likely to be: October onwards. The recent GDP number has been bad at just 5%. There is a lot of fearful sentiment about the slowdown, and we are slowing down. Car sales have reached levels first seen in 2010. There's a global trade issue, and a whole host of job losses, and entirely bad sentiment on the street.

But the good thing now is that there's some layer of government response, and Trump notwithstanding, we might be looking towards a point of turnaround in the next few months for the economy.

Markets are however different beasts. They will continue to be slugging even as the economy recovers, because once sentiment turns it's difficult to turn it back. But this is the kind of change that differentiates the winners from the rest, and we will look carefully to see who survives and thrives in such a time. Companies that are strong and designed to last will eventually fight it out and survive, and typically gain marketshare because their competition doesn't survive.

There's a lot of fear in the commentary now. That we'll see a recession. In India. In the US also. There's a bit of despair too - that nothing good will, or can come out of this. Such a time typically indicates a point from where a rebound begins, but at this time I don't think it will be a sudden turnaround or a quick recovery. Economies and markets climb up a wall of despair - things happen when you least expect them to. Meanwhile, it's prudent to be prepared for the worst, and look for signs that there is a change for the good.

We're super excited for the next 10 years. We hope markets do what they do best - eliminate the bad players and reward the good. Our job is to keep with the good ones, and take away allocations to those that permanently falter. In the long term, we are all dead anyways, so we can dwell on that and be unhappy - or, we can live through moments of gloom, to build for a time where there will be lots of joy.

Cheerfully,

Deepak Shenoy