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3 Investing Lessons from “Game of Thrones”

The experience of watching the first season nearly 8 years back and the journey with the characters (or at least whoever is left!!) over these years will occupy a permanent place in memories of GOT addicts. The journey, like investing, has some parallels.

With the Game of Thrones (GOT) final season just around the corner, my mind is more on GOT than investing! The experience of watching the first season nearly 8 years back and the journey with the characters (or at least whoever is left!!) over these years will occupy a permanent place in memories of GOT addicts. The journey, like investing, has some parallels.

1. The saga, takes time: 

What is wonderful with such sagas is that it takes time to develop the story. Really good stories have intricate plots and it takes years for the story to unravel. It is not a 30 min story, where you tune in and tune out  – not even remembering the story the next day.

Investing too, takes time. It is a lifelong journey. Unlike GOT, which will probably come to an end soon, the investing saga will continue for a long time. Enjoy the journey and have a longer term view. It is no 30 minute experience.

2. Not all characters survive: 

As the first season developed, one started to love a few characters. By the end, many were simply gone. It shocked as well as saddened us. One realised the story is to some extent about building out great characters and then send some of them off to an unexpected demise.

Even in investing, if one were to invest directly in stocks, one could have the experience of seeing some companies fade away. Many big stocks of the past (Kingfisher, Unitech, Reliance Communication, JP Associates) have faded away. Nearly 70% of the companies ever listed are just gone. That is the nature of free markets. New companies, with new business models, replace old ones.

One needs to be prepared for that and make sure you own a diversified set of companies. One can own these companies through a mutual fund. You don’t want to be running the risk of the characters you own disappearing overnight. The mutual fund manager will handle the task of monitoring and eliminating the poor performing companies.

3. If you want to fall in love with characters, do so with the ones who would last:

Falling in love with characters in such sagas is a natural thing for all of us. As the seasons evolved, I realised it is better to fall in love with characters who, in my best opinion, would last all the seasons. At least the pain of seeing your favourite characters disappear is not there.

The strong remaining characters are great to get associated with. Even in investing, some companies last for a long time and do so wonderfully well. These companies have been around for several years and likely to remain so for a while. Recently, one listed company’s CEO talked of the 100 year vision for the firm.

By having a good mix of large, diversified and midcaps portfolios, one can create a durable relationship with a range of companies. Some of the larger equity mutual funds will ensure companies for the long terms are always in their kitty.

In a few months, Game of Thrones will come to an end, and with it our obsession (hopefully!). There will be a void in your life. Better to replace that void by forming a strong relationship with ‘Investing’. This relationship lasts a lifetime and the rumour is – it can probably be more interesting than your GOT obsession.

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