#
How do we become good at something? My answer to this may seem glib, but I can't help it
#
because it's true. You become good at something by doing it again and again. Constant iteration
#
is the only way to improve. And it helps if you love this thing that you're doing again
#
and again. You're more engaged with it than you care about the result, as opposed to working
#
in a boring, awful job where you're paid to do the same thing for years and years,
#
when you're just going through the motions. Now, when I look back on my own life, I realized
#
that I got good at the things I am good at by doing them again and again. But in the
#
beginning, I sucked. I wanted to be a writer since I was five or six years old. But when
#
I look at the writing I did in my 20s and even some of my 30s, it is cringe-worthy.
#
I was bad to begin with. Everyone is bad to begin with whenever they start whatever they're
#
doing. The trick is to keep at it. I started my blog India Uncut around 2003, and for five
#
years I did an average of five posts a day. The 8000 posts I wrote in this time made it
#
a fantastic gym for my writing muscles. Iteration made me better. Now, how good I am in absolute
#
terms is not for me to judge, but I was a quantum leap ahead of where I had been. A
#
similar thing happened when I started podcasting. When people discover the seen in the unseen,
#
I asked them to listen in reverse order. I didn't know what I was doing in my early
#
episodes. It took a lot of time and a lot of doing to become good and a lot of thinking
#
about my craft. Now the thing is, when I plunged into blogging or podcasting, I wasn't thinking
#
about first principles, building frameworks and so on. These happened after the fact when
#
I was well into my journey. When I teach my writing course, for example, I try to teach
#
all the frameworks and principles I've learnt, but I also emphasise that you have to do the
#
hard yards yourself. Build reading habits, build writing habits. That's the best way
#
to learn. Well, my guest today has had a similar journey to mine. He's learnt what he knows
#
from decades of doing it while learning. He's built frameworks that allow him to now teach
#
others how to be good at it. That's pretty much the same as me. And in this crossover
#
episode today, we share our learnings with each other and with you. I hope you enjoy
#
it. Welcome to the seen and the unseen, our weekly podcast on economics, politics and
#
behavioral science. Please welcome your host Amit Varma. Welcome to the seen and the unseen.
#
My guest today is my good friend, Deepak Shanoi. And this episode is a crossover episode of
#
our podcast. This is not just the seen and the unseen, it's also the capital mind podcast.
#
I've known Deepak for maybe 17 or 18 years now. And my first impression of him was that,
#
hey, this is such a nice guy, warm and genial and always cheerful. As time went by, I realised
#
that he also had a brilliant mind and how his generous nature meant that he was always
#
willing to share his knowledge. Deepak is a financial genius who nailed the art of investing
#
many years ago, and then founded capital mind to help others with his expertise. I recorded
#
an episode with him last year, which is the 10th most downloaded episode of this show,
#
in which he shared his journey and his insights on investing. I'll link that from the show
#
notes. Since then, he's written a book called money wise, timeless lessons on building wealth.
#
It's a perfect way for a newbie like me to learn the basics of investing. And I figured
#
we should do an episode about it. When I invited him on the show, he told me that he'd also
#
love to have me on his podcast, the capital mind podcast to talk about the creator economy,
#
a subject I've been thinking about a lot in recent months. So I thought, hey, let's do
#
a grand crossover episode. I went over to Bangalore and we recorded this in a swank
#
office studio. The first quarter of the show is Deepak and me shooting the breeze about
#
random stuff like growing middle aged and how to invest our time, not just our money.
#
In the next quarter, it's me giving Gyan and the creator economy. And the second half
#
of the show is Deepak speaking about investing and his book. Now, even though this is a five
#
hour episode, I felt like we couldn't cover so much. And I know regular listeners will
#
complain about how short this is. Well, what to do? We recorded this on the day Russia
#
invaded Ukraine. So Deepak had to deal with worried investors all day, which is why we
#
couldn't talk for say 10 hours. This was also when the Joe Rogan controversy was at
#
its peak, which is why we mentioned it in the episode, though it seems prehistoric now
#
because that new cycle is behind us. Just shows you how fast new cycles move. Anyway,
#
do listen into this episode, do buy Deepak's incredible book. But first, let's take a quick
#
commercial break. Do you want to read more? I've put in a lot of work in recent years
#
in building a reading habit. This means that I read more books, but I also read more long
#
form articles and essays. There's a world of knowledge available through the internet.
#
But the problem we all face is how do we navigate this knowledge? How do we know what to read?
#
How do we put the right incentives in place? Well, I discovered one way. A couple of friends
#
of mine run this awesome company called CTQ compounds at CTQ compounds.com, which aims
#
to help people up level themselves by reading more. A few months ago, I signed up for one
#
of their programs called the daily reader. Every day for six months, they sent me a long
#
form article to read. The subjects covered went from machine learning to mythology to
#
mental models and marmalade. This helped me build a habit of reading. At the end of every
#
day, I understood the world a little better than I did before. So if you want to build
#
your reading habit, head on over to CTQ compounds and check out their daily reader. New batches
#
start every month. They also have a great program called future stack, which helps you
#
stay up to date with ideas, skills, and mental models that will help you stay relevant in
#
the future. Future stack batches start every Saturday. What's more, you get a discount
#
of a whopping 2,500 rupees, 2,500 if you use the discount code unseen. So head on over
#
to CTQ compounds at CTQ compounds.com and use the code unseen, up level yourself. Deepak,
#
welcome to the capital mind podcast. And thank you, and welcome to the scene and the unseen.
#
So as we already mentioned in our respective introductions, this is a crossover episode
#
and sort of a meeting of two podcasts. I won't say a meeting of two great minds because I'm
#
not quite sure if I'm a great mind. But yeah, so let's, you know, one of the things that
#
we have in common besides our good is that we've both sort of hit our late forties, so
#
to say. Right. And I kind of find that interesting because I think what happens over a period
#
of time is, at least in my case, is that for the longest time ever, there is this period
#
where you think of yourself as younger than you really are. Like when you're 20, 21, 22,
#
you think of yourself as a young man, right? And that's how you think of yourself. And
#
then when you get to 35 and 40 and all that, your mental image is still that. You haven't
#
quite adjusted. And then a moment comes where you realize that it is not exactly the case,
#
right? That you are not the whippersnapper anymore. That, you know, you don't necessarily
#
have more of your life in front of you than behind you, right? And this then in some ways
#
changes the way that you think about your life and the stuff that you're doing. So,
#
and I find that this also informs the way that I do the work that I do, which is in
#
the creator economy. And I'm sure that this also informs the work that you do, especially
#
when you talk about investing, especially when you, you know, in your excellent book,
#
you talk about things like life insurance and retirement funds, which maybe you would
#
not have placed so much stress on a long time back. So tell me, my friend, how have the
#
years been treating you and how have you changed?
#
Yeah, so, you know, Amit, we're both there. And, you know, I think we've got, I think
#
of this as an analogy from a different perspective. Bear with me because this goes weird. When
#
I was younger, so from the age of perhaps 14, 15, 16, I would watch a sporting tournament
#
of any sort, whether it was tennis or, and say that one day in my dreams, I become this
#
player. And I think of myself doing that. No, this is natural, right? Everybody has
#
these dreams. Oh, I'll be a great cricket player. I'll go and play these things. And
#
it was always contemporary. So if I was 16, I would be, oh, when I'm 18, because I have
#
two years more, I can practice and all that stuff and I will get there. Of course, I'd
#
never do anything about it. But the dream was all, it was great. Just dreaming about
#
it. And these dreams continued. So when I was 25, I would say, oh, by 28, you can still
#
be a great player in the tennis circuit and win the Grand Slam and win the 35. Well, you
#
know what? Steffi Graf did it when she was X and, you know, somebody else did it. So
#
it was still okay. The time I crossed, I think it was 42 or 43 is when I said, okay, I can't
#
dream this dream anymore. It is not possible because you can't have a, I mean, it's just
#
physically impossible. And although having never attempted it, actually, it suddenly
#
realized that your dreams have to change. And that, I think, was the beginning of the
#
factor of saying, listen, a lot of other stuff. And, you know, there's this, when you start
#
a business, there's always this feeling of, at some point in the future, there will be
#
a point at which some great thing will happen. And that great thing could be you becoming
#
rich or you becoming X or you becoming Y. You do, at some level, get this feedback from
#
life, your body and all of that stuff. You can no longer do, have those crazy dreams
#
and they have to be achieved in a relatively shorter amount of time. But increasingly,
#
and perhaps the COVID thing has kind of changed, at least for me, I can't dream of doing these
#
things in the future. I need to do it now. This, I think, is where, at least my mind
#
has started to change, saying, listen, I'm 40X and that 40X is closer to 50 than it is
#
to 40. And according to my kids, at the time I reached 50, I would have lived half my life.
#
I wish they're right. But I do know that, you know, that concept of every day, start every day saying,
#
this is the beginning of the rest of my life, increasingly gets more desperate, saying,
#
I better live it now. Otherwise, it is, it's going to be so far behind that, I mean, I'm
#
just, you can't live your life thinking of what is going to come. You have to live your
#
life thinking of what you are today. And this perhaps is a slight change in my mind. I don't
#
know how it is for you. And this is where I think you got to focus on these little things
#
and the big things, all at the same time. It's a weird thing. For instance, I have,
#
my son is in the ninth standard. And he told me a few months back, Dad, after three years,
#
I am going to be gone, doing my college. And it hit me like a brick. And you know what?
#
I knew this. It's not like I didn't know this. But it hit me like a brick because three years
#
is not a lot of time. We've already spent two years into the corona and well, three years
#
into, no, two years into the corona. But we've literally, I mean, it's now at, you know,
#
catching distance of the point where he kind of moves. So it's not just the fact that I
#
am growing old, that things are happening that should have been long term future somewhere
#
in the, I mean, you know, at some point I might get diabetes kind of thing to point
#
where I better fix my life before I get it today. It's induced a sense of urgency in
#
my thought process, which I don't think has happened before earlier. So dealing with this
#
growing old stuff is just, you know, it's mind boggling. But how is it for you? I mean,
#
you're also in that phase of life because you're, you've, from a career perspective,
#
I think you've gone through multiple phases of very deeply immersing yourself into different
#
things. Does it change in the late forties? I think what's happened, like everything you
#
said resonated with me and you, you know, used that interesting phrase in terms of,
#
you know, little things and big things, little dreams and big dreams. And one of the things
#
that I've realized is that as far as the little things are concerned, they can be goals, but
#
as far as the big things are concerned, they should be processes in the sense that, you
#
know, when you're young, you have all these goals. I'll do this. I'll do that X, Y, Z.
#
I'll write so many books, blah, blah, blah. You have all those goals and those goals are
#
further tied into, you know, after I do the book, this is how successful it will be or
#
whatever it is. And I think you reach a stage in life where you realize that one, those
#
goals are probably not going to happen. Two, that's not necessarily a bad thing because
#
those goals are very often tied into something you should not have been chasing in the first
#
place, which is a validation of others, you know, which is why you don't just think I'll
#
write a good book. You think I'll write a good book that wins an award or becomes a
#
best seller, right? And I think like if there is one realization that I want to keep with
#
me every moment, it's that universal human anxiety of what other people think of you.
#
You got to let that go and you got to realize that no one is thinking of you, you know,
#
everyone's got their heads up their own ass. Everyone's obsessed with themselves. So it
#
doesn't matter that, that, you know, universal anxiety, which is there is false. You also
#
have to redefine what you mean by happiness. And here's the thing. It is not a fixed thing
#
that X will make me happy and Y will not. What makes you happy is you decide what makes
#
you happy. It's your state of mind, right? So now do I want my happiness to be dependent
#
on achieving some random thing, which is not in my control, or do I want to sit back and
#
say, let me enjoy the small joys, right? So what I try to do rather, and those small joys
#
can be goals. Those small joys could be that you'll get me a nice steak for lunch, for
#
example, which itself is a small joy, right? And that can be a goal. But otherwise it should
#
more be processes that there are things I like doing. For example, these days when I
#
think of the scene and the unseen, I do not think that I will do a kick-ass episode that
#
will get X downloads or whatever, or so many retweets or whatever. I just think that I'll
#
have a great conversation, you know, that I'll just sit with a friend and I'll have
#
a great conversation. And my joy in the conversation we are having right now is not dependent on
#
the final product, that this will be a conversation everybody will appreciate. It is, it comes
#
from the fact that I can sit across the table with an old friend and I'm listening to him
#
and he's listening to me and we are both comfortable and we are at a stage where we don't need
#
to impress each other or think about, you know, all that shit is out of the window.
#
There's no posturing anymore. You know, you're kind of what you are. So I'm giving this as
#
an example of a sort of a small joy. And I've realized that it is these small joys we should
#
focus on, except that my lament still is that I am not mindful enough. And I also realized
#
that all the goals that I wanted to achieve and haven't achieved, they are still within
#
my reach, except that it's a mistake to keep those goals in mind. If you just build the
#
processes, those goals will happen. Like I tell myself that, okay, all these years, you
#
know, I mean, it's been interesting. I've five years, I was a professional poker player
#
and I kind of rambled around and did other things for a while. So I, the regret I have
#
is I could have written nine, 10 books by now. I haven't. But the reason I haven't is
#
that I didn't put the process in place. The reason that didn't happen is I didn't have
#
the writing habit where I sit down every day, write for a number of hours, where I build
#
the mindfulness where, you know, your mind doesn't wander all the time. You know, I didn't
#
build the discipline that when I'm bored, instead of reaching for my smartphone, I reach
#
for a book, maybe your book. So I didn't kind of build all that. So I think what I have
#
sort of realized and when I teach my writing course, for example, my fourth webinar is
#
just about process. And my point there is that, listen, you know, we can, we can master
#
the craft at an intellectual level, we can know what is a perfect sentence, how we are
#
building rhythm, all that shit. But if you don't actually get your ass on the chair and
#
actually get it done, it's no good. And, you know, and when I teach my course, I often
#
think that I wish I had, you know, done such a course in my early 20s, I would have learned
#
so much. But the biggest learning that I would have had is from sort of the process aspect.
#
So in a sense, as far as my personal life is concerned, and I've been very lucky also
#
to be part of the creator economy, and that's given me satisfaction. Like earlier for me,
#
the satisfaction of creating was in creating, you know, and that I think has to be your
#
core satisfaction. But we've reached a stage where you can see that you can be, you know,
#
which we'll discuss, you can be independent of a lot of the constraints that otherwise
#
constrain creators. So all of that is great. Like every morning when I wake up, I can easily,
#
you know, look around me and say, fuck, I'm so lucky to have this or so lucky to have
#
that and whatever. And it's not even a big deal. It's not like, but that stuff is there
#
that, you know, and obviously we are human. We still, you know, we still think of goals.
#
We still say, ki haan ye karna hai, wo karna hai and all of that. I was interested in your
#
sort of your sporting daydreams because I think my mind has this default mode where
#
it goes into Walter Mitty or like Mungeri Lal Ke Haseen Sapne kind of mode and all that.
#
Does that happen to you also? All the time. In fact, every single thing that you think
#
about that says, okay, well, I can do, well, I want to do this. It becomes that Mungeri
#
Lal Ke Haseen Sapne. What happens if I did that? And then for instance, if I found a
#
cure to cancer, you know, then what happens? How am I going to deal with the fame and this
#
thing of it? Will I give it away for free? I mean, this is, this is nonsense because
#
I'm not going to discover the cure to cancer in all probability. But if I did, it's just
#
nice to think about it, right? Because it's like you're building a world of your own.
#
And in that created world, you're kind of exploring things that otherwise would be nonsense
#
if you ever tried to do this on stage. The fact that I can talk about it openly is also
#
a symptom of my age and perhaps the creator economy, where such a view would not be considered
#
out of place. Perhaps 10 years ago, if I made such statements, it would be like the packages
#
so full of yourself. It's just honesty, but it's all of us are full of ourselves. And
#
I just introduced my children to the Truman Show. You know, so there was a point in my
#
life where I thought the whole world actually plotted to revolve around me. I think all
#
of us have that at some point in our lives. But the Truman Show was a manifestation of
#
it. And, you know, he makes a statement that this is going to be part of my letter on the
#
blog and on to the scene itself. But he says, you accept the reality with which you are
#
presented. And I think that is a clear statement that is so true when you're older, because
#
now you've seen life in so many different vantage, through so many different vantage
#
points, that you suddenly realize that my, you know, my outrage, my emotion, my thought
#
process, very few, little of it is a function of itself. So there was moments of grief in
#
my life where it was grief. But there were moments of grief where it was induced by the
#
narrative of what was shown to me. And it has never been more obvious to me than it
#
was today. So when they say, you know, you're young, you're probably leftist in thought
#
process, that the world should be equal and all that stuff. And as you grow older, you
#
become this rightist. Because you see all these different things and you say that stuff
#
doesn't work and this stuff also doesn't work, but the reality is somewhere in the middle
#
and we're happy to be in those gray areas. I think that the fact is that every outrageous
#
act no longer outrages you anymore because you are looking at the motivations behind
#
it and saying, listen, I don't have to react to it the same way that the listener wants
#
or the speaker wants me to react to it. Simply because I know they're pointing us out in
#
a certain direction. I mean, this is whether you call this certain TV channels where there
#
is a sun sunny kind of thing, or whether it is a news that is innocuously misleading.
#
It may be anything. It may be a commentator in like, I mean, Formula One recently, there
#
was a big issue with the last race. In the last race, the race director changed or interpreted
#
the rules for his own sake. And to a person who's watched it for a while, it's not that
#
particular event was the problem. There was a history to it. There's a fact that Hamilton's
#
been winning. There's a fact that people had been getting, there was boredom and such.
#
You to have a final race that is exciting has not happened for like 10 years. You take
#
that history in context. You can see why he made the decisions he did. But if you take
#
it from the rule book context, he was wrong. So it's very interesting because he brought
#
more popularity to the game by that one act than the fact that he was insured for it and
#
banned or whatever he's been taken out of it and all that stuff. But it made the game,
#
made it exciting, which is what the whole game is designed to do. What's the point
#
was watching cars go at 300 kilometres per hour. It's exciting because there is some
#
excitement in it and the commentary and all of this. But this is, and this is where you
#
realise that I would have never thought of this when I was younger. I would have made
#
up stands saying he was wrong. And now I'm sitting there saying, dude, you know what?
#
There's a bunch of things to it. And in the Truman show, there was a particular piece
#
of time when they had to cut the transmission of this 10,000 hours of continuous transmission
#
and suddenly they had to cut it. And there was an empty screen and one guy comes in and
#
says, you know, the sponsors are threatening to cut that. And the director of this whole
#
thing, he says, well, we've never had so many views of a blank screen of the actual show
#
as we have of this blank screen going on right now. So it's true, right? Because the reason
#
you're generating that excitement is now is considered bad in all traditional aspects,
#
but you're getting exactly what you wanted out of it, viewership, sponsorship, recognition,
#
fame, whatever it is. So maybe this growing old is just earlier, I would be like, that
#
is wrong. Why should that be the case? Now I'm like, no, maybe the process is the objective.
#
The goal is not the objective. How I got there is what I wanted to achieve. Whether I get
#
there or not is irrelevant. If I got my fame from not doing something, then from doing
#
something and the fame is what I wanted in the first place. So there we are. And it's
#
very interesting, and I'll probably segue into different contexts in this, in finance
#
itself. I have a very clear thought process over here, which is in finance, it is not
#
the person who makes the highest returns that wins. Warren Buffett hasn't made great returns
#
for the last 15 years, and he's still winning. And he's winning because people aren't selling
#
his company or telling them that they need to replace this guy because he's not making
#
great returns. They're still quoting anything that he says. They still go to him every time
#
there's a crisis. The point is he's done this without focusing on the one thing that everybody
#
wants you to focus on, which is can I make 10 rupees, 20 rupees? Can I make 10 rupees,
#
25 rupees? If I made it 25, am I better than the guy who made it 20? The answer is no.
#
The guy whose embodiment of how he got there, which makes it exciting, he can make 10 rupees,
#
12 rupees, and he might still be more valuable as a person than the person who made it 20
#
or 25. As you grow older, I think the stark realization that it's the journey and not
#
the destination, to me at least, I mean, it was a proverb earlier, enjoy the journey and
#
all that. Now it's hitting you on the face. It's like, dude, this is it. This is what
#
you are. Your journey is who you are. Where you get from here, even if you got into a
#
lot of money or a lot of whatever, is just a byproduct of whatever you did to get there.
#
So although this is a very long segue from where we are. And what are your thoughts?
#
Do you feel now that you'd focus a lot more on the journey? Like you said, the conversations,
#
the fact that they give you those little joys. Then just the destination, which is, I mean,
#
I don't even know what the destination is anymore. It's like I got somewhere and suddenly
#
it became all hazy, right? I wrote a book. I want to write 10 more books because I feel
#
I've not written enough. And then I feel I've written too much in certain cases. What was
#
the song? I forget. The one in which he says, I haven't said enough. I've said too much
#
and then I haven't said enough. So I mean, at the time, you would never understand what
#
the lyric meant. Suddenly at 47, I'm like, oh, okay, I know what that means.
#
That's a very with or without you sentiment. I think this whole thing about journey and
#
destination ties into process and goals, right? That for me, the journey is really the process
#
and the goals take care of themselves. But to double click on a couple of things you
#
mentioned. One, the way I would view that Formula One differently than you is I would
#
just think that, okay, Hamilton and Max, whatever his name is, and they're both going to die.
#
The cars are both going to be scrapped, you know, eventually in the longer scheme of things,
#
the longer that you look at it. So who cares? So sometimes I kind of feel like that, but
#
you want to enjoy the ride in the moment. I also want to, and by the way, that quote,
#
which you referred to about, I think it goes to the effect of if you're not a socialist
#
at 18, you don't have a heart. If you're not a capitalist at 25, you don't have a brain,
#
which is resonant. And I think both of us would kind of agree with that. But I want
#
to double back on what you said about being full of ourselves, you know, what some people
#
might say. And I think here's the deal. Number one, I think it's important as both of us
#
would I think have the self reflection to say that, you know, that there is no such
#
thing called an adult in that sense of somebody who has figured everything out, you know.
#
So it's a little bit of posturing when you act with that certain kind of, like you spoke
#
about your Mungheri Lal moments, and I'm sure I have them as well. And we are both in a
#
sense, complex messes, except that we learn to kind of control the complexity and think
#
about it a bit more. And I think one of the important padhavs to, I don't know why I
#
thought of that term from Konbanega Krotapati, but one of the important padhavs that we have
#
to kind of get past is to just stop posturing at some points in time. We spend too much
#
of our life posturing to others and even posturing to ourselves about what kind of person we
#
are. And I think maybe a time comes where you give a little bit more to self reflection
#
and you stop a little bit of the posturing and you get a little more comfortable in your
#
own skin. That this is who I am. If there is a word THAT, I can only pronounce it as
#
that, right? And I don't care if, you know, I don't even want to consciously try too hard
#
to correct it because this is who I am. I'm happy kind of being authentic. You are happy
#
kind of being authentic. And I think one of the big secrets of the creator economy really,
#
and one of the things that I stress upon when I speak to young creators, is that just be
#
true to yourself, be authentic to yourself, because that is the only thing you have that
#
sort of, you know, sets you apart from everyone else. So, so yeah, that's, that's kind of
#
interesting to bring that up because the creator economy is a lot about authenticity, right? So
#
in the sense of, I think you and I've heard you walk us through a presentation of how
#
to think about the creator economy. And it's interesting here because this authenticity
#
angle was always something that was shied. People told you that don't do it. Don't be
#
authentic because there is this formal prose that you have to follow. Certain things have
#
to be in the passive voice. Certain things have to be in the active voice. There is,
#
you should have, you should start a sentence with dear sir or whatever. It's like, it's like a set
#
of rules that you have to follow, which is why even today when we, when, when I get, let's say
#
people who want to write for Capital Mind, they send us the stuff. It looks like this is
#
manufactured from a textbook. And then I'm like, no, no, you don't want people. And I feel lousy
#
saying this, but I have to tell people, unlearn the textbook writing process and move to. So what
#
is it about the creator economy that has changed this whole thing? And, you know, you've seen this.
#
I mean, you've, you've been, you, India Uncut was one of the most popular blogs. And I think
#
that's when I first came in touch. We got in touch. That's when I met, I was also blogging
#
at the time. And so I was talking money. You were talking so many other things. And then we saw the
#
IAPM fiasco at that time. And then onwards to there. It's a very interesting time because I
#
think India Uncut was very refreshing because it was from the heart. It was like, if I read Amit
#
Varma in a magazine or they would somehow take you and put a suit on you. And, you know, they
#
would edit out the aspects that were you so that it fit into this, say business standard or whatever
#
it was. I would think that I would like, it's like, it's like when you write for one of these
#
newspaper type things, you had to change your thought process, but, or change your writing
#
process. But on India Uncut, I could see you as Amit Varma. It, to me, that was important,
#
but suddenly it's become important to the whole world. It's not just me. It's the, I mean, when I
#
was, when we were doing this, there was a small clique of people blogging and we had a reasonable,
#
I think, thought process in the fan club. What's changed from that early blogging media to maybe
#
the creator economy, as you've seen? So a number of things that I'm happy to kind of take you in
#
detail, like I did in the presentation through all the various phases and all the things that
#
have changed. But about the intimate economy, what I call the intimate creator economy,
#
here's the thing. When we are consuming content, when you're consuming art or consuming
#
entertainment in the seventies or eighties, the stars you admire are larger than life,
#
right? They are not your friends. They're larger than life. They're up there. You're building
#
temples for Amitabh Bachchan and so on and so forth. That is, yeah, that is kind of what it is.
#
And that's come a full circle today where a podcaster, like podcasters like you and me,
#
are a voice in somebody's head. So when I listen to a podcast that I love, maybe by
#
Bass Roberts or Tyler Carvin or whatever, somebody's voice in my head, it feels like
#
an intimate connection. Let me sort of draw a metaphor I've spoken about before to sort of
#
illustrate that. Let's say, let's look at the audiovisual medium, right? Let's say you go to
#
watch a movie in a theater. There's a certain distance between you and the screen, right? And
#
there's a similar distance between the camera and the actors. So you'll have your Grand Western and
#
there is that distance and there is that scale. Now, when you watch something in a television,
#
the TV screen is a couple of meters away from you. And the camera is that much distance away
#
from the actor. So you have friends and Seinfeld and those kinds of indoor settings, five, six
#
people. That's what you get. If you're watching something on your laptop, it's less than a meter
#
and a lot of made for YouTube content is like that. It's much closer. Now, where I look at it
#
in terms of audio and why I always say that podcasting is very different from radio, it's
#
not radio on demand. The reason is that radio is more like television. It's kind of broadcasting.
#
I think of radio as you're driving in your car with four other people and your radio speaking
#
to all of you. It is playing on the speaker, just as a kind of a metaphor in the sense that
#
because of all kinds of imperatives and incentives in India, for example, there'll be the high license
#
fees and all of that. They don't have a choice, but to go wide and not to go too deep. As our
#
mutual friend, Trane Panikkar says, you are a mile wide and an inch deep, right? I love that phrase.
#
And that's kind of what radio is. Now, in some places, I believe New York has some 70, 80 FM
#
stations and it's a different whatever, but even there, there's only so far you can go.
#
In India, you've just got to play your Bollywood music and be very mainstream and you can't
#
approach any niche. Now, podcasting is the most intimate thing of all. It's a voice in your head
#
and people listening to me know this, like the kind of love I've got from my listeners.
#
Boss, it makes me tear up, right? You feel the connection, how deep it is. And I feel that way
#
for podcasters I listen to, or even people whose vlogs I watch these days on YouTube, for example.
#
You feel like you know this person, he's your friend. You're worried that if you come across
#
him in the mall, you'll just slap him on the back and say, hey, how's your cold now? Are you better?
#
That kind of thing. And this changes the way that you approach your content then, because if you're
#
on radio, you are kind of broadcasting. You have a certain kind of voice, a certain kind of, you know,
#
like Amin Sayani will speak in the Amin Sayani, and he's beautiful and charming and he's lovely,
#
but he belongs to everyone. He doesn't belong to you alone, right? And so people will ask me things
#
while podcasting that, you know, do I need to do voice modulation course and all of that,
#
and all that nonsense. And I say, no, all you need to do is you need to talk normally, like yourself.
#
Like the way we are talking to each other is the way we talk to each other, right? There's, you know,
#
just making sure we avoid cuss words, but that's pretty much, in my case, not even that frankly,
#
but that's pretty much what it is. And that's what listeners love, that you are who you are.
#
They feel like they know you. There's a straightforwardness to it. And especially
#
if you're not pretending, if you're not posturing, because over a period of time, you can't fake it.
#
You are who you are. Like I used to watch Big Boss a lot back in the day. I think I even,
#
I was kind of tweeting about, almost live tweeting about it in 2008, 2009, whatever, you know,
#
I just found it fascinating. And the thing is they know there's a camera, right? But they know
#
there's a camera for a little while, but then they lapse and then they are who they are. You are who
#
you are and your personality expresses itself. So you can't fake it too much, you know, especially
#
when you do a podcast over a period of time, like I have where I'm following my curiosities. I think
#
people appreciate that I might say something in one episode and 10 episodes later, I might say I
#
was wrong there, or this is how my views have evolved, and so on and so forth, you know, and
#
I think that that's a massive feature. Now, as far as the people who, for example, come to you and
#
they sound like a textbook, one of the pieces of advice I give in my writing course is, and it's
#
really standard, it's not like a new insight from me, is that read out everything you have written.
#
If it sounds like something you would say, then that's fine. If it doesn't sound like something
#
you would say, you know, like, for example, after due consideration, we have whatever,
#
we don't talk like that, right? So then it is contrived and it will sound contrived to the
#
reader also. And because they're not used to it, they'll have to work that much harder to process
#
it. And all good writers get this. Like a classic example I give, which is a great example across so
#
many domains, is Bob Dylan's blowing in the wind, right? So your key line there is the answer my
#
friend is blowing in the wind. You could also, instead of saying the answer my friend is blowing
#
in the wind, you could have said the response comrade is wafting in the breeze, right? Now,
#
why is that bad? That is bad because answer is a word we will use when we are speaking, not response.
#
And we will say my friend, we won't say comrade, unless we are from whatever particular,
#
yeah, yeah, or the CPIM somewhere. But and we won't say wafting in the breeze, we'll say blowing in
#
the wind. It's really natural language. Like in one of my webinars, I talk a lot about Shakespeare,
#
whose language seems so archaic to us today, but it was a common speech of his day. You know,
#
if you look at how many words Shakespeare used that are more than two syllables, there are very
#
few. He's using the common language of the day, he's creating great art, which at the same time
#
makes him a box office superstar. He was a Spielberg plus Yash Chopra office time. So I think
#
that this just this one piece of advice for anyone who's writing that read out what you have written.
#
Does it sound like because you know, Deepak, we know a lot of writer friends in common,
#
right? They want you that the Niranjana Roy, all of these people, Salil Tripathi, you know,
#
whenever we read, whenever I read anything by them, I can hear it in their voice. Yes,
#
it's like they're talking. They're talking because it's natural to them, because they're
#
not trying too hard. They're not trying to be too writerly or verbose or so many people will read
#
this, I have to do something special and all of that. They're just kind of being themselves.
#
And of course, they're not making a lot of the mistakes that we make in our speech. Like I'll
#
say very and I'll put adverbs and I'll do um and ah and all of that, because when we are talking,
#
there's no filter. But when you're sort of so, you know, an old editor of mine, Tim Delisle,
#
once who wrote this great book, I'd recommend to all my listeners called the Cornell Guide
#
to How to Write Well. It's on Kindle Unlimited. You can read it in a couple of hours. He once said
#
that good writing is like enhanced conversation. So it's like, you know, that old phrase goes right
#
as you speak. People misunderstand it. They think it means that the way you're speaking,
#
you just write like that. That's not what it means. Because if you did that, you'd be reproducing
#
all the, you know, the mistakes we make while speaking because we don't have a filter. So the
#
ums and the ahs and the run on sentences or whatever. No, it's that it's enhanced conversation,
#
but right as you speak means that when you write something and you when you say it out,
#
it should sound like it's you. And therefore that textbook thing goes away. If you just,
#
you know, that textbook thing completely kind of goes away. And this is and this is something I
#
see in streams as well in the blogs I watch that people are just being themselves and there is a
#
charm to that. You know, creators today should not think that, oh my God, you know, like I
#
occasionally teach this podcasting course. I do like two cohorts a year, unlike my monthly writing
#
course. And people will sometimes ask that, you know, what is my USP? Like should I even do it?
#
Or what makes me special? I'm not a domain expert in anything. And my point always is that,
#
boss, you just have to be you because you are on a journey, which many other people share,
#
intellectual journey, journey through life. They are at different points of it. Some may even be
#
ahead of you. But the fact that you are on that journey immediately makes them empathize and makes
#
them curious and makes that connection happen. And here's the other thing which feeds into
#
something we were talking about earlier, where I lamented the lack of mindfulness. Now I did a
#
recent episode with the writer Amitabha Kumar, which I just loved. And one of the things we
#
discussed was how writing every day not only enriches your appreciation of life, because
#
the act of writing every day means you're sitting about, you're sitting down, you're thinking about
#
something that would otherwise just have passed, and you're capturing it, it also changes a little
#
bit of you. That every day with, you know, with whatever you write in a day, it can be a couple
#
of hundred words a day, you are sitting down in a quiet space, and you know, get thinking about
#
something that is kind of improving you. And there I think lies the magic that maybe I'm on a journey
#
of trying to figure something out, maybe trying to figure my society out or whatever. Now I need
#
not necessarily be smarter or more knowledgeable than anyone listening to me. But the very fact
#
that there is that moment of examination, where I am sitting down and thinking about something is
#
something that others can share in, and then they can think with me and they can feel part of the
#
process. So, which is, and just an anecdote about this whole intimacy thing that I did an episode
#
with Abhinandan Sekri, where we spoke for four hours when I went to Delhi. One listener wrote
#
in to me to say that I felt so much like I'm sitting with two friends in a living room,
#
that at one point I interrupted you before I realized that I'm not there. Right? And I was so
#
touched by this, you know, and I can only hope that people listening to us right now feel that way.
#
No, no, it's so true, because sometimes in a conversation, I mean, that is the ultimate,
#
right? Because you're, you know, that you're in there, and you're speaking. And so I often
#
think about this. If in a podcast, and I almost force the user to stop there and say, hang on,
#
I have a point that I want to make over here. That is when you know that you've touched the soul of
#
the person who's on the other side. And I don't know if people do it. I mean, nobody tells me,
#
like somebody has actually told you about this, which is like awesome. But I think that is the
#
ultimate. If I saw someone listen to my podcast, pause the podcast and say, shit, you know what,
#
this just triggered this thought in my mind that I have to kind of get out right now because it's
#
there. It's part of the conversation that we're in on right now. And the realization that you
#
can't because, but so it's, it's, it's something that says you've achieved something in that
#
podcast. Or in the, it's like, if you're having a conversation with someone, and there's one line
#
that strikes you and you take that away and you will never forget that line. It may not make any
#
sense for you to remember the context in which that conversation actually happened. But the fact
#
that line impacted you or something impacted you so deeply is part of, you know, your learning
#
process and your joys and the fact that that conversation left you a little bit, you know,
#
higher in dopamine levels or, you know, thought process levels. This is, maybe this is just again
#
part of growing old, that you enjoy this a lot more than you enjoy partying and doing all the
#
other stuff that, you know, perhaps you enjoy more as a kid. But this is the part where I think that
#
that intimacy thing matters and matters deeply in the sense that without it today, I feel like
#
you're watching a news broadcast where somebody is just reading out from a teleprompter with no
#
emotion other than, where do I put the pause? So, you know, and another point of what you just
#
mentioned, which was, don't speak as you are speaking. I found that often I violated that
#
construct. So for instance, I use a phrase called Abhayar and I use this Abhayar in my writing.
#
I saw that and I found it charming.
#
It was interesting because I was like, if someone put this question to me, I'd say,
#
Abhayar wait, this is not how this thing works. Instead of me, in a normal point, I would edit
#
out the Abhayar wait and then tell you exactly what follows with that, right? But putting the
#
Abhayar wait in the writing is somehow more appealing to the reader because he's almost
#
like, okay, this is what he's trying to say, saying, you know, hold off. And for some strange
#
reason, it works. I mean, it works at least for the few people who read what I have to write, but
#
it's very interesting in that it works from an aspect of violating that very rule, which was a
#
rule in my own head saying, you know, remove the, I should go to this Toastmasters thing. There was
#
this R-counter concept. There's a person who counts the number of er's and a's and um's in the
#
business. And you're supposed to reduce your R-count over time. I'm like, no, in writing,
#
you can have a little bit of an R-count.
#
I think, I think where it comes in is that that's a voice. If your voice is Abhayar,
#
like in your book, there are these moments of humor, which like, I can't recall one offhand,
#
but there are these moments of humor in different places where I'm like, this is a typical Deepak
#
joke, typical, you know, and I'm sure you know what I'm talking about, but there are a whole
#
bunch of those and it's very charming because I know you, but even if I didn't know you,
#
I would know you a little better just by seeing that and there you're being true to yourself.
#
See, I think one core point is this and why this kind of content appeals to both of us
#
and to so many people is that we live in a constructed world. Okay. Everything is
#
constructed. Like you said, TV pay, things are being presented in a particular way. Radio pay,
#
things are being everywhere. Things are being presented in a particular way. Social media is
#
nothing but people posturing and you know, I am so virtuous or I am so sanskari or whatever
#
shit it is, right? And where are the real connections, right? And it is not true that
#
we are happy to be in this constructed world and all of that nonsense. I think people at some level
#
crave those real connections where, for example, when they listen to me talking to a guest, maybe
#
that, you know, sometimes we'll have different point of views and we'll, you know, discuss them
#
in a civil way, but sometimes we won't be sure. And that's also okay because certainty is constructed
#
when you come across it, right? So we are recording with all this Russia, Ukraine thing,
#
and so much of the commentary about it is going to be random people giving random
#
gyan in hindsight, right? And constructing narratives. I think, you know, I did an episode
#
with Rukmini, the data journalist, and she told me about this TV program she was watching at the
#
time of some election, I think the last UP election or whatever, where at one point they had the wrong
#
result. So then all the experts there started giving gyan on the wrong result that you see this
#
is what has happened and this has been mobilized and that has been mobilized. And then suddenly
#
they realized that the result is the other thing and has gone the other way. And the same experts
#
are giving gyan. You see, this is not hard to figure out. This is the dynamic here and all of
#
that bullshit, right? And it is that constructed world. It is that artifice that I think, you know,
#
many of us, even if everybody has a bullshit detector, you may not specifically know that
#
what so-and-so is saying is bullshit because you may not know that domain, but you have a sense,
#
boss, you know? And then when you have people who are not trying to construct anything, like you and
#
I, we are not trying to present a point of view or present this or whatever, you know? And there is
#
a charm to that, which is why, you know, very early on I remember someone sent me some advice
#
that, you know, your show should be much crisper. You should make them 10 minutes. You divide it into
#
point-wise format and all that. And I was like, boss, I am not doing an explainer. I understand
#
the value of an explainer, you know? And the person who sent me this advice, by the way,
#
went on to YouTube and does really good explainer. So credit to him, you know? But I was doing
#
something different. And there is just a lot of value to that for me. And these are just such,
#
you know, in a sense, like I wonder what you feel about this, but I think both you and I, in a sense,
#
are really lucky to be alive and this old, at this precise time. Because you think about it,
#
we were born in the mid-70s, broadly, right? And we have grown up, in a sense, in an analog world,
#
right? And we've grown up in an analog world. And we have had one kind of education where
#
you read every book you get your hands on because books are scarce. You put together a mixtape of
#
music that you like. It is so special. You're trying to woo someone, you make a mixtape for
#
them. It is a big freaking deal, right? It's, you know, when you communicate with other people,
#
when you write letters to them, you write long letters. You actually sit down and you put a
#
little bit of yourself into each letter you write, and it's not all functional. And then we come into
#
the internet when we are adults, and the whole world is kind of opened up for us. And then we
#
have a second education, and this is like another layer that is happening. And the result is that
#
where we are sitting, we've had these multiple educations, we've been enterprising enough to kind
#
of go with the different flows that we've gone with, but we don't take it for granted. Like,
#
I think people born, say, in 1995 will take some of it for granted, and they may not even have
#
experienced that, they may not have experienced boredom. What is the value of boredom? You know,
#
does a kid who always has a smartphone with her, and does she know that what it is for the mind to
#
be that empty space where it can just wander, and it can think about stuff. And in that thinking,
#
you also find things about yourself. Like, one cliché that I keep, I say cliché because I keep
#
coming back to it, it's not a cliché, it's a great insight by Jonathan Hyatt, where he says that sure
#
we have the internet and all of history available to us, but everybody is consuming something that
#
was made in the last three days. Wow. Right? Wow. And I want to find ways to break past that,
#
in my own life, I'm a victim. This is not a lament about others, it's a sort of complaint about
#
myself to myself, that too often, I'm like, kind of sitting there, and instead of reading a book,
#
I'll go online, and I'll, you know, I'll go to sites, I'll play a little online chess and get
#
my dopamine and all of that, and I'll just do a bunch of different things. But I am going from
#
moment to moment, from shallow moment to shallow moment to shallow moment to shallow moment.
#
And I think all of us, you know, everybody who's listening to this also, I know you agree with me.
#
This is like a common struggle, that how do we get past this? Because you almost feel trapped,
#
like I played poker professionally for a few years, right? So one of the things I looked into,
#
like the first time I went to Goa, right? And I went to Goa for three, four years without seeing
#
a beach, because I would just, you know, go to Panjim, check into whatever hotel I'm in,
#
and then I'd go to my offshore casino, which in those days was Casino Royale, and there was
#
another one called Pride. And over there, what a casino does is that there are no windows, so you
#
don't know, you don't have daylight or anything. There are no clocks. They pump in oxygenated air
#
to keep you fresh for long periods of time. And so I remember once I started playing at two o'clock,
#
and I thought, oh, it must be four o'clock after a while of playing, and I found this nine o'clock.
#
You have no sense of time, time just passes. They want to keep people fresh and gambling, right?
#
And I would, of course, play the one game there that is a game of skill, everything else you're
#
playing against the house. And I kind of studied that a bit, bought a couple of books on that,
#
which are linked from the show notes. And from the 70s, 80s, 90s onwards, there is a science
#
about how to get people addicted, how to keep people addicted, to the extent that the noises
#
and the music that a slot machine makes is all particularly designed to trigger the brain in
#
different ways so you keep sitting. And there are patterns by which somebody monitoring it from a
#
control room, if you're sitting at a slot machine and you sat for two hours, three hours, whatever,
#
someone from a control room can see from your patterns of play and their past data when you're
#
about to get up. And then they will send somebody down who will say, sir, because, you know, you've
#
sat here for so long, you must be tired. Let's give you a complimentary drink and they'll give
#
you a drink and then you keep playing. And this is a science that's there in the 80s or 90s.
#
So everything that you see on social media today was mastered by the whole gambling business
#
a long time back. And why? The common thread is addiction. So today, all these big social media
#
sites, they keep us hooked, they keep us addicted in this constant feedback loop of shallow
#
impressions. Like one of the cleverest ones was some social media sites, they did it so that
#
earlier when you hit the back button, you get out of the app. Today, in most of these sites,
#
you hit the back button, the page refreshes. Wow. Like Pinterest, I think. So something else will
#
come up. So you can't leave, you're kind of stuck there, right? And you can spend five hours on
#
Instagram or whatever your social media poison of choice is. And you've been busy, you haven't been
#
bored, you know, but and I think that is sort of the challenge that people like you and I face and
#
it ties in with that whole question of time. Like one of the questions I wanted to ask you
#
when I was reading your book is that like number one, I wish again, I read your book in my 20s,
#
because I would have made so many better decisions. But critically, you know, you've given great advice
#
on how to spend your money. Tell me something about your thoughts on how to spend your time,
#
because time is an equally scarce resource. And, you know, what's the thinking you've done on it?
#
How do you how do you kind of maximize that? I know this is interesting. I think a lot of things
#
lead into it. All of the stuff that you mentioned, one of the things that I'll talk about time is,
#
there are certain times at which having a lot of options is complicated. It's that, you know, that,
#
you know, choices, choices, choices, dialogue that happened in I think, when Harry met Sally
#
at some point. This was this was a revelation to me because having less to do at a certain point
#
is actually a benefit. We don't realize it. And I'll tell you, you know, so many thoughts over here.
#
So let me explore a few. So one of the things over here is my college days. I was in a college called
#
KRSC Suratkal. We had a beach next to the college and there in the beach, there was a big rock.
#
And I would sit on that rock and I would look at the sea and I would dream and think. And sometimes
#
you didn't know what you were going to think about. And sometimes you knew exactly what you
#
were going to think about. And you would go there and you let your mind wander. It would go, it
#
would go, it would go strange places. And I remember those places today because I would
#
remember it. Something that is very difficult to do today because you have a phone that can instantly,
#
you can sit on the beach and keep listening to the waves and watch some random YouTube shots and all
#
of that stuff and ruin the experience because you have to let that boredom build a thread of its own
#
that allows you to explore. And you're not building that. You're just letting someone else dictate
#
that from you because, you know, a tennis shot that was fantastic. Of course, it's a great shot,
#
Federer and Nadal and all that stuff. But is that taking away from that building thought process
#
that would have germinated an idea that could have been very different in your own thought process
#
many years later? And I see this as both good and bad. I'll tell you why. In my college days,
#
I didn't have too much of an input. The inputs were largely books. You would kind of look at them
#
and kind of think. Today, I have multiple sorts of thoughts of input. So, whether it's electric
#
vehicles at some level or, you know, like some of the thoughts that you just, we just talked about
#
and you said when people don't trust, you can't really trust what people are saying because all
#
manufactured. You trust the authenticity of a person who's coming in. But in the past, people
#
used this for religion. Religion was, there was a God who could not be untrue to you and he was your
#
truth and therefore it was your God. And if multiple people kind of came in together and said,
#
my God is my truth. And then they all said, maybe it's the same God. And then they made it a religion.
#
And in a way, that was the same, their way to fight the fact that there was an unreal, you know,
#
manufactured world out there, perhaps in whatever little way it was. But what's happened with time
#
today and perhaps spending time is more important than spending money, is that you can choose to
#
spend it in a hundred different ways. But you can't choose to spend it on boredom unless you
#
actually make an attempt to do so. Which means, in fact, it doesn't mean locking you up in a room.
#
It means, can you take a walk without having a phone and your music on or, you know, things like
#
that. I know many people for whom this is just simply, for me, it becomes like, I need a Bluetooth
#
headset and a podcast to be on so that I can walk. Because I want something to keep triggering my
#
thinking. And I'm like, at this point, I need some time to just think that song, that
#
Fursat Ke Raat Din, you know, that Fursat Ke Raat Din are not there anymore. And it's a valuable
#
resource because that word Fursat has a very deep meaning to me. It is that the boredom
#
germinates ideas and those ideas are very valuable for you to build in later life. So with the kids
#
now, with my kids, for instance, I see that the minute they get bored, they want to touch a device
#
and, you know, accept something. The devices have figured it out. The devices have also figured out
#
that you need some Fursat in terms of less activity when you're doing something. So I'll give you one
#
of the examples. There's a YouTube Shorts and there's Instagram Reels. You can't forward them.
#
You can only watch this short. They're not very long, but you can't go forward. You can't just
#
skip to the end. So you actually have to watch the whole thing. And you're like, okay, they're doing
#
this because they know that your mind is racing forward. And if you were given the option to go,
#
you would go. But they want to keep you there. So they're building that Fursat thing right there,
#
but they're not giving you time to think. They're going to keep the screen on at all points in time.
#
And this is, in one sense, very evil because it takes away from that point of saying, listen,
#
I just want to watch this and I want to go think about it. You're not giving me the opportunity
#
to do so, but at the same time, addicting me with all the addiction influences that you build.
#
To get out of this, you have to have a mindset that says, I will not conform and I need to
#
get out of this to just think. This is a point I think very few of us... I'll give you one example.
#
A lot of people I know told me this in the last two years. Deepak, I miss international travel.
#
I said, why? Two hours or eight hours of just me. You can't... I mean, you may have a laptop or
#
something like that, but many of them are like, you know, I use that time to think because there
#
is no internet at the time. Well, I hope not, but it's coming soon. But assuming that it's flaky,
#
it's not going to happen, but you just have your laptop. At best you have some movie that's playing,
#
but you can switch it off. But at the time, it's you time. And that you time I think is very
#
important. And so people I know who travel have gotten cranky about it in the sense that they
#
said, listen, I don't have that time anymore. So I'm just losing it by, you know, not having
#
those moments of relief and release. More important than money is finding the space that you can do
#
this. Now, whether it takes money to do this or not, I don't know. But, you know, it's like,
#
sometimes we would just sit in a coffee shop and sip coffee and do nothing. And, you know,
#
sometimes just sit in front of each other and not even talk. Can we do that right now in any
#
meaningful way? I think the day you do that, you're richer than most other people are.
#
And although, I mean, we're also guilty because we're building a podcast that gives in so many
#
ideas in so many different ways that perhaps people are like, okay, you're listening. I'm
#
listening to this. I'm getting my own ideas, but I'm not taking the time out right now because I
#
want to listen to what comes next. But I think it's important to bring that point out to say,
#
get out there and be a little bit of, you know, find a little bit of, and this is where writing
#
helps, right? Because writing discovers you in a way that you haven't discovered yourself. So when
#
you write something down, you say, is that what I am, what I'm thinking? And sometimes it is just
#
stupid. The sentences don't string together, don't make any sense. But sometimes you'll find
#
yourself becoming a Dave Barry. And I like Dave Barry because he's one of the people who's really
#
inspired me to be myself. Once he wrote a sentence that lasted an entire full page and half of the
#
next, and it ended with warning, warning, we are now reaching the end of the sentence.
#
So, because the sentence just kept on rambling and I'm like, you know what, he can write like
#
this. It's like I'm in his head. And he in the process of writing this, he's probably discovered
#
a little boat about himself when he did it. And the only way I could have figured that out was
#
when I wrote that Abeyya or whatever it was, it was me, it was my head writing what was on the,
#
what was on the page. And I think it ties into the concept of time in the sense of how do you
#
spend, how do you spend your time meaningfully? It's perhaps to not spend your time meaningfully.
#
It's to find meaning in whatever you, whatever you're thinking, rather than in trying to spend
#
your time doing something specific. When you talked about the process, one of the things that I
#
think should be included in any longer term thought processes, the time to sit back and say,
#
the time to sit back and say, dude, I don't know what's happening, but this is my post-mortem or
#
my thought process. This is where I just let my mind think. It should be the part of the process
#
itself, rather than saying, this is the process and I'll go outside of it and think of the process
#
at a later point. So give yourself that for 10 minutes of, I don't know what this is, but I have
#
to take some time out and think. Do you find that fursat thing meaningful or exciting?
#
It's very meaningful, but what has happened is we've gotten so used to our addictions of
#
constant sensation and dopamine hits and all that, that it becomes difficult. Like I remember a long
#
time back, I recorded this episode with Santosh Desai on Indian society of the last 30 years.
#
And in the intro of that, I think I did some kind of dream sequence where I imagined somebody just
#
sitting in a cafe without a smartphone and everybody else is looking into a screen and
#
there is this one person who doesn't have anything and they're looking around and gradually everyone
#
notices this one person. And it's spooky because it's like a psychopath, right? What kind of person
#
would do something like that? And there was this interesting Twitter thread by one of my writing
#
students, Gurpreet, who is based in Bangalore. And the thread was about how she's found a couple of
#
times when she's sitting in a cafe by herself. People on other tables, you know, girls or mixed
#
groups or whatever, will say, oh, you're alone, why don't you join us? Which is really interesting,
#
but the interesting part, the part that really struck me was she said that I wasn't looking into
#
my smartphone. And she said that had I been looking into my smartphone, nobody would have disturbed
#
me, but I wasn't looking into my smartphone. And therefore there is this human connection
#
and maybe new friends and whatever. And I find that very touching, right? And, you know, it's
#
where are those human connections is a question you have to ask. And it's a question in multiple
#
levels. And I'll throw you another related question, which is I have in recent years been
#
thinking about, okay, before I come to this, you had said something earlier about how at one point
#
you thought you were the center of the world and everything was made for you. So I quickly dug up
#
this Douglas Adams quote I love, the quote about a puddle. Have you heard it? No, no. So let me read
#
this out for you. This is Douglas Adams. Imagine a puddle waking up one morning and thinking,
#
this is an interesting world I find myself in an interesting hole I find myself in fits me rather
#
neatly doesn't it? In fact, it fits me staggeringly well must have been made to have me in it.
#
This is such a powerful idea that as the sun rises in the sky and the air heats up and as gradually
#
the puddle gets smaller and smaller is still frantically hanging on to the notion that
#
everything's going to be all right, because this world was meant to have him in it was built to
#
have him in it. So the moment it disappears catches him rather by surprise. I think this
#
might be something we need to be on the watch out for. Stop quote, right? And I just love this quote,
#
our over inflated sense of ourselves as a species and also at a personal level.
#
And the question I was coming to is this that Kant, not Amitabh Kant, but the philosopher
#
Immanuel Kant, you know, once coined, like he coined a number of categorical imperatives.
#
And one of them was this, let never treat another person as a means to an end. Treat them as an end
#
in itself. And I think of this and I think that, is it the case that much of my life
#
is really me being this puddle, me being at the center of everything and everybody else
#
is a character in my play. They are instrumental to me and I'm not trying hard enough to look at
#
them as real people. And I think that this is actually perhaps a default mode for most of us
#
and you have to become mindful and try a little harder to make those connections and to not sort
#
of do this. You know, for example, Stephen Covey once said, talking about conversation and listening,
#
Stephen Covey said, most people don't listen to understand, they listen to respond. Right?
#
And what is the key point here? The key point is that you and I are having a conversation,
#
but I might be listening to you, waiting to jump in at some point so I can show how clever I am or
#
how right I am and so on and so forth. And it becomes my ego. So then the conversation
#
becomes completely about my ego. I'm not really listening. And I arrived at the ethic of never
#
interrupting any of my guests in conversation, you know, and I just find that listening is
#
beautiful when people open up to you. Like, first of all, it's an enormous privilege when
#
people open up to you. I did an episode with Brinal Pandey, I asked her my first questions,
#
she spoke for an hour. Yeah, I just sat and listened. And it was magic. You got to listen to that.
#
And so many people wrote in young people wrote in saying this made us cry. We send it to our
#
parents. Right? And if I interrupt her in the third minute, and I say, Oh, can you tell me a
#
little bit more about this? The magic is doesn't happen. The magic is gone. You know, so you kind
#
of sit back and listen. And even there you could say I'm treating her as instrumental because I'm
#
getting a good episode out of it. We don't know our own, you know, there is a scene on the unseen
#
about the things that we do as well. So what are your thoughts on this? Like, when you, you know,
#
you grow older, you have family, you have kids, you know, they're real people, you know, you have
#
colleagues in this wonderful, incredibly swank high tech office of yours, you're recording it.
#
So, you know, is this something you've thought about? Well, it happens all the time, to be honest,
#
you know, it's very weird, because sometimes somebody comes to you with a problem. And I'm
#
sure all of us have experienced this at some point. Amit, you know what, there's this thing
#
that's happening with Russia and Ukraine. And you know, I can't understand what's happening.
#
Now you're listening. And you're not saying anything. And I'm going to know Russia has
#
attacked Ukraine, and it's doing all this thing. And then we're worried about what happens to,
#
you know, the prices of crude. But how long can Russia attack? You know, what can it keep on
#
attacking? Well, no. And while I'm talking to you about this, the clarity starts to appear in my
#
own head. You almost don't have to do anything. You almost like literally looking at me and saying,
#
go on. And at some point, I come to a conclusion that the fear and the anger and the thing that
#
I came with, half of it is evaporated simply because I've talked it out to you at one level.
#
And I've discovered, I mean, this is me being a little sexist is that my XY chromosome, the Y
#
portion missed that little element of understanding when it was only time to listen. And when it was
#
time to give suggestions or take action to my wife to the to this day is like this is only for
#
listening. So I shut up and listen. And it's incredibly, you know, I'm a rational person,
#
I like to say, but I none of us are rational. So this is one of my behavioral traits that just
#
gets me is that I don't get it, that I have to just listen sometimes. And it's okay if it doesn't
#
leave with an answer. And even if you know the answer, or if you know that there is there are
#
five things I can suggest to you that would give you that would solve this problem. Sometimes I
#
don't have to solve the problem. It's just that the person wants to enter talk or something like
#
that. I use this often as a one way communication on Twitter to wait. At this point, I don't even
#
care what people are responding to me about because I is not meant for a response. It is just me
#
talking, but I can do that on Twitter because I'm comfortable with it. But in person, when a person
#
sitting in front of you almost like, if he's telling me this, it's my duty to respond to that
#
person and give him advice or give my Gyan on it and all that. But much as I mean, much as I find
#
that this is a behavioral problem of us not listening, I think to a large extent, we're not,
#
we find, you know, this concept of just listening is like reading a book, because the author is
#
talking to you. You aren't talking to the author, right? So, and you have no problem with that,
#
because that's what you want to do. You want to hear the author. Why do we find it so difficult
#
to do this in person is something that is astounding because sometimes a person has great
#
things to say. And you know what, you can see these religious sermons. You can see a talk on
#
YouTube by somebody and you want to watch that talk. It's a one-way conversation. It's still
#
coming at you, but the person is not talking to you directly. But if the person was sitting on the
#
opposite side of the table, suddenly the whole thing changes into, I don't want to listen to
#
you anymore. I want to tell you what to say. I want to tell you my opinion in the middle.
#
Why does this happen and why, I mean, should it be prevented? Of course, I mean, I think we can
#
always do things better. But at some point, I think, you know, freewheeling listening,
#
what is the difference between are you hearing things and are you actually listening to things?
#
So, for instance, I have a fundamental problem in being in a closed room in a seminar. I fall
#
asleep. And this has been such a big problem for me, even in the context of, so like I say,
#
you know, if I'm in a conference room, I better be the one talking. Because if I'm the one listening,
#
then I'm going to fall asleep at some point. It's just that there's some part of me that is just
#
designed to, I can absorb reading, I can absorb listening. But the minute you put me in a position
#
where I can talk and I'm not allowed to, it just, you know, I have to fight it a lot. I'm 47, so I've
#
learned a little bit of, you know, how to deal with it. But it's surprising how little I
#
do the same thing, for instance, when my kids want to talk to me. Because when the kids want
#
to talk to you, you're like, I'm dad, I know everything, right? So you should do this.
#
And suddenly you're like, I don't know everything. My son recently, I don't know what they teach
#
people in ninth standard these days, but this is far more complicated math than I've ever
#
ever imagined. So he will come and say, daddy, but what about this? And what about that? And you
#
would have read something on the internet. And I feel it's like my job to educate him about this.
#
But he doesn't want me to educate him. He's already figured it out. He wants to tell me
#
that he knows. And why can't I just listen to him and say, well, you know, this is great,
#
tell me more. I find it astounding that I can't. It's, I don't know whether everybody has this
#
problem. Obviously, everybody doesn't because people, but it, it's, it's like you like hearing
#
the sound of your own voice and therefore you have to have your voice in every conversation.
#
Sounds terribly irrational to me, but it's who I am for some reason. And it's a part of me that
#
I just don't like. It's like, you know, I wish I had, I wish for all those times that I had great
#
conversations, that I was more of a listener than a talker. So there was this book, I remember
#
reading a couple of decades back, random self-help book. I don't even know why I read it. It's called
#
Men Are From Mars, Women Are From Venus by John Gray. And he speaks about exactly this thing.
#
And of course he's essentializing. And today it's not politically correct to say that men have
#
innate traits and women have different, whatever everyone's supposed to be a blank slate, which is
#
of course not the case. But his point about men was that men are always in problem solving mode.
#
If you talk to them about a problem, they will want to offer you a solution, right? And sometimes
#
like you were describing in your conversations with your wife, sometimes they don't want solutions.
#
They just want to be heard. They just want that kind of empathetic environment and you don't
#
actually have to put your engineering cap on and solve the damn problem. And I think at some level
#
it's also, you know, we are so focused on ourselves sometimes that we feel that we have to show that
#
we exist to ourselves. But you know, it's like Descartes said, I think therefore I exist. It's
#
really, I solved your problem, therefore I exist. So it's the ego. It's the whole male ego thing.
#
And there's definitely something to that because women don't do this. And if anything, if anything,
#
and this is really a problem with our society. If anything, they don't speak up enough and they
#
listen, you know, you'll have good listeners there. And there is, you know, this kind of
#
confidence issue there. And you see this dynamic playing out where if you have a meeting with men
#
and women, just listen to who talks more, listen to, you know, just those dynamics who interrupts more.
#
Like women will get interrupted more by far. It's not even close, right? If you just sit at a cafe
#
without a smartphone, so in full psychopath mode, and you just listen to the conversations around
#
you, it can actually kind of be very interesting in these different ways. So I'd say the thing is
#
not to beat ourselves up too much. The thing is just to be mindful of these things and just to
#
try to be aware. Because at some level, you also realize that, you know, and I don't know what the
#
listeners would feel about this, but sometimes you become aware of your own frailties and you
#
can do something about them. And sometimes they're just ingrained in you. And at the most,
#
you try to control their manifestations and you try to sort of control your behavior the
#
best you can and mindfulness helps. But, you know, sometimes you kind of accept, you know,
#
accept the hardwiring and say that, okay, this is a hardwiring, I won't be ruled by it. Like,
#
I think a lot of, you know, we are, of course, a product of a combination of nature and nurture,
#
as Steven Pinker memorably said, nature gives us knobs, nurture turns them. And the way I think
#
of the progress of civilization over the last few centuries, particularly
#
the Enlightenment onwards, is that we are mitigating our hardwiring. That nurture is,
#
you know, one of the things that we were hardwired to do is think independently about our
#
hardwiring, which is not something any other creature has. Only humans have that. So I can
#
look at myself and think that I am programmed to be like this, but I can fight it. That I can sort of,
#
you know, and that's a lot of the Enlightenment values stress towards that, that we can
#
intellectually imagine a better society. And then we can work towards it. And of course,
#
we are hardwired in many contradictory ways. We are hardwired as much for selfishness and greed as
#
we are also hardwired for altruism and empathy, right? It's which knobs you then decide to
#
focus on and how you kind of control your behavior. Sorry, that's a bit of a ramble.
#
No, no, it's been quite interesting. I mean, because I think this ties into the point of,
#
I mean, coming back to, say, the creator economy and the way things are, the fact that we are
#
talking about this and recognize, and this is actually a prime example, where in my mainstream
#
media, and perhaps even on a radio talk show or anything like that, would you ever find
#
some nuance like this being discussed to this extreme without somebody saying, listen, there's
#
not enough of an audience for this, or that, oh, no, no, my 90% of my audience wants a Bollywood
#
discussion or I wonder, so should we just focus? So this is where I think, you know, the times of
#
today kind of coming back to this, we've, we've changed the way we produce content in the sense
#
that earlier it was blogging and now it's gone to, you know, and you've talked about it a little
#
bit in your presentation, I think you said, the reason, the way to do things has moved from a
#
blogging text interface to audio plus YouTube plus a bunch of other interfaces and so on.
#
And this is where I mean, I think you probably will see this better and I want to bring this
#
back to you on that, you know, on that aspect. How does this change? I mean, so for instance,
#
what are the constraints? So you're sitting here with a different world today than it was when we
#
started off. And when we started off, I don't think when I was 20, I could have ever imagined
#
that I would be talking and hundreds of people would be listening without me being on some fancy
#
TV channel or without some fans. It was almost impossible to imagine that people would listen,
#
you could stand with a soapbox in the middle of MG Road and two people will listen and mostly
#
they'll tell you to shut up. Right now, if they're telling you to shut up, it's probably a small part
#
of the brigade, but there are enough people listening anyways. What happened here, how did
#
those little constraints change over, you know, I think you have a great handle on this and you've
#
seen this evolve because you've gone from being a mainstream media person to a blogger to a sort of
#
mainstream media person to a podcaster to now, podcaster plus educator plus so many other things.
#
What's changed? Okay, so just for the listeners, the presentation Deepak is referring to is a
#
presentation I've given in a couple of places. I think I also did it for Spotify podcasting day
#
last year when they asked me to talk about the creator economy and I just shared it with Deepak
#
and he said, let's chat about this. Now, here's the thing, the world has changed so fast and so
#
drastically that we almost don't notice. Now, I divide the history of creation really into five
#
periods and one is got to Gutenberg, you know, G2G, which is basically till the invention of
#
the printing press, right? And I don't need to elaborate what the scene there is that you can't
#
achieve scale and blah, blah, blah, blah, blah. Therefore, you don't have access to what other
#
creators have created necessarily. It's limited and your audiences are limited and so on and so
#
forth. Now, then the second age is a mechanical age, which is all the way to let's say the early
#
2000s where the printing press, television, all of that is included. Then I talk about sort of the
#
blogging and early social media age, which is the auties. And then there is a YouTube and Instagram
#
age, which is the, you know, 2010, 11 onwards to 2019. And then number five, I grandiosely call it
#
the age of the creator, which is, you know, started in 2020, not necessarily enhanced by
#
the pandemic. I think it was kind of happening anyway. Now let's quickly go back to the
#
constraints that we faced or the constraints that both of us would have faced as creators in the
#
nineties. Number one, we don't have the means of production. So if I want to write something,
#
who's going to publish it? Who's going to get it out there? I have to, you know, send it to a
#
newspaper or find a publisher or all of those things, right? Number two, access that I am
#
dependent on gatekeepers for that to happen, you know, and I have to meet, you know, there is a
#
consensus on the truth and there's a consensus on style and I have to go through them. If I'm
#
writing for someone, I have to be, you know, follow the news cycle, write about something which is
#
topical. Number three, there are restrictive formats. So if I want to write something, you know,
#
an article is 800 words, a book is a hundred thousand or whatever it is. If I'm a filmmaker,
#
I can make a 24 minute episode for a serial because the other six minutes would pad it up with ads
#
or a 90 minute Hollywood film or a three hour Bollywood film. So those are the formats which
#
are constraints on me also. The fourth constraint is connecting with audiences that I can randomly
#
write or make something, but I don't have a direct connect with my audience where I'm speaking to
#
them all the time and they're speaking to me. And the final one is making money where, you know,
#
if I read something by you Deepak, I'm actually paying for it because time is money. I spent half
#
an hour reading something you've written. I value it. It's evident because time is money. I spent
#
half an hour reading it. I value it. But you should have a way to capture some of this value
#
directly. Now, what used to happen in the nineties is you write for a newspaper, they'll aggregate
#
eyeballs, they'll get advertisers, and you'll get a tiny, tiny chunk of that, right? You don't have
#
a direct way of benefiting from the value that you provide to others. Now, these are the five
#
sort of constraints that I saw, the means of production, the access slash gatekeepers problem,
#
the restrictive forms, and, you know, direct connect with the audience and directly making money.
#
Now, this kind of started changing with the blogging age in the sense that the means of
#
production opened up for us, right? And so, I was, at that time, in Cricinfo and part of
#
mainstream media there, but I wanted to write about other stuff. So, I could just start a blog
#
and, you know, so no gatekeepers therefore. And in terms of form, I was freed. I didn't have to
#
follow the news cycle. I can write about whatever the hell I want. I don't have to do 800 words.
#
I can do 80 words, eight words, because there's no Twitter. So, even microblogging happened. You can
#
have eight words with a link. I have seen some of your posts. Yeah, I used to do five posts a day.
#
I think my record was 17 posts in a day, but, you know, I did some 8,000 posts in five years.
#
So, you are not constrained by the news cycle. You're not constrained by word count. You can be
#
80 or 80,000. You're not, the 80,000 dog posts would be a big match. You're not constrained by
#
style. You can find your own voice. You know, you, for example, if you were blogging, you could say,
#
Abhayar, you know, no senior sub editor at Hindustan Times is going to say that, no, this,
#
you know, you're not allowed to use this language. And you could connect directly with audiences
#
because you would have comments and all that. I think my blog went beyond a certain level of
#
traffic where the noise to signal ratio went out of whack. So, I disabled them like many other big
#
blogs did, but you had that direct connect and people would still write to me. But two things
#
didn't happen here. It was still hard to make money from your audiences directly, unless you
#
were like a super superstar tech blogger or whatever. And mainstream media remained mainstream.
#
Like when I started writing my blog, you know, the Wall Street Journal came to me and said,
#
oh, why don't you write for us? Mint gave me a column, which later won me the Bastia Prize.
#
So, many of the benefits from the blogging came in these indirect ways where I was validated by
#
the mainstream media. And that was still very much the model at that time, right? So, even when Nate
#
Silver does what he does with his data analytics and 525 and all, eventually NYT comes to him and
#
says, hey, you come for us. And that becomes, you know, the next step. So, there is a hierarchy of
#
success and mainstream media is still at the top. Now, in the YouTube Instagram age, what 2012 to
#
2019, and I'll probably put up a newsletter post and link it where I expand on these ideas so it's
#
easier for people to refer to, what happens is a means of production opens up for all media,
#
not just a written word, right? Including audio visual, including podcasting. Like the kind of
#
recording that we are doing now is doable within the budget of an individual, but 30 years ago,
#
it would simply not have been possible. And we were discussing before this that, you know,
#
you've built this beautiful YouTube come podcasting studio and you do a lot of your editing with
#
DaVinci Resolve, right? Now, DaVinci Resolve was originally a pro color grading software,
#
which later became a fantastic editing suite. And now there's a free version, which basically
#
does whatever you want it to do and it's available. And even the paid version doesn't cost much.
#
And in 2010, DaVinci Resolve, only the color grading, not without the editing suite, only the
#
color grading you today get, which today you get a better version of that for free. In 2010,
#
it cost $800,000. Because this is what Hollywood used. You would not get it on a PC or a laptop or
#
your computer or whatever. There were special machines built for it. And therefore when films
#
were sent for color grading, you'd pay big amounts of money, send it to the US from India, for example,
#
get it color graded, get it set back. And that's kind of what it was. And this is just the extreme
#
example that I can think of, right? And today it's free on every PC and every laptop. It's
#
completely open. And you know, genius is no longer constrained by the means of production,
#
like when TikTok came to India, that first year and a half. And I love TikTok because
#
for the rest of content also, there was a sort of class system in play in the sense that you saw
#
a certain profile of person who would on Instagram on whatever. TikTok democratized that because it
#
happened around simultaneously when Jio happened and broadband access went everywhere. Smartphone
#
access was much more common. And people could just point their cell phone camera at themselves
#
and shoot stuff. And the kind of creativity one got from villages, the kind of empowerment,
#
for example, for people of alternate sexualities who suddenly see TikTok stars and TikTok content,
#
which is by people like them, right? Which in a geographically constrained area, like a village,
#
you may not think there was someone like you, you may think that, you know, and suddenly that opens
#
up. And then you realize one day that I can also create, I can also do this. And you start with
#
low hanging fruit, like lip syncing to something or dramatizing a track that is already there.
#
And then you move on from there. And one saw that journey. And I briefly taught a course on TikTok
#
and Indian society also, but I did one course, one cohort of it. And I did it on WhatsApp,
#
so WhatsApp University. And the reason I did it on WhatsApp is I needed to share hundreds of
#
vertical videos, which was, couldn't do it on zoom or anything else. So anyway, so that kind of,
#
so to that extent, the means of production opened up mainstream media started fading in power.
#
So you had creators like Casey Neistat, for example, the YouTube guy who's making enough
#
money who doesn't need to be signed by a Hollywood studio or Netflix or whatever.
#
And though it's all good if that happens, but he's making enough money, YouTube creators start
#
making enough money where they don't have to think about validation from big mainstream houses.
#
You look at YouTube creators today, like Mr. Beast and so on. It's not, you know, it wasn't
#
necessary. And the technology enabled you now to go beyond all formats. And maybe creators were slow
#
to catch up to it and all of that. But you no longer had to do 24 minutes or 90 minutes or
#
whatever. You could think in terms of just any damn thing. Yeah, five minutes to five hours.
#
To five hours. I have streams which have gone on for six, seven hours and all that. And the whole
#
sort of the whole streaming economy on Twitch and even YouTube is insane. And that's another sort of
#
way in which intimate content comes up where you see people in their everyday lives just doing
#
whatever and those connections form. And creators began to form communities of fans where, you know,
#
you could set up a Discord server, or, you know, you could form those kinds of communities for
#
yourself, set up a Patreon page. And that's the next point that you could take, you know,
#
you could monetize directly without necessarily being part of a big platform, except that in this
#
time, till maybe 2019, most of it would still come from ads and sponsors. So you don't have the
#
middleman in between, right? So if I'm making audio visual content, I don't have to sell it to a Star
#
Plus, I can take it to YouTube directly, but it's still ads and sponsors where the money is coming
#
from, you're still not taking enough money directly from the consumer. Now all this has been upended
#
2020 onwards. One, the means of production have of course opened up even further, right? And people
#
have started vlogs and all of that with their smartphone and just gone way beyond. Mainstream
#
media, I believe, has disintegrated and become completely irrelevant. It's not even a factor.
#
New formats have emerged, intimate content has grown. Every creator can now build their own
#
community. You know, you can use the Scott servers, you can do newsletters, you can kind of do
#
whatever, you know, and creators can now make money directly from fans. Where the whole buy me a
#
coffee thing, like 10 years back, if you told me that a creator is going to say that if you enjoyed
#
my content, pay for it yourself, I would have said no way that's going to work because micro
#
payments, friction, all of that. It really works. You know, I have myself experienced enough love
#
from my listeners that has kept me independent, that I don't need to work, that it's fine. You
#
know, so that whole thing of, oh, podcasters don't make money is not true anymore. I'm independent,
#
I'm getting by. It's kind of worked for me. And you can make it in different ways when you form
#
communities and think outside the box. So, you know, because I know that enough people have enough
#
exposure to me, that there's a certain credibility, I can then sell an online writing course and people
#
will come for that. And obviously it cannot be a cynical exercise. You got to do a good job,
#
otherwise they don't come back. And then over a period of time, what happens is that people
#
initially sign up for the course because they've heard the podcast and they know your legit.
#
But then they sign up for the course because other people who've done the course tell them that, hey,
#
you know, this is a good course, it meant something to me. So in all these ways, it's changed the game
#
for creators to the extent that creators now can sort of think outside those early boxes.
#
And some advice, I'll quickly go through six pieces of advice that I give creators since
#
we are on the subject. One is it is no longer necessary to scale. Back in the day, you have
#
your top 0.5% to manage to scale and make a lot of money. Everyone else, it's a labor of love.
#
Now you can reach what Kevin Kelly calls a thousand true fans, where Kevin Kelly wrote this essay
#
more than a decade ago, where he said that if you get a thousand true fans who'll pay a hundred
#
dollars a year each, that's a hundred thousand dollars. You don't need more than that, right? And the amounts
#
can vary and most people would get by with less. And that became such a reality with Substack
#
because a typical Substack annual subscription is a hundred dollars. And there are tons of people
#
who have never been heard of before. You know, like Bill Bishop, who writes, you know, a gentleman,
#
I think in his fifties, who writes a newsletter on China called Cynicism, right? Cynicism, not
#
cynicism, and thousands of paid up subscribers. So you have people making tons of money and,
#
you know, making it work for them. So you don't have to aim for scale. You just have to, you know,
#
and there's another writer, I forget her name, who wrote another essay recently, taking off from that
#
and talking about a hundred true fans who will pay a thousand dollars each. And there are people who
#
are actually successful with that model, right? And because what happened, what happened was that
#
as a creator, you discover a niche, which otherwise would not have existed. You know,
#
when there's mainstream media and they're going broad and they're not going deep, not only do
#
they not cater to niches, they don't, those niches don't form because nobody knows they're out there.
#
And then something happens and boom, they blow up. So the LGBT thing that you talked about,
#
the niches there. Yeah. And that's of course a huge niche. It's not even a niche. It's like,
#
it's just, you know, so huge. Two creators, I think should think in terms of reach and revenue.
#
You do some things for reach and you do some things for revenue and reaches the first thing
#
you build, you know, you build credibility, you build trust, and then sort of the revenue happens
#
and you have to be clear and you can't do everything for revenue. Like, and this is me thinking,
#
this is all post-hoc, me thinking in hindsight, it wasn't planned like this. But the fact is like
#
all my blogging years, I made nothing from blogging, right? Directly. It was a labor of
#
love. I enjoyed doing it. Similarly, you know, the seen and the unseen has existed for more than
#
five years. And for the first three and a half years, I made nothing, zero, right? It was a
#
labor of love. I just enjoyed doing it. So I did it, but it worked out because it got me that trust.
#
It got me that credibility. It got me the reach. And then the revenue kicks in in various other
#
ways. So you've got to kind of define what you're doing and why. And three, build a community of your
#
fans once upon a time you couldn't. Like, you know, people who do my writing course, those who want
#
to be journalists will sometimes say that, you know, is there an editor at TOI, you can give the
#
email ID, we'll write to them, we'll write to people at Express. And of course, I help them in
#
whatever way I can. But my main advice is, don't do that. For a number of reasons. One, there'll be
#
a gatekeeper, you'll have to follow a particular house style, you'll have to cater to the news
#
cycle. Two, your work will appear sporadically, and therefore you're not writing enough. And if
#
you're not, you know, you become excellent at something by doing it again and again, you want
#
to write as much as you can. And three, it's very dispersed all over the place, and you're not building
#
a community of fans. So if I read something by Deepak Shenoy in Hindustan Times, and I say, wow,
#
this guy really knows what he's talking about. But the next moment I've forgotten about it.
#
Whereas if I click on a link on social media, and I read a great piece by Deepak Shenoy, and there's a
#
thing, subscribe to my newsletter, I put in my email ID, everything you subsequently do comes to
#
me. That email database, by the way, belongs to you. For every creator on Substract, the email
#
database belongs to the creator. So I automatically become part of a community of Deepak Shenoy fans.
#
You can send me more pieces, you can crowdsource funds from me for various things. Tomorrow,
#
when you have a podcast, you notify me and subscribe to that. Tomorrow, if you teach a course,
#
and which you absolutely should, frankly, then I might sign up for that. All of that happens.
#
So building that kind of community is important. My fifth out of the six commandments, as it were,
#
is don't pigeonhole yourself. Too often, you think, oh, I want to be a writer, I want to do this,
#
and this is what I want. But the point is, if you're a creative person, there are multiple
#
things that you can do. So don't pigeonhole yourself. Maybe it's writing, maybe it's
#
podcasts, conversations like this. If you're someone listening to this right now and thinking
#
that, oh, I've heard so many of Amit's episodes and I love his conversations, what the hell
#
stops you from having conversations like this? What stops you? Nothing stops you. You could
#
start at home. Before my father passed, a year or so back, I sat down with a recording device,
#
and we just had a conversation, and I asked him about his life and did that. And you can do that
#
at home now with your parents. Maybe you can have a conversation with your spouse and ask her,
#
and you might discover things that you hadn't realized. One of my guests, I won't name him,
#
mutual friend of ours, did a four-hour episode with me. And after it was done, his wife got mad
#
at him and said that you told Amit so many things you have never told me. And they've been married
#
for some 35 years. So try having conversations. It can work. And the fifth of my commandments is,
#
don't worry about metrics. Here, again, we have to get past that whole anxiety of what other people
#
think of us. And the problem is that I think creators tend to, and this is also said about
#
futurists and science fiction writers, but it's true of creators, we tend to overestimate the
#
short-term and underestimate the long-term. So in the sense, I'll start a podcast and I'll think,
#
oh, we'll become superstars. So many people will listen and all of that. And that never happens,
#
right? It takes time. It takes time to grow organically, but also it takes time for you
#
to become good. Because whenever you start at something, as you and I know, whenever you start
#
at something, you suck at it. How do you become better? You become better by doing it again and
#
again and again and again. If validation is going to be the sole motivation for doing it again and
#
again, you'll just stop and then you will never get good. And it'll be an opportunity lost. And
#
you could say it'll be the unseen. So therefore, when you start off doing something in the creator
#
economy, start off with something you love, which you would do anyway, right? So the motivation is
#
intrinsic. It comes from within. And then you become better. And then the growth is really
#
exponential. It's kind of like, I mean, maybe you'd be better placed to comment on whether
#
compound interest is a bit like that. But it takes time. Don't underestimate what the long-term can
#
do. And my final commandment is that, and we've discussed an aspect of this before, that be
#
authentic to yourself, right? Seven billion people on this planet, you know, what makes you unique,
#
Deepak? It's Deepak. There's nothing else, you know? And I would say at a broad level,
#
we are all basically the same with minor differences in hardwiring and circumstances,
#
but basically the same. But what sets you apart, the only thing that sets you apart is yourself.
#
And you don't need to do anything else. You want to start a podcast, you don't need to do voice
#
modulation. You don't need to do any of that crap. So, you know, if you want to be a creator,
#
therefore, in a nutshell, I would say that don't overthink it. Jump into it. There's a trade-off
#
between getting it done and getting it right, you know? And the only way to get it right is by
#
getting it done. Just get it done. Do it again and again. You'll eventually get it right. So just
#
jump into it. Do something you love. Don't worry about validation at first. Recognize that you
#
probably suck and just do it again and again so you become better and just enjoy the process.
#
Yeah, this is so rich. I mean, there's so many things to take out from here, but I think you've
#
succinctly put it in. It's that it's a phase of the economy that has empowered people, ordinary
#
people, you and me and a bunch of other people who earlier thought they didn't have any way to
#
express their voice, to monetize their, or make it a living. Because doing what you love is one
#
thing, but doing what you love and earning money from it that makes a living possible is a part
#
of the world that's only happened now. And I mean, I really think so many of these things
#
resound with me completely, especially about short term versus long term. Now, I've been blogging
#
for since 2004 to now in CapitalMine itself. And people come back to me and send me stuff that
#
I've written in 2007. So I'm like, I don't even remember I've written this stuff. And I've written
#
something about guzzles. And so I look at that and I'm like, oh my God, it's interesting that
#
someone else is reading this stuff. It's given me, but the magnification, like you said, compound
#
interest. It is that something you've written at a point in the past survives enough to compound to
#
everything else you've written 10 years later or 15 years later. So one of the things that people
#
often, I think, ignore is that this power of compounding does not come from doing
#
for a purpose. That means if I had written that article on guzzles to get 100,000 views,
#
I didn't get 100,000 views at the time. But when I write, point to that article again today,
#
after 10 or 12 years, when a similar situation arises in the market again,
#
people look back at it and say, wow. And then it gets the 100,000 views that it would have
#
otherwise not gotten at all at the time. So I think that this doing what you love and then
#
doing it for the purpose of getting it right, getting it better has enormous potential.
#
And we've never seen, I mean, I look at this and say, you know what, we were talking about
#
a few listed companies recently. They're trying to get to smaller towns using influencers. This is
#
insane because if you think of the traditional concept, they would be like, oh, get a wholesaler,
#
hire a bunch of distributors in each village. The wholesaler we parcel the inventory to,
#
the wholesaler then transfers it to the, and then each of the distributors have to order
#
and they have to put some money down to get their inventory going and they transition it to the
#
shop. As an example, what they're doing right now is saying, listen, what we'll do is we'll figure
#
out whatever they want to buy. But how we get to them is not by us putting paper ads and all that
#
stuff. We're going to get people on YouTube who use our products and demonstrate how these products
#
are used. Now, whether they're headphones or lipstick or whatever it is, it's not relevant,
#
but this is an audience you would just not go after as a large FMCG company or a large company.
#
Know what? How many people use lipstick in these? So if they want to buy it, they just have to wait
#
because my supply chain is not going to be strong enough. The difference now is suddenly
#
everything is changing that ecosystem where you're saying, listen, you want that lipstick,
#
we'll deliver it to your house because somewhere along the line, the whole logistics frameworks in
#
India have gotten sorted out. So if you order from a small village in Kerala, anything can get you,
#
get that product over to you in two months directly to your house.
#
How do you even figure out which product to buy is you're now on YouTube. So you're going to use
#
authentic people to figure out the, when I say authentic, it's like, I don't have to hire an
#
Aamir Khan all the time. If I find another person who speaks my language, who looks like me and is
#
a person that I associate with and they like this product, I would rather, you know, I would,
#
I would actually give them as much credence as me looking at a film star into buying that product.
#
So the, it empowers the creators who can then therefore find a revenue stream by, you know,
#
doing this, but it also empowers brands, which otherwise would have, I mean, I keep in the,
#
in the financial world, they keep telling us their brand is a moat. It's this moat that says, well,
#
you know what, if it's Nestle Kit Kat, then Nestle is Nestle and therefore it can't be broken.
#
Why is Nestle Kit Kat Kit Kat? Because they've done these ads on TV and people have used it and,
#
but the product is just a wafer covered with chocolate. I can get better chocolate.
#
I can get better wafer. I can get a similar crunchy sounding feel with a better actual
#
physical product. The problem isn't that I have a better product. It was that I don't have the
#
distribution or the reach. Now you do. So if you build a product like that, you could get it to
#
people in a way that Nestle is going to be totally blindsided to because their way of responding is
#
go to the IPL and put more ads because that's how people are going to find my product.
#
The other person is going to be like, you know what, I am going to do a review of each IPL game
#
on my YouTube channel. And you know what, I'll talk about this new fancy Kit Kat competitor
#
that is out there. And both things have the same reach except the TV guy, TV ad fellow is,
#
is paying a hundred X for the same kind of reach as the influencer is who's just talking about IPL.
#
It's just incredible that this economy exists today and that everybody can harness it. Today,
#
if one person talks about a product that I have built, it gives me more revenue than if I had
#
put an ad that said, come buy my product. It's because people don't want to listen to come buy
#
my product. They want to listen to go buy his product. So that, I mean, this change, and I
#
think the economic change of the whole thing has so many ramifications where more and more people
#
do this. And you have another layer, which is the creator economy is great from an, you know,
#
from an independence perspective, but there is still not enough of a financial structure around.
#
And I say this in the, my book actually talks about it is you have to think of these things
#
because earlier the governments of the day or the companies of employers of the day would think
#
about it for you. They would set up your pension plan, your EPF. Now what is the EPF? Part of your
#
income gets automatically saved somewhere. After 50 years, when you retire, you suddenly say,
#
Hey, what do I do? I don't have an income anymore. Employer graciously says, listen,
#
I've been putting 10% of your money in this thing. And here's a big lump sum. Go, go spend it now.
#
And you could look at them and says, thank you. You're my savior. This is the traditional way of
#
thinking about it. But over time, people got more and more intelligent. People said, okay,
#
the government said we can't fund our pension pensions endlessly. You guys have to start
#
thinking about your own retirement. Employers were forced more and more. So right now, for instance,
#
traditional employment, you have to put 10% of your income and the employer puts another 10%
#
of your income. So 20% of your income goes to this fund, which you can't touch until you retire or
#
until you go out of a job. What is the equivalent for a creator? Unless they plan it themselves,
#
the creators, while they get the freedom, it isn't entirely easy for them to build themselves
#
a smarter financial retirement. Because like all jobs, every creator, like restaurants perhaps,
#
every creator will have a shelf life of some sort. That shelf life, maybe because of topicality,
#
I am famous for talking about something and that something itself got violent. I faced that myself.
#
There was a language called Delphi. I used to be so fond of it as a programming language that we
#
set up in India a Delphi users group and we did things. I went to Borland in the US too. Borland
#
was the company that owned Delphi at the time. I presented an international conference. You search
#
for Delphi in India, you would get Deepak Shanoi and my company Agni and all that stuff, except
#
Delphi died. Delphi died not because it was not a good product. It was just that the powerful
#
competitors had more marketing resources and better. In fact, the guy who built Delphi went on to
#
go to Microsoft and build even greater stuff over there, including the next pair of technologies
#
that came out of Microsoft, which have dominated it for the last 20 years. However, what happened
#
there was my creator influence. If I had just sat the Delphi thing, I would have died. I would have
#
had a good life when I did, but the shelf life. So what happens to the creators when their shelf
#
life changes? And the guy who used to do or the girl who used to do a video every single day at
#
9 p.m. in the night has a child and the 9 p.m. is not possible. I can tell you from being a parent,
#
trying to commit to a 9 p.m. lifestyle when you have a young child is altogether, at least in my
#
case, it was impossible to predict. I mean, maybe it's different for different people, but
#
my children taught me that the value of knowing when one can actually sleep,
#
if it were traded as an NFT, it would be one of the most valuable things in the world right now.
#
So to be able to accurately predict that when you have a baby, it's different.
#
So what happens then? Does your income stream fall because the YouTube algorithm says,
#
this person is no longer producing a 9 p.m. video every month. I'm going to downgrade their
#
lifestyle or whatever it is. I think the financial aspect of these extremes does need to be considered
#
apart from the social impact as well. Because suddenly it's like the
#
AMWE problem. In AMWE, once you become an AMWE distributor, suddenly all your friends start
#
looking to you like customers. So you go to their houses and you say, why aren't you using
#
AMWE toothpaste? I'll settle it to you. Suddenly nobody wants to invite you to their house anymore
#
because all you're talking about is AMWE. Does it happen in social media and creators? Maybe,
#
I don't know. I'm just thinking that, of course, most of the time when I go out, I end up talking
#
finance because that's what people want to talk to me about. But I have more to say than finance,
#
most of the time, though most of it is bad jokes, so people would rather talk to me about finance.
#
However, the interesting part of this is that, where was I going with this? Yes, the issue
#
that happens with a lot of the creator economy, sometimes I feel that the backbones of the
#
regular economy, which got built over time, like the financial concept, the fact that Saturday and
#
Sunday are a holiday, there's a reason Saturday and Sunday are a holiday for many people is just
#
because they needed to get away, they needed to unwind. How do you unwind off being a creator?
#
Because you're always creating and you can always create because your mind will never rust.
#
Therefore, you could technically work seven hours a day or seven days a week because you can. Now,
#
these constructs in the creator economy become what? Does it, is it important? Is it important
#
is it like, no, the world has changed, you have to work 24, I mean, you have to work seven days a
#
week, no matter what, or is it like, is it true freedom saying, listen, it doesn't matter, you
#
can work one day a week, you don't have to conform to the norms as they are. But at the same time,
#
the norms are important because if you choose to work seven days a week, that is also a problem
#
because it'll hurt you in the longer run. So great questions or great thoughts. Let
#
me take a stab at kind of sharing my thoughts on it. But first, you know, that KitKat example,
#
where I just want to point out that one thing advertisers don't realize, possibly because
#
people and ad agencies are our age and all that, is that many young people don't even,
#
for them, KitKat is not a special thing. That brand resonance isn't there for them.
#
That brand resonance is for an older generation. What I think people tend to miss is that look,
#
60, 65, 70%, I don't know the exact number of India is born after liberalization.
#
Right? So you and I have a sort of a shared reality, a shared basis for thinking about
#
things that they may not share. There might be young people today for whom KitKat is nothing.
#
There are certainly young people today on social media for whom Amitabh Bachchan is just a guy who
#
puts his weird numbers on his tweets. Right? And that's what they know of the guy. And for them,
#
he's famous for being famous, not for Deewar or Sholay. Right? So we have to, you know,
#
and different people think of the world in different ways. And that mainstream,
#
there's no mainstream. Like, you know, this was a thought sparked by an interview of Steve Van Zand,
#
the guitarist who once said that rock was mainstream, really between around the time
#
of the Beatles and when Dylan went electric to Nirvana. And after that, there is no mainstream
#
anymore. Everybody isn't listening to the same thing. Look, another thing that's changed. Back
#
in the 90s, we all listen to the same thing. Right? Back in the 90s, we got our news from
#
the same three or four places. There was a consensus on the truth. All of that has completely
#
dissipated. And net-net, it's a great thing. Obviously, there are problems like polarisation,
#
the world of fake news, everything has become a narrative battle, whatever, big subject. But,
#
you know, coming back to this whole sort of issue of how do creators think about thinking,
#
this is a difficult problem. You know why? Because, and this is a problem that will be open to
#
be overcome when the ecosystem changes. So let me explain what I mean by that. Today, we are in a
#
situation where a creator has to simultaneously be an entrepreneur. Right? So your one skill might
#
be you're a creator. The other skill that you have to develop is you're an entrepreneur of your own
#
brand. And then you kind of have to figure it out. Now, this, you know, and there are many human
#
failings that come into play. Like when you were speaking, you were talking from the money aspect
#
and we'll talk more about your book soon and these things will come up. But what is the reason that
#
people don't make wise financial decisions for the future? It's because there is, number one,
#
of course, there is a fact that most people just don't understand money. It's not intuitive,
#
you know, big numbers are too much. But there is also this illusion of immortality,
#
where you don't, in your mind, you don't come to terms with the fact that one day you might be
#
weak and frail and your memory might be passing and you may not be what you are today,
#
and your capacity to earn has gone down. Or you don't come to terms with your own mortality,
#
for example, and the notion that like so many people don't take life insurance because in a
#
sense, I think they're going to live forever. And in your book, you, you know, argue at length
#
that why you should depending on, you know, who you are and what your circumstances are.
#
And there is also sort of this sense of continuity. Like in my poker days,
#
I would constantly remind myself and tell others that just because you're making a lot of money
#
now, so you've got a lifestyle with it. Don't assume that the flow of money will continue,
#
you know, so then you get used to a lifestyle, you continue that lifestyle. And then one day
#
the flow ends and you can't adjust and it becomes a problem. And you're right, creators do need to
#
watch out for that. And because creators are not just at the mercy of changing fads or what they
#
do no longer being so relevant, they also have the mercy of algorithms by social media giants,
#
that if suddenly an algorithm changes in some subtle way that downgrades your content,
#
then that kind of becomes an issue. So I think this is a short term problem that creators need
#
to think as entrepreneurs. But I think in the long run, an ecosystem will come about around this,
#
where you will have intermediaries who will, you know, say that, okay, you're a creator,
#
you don't have time to spend on marketing, or you don't have time to, you know, get brands who
#
might want to advertise with you, you know, we'll take care of all that for you and all of that.
#
And that ecosystem is going to kind of emerge. And you know, that's sort of bound to happen. So
#
I'm not kind of so worried about that. But just to go back to, and again, what you said about,
#
you have to do switch off. You look at someone like one of the most successful podcasters is
#
this guy called Dan Carlin, who does a show called Hardcore History, right? Like, first of all,
#
it breaks every notion of what you might think about podcasts. Like, he did a series called
#
a blueprint for Armageddon about World War One, which was 25 hours, five episodes of five hours
#
each. And it's just him talking, no music, no sound effects, nothing, it's just him talking
#
for 25 hours. And I remember the first time I went for a walk. And I was listening at a higher
#
speed, obviously, and I started listening to one episode, not realizing the impact it will have on
#
me. And obviously, it did wonders for my fitness, because that particular day, especially, I just
#
kept walking, I couldn't stop. I remember standing outside in the twilight as the sun is setting and
#
is growing darker on me, just listening to this guy talking. And it's magical. And it is not
#
presentation mode, where it's, you know, this happened after that, and so on and so date,
#
this happened. It's very informal. It's rambling. He's thinking about something else. There's one
#
really moving section where this bunch of soldiers go into a battle and they all die. But the day
#
before they go into battle, they write letters to their wives and girlfriends, and he's reading them
#
out. Right? So it's incredible. You're standing in the twilight under your building, the sun is
#
setting, and you're listening to this and you transport it. And this is history, but it's real
#
again. Right? It is people who died, but it is people who are in your head. It's beautiful,
#
the power of podcasting. And the reason I mentioned him is he doesn't do this every day.
#
He'll bring out one series a year or one series every one and a half years or whatever,
#
and everybody binges and they just go mad. And he can't do this. If you're doing a 25-hour series,
#
you can't do it weekly. You'll do it once a year and he'll publish all his resources and everything
#
will be on his blog that these are the 80 books I read for this and everyone. So then people can
#
go down rabbit holes and all of that. So what you're creating, the experience that you're
#
creating, you can define for yourself. You don't have to think within fixed boundaries.
#
You know, imagine him in the 90s going to radio station or going to whoever and saying,
#
I'll talk for 25 hours. And they're like, fuck off, man. And you know, another example of that,
#
which my friend Chuck Gopal introduced me to in the episode I did with him,
#
is this lady called Miss Excel. Right? Now Miss Excel is this Instagrammer who has knowledge of
#
Excel and a passion for EDM music, a passion for EDM and for dancing. She combined them, right?
#
She started bringing out these Instagram videos where she's dancing to EDM and on the top of the
#
screen, there's an Excel problem being solved and you're shown how to do something. And people
#
loved it. And she met all the rules. If she goes to a TV channel and she says, I'll do this,
#
they'll laugh her out of the room. But from my point of view, she met every parameter a creator
#
needs to meet. It's authentic. She really cares about all three of these things. It's intimate.
#
She is being who she is and you appreciate that. Right? And so on. Meets every parameter.
#
And you know, for a while she was making $100,000 a day selling courses in Excel.
#
Right? So here's someone who's made millions, definitely the richest Excel teacher in the world,
#
a young woman dancing to EDM or doing other things to music. And it's delightful. Because she knows
#
her shit. She really does know Excel. She's qualified to teach. That's evident. But it's
#
just so light and it's beautiful and it's wonderful. Right? And so it's for creators,
#
it's unknown unknowns. And this is such, you know, a fascinating time to be living in,
#
because one, I think creators will begin to explore all of these. Two, an ecosystem, a support
#
ecosystem will obviously develop around them. And, you know, and the other thing is that back in the
#
day, it was worse for creators because either you make it to that top 0.5% which makes all the money
#
or you get nothing. It's a labor of love. You know, like I say, the cafes of Vesubha where I live
#
are filled with actors who've struggled for the last 30 years. It's sad, right? Everybody doesn't
#
make it the top. But here in the creator economy, there are all kinds of niches which don't even
#
interact with each other. Where a superstar in one niche may pass a superstar in another niche on the
#
street and they may not recognize each other and their fans may not know each other, but they're
#
big stars, you know. So in that sense, there are more opportunities. There are more. And, you know,
#
I just feel that, I mean, obviously the role of luck is huge in life, but it's a little less in
#
this. Your probability of making it if you're true to yourself and you, you know, continue working
#
on your craft and do work that you enjoy doing, the probability of your making it is a bit much
#
greater. You know, this is fascinating from a perspective also. I keep thinking about this.
#
How come India is defined by the lack of enough niches? I mean, it's not defined by it, but it
#
seems to have come across when everything about India is so big that every niche is probably a
#
country of its own. So you end up with, you know, so like, you know, how come cricket is our number
#
one sport? In the South, volleyball is insanely popular. I mean, there's a volleyball league also
#
that's going on. Perhaps it's only time that, you know, the other sports come in. And, you know,
#
a country like Canada has like three sports. I mean, three large sports. India is maybe once in
#
a while we get a tennis player or a badminton player and we, you know, or a set of badminton
#
players. But otherwise, this isn't that much in India that's, you know, talked about. So
#
the creator economy, I think for one is what will change because all the mainstream channels are
#
like, listen, we want to get to 90% of the population or 80% of the population. I don't
#
care if 10% of India's population is as much as France. They're like, no, no, we don't, we don't
#
give a damn. That does not matter to us. What matters to us is that I want, I want to get to
#
80% of India. So, you know, this was for me fascinating because, again, it goes back to
#
college when I discovered this. Till I was in college, all I was listening to was English music
#
and Hindi music for the most part. And English music was largely pop, some rock, some friends
#
introduced me to metal, which I pretended to understand, but didn't. And then I went to
#
college and then I discovered this thing called AR Rehman and Tamil and Telugu music, and even
#
a bunch of other genres as well, which I had no idea. Now, I did not know, for instance, that the
#
audiography of the beat and the thing of Tamil music was insanely good. I mean, way better than
#
anything I'd heard in Bollywood music, at least so far. And I was like, wow, this is amazing.
#
The fact that I was exposed to it at that time told me that there was more, you know, much more
#
out there than I had ever seen. I saw what rock really was. Till that time, Pink Floyd was, I
#
think, that another brick in the wall. But then you heard the whole albums and then you said,
#
okay, this is a different beast. Each one is, each set of albums or each album is a different
#
thought process altogether. So, the discovery of these things changed perception, at least in my
#
own head. And I think that's happening now. It's like you're starting to, hang on, is this
#
something that I can think about? And right now, I can think about at least 20 or 30 topics that
#
I've discovered almost entirely because someone has taken the time, including, let's say, in your
#
interviews and podcasts. You might have not wanted the podcast to go there. But it turns out that it
#
is because the person on the other side or the conversation that you have brought about this
#
intensely interesting piece of information that is a rabbit hole by itself. And as a listener,
#
while you may not have gone down that rabbit hole, it takes me down that rabbit hole in the sense
#
it says, well, I can do this. Sometimes, you know, it's bits and pieces of different things as well.
#
So, one of the things that fascinated me a lot or continues to fascinate me is energy, you know,
#
as a whole, at how we consume it and how I keep thinking about this and saying, you know what,
#
we've started to move and this is my engineer, me speaking, we've started to move slowly from
#
what used to be an alternating current based setup, which is largely your earlier lights,
#
your fans and stuff, to LED lights and LED TV and LED chargers and digital chargers and TVs and so
#
on, all of which actually require DC power. So, you send AC through the wire and then use a DC
#
converter to charge your, and you want much lower voltage for it. You don't need the 220 volts.
#
More and more devices go down this hole. But, you know, I realized this, it's not like the
#
mainstream media is making all this stuff up. It's somewhere somebody started to talk about
#
something and something. So, the picture started to build in my mind that today,
#
you could have a house built entirely out of DC power almost, other than maybe your fridge.
#
You could go off grid, which means you have a solar power thing. Solar power,
#
it's stored in batteries as DC. You have to actually convert it to AC to be able to use it.
#
But if you kept it as DC and powered your devices directly, you might not need as much power as you
#
think you do because the size and scale of the batteries required to convert something to AC
#
is much higher than if you were to directly use the DC. This is interesting because you
#
could go off grid almost entirely. Then what happens to the grid? They spend so much money
#
and time building, saying, oh, we have electrified our villages. And you go to the next village and
#
say, screw you guys, we're already electrified because we have the solar power, we have the
#
batteries and we've been running this for the last decade and everybody's looking at each other and
#
saying, but we never drew our lines. What happens to all the money that we spent drawing lines to
#
this stupid village because we thought it's not electrified? Worse, what if people in the city
#
started to do this for themselves and said, forget it, we're not using the main grid anymore.
#
All these discoms and the distribution companies, what happens to them? And this is not me speaking.
#
I mean, this is me speaking right now, but it's a confluence of ideas I've started to look around
#
and saying, okay, this guy is asking that question. I'm just putting the points together.
#
I don't think I would have had this as an original thought just by myself. It's got to have been all
#
the influences that I've got, maybe bits and pieces over the years, that jigsaw puzzle starts
#
to come into place and suddenly I find there's a gaping hole over there. For instance, you can't
#
stop running a power plant, which is made of coal or natural gas. It's a lot of effort.
#
If solar power were to take over in a way, power is consumed as soon as it's generated.
#
We don't have the battery capacity to store power at that level. So every time you generate the
#
power, it's the same time that it is consumed. If solar power works in the day, my availability
#
of my power in the day is 50 gigawatts, but in the night it's 20. So to make up for the night,
#
if my power requirements are 30 gigawatts, for the night, I need that extra 10 gigawatts to come
#
from somewhere, so not from solar. Can I run power plants only at night? The answer is,
#
are you freaking kidding me? You can't. A natural gas power plant will have to be run for most of
#
the day. Otherwise, you have to change that technology. Suddenly you have a problem,
#
because if you keep giving impetus to solar power, in the day, your power costs will be so low
#
that certain power companies will go bankrupt. And in the night, power costs will be so high
#
because solar power isn't there. You don't know how to marry these two in any meaningful way,
#
unless you actually store power. And storing power is a nuclear physicist level problem right now.
#
And the sense of storing power at that magnitude, it's an interesting problem to have. And the
#
reason that I have it as a thought process also is simply because there are so many of these things
#
I have seen, these pieces that I have seen, and some of them are comedy. Some of them are probably
#
mentioned in some comic. They are these people who kind of do physics. Like you said, miss Excel,
#
there's miss macroeconomics in a way. They come and do these complex macroeconomics topics,
#
and then they put this into this really funny video that after you finish the video and say,
#
I had a good laugh, but this is a real problem. I find it fascinating that the creator economy
#
opens our eyes into these crazy levels of things, which for a mainstream media to have actually
#
addressed would be get 15 people who are PhDs, get each of their opinions on the problem. So you
#
would not go to a random person on the internet who perhaps has about 5% of an idea on this.
#
And this is the interesting part. I think you and I gel on this. There is no longer a call to
#
authority that works on the internet, which means you could be a nobody, a Joe Rogan, and comment
#
on something that you don't have a degree in simply because you have enough of a context to
#
make a voice. And people will not grudge you that. Of course, some people will grudge you that forever,
#
but not enough people, and people will give you a chance. Whereas in the olden world,
#
you wouldn't even get the podium to stand and speak on. What changes? Because this thing is
#
remarkable from a perspective of equality democratization. Also a lot of noise,
#
because now everybody is an expert on protein covered with something that, spike protein,
#
yeah, that's the word. Everybody knows what spike protein is and how it works,
#
which is not necessarily a good thing. But at some level, this democracy is helpful,
#
because if it changes, if it helps change the world in a little way,
#
that little way will magnify to give compounding effects in the future.
#
So I want to touch on various aspects of this. Like in our last episode, I think we discussed
#
nuclear power a little bit, which I think is the one big solution which makes much of this mood.
#
But apart from that, I loved your framework. I loved the phrase I've written it down,
#
what happens to the grid? Because I think as a framework, it works across so many things,
#
and it works in the creator economy, right? Now, what you were earlier saying about
#
niches not being recognized. So in the 90s, what used to happen, and I worked for a while
#
there in Channel V and MTV and so on. And in the 90s, there was a thing where
#
multinationals would come to India, and they would think that India is Bollywood and cricket.
#
To jo bhi karna hai, you make your marketing, your advertising around Bollywood and cricket,
#
and that's it, and that's all they knew. And then over a period of time, there was some nuance
#
kind of crept in. Now, what I have seen recently is a lot of new entrants into this space
#
came with this whole mindset. Audible started this podcasting, this thing called Audible Suno,
#
briefly, and Spotify came in here as well. And they came with the same mindset. Even Netflix
#
has that, that Bollywood is everything. So Netflix is not coming here and saying,
#
okay, let's look at the whole creator ecosystem. They're saying, let's go to Karan Johar,
#
or let's go to big Bollywood names, and that's it. So when Audible Suno came, I pitched a couple
#
of shows to them at the time. And the scene in the unseen, even then, was doing pretty well.
#
But the person I met there had been hired from Zee. And forget me, she hadn't heard of Joe Rogan.
#
And she said, ki interview toh aadha gante se zyada hona nahi chahiye. And she said,
#
I don't listen to podcasts, main toh Zee se aayu, mujhe filmon mein interest hai.
#
And they commissioned a bunch of filmy shows, and they commissioned a bunch of
#
shit which was based around celebrities. Now the point is, those big names will get you
#
initial numbers, but they won't get you the depth of engagement, because they are not,
#
because the content is shallow, right? They won't give you that intimate economy feel,
#
that intimate creator ecosystem feel. The smart way for these big companies to think about it
#
would be to say, what can we do to enable an ecosystem where the best creators rise to the
#
top, where we can look for authentic voices? Like this, in a sense, is a kind of thinking
#
which is skeuomorphic. Have you heard the term? Skeuomorphic, yes. Skeuomorphic. So in design,
#
skeuomorphic is used as, you are using a design from one paradigm, in a separate paradigm,
#
to make people comfortable with it. For example, when Apple had their e-books app in, I think,
#
the late autees, you know, it looked like a bookshelf on the screen, right? So people who
#
want to read books, you're giving them an artifact from the past and making that the visual
#
representation. So that's kind of how it looks like. Like there are some music mixing softwares
#
where you will actually, the software will have these knobs which you can turn. Yeah. Right? And
#
you don't actually need that, but it's just to make people comfortable with because they are used to
#
it. Now, I think that marketers in the mainstream media increasingly think of the, not increasingly,
#
they forever thought of the world in these skeuomorphic ways, where if there is something
#
that comes up that they don't understand, they want to fit in into their pre-existing conceptions
#
of what is kind of going on there, going on in the scene. And I think this is, you know,
#
and I think this doesn't matter. Like I'm a creator, it doesn't bother me, you know? It
#
doesn't bother me at all. I had pitched stuff to Spotify as well. They also, they were just
#
more into celeb names and all that. I keep saying Audible Suno was about Bollywood, Spotify is about
#
Bandra. It's just, but it, you know, so they can do whatever content that they want and eventually,
#
you know, should settle down. But the point is, thankfully, the creator economy has gotten to the
#
point where we don't need these people anymore, right? And creators everywhere get this. And
#
there's kind of a period of time and some of them will figure it out, right? Like, and some of them
#
won't. So Kodak didn't figure it out, for example, and they're not there. Netflix figured it out.
#
They started as DVD rentals, right? And, but they figured it out. So some people will figure it out,
#
some people won't, and it doesn't really bother me. And as far as, you know, what you mentioned
#
about, you know, you mentioned Joe Rogan. Now the thing with Rogan here is this, that number one,
#
I don't even know why he signed the Spotify deal. He's already, you know, he transcended that space,
#
you know, whatever one thinks of him, you know, I could give him a few tips on craft, but whatever
#
one thinks of him, he transcended that space and did some things really well. And he didn't need
#
to do that. But the important thing here is this in terms of principle and why I agree with you
#
that the increased democratization is a good thing and that people like him are uncancellable.
#
That today you may disagree with Joe Rogan and say that, oh, he's siding with the anti-vaxxers or
#
he's got this idiot called Malone on his show who's talking nonsense and, you know, deplatform him.
#
Today you may say that, but today you may agree with, you may disagree with Rogan. But tomorrow,
#
somebody you agree with, the same principle will apply, right? You know, what will the tech giants
#
go by? The tech giants will either go by the prevailing politics of the day as they might be
#
within the company or by the government of the day and what the state in each country tells them to
#
do, you know. So today, if you're a liberal in India saying that, oh, he's an anti-vaxxer and
#
he's this and shut him up, tomorrow Adityanath will apply the same principle to shut your ass
#
down, right? So what you got to do is you got to stand up for principles. And the principle there
#
is free speech and the principle there is whatever. And in this whole fracas, by the way, I think
#
everyone behaved appropriately. You know, Neil Young and Jonny Mitchell, both of whose music I
#
love and listen to much more than to Rogan, were entitled to make a stand and take their music out.
#
You know, more power to them standing up for principles. Spotify also was entitled to say
#
that, no, we'll keep this guy on our platform, you know, though I think they should have been
#
more firm about it and reiterated the principle behind the whole thing. And so, yeah, it's kind of
#
an interesting sort of case, but I just don't know why he signed with Spotify. In fact, one thing that
#
I do want to say over here is he had about 200 million downloads a month before he started
#
at Spotify. And Spotify now has 400 million downloads a month, which I think is weird
#
because he's half of Spotify in terms of downloads. But the point isn't that. The point is you can't
#
cancel Joe Rogan because earlier you could shut a person down. You could shut a person down by
#
going to his employer and saying, shut him down. He should not be allowed to say what he wants to
#
say. You can't do that with Joe Rogan anymore. If you take him out of Spotify, they will still
#
be a Joe Rogan that is intensely popular and so popular that you would now no longer have anywhere
#
else to go. You literally have to go to the internet to shut them down. You have to go to
#
Google and say when people search for him, stop showing his show, at which point they will be
#
a competitor to Google who will show them and people will still find. This is insane because,
#
I mean, I'd learned this in Dream 11. Dream 11's app apparently was not available on the app store
#
because it was akin to whatever gambling or whatever it was. So people found a way to install
#
it on their Android phones. I'm like, you know, you couldn't say this to a person saying, if I'm
#
not on the app store, am I finished? The answer is no. With appropriate popularity, you can get
#
people to bypass what the traditional way was to access your application, which is go to the app
#
store and search for it. Two, I have an app over here. Please download it. Do this setting in your
#
phone. Allow external apps to be run and then let run this separately. Enough people ran it simply
#
because it was an app that was immensely popular. You can't, you couldn't cancel the app. It had
#
enough money behind it. But now you can't cancel a voice because the voice will find a way to get
#
to you. Regardless, I mean, you could cancel it by, you know, putting the person in jail.
#
Of course, that can happen. But I'm just saying that this concept of a popular notion of saying
#
50% of the people are for something and 50% are against, but the against people are louder.
#
And therefore, they should be allowed to shut this person down. I don't think that happens anymore.
#
It's very clear, which is very huge. I don't think anybody could shut down Amit Verma
#
for meeting a person who had an alternative view about science, religion, technology, whatever,
#
or who came and said, of course, you can cancel the grid. All the discoms ought to be bankrupt.
#
Can the discoms go to the government and say shut Amit Verma down? I don't think they can.
#
I don't think they should be allowed to. And it's more power to the creator economy because
#
if Amit Verma was on a Wall Street Journal, that Wall Street Journal could have stopped your column.
#
Yeah, no, a number of points. And by the way, the Ministry of Aayush once complained to Times of
#
India about a column I wrote where I really shat on the Ministry of Aayush and they demanded an
#
apology. And my literary TOI called me and she was quite amused and she said, what do you want to do?
#
And I said, I can double down. No way I'm ever apologizing. And of course I didn't and I wasn't
#
canceled. But there's a disturbing nuance here, which is that yes, Joe Rogan is too big to be
#
canceled, but he's too big. That's why, you know, if you're much smaller, if you're somebody starting
#
out, if you need to do 200 videos before you become good and you reach that level and early on,
#
you don't agree with whatever the consensus is, whether it's right wing or left wing or whatever,
#
and you're shut down, you know, for that reason, then, or you censor yourself and you just stop
#
for that reason because the environment is too noisy. That becomes a problem. I mean, I don't
#
even, you know, that 50-50 formulation you made, I don't agree with it. I think only three or four
#
percent of the people are strident and loud and go into this. You have a vocal minority, which is
#
really small and a silent majority, which either doesn't give a shit or they are like, you know,
#
let a thousand flowers blossom. But the silent minority is kind of an illustration of this is
#
Dave Chappelle, where, you know, there was such an outcry when his last special came out, but you go
#
to Rotten Tomatoes and you see the rating, you know, and there is no doubt it was last I checked
#
97.5 percent or whatever, adored by the vast masses of people. Now, a few random people will
#
do their thing and that's okay. The worry is that these manic silent, these manic vocal minorities
#
might sometimes, you know, have, yeah, you know, people will just say that, you know, why get into
#
this, you know. Yeah, especially, I mean, if you like, for instance, if Neil Young, for instance,
#
who's universally liked, I think, takes a stand, it almost makes you feel that Joe Rogan must be
#
doing something really stupid. You know, the interesting thing there is that two artists I
#
greatly admire to my great dismay took a stand last year, which I didn't agree with, which is Eric
#
Clapton and Van Morrison and I adore Van Morrison. You know, a lot of some of his music is like the
#
soundtrack to my growing up years and they came out as hardcore anti-maskers and anti-vaxxers and
#
all that. And it's so sort of, but that consolidated my case for separating the art from the artist.
#
I love their music, but now the guy is behaving like a, you know, whatever and they're wrong,
#
but it is what it is, right? So it's not as if all the artists are necessarily on one side on this.
#
I mean, a Neil Young versus Eric Clapton mud fight or something would kind of be fun. But,
#
but yeah, on the whole you want diverse voices to flourish, but then the worry there is the tyranny
#
of the social media algorithms because the fact of the matter, and that's a whole separate problem
#
we could talk for five hours about, is that you have these social media behemoths like your Facebook
#
and your Twitter and your Google, which have way too much power, which have way too much power.
#
So what you want to democratize also is that kind of access where artists aren't necessarily
#
dependent on them. That if they run afoul of the YouTube algorithm for whatever reason,
#
they're kind of cut out of it, right? Now, what I have built is that whatever audience,
#
like my thing comes on all podcast apps, I'm not dependent on algorithms for discovery.
#
The audience I have is the audience I have, and it spreads by word of mouth and is grown organically.
#
So I'm lucky enough to get to that stage where, you know, that is there. But if you're just starting
#
out, you know, and the algorithms are doing whatever the hell they're doing, then what do
#
you do on Facebook? For example, I just have a, it's like very personal. Twitter is where I
#
broadcast. Facebook is just kind of family and friends and all of that. But there every time,
#
you know, just as I post a link to my podcast on Twitter, I post them on Facebook and nobody
#
notices because there I'll go downgrades links. If you put a link, it will not show up on somebody's
#
timeline. So yeah, if you put a photo, it will, but only if you don't post a link with it. So
#
what many people will do is they'll post a photo and they'll say link in the first comment and
#
they'll put the link there. And I don't give a damn. I just, whatever I post on Twitter,
#
I posted there. I know there'll be like four likes and I don't, I don't kind of care about that,
#
but that shows you that, you know, that artists should not have to think about algorithms and
#
have to cater to that. And there'll be YouTube courses, which will teach you how to sort of,
#
you know, sort of weave your content and all the things that you do and the headline that you give
#
and the image that you use or that, you know, and the frequency with which you post. And I,
#
you know, and I'm probably a bit extreme in this kind of idealism, but I just want to do my,
#
whatever I do without thinking of any of these things that, you know, if I'm recording a
#
conversation, I want to record the conversation I most enjoy having and not think how to market
#
it and how will an algo push it and all that. But that's a bit of a... It's interesting that
#
you say that because one of the things that people told me when I started off writing at
#
Capital Mind was that Deepak, you have to focus on SEO. So being lazy as I was, I said, I have two
#
things to do. I have a limited amount of time. One, I can learn more about finance and write it,
#
or I can learn about SEO. I chose to learn about finance and write it. And of course,
#
that was interesting that I went... What happened to this SEO stuff was quite interesting. So in the
#
process of doing this, people had figured out Google's algorithms around text. They said,
#
you know what, this is what you should write. The headline should have these keywords and
#
something. Search for the keywords before you write the content. I'm like, I need to figure
#
out what I want to write about. And I want to write about that. And this may be an esoteric,
#
very boring topic, like how does RBI pump money into the economy, which is a great headline to
#
have because you read that and then you read the content and you're like, oh my God, this is really
#
boring. So how do I make it exciting? So I'm going to use my other ways to keep the audience
#
at least hooked up to a point where I can say you've read enough to answer a few questions
#
if you're asked about it at parties. But beyond this, I am not willing to do an SEO work that
#
says, you know what, put the word RBI 17 times so that when people search for RBI, Google says,
#
you're right. So I was doing this normally, but then somewhere along in I think 2010 or 2011,
#
Google changed its algorithm. It suddenly decided that people who are tricking its algorithm into
#
bringing their pages to the forefront are going to get penalized. And people suddenly lost a
#
very large amount of traffic. And I would get people in the finance area, which is a bunch of
#
people in the same area that I was complaining, saying, listen, we've lost all, I'm not getting
#
enough hits. I'm looking at my hits and I'm like, they're the same or they're growing. And it turns
#
out that because I was not using any of these SEO techniques, I saw nothing change in that algorithm.
#
And therefore I was not a slave root. Of course, I may, I will still be a slave root in some way,
#
but I was getting the compounding effect that because now when people start searching for the
#
same content, I didn't have as much competition. I was getting highlighted a lot more. I think this
#
is going to happen with the algos that you mentioned around YouTube and Facebook also.
#
Facebook, of course, there is an evil nature to it, which is that they tell you that, listen,
#
you are no longer going to be organic because you aren't paying us. So if you paid us, then maybe
#
we would show you some more, we'd show you to a bunch of more of your friends. And you're like,
#
dude, I built this community on Facebook. That means all these people follow me for me. And now
#
you're telling me I need to pay to get to the same people, which sounds a little obscene, but
#
that's fine. It's a platform by itself. You learn, you live to learn and so on. But
#
over time, I think like what you've done is built a community on so many platforms that if one
#
platform threw its weight around, you would not get impacted. Of course, they're eventually all
#
slaves to at least a few of these at some point. I think what I managed to do and what not
#
everyone can do and I kind of lucked into it. And I'm probably the kind of person who I was like,
#
I don't care about money. I don't care. I'll just do what I do. And whatever following that I have
#
has nothing to do with an algorithm. The discovery is not algorithm. The discovery
#
is always word of mouth or some friend said, Hey, this episode is great. And you listen to it and
#
it becomes a habit and all of that. And so therefore I'm freed of the algorithm. Now,
#
the point is, if I was a really savvy marketing person, if I understood all of this, could I get
#
more people to listen? Perhaps. But then the point is that part of my mental bandwidth would go
#
there. And I just want 100% of my mental bandwidth to go into this. You know, if I'm going to talk
#
to you and I have say 20 hours, I want to spend that 20 hours in prepping for talking to you and
#
then have the hopefully five hour plus conversation, which this can become. I don't want to spend 10
#
hours out of that thinking, how to do this algorithm, how to do that. I don't want to do
#
that. Or whatever shit. Yeah. Because I think then, you know, it's, that's an endless game
#
you are playing because any algorithm can be gamed. But as people figure out the way to game it,
#
the algorithm will change. And that's an endless race you can get into. And I'm like, no, man,
#
I'm like, I idealistically say a good product is the best marketing. Just do something that makes
#
people, you know, recommend what you're doing to other people that makes people, you know, make
#
you a habit and, and so enter the comfort zones. And, but, you know, it's easy for me to say that
#
having reached a stage where, but if you're starting out today, then it's so confusing for
#
a young creator. And my advice would still remain that just do what you love and do it often and
#
don't care too much about validation. And eventually shit works out. And a lot of work is good and
#
worth doing for its own sake. In fact, that is the most difficult thing you can ever teach somebody
#
is like, do it now. They will not come now. They will come later. And the problem is build it and
#
they will come almost says as soon as I finish building it, they will start coming. Whereas I'm
#
saying just keep building it and they will keep coming. Eventually, it's not it's a difficult
#
conversation to have because you're talking delayed gratification of someone's work. Because when I
#
work, I get a salary at the end of the month. It's instant gratification in that context, right? But
#
when I'm building a business, I'm going to struggle, struggle, struggle for three years. And
#
somebody told me this, you know, this is saying that for the first three years, don't ask me about
#
profit or what I get out of the business. After three years, ask only what I get out of the
#
business. That means your first three years are built in only building a flywheel that generates
#
revenue. After three years, you can optimize it and build whatever. So maybe it may take five
#
years in this case. But in a day when you're watching content that's only three days old,
#
five years sounds like what is wrong with this guy is like,
#
my credo, like, you know, when Shruti Rajgopalan, our friend asked me about, you know, she was
#
starting her podcast ideas of India back in the day, and she had long conversations with me about
#
what it should be like and all of that. And I gave her much of this advice. But one of the things I
#
said was that when I conceived of the scene and the unseen, I conceived of it as not just reaching
#
across space in terms of geography, people listen to me from everywhere, but reaching across time.
#
So if you listen to it in 2030, it is still valuable to you. So my advice to her was that
#
when you're thinking about the kind of content you want to do, don't think about what someone
#
listening to episode one is going to hear. Think about what somebody discovering you at episode
#
100 will binge on, right? And when you think about it like that, that changes everything,
#
right? And speaking of the long term, I think now it's, you know, a lot of your book, Moneywise,
#
Timeless Lessons on Building Wealth, which I enjoyed reading so much. And I worry if I'm too
#
old to benefit from the advice. So you have, you know, a section addressing just that and you say
#
I'm not. So, you know, and that takes a long term view as well. And, you know, let's take a quick
#
commercial break. And when we come back, I have so many questions to ask you about that.
#
about the craft and practice of clear writing. There are many exercises,
#
much interaction, a lovely and lively community at the end of it. The course costs rupees 10,000
#
plus GST or about $150 and registration is now open for my April 2022 cohort. The first webinar
#
is on Saturday, April 9th. So if you're interested, head on over to register
#
at IndiaUncut.com slash clear writing. That's IndiaUncut.com slash clear writing. Being a good
#
writer doesn't require God given talent, just the willingness to work hard and a clear idea of what
#
you need to do to refine your skills. I can help you. Welcome back Amit to the seen and unseen.
#
No, no, no, Deepak, you're getting confused. Welcome back to the Capital Mind podcast.
#
So yeah, so this is our grand crossover. And before the break, we spoke about middle age and
#
the creator economy, both subjects I know a little bit about having participated in both of them.
#
And as a view, in fact, but now we're going to talk about a subject in which you are absolutely
#
the expert and and I'm fascinated by and I'm trying to learn about it. And that, of course,
#
is your brilliant book Moneywise, which, you know, tells people how to approach their money
#
and just demystifies that completely and breaks it down. Before we get to the book itself,
#
tell me about where the idea of the book comes from. Like, when did you think of the book? And
#
when you thought of the book, like, were there any models that you looked at any previous books
#
which were in the same territory? You know, how did that how did the book evolve?
#
So this is interesting, because the book itself has been thought processed in the last maybe five
#
to six years. In fact, the first time I started talking about a book of this sort was to a
#
publisher in 2014, roughly. That's the first time I had a conversation. And then I wasn't very sure
#
that I could do it at the time. And I didn't feel that I had enough to write about. And I wanted to
#
write about a slightly different topic at the time. And it's chapter in this book that I think
#
deserves to be a book by itself. It's called succored. So the idea being, you know, all the
#
scams that have happened and all that stuff. But there wasn't that much of meeting of minds there.
#
And I didn't think I had enough, enough material. But you can always trust scams. So we've had about
#
five or six since then, we then I said, Okay, I maybe I should go on this on my own to try and
#
at least write the book and but what actually happened was interesting. In the pandemic, I was
#
at home, there was enough time because at your lockdown, so it's all you can do is you have a
#
lot of thoughts, you can put this together. Chiki at juggernaut, you know, we there was a common
#
connection, she knew her and then, you know, which he introduced us and then we start talking and
#
she looked at a piece couple of pieces of the writing. And she said, Okay, this is a great idea
#
to write a book on the succored topic. But just started to get this together. And I said, Okay,
#
let me get the material together. I started putting it together. She then said the I mean,
#
this was just about before the pandemic is when all our conversation started to happen. And then
#
she said, Deepak, there's a problem in the pandemic, you're, you're, you're seeing people
#
want to invest, but they don't have the ability to why don't you write something that helps the
#
person who doesn't really know about finance, and that's more challenging for me, because if you
#
don't know anything about finance, I can't use half the jargon I use. So how do I make it sound
#
interesting, and yet it should have enough information and enough depth for someone to
#
be able to get out of this and say, Listen, I've got something that's good, good enough for me to
#
at least start. It took a while because it I did the first round of writing, I had a bunch of
#
articles of my own from the past, which was we have about 5000 articles on capital mind. So some
#
of them are timeless, in the sense of having, you know, talked about a lot of this from the very
#
basics. But more importantly, I had to write this now in a way that was kind of structured
#
to read as a book. So it was different chapters. So I started off with something and then I had
#
to start off with a very basics, which was, which was more of the element of so you come to start
#
thinking about stock markets, if I invest, I put my money in, and I instantly make some money that
#
comes out of it. And sometimes I can put 100,000 rupees in and get 125,000 rupees. So I make 25.
#
So there's a thought process that goes in. The problem is, we shouldn't think of finance that
#
way. So I had a different thought process around it, a lot of myths around these things, I had to
#
break them down first saying, listen, you can start investing whenever you want, you just have to be
#
disciplined at the concept, you need to understand that there are different types of instruments,
#
different types of vehicles and different types of approaches you can take to the market. But
#
before you get there, to stock market investing and all that, you have to fix some hygiene elements
#
first. Once you start to build that out into the in your flesh it out properly. In fact,
#
once I did this, Devang Shu, we both know, he actually took a look and then removed all the
#
stuff that wasn't in the book. So effectively, it's like, you know, how do you make an elephant
#
sculpture, you find a piece of rock and remove the stuff that isn't the elephant. So Didi actually
#
helped kind of break it all down. But in the process, I found that I had repeated the same joke at
#
least two times in the book, because I'd written the two parts at different points, I'd forgotten
#
I'd written that, you know, so all the stuff I kind of went away. But also, you know, then later,
#
of course, they cleaned up, they brought in an editor who would help with the documents cleaning
#
up and so on. And then, you know, we released it in November, I think they released it in November
#
of last year. It took a while to get this into shape. However, I had to spend more time editing
#
it. And I don't edit my articles that much. When I write them, they stay written for the most part,
#
even with the spelling mistakes, I don't really go back and read unless there's a factual error
#
somewhere or something like that. So it took me a lot of effort, I hate listening to my own voice,
#
so I don't listen to my own podcasts. And I hate reading my own articles, because somehow I find it
#
very difficult for me to read at the same time, just when I've written it, I read it about, you
#
know, one year later, then I'm fine. I say, oh, okay, this is a great, this is an interesting
#
thought process that I had at that time, and so on. So this part, this time was different,
#
you had to write and read it again, as if you're reading it afresh. And you've actually been an
#
inspiration in that because you wrote a book like way back, right? So I saw that and I said, okay,
#
I don't think I'm cut out for fiction. Maybe I am, but it's not what I am doing right now. So
#
I'm more keen to write books on finance. I also think you have many books left in you,
#
but looking at just that, so just your poker experience, and I know the discipline and,
#
you know, so a large part of this also came in from the fact that we know a lot of people who've
#
written books. It isn't very different from how they write in some of the, you know, email groups
#
that we're on or something like that. But the point is to put a lot of what's in your head
#
into a structured way into the writing. And we know Narayan, for instance, who I think,
#
if you just collect all the stuff he's sent over the years on WhatsApp and a bunch of things,
#
could be a fantastic book called Narayan is Typing, which is what happens when he's typing
#
on WhatsApp. I mean, so writing a book, I think is not so much about the writing. It's just about
#
the rigor and the discipline. So my inspiration has been, of course, you know, number of writers,
#
and it isn't the charm of having written a book to the name that it's a nice feeling. And it's
#
not the economics, because the economics never works out for a book writer, in the sense that
#
there are very few people who have become rich writing books, very, very few. And if you start
#
off saying, I'll become rich using books, you should write a cookbook and try to compete with
#
Arla Dalal, because that's pretty much as transactional as the value gets from a book,
#
or write something religious that becomes really famous. But don't write like these,
#
I mean, writing about investing is great. But with the objective of making money is a very bad idea,
#
I think. You know, and two recent web series got this spectacularly wrong, where in Gehraiya,
#
you have this one character telling his girlfriend that just wait till my book is published,
#
everything will change. And in this series called bestseller, this woman goes to this guy and says,
#
you have got an advance of 10 million rupees. And I am like, Thora thora basic research kar lete,
#
thora asa. And it would have been nice. But anyway, and Naren Shinoi, you're referring to,
#
of course, I read, you know, my 250th episode with him. And we had even started a Facebook group
#
called we want Naren Shinoi to write a book. And and yeah, and the last hour of that four hour
#
episode I did with him was just him telling stories, one after the other. And it was it was
#
quite beautiful. So, you know, in another part of your biography involves you for a very brief time
#
teaching, where you would teach Java, I think, for 800 rupees a week or something like that, right.
#
And here you are sort of writing and rewriting your book. Now, both of these are really good
#
ways also of sharpening your thinking and learning. Like when you have to teach something,
#
you have to answer the really the basic questions, and you've got to know the subject really well.
#
Similarly, when you're writing about something, you know, you can write a blog post or an article
#
and put it out there. But if you're writing a book, and you're editing it, you got to,
#
you know, make sure everything is in its place. And that also forces you to kind of examine
#
your thoughts and all of that. So well, as you know, the subject, do you feel that your
#
thinking was, you know, clarified further by the act of teaching it or writing about it,
#
which are similarly deepening? Oh, yeah, I mean, anything, I think I keep having this conversation
#
even with people with all my colleagues at Capital Mind itself is when you have an idea,
#
write about it. Because if you start writing about it, you start getting conceptual clarity.
#
And if you don't get the conceptual quality, there's something wrong enough wrong into the
#
idea because it may be as simple as saying, I think there's an opportunity here because
#
and then that because the way you answer that because shows me how much conviction you have
#
in the idea and will show you how much conviction you had in the idea. But also about whether you
#
know all the specific aspects around it. So for one, for instance, our problem in this field is
#
that there are way too many way too many things that can happen. Like today, for instance,
#
who would have guessed that today was the day where Russia walks into Ukraine?
#
You're the stock market is down x percent and all that stuff worldwide.
#
Does this really matter to you as a long term investor? And whether it's a temporary blip or
#
a permanent one is not something we can answer and you know, or do anything about when you're
#
trying to write about something like this. If you've never experienced this before,
#
you will not be able to write about it. If you experience this only once,
#
you'll take the wrong conclusions out of it. If you experience it one too many times,
#
you'll end up being very cynical about the whole world and you'll probably end up writing the wrong
#
thing. So to get perspective, you have to basically start thinking from the in the shoes of a person
#
who's never seen this before, who's seen this once before and who's seen this all the many different
#
times and try to address each of their fears and concerns in a different way. This can only come
#
from learning. So for instance, when I first started to write about stuff in,
#
I would analyze history. And in history, the problem in history is you get very dry
#
accounts, stock prices, for instance, they don't tell you anything, something has dropped to 20%.
#
But if you read a book about that day, it will tell you the emotions of the people that were
#
involved on what happened during that day. So there was a day in October 1987 when the US
#
stock market fell 22%, which is a ridiculously high amount for the stock to fall. Imagine one
#
fifth of your wealth is gone in like a five-hour trading day. How would you feel? Now, this is like
#
Eddie Izzard says, pole pot killed 1.5 million people. And we can't get our heads around that
#
number. And we're like, how do you do it? I mean, your schedule must look like wake up in the morning,
#
have breakfast, death, death, death. So he said this and he was right, because we can't get our
#
heads around these kinds of numbers in any meaningful way. 22% in a day when your average
#
movement is 0.5 and 1% and one and a half percent a day. So you have no idea what it feels like.
#
So you have to go through those accounts. And then you have to write about it in a format that
#
doesn't make you look like you're giving a sermon because most likely you're wrong if you're trying
#
to give a sermon and therefore you shouldn't go around saying that this is exactly the right way
#
to go. Secondly, you should also appear or at least have the knowledge enough to be able to
#
tell people exactly what you're thinking about. So for instance, if the markets were to go down
#
and you're writing a book about what you should do, my always my answer to this is don't react
#
in panic, don't buy in a panic, don't sell in a panic because both have downsides. Now, why is
#
buying in a panic bad? Because the market has fallen X percent, you must be feeling like it's
#
better. But there are, you know, a stock that falls 90% is just a stock that first falls 80%.
#
You buy it and then it falls by half. So you have no idea where the, you know, how deep the
#
knife will gash in. So don't try to catch a falling knife. This is unfortunately an
#
element of experience, but it's also an element of how you can bring this imagery across to the
#
reader without boring the daylights out of her. So, you know, that I think is where you have to
#
write to get clarity for yourself. Most of the time, I erase maybe 20 to 25% of what I write
#
saying, this is not making sense. But without that erasing, I would not be able to write,
#
which means I've gone down a rabbit hole and I'm saying, no, no, this whole thing is wrong.
#
I want to come back a little bit, back it up and then start writing again. That is clarity. So
#
unless you get that conceptual clarity, you know, but there's some topics where you have
#
conceptual clarity because you just know, and then there you can, you can be more, you know,
#
it, the amount it helps you is relatively lesser compared to the amount it might have helped you
#
in a subject where you have a lot of experience, but you're trying to string these thoughts
#
together. The process of writing sometimes tells you more about what you don't know than about
#
what you know. And hopefully, and I've seen this in a few authors very prominently, but hopefully
#
hopefully it builds humility inside of you that says, listen, I'm giving all this Gyan, but I
#
don't think I'm the expert at this. And perhaps it's just me, but I think the one thing that,
#
you know, in the finance world, the only thing that really works in the long term is that if
#
you're humble enough to accept that you don't know what you don't know, or that you know that
#
you don't know a lot of stuff. Yeah, I mean, one of my favorite books of the last decade is
#
Super Forecasting by Philip Tetlock, where he kind of talks a lot about this. And what you sort of
#
realize there is that most people who pretend to be most people who claim to be experts or who are
#
known as experts, they are known that way because they'll be public intellectuals, they'll come on
#
television, they'll come wherever, and they are incentivized to exude certainty. And they will
#
be wrong a lot of the time. And it doesn't matter once you're, you know, classified as an expert,
#
that's who you are. But they're incentivized to exude certainty, and they often get a lot wrong.
#
And what Tetlock found is that most of the time you pit experts against a kind of forecasters,
#
he calls super forecasters, who get much more right. The experts do really badly,
#
sometimes even worse than average, because they're holding on to their
#
certainties. And the classic quality of these so-called super forecasters is that humility,
#
that they are open. And they're not hedgehogs, but foxes in Isaiah Berlin's, you know, terminology,
#
where they're not wedded to one theme or one big idea or whatever. They are constantly updating
#
their priors, thinking probabilistically, all of that. You know, one thing that strikes me,
#
and when I think about it, the reason that I just don't think about finances, I just don't,
#
right, I've always avoided it, like a reflex action, you know, do something else immediately,
#
when the thought comes to mind, is that human beings are hardwired to not understand big
#
numbers. We evolved in small tribes, where, you know, everything is small numbers, right?
#
I think there's something called Dunbar's law, which means that, which basically says that
#
you can't remember the names of more than 150 people, in the sense that those are the people
#
you relate to as actual people, because that's the kind of tribe size when we evolved. And if
#
you go beyond that, it becomes an abstraction. So I can, you know, if there are 10 oranges,
#
I can comprehend those 10 oranges, but if you tell me 1.5 billion or 1.2 trillion,
#
I don't actually know the difference between them. I mean, of course, I do in terms of zeros,
#
and I've been educated, but there's no way to get my mind around it. So this is one hardwiring,
#
that wherever big numbers come in, I, you know, we rebel against it. And the other way is that
#
we are also perhaps hardwired to ignore mortality, because how do we live if we think about mortality,
#
or if we accept the fact that life is meaningless and we're going to die, right? So, and we get
#
past it in various different ways, various false constellations, like religion and so on. But this
#
also means that we live with this sort of effective illusion of immortality, where we assume that if
#
things are going well today, they will go well tomorrow, we don't need to plan, it's okay.
#
And of course, we know that is wrong. You know, like one thing that struck a chord with me was,
#
at the start of your book, you write about how when your father died, the papers were all over
#
the place and all that. Now, my father died last year, and he left just no account of where anything
#
was. So we could figure out one bank account of his, where the total money was less than a year
#
of pension. So clearly, that's not the only thing, we can't figure out anything else, you know,
#
and it's just a complete mess. And in his own lifetime, obviously, I can imagine why he would
#
not think about it. And you believe that, you know, all of that. So question, therefore,
#
from two angles. One is that, in your own life, how did you come to sort of take an interest in
#
this and be able to understand big numbers, because I don't believe that this truly comes
#
naturally to anything you have to anyone, you kind of have to train yourself to go against your
#
wiring and sort of get to a way of understanding big numbers. And the second one is this bizarre,
#
and we also, I guess, hardwired to be delusional in different ways, this bizarre tendency of people
#
who do not understand the stock market in any way whatsoever, thinking that they know the formula
#
and putting their money like the reason I haven't invested so far, though I will invest with you
#
now. But the reason I haven't invested so far is that I realized that I don't really understand
#
the markets in the kind of way that would justify my putting my money on it. It doesn't make sense.
#
And yet so many people get overconfident. And, you know, you have a chapter in your book called
#
suckered, like you said, and most people are self suckered. So two questions, one, the personal
#
element into, you know, how and yeah, so let me get to this, the first part first, how do I handle
#
high? So actually, it's a problem because the first time you deal with large numbers, you kind
#
of think of this as oh my god, this number is too big or this large and the issue with that is that
#
quickly passes because eventually it's just a number at some level. But you see, there are some
#
numbers which are hardwired in our own head. For instance, the time I used to buy a stock,
#
it would always be 10,000 rupees of that stock. I would never buy more than 10,000 rupees. And now
#
that was the same 15 years ago. And if you ask me to buy something today, my instant reflex is to
#
buy 10,000 rupees worth of that stock. Of course, now I don't trade anymore. But this is nonsense
#
because it should always be a percentage of your net worth and you have to start thinking of those
#
larger numbers in the first place. The problem that I was having was that at some point, it's
#
just mathematics because it just applies to larger numbers. But I was trying to deal with
#
the behavioral aspect of saying, if I have 25 lakh rupees in something, and if I lose only 2%,
#
that's 50,000 rupees. And then I was equating that 50,000 rupees into what I could buy for me.
#
50,000 rupees is five cell phones that nowadays come by or two 50-inch TVs. I don't know.
#
It could be any of these arguments. And then you were trying to think of things in absolutes,
#
which is a horrible way to think because that means if I did the same thing with a 5 lakh
#
rupee portfolio, I would be comfortable losing one cell phone worth, but not five cell phone
#
worths. Is that how I'm thinking about this? But I mean, at some point in time, I realized
#
that I have to make that switch between small and big. It took some time. But what helped
#
really was the study of macroeconomics. When you start studying macroeconomics and RBI and inflation
#
and all that stuff, all these numbers are so big, you can't imagine them. I mean, I can imagine,
#
for instance, owning at some level up to say 20 crore rupees. Beyond 20 crores, I don't even
#
know what... I mean, I know, of course, I will not refuse that kind of money if it comes to me.
#
But beyond that, having that much more of personal wealth is possibly going to be just an extra.
#
It's useful because money is a motivator, it drives you and all that stuff. But I know inherently
#
that beyond that number, it's not going to go to meaningfully change my life from what it will
#
up till that first 20 crores. When you get to 100, you're like, okay, now you're talking 5,000
#
crores suddenly, let's say. And I'm like, okay, I have no idea what to do with 5,000 crores. I don't
#
even know where to begin to say what, as in those numbers start sounding big. 5,000 crores is
#
probably the lowest number you will start looking at when you're looking at macroeconomics. So,
#
foreign investors stole $2 billion today or $1 billion today. That's $1 billion is $7,500 crores.
#
It's a big number. It's larger than what you can have. So you stop thinking absolutes because
#
you're saying $1 billion is less than their worst day, which is $5 billion, let us say.
#
So it's not that bad a deal, but it's still bad. When RBI talks about certain numbers like money
#
supply, it's 800,000 crores. This is such a big number that I don't even know what to say in terms
#
of absolutes. How many cars can it buy? It will be like X number and all. But in terms of India's
#
total economy, it is roughly 4% of all the value produced in India in the year, which technically
#
means that it's not a very big number for India as a whole. So having that much money is a big
#
number compared to its own past, but it's not a massive number compared to what India's entire
#
GDP is what they call it. That's where I think I got into this concept of saying numbers are just
#
numbers. But you have to look at numbers with certain comparisons. So what I call a big number
#
for India is small for the US. India in total trades about 60,000 crores or 70,000 crores per
#
day, which is about $10 billion. That is equivalent to what one stock in the US trades per day.
#
So relative terms, we are tiny. Even though this number of 70,000 crores is so large that I can't
#
even imagine what that 70,000 crores would look like. I just know that from a comparative
#
perspective, it's not a very huge number compared to the US. So there's a reason you have to start
#
thinking this way is that when especially what we're doing right now is managing money. So we
#
manage roughly between 650 and 700 crores. This number can scare the daylights out of you if you
#
start thinking absolutes. But as you start getting relatives in place, my job is primarily to ensure
#
that this money can grow over a period of time. So whether I was growing six crores or 650 crores
#
should not be any different, except my motivations to do both are slightly different. In six crores,
#
you can buy a lot of really tiny companies. In 670, you can't because the tiny companies will be
#
volatile and you won't be able to exit your portfolio position quite as easily and so on.
#
So apart from that, the size number itself shouldn't scare the daylights out of you. Perhaps
#
this is a function of experience, but it's also a function of exposure. I was just lucky enough to
#
be exposed to these numbers within my job though. I set up the company and did this whole thing
#
in terms of setting up and getting things involved. But if it scares you, you will fall victim to
#
the fear of large numbers. And in your own case, so for instance, if you were to say, if I were to
#
tell you, Amit, you're going to need at least 10 crores to be able to build a lifestyle for yourself
#
to retirement. That fear, 10 crores, what is Deepak talking about, is a little bit of storage.
#
If you're 30 years old, to build a 10 crore portfolio will just take 20 years of investing
#
maybe 25,000 rupees a month. And then you're like, why didn't you say that? Because I'm thinking 10
#
crores is impossible, but 25,000 rupees a month is possible. It's just the way you frame the argument.
#
So instead of telling a person that all your relatives will die before you, you tell him
#
that he will outlive all his relatives. It's just a different way to state the same thing,
#
just more acceptable. So the law of large numbers is just that make it sound not as large as it was.
#
That's a remarkable analogy, all your relatives will die before you. And I completely get where
#
you're coming from, because in poker also, you know, any good player, you could be playing
#
low stakes like 50,000, where you're sitting with maybe 20k on the table, or you could be playing
#
500,000 where you're sitting with 2 lakhs on the table. But the point is, once you're sitting there,
#
you're just thinking of the odds, you're thinking of big blinds, you're thinking of the odds in a
#
particular hand, you're thinking of equities, you're not thinking of them as absolute numbers,
#
because that makes absolutely no sense. But one area where I wish that, where I think more poker
#
players should think of absolute numbers is, you know, we'd have these long sessions play 15, 16
#
hours, and, you know, winnings would go up to, you know, a couple of lakhs up or down in a session.
#
And sometimes we'd have to go for breakfast, and we'd all just stoop to the Marriott. And the logic
#
was, and it became very regular after a point, and the logic was that what is breakfast at the
#
Marriott? It's like a couple of big blinds. It's like you posted a straddle and somebody raised and
#
you folded, you know. So when you look at it from that perspective, everything seemed trivial. And
#
one mistake I see many poker players still making, I mean, I retired in 2015, but one mistake I see
#
many people making is living that kind of lifestyle where you are not giving the, taking the absolute
#
seriously enough, right? And you're taking that poker mindset to everything else, which doesn't
#
always work. And there's one similarity, in fact, between writing well and investing well. And I
#
want to make it here. Like when I speak to my writing students, you know, and I'll tell them
#
about, like, one of the points that I drive home is that what is a piece of writing? A piece of
#
writing is a series of choices that you have made. You know, how long are your sentences? What words
#
are you using? Where are the para breaks? What is the rhythm? Every piece of writing is a series of
#
choices you have made. Those choices individually and together affect the reader in a certain way.
#
And you want to affect the reader. Now, the point is, you could say that I don't care. I'll just
#
let it flow. I won't be too mindful. I don't want to work too hard. But that doesn't change the fact
#
that those choices are there. You know, just as when I talk about making sure that a piece sounds
#
well, that there is a coherent rhythm to it, you could choose to ignore that and say, I don't want
#
to think about that. But then the point is, there is still a rhythm that is there by default,
#
except it's a random one that you haven't put. Similarly, you might be a person who says that I
#
don't invest. But the point is that if you have money, you have already invested. If it is in
#
your savings account, you've invested in that, right? And you feel like you've done nothing and
#
the money's coming to your bank. But the point is, it is a choice that you have made by default.
#
In a sense, not doing something is doing something and doing something bad in this case.
#
And therefore, just as a writer owes it to herself to write the most effective piece she can without
#
compromising on her content. Similarly, all of us with money owe it to ourselves to sort of try and
#
figure out the basics of investing because it is after all our money. You know, if you're just
#
putting it in a savings account or you're not investing it optimally, what are you doing?
#
You're burning your money. That's effectively what you're doing. You're just completely burning it.
#
Is this a difficult point to get across to people? Because I know, like on the one hand,
#
there is that thing of don't invest if you don't know the markets well enough because
#
people get suckered by themselves. On the other hand, there is also this drive that my money is
#
basically bleeding away. I need to do something about it. And then that comes with the added
#
question of where is my bandwidth? I'm earning a living doing whatever I'm doing. Where is my
#
additional bandwidth to then think about this? So, you know, when you have conversations with
#
people and indeed during your own journey, maybe speaking to your own family, your own sort of
#
beginnings as an investor, you know, just take me through your thoughts on this.
#
Oh, yeah, this is so this is so many facets to it. I'll give you one thing that I told someone
#
who was doing running a startup in this space about 10 years ago. They were running a startup
#
around investing in mutual funds. And my statement to them was when you get a 10 to 20% increment
#
every year from your job, and that is a time when there was 9% inflation. So 10 to 20% was a given.
#
When you have that much coming in from your job itself, why does investing matter to this person?
#
Because if I am making 10% more by just working harder at my job or not even working,
#
just having a pulse, then should investing matter at all? Because making the market will give you 10
#
to 12% or 15% a year. They will not excite you at the absolute number will not excite you unless
#
your corpus is really big. You're starting out investing, your chances are you look at a 50,000
#
number that's been invested as okay, give me 10%. What's the number? It's 55,000 rupees,
#
that's just 5000 rupees more. And instead, I have now earned maybe 20,000 rupees more a month from
#
my primary job. Those absolute numbers, you know, that's where the problem comes. And a lot of people
#
don't invest because they don't see this, they think of it as a useless waste of time. And the
#
aspect that you have to worry about here is that investing is purely behavioural. That means a lot
#
of money is made on behaviour and less is made on the skill of identifying great investments,
#
which means like you said, it's our job to find the greatest investment or find a way to,
#
but I think our job is actually not to find the best investment. Our job is primarily to find a
#
way that ensures that the stuff that I should plan for is being planned for. So when I say that,
#
I mean, for instance, I tell everybody you need a six month emergency fund, you need a life
#
insurance if you have dependents. So to give you an example, if you don't have any dependents,
#
nobody depends on you for income, you don't need life insurance. Anytime you have any amount of
#
money you're paying for life insurance is a waste of money. But if you do have dependents, at least
#
have insurance for the time that they're dependent on you. So if my children are, let's say, my
#
youngest is 10 years old. So I probably need another eight to 10 years of insurance to ensure
#
that if something happens to me today, that he can be taken care of. So there is that that one has
#
to kind of, you know, so you say that a spouse has to be taken care of, or anybody else that has is
#
dependent on you. That is when you need life insurance. But when you do need it, take care
#
of it first. So you do the hygiene part, six months of an emergency buffer, life insurance,
#
health insurance, that we owe it to ourselves. The next thing we do owe it to ourselves, there'll
#
be a some point in our life, and maybe the creator economy ensures there will never be that point in
#
our lives, where we will stop working and stop making money. This point of stop working and stop
#
making money may be voluntary saying I don't want to work anymore for money. I'm going to do
#
charity based work. My savings should care take care of my expenses. This is called retirement.
#
And whether it happens in your 60 or it happens in your 35 is left to how much corpus you have,
#
how much you spend per month. To understand how much money you're going to need is our job. So
#
we're going to need to know that in order to if people got this in place, then whether they put
#
their money into an FD, or whether they put it into the most complicated, complicated, you know,
#
complex product, structured product that invest half in India, half in the US. It is not relevant,
#
because you know exactly where you need to be. And you've chosen a path to get there.
#
You could tell me Deepak, listen, I don't get the stock market business, okay, my FDs give me 5% a
#
year. After tax, I make 3.5%. How much time is it going to how much money do am I going to need to
#
put per month to get to my investing goal, which is, let's say 15 years from now, which is a
#
retirement corpus of X crores. And in I can tell you this that I might tell you, let's take the
#
risky road and you can put 75,000 rupees a month, take the non risky road, and you can put 1,25,000
#
rupees a month, both of which will get you there. You can look at me and say, Deepak, I don't want
#
the risky road. I'll find a way to make that extra 50,000 rupees a month to be able to pay for the
#
non risky road. Fine, it's great. It doesn't need to be optimal. It doesn't need to be that you get
#
the most maximum optimal return possible. More important is the fact that you're comfortable
#
with whatever risk and elements are given. Remember in the market, the problem is that when
#
you make 10 rupees, if I told you that you are as happy as having eaten one lollipop,
#
the losing of 10 rupees is the feeling of having dropped two lollipops before you could eat them.
#
So the amount of unhappiness you face when you lose money is far more than the amount of,
#
because inherently when markets go up, we think it's our right. That we're entitled to this
#
5%, 10% gain. We normalize it. Yes. It's like, you know what, I'm smart. I did engineering in
#
engineering in X college and therefore I deserve this money. But when it goes down, we're like,
#
shit, I deserve more, but I got far lesser. So I'm actually going to be more miserable than I am.
#
And it went up. So this misery is a cause of concern because every piece of misery you add
#
to your life is just one more heart attack waiting to happen 25, 30 years down the line.
#
So you want to optimize for lack of misery, not for maximum returns. This is an aspect that not
#
many people understand in the beginning. And some people will never understand. So they will, for
#
instance, they will go into the stock market and say, we want the maximum returns. They will lose
#
money. They will get out and say, I will never invest in stocks again. And then buy real estate.
#
And it doesn't matter that the real estate gives them less returns than a fixed deposit. They will
#
just say, I can't deal with the stock market, boss. It was never my thing. And I'm happy doing
#
whatever I'm doing. Rather than going down the route of saying, listen, I just was miserable
#
taking this kind of risk in the market. I'm just going to put lesser money into the stock market,
#
more money into something that is fixed income. And therefore my combined misery on the both,
#
if I look at them together, is a lot more easy for me to handle. And I wish I could answer that
#
other and answer the other part of the first question that you asked, which is why do so many
#
people feel that they can make out like bandits in the stock market? I think it's the same reason
#
why everybody feels they can win against a casino. And though the stock market is not a casino,
#
it's not a zero sum game. And I think I mentioned this on your, on our earlier podcast, but I'll
#
repeat that. So the reason the stock market is not a zero sum game is if there's a stock that makes
#
10 rupees of profits and you buy it at 100, you're paying 10 times earnings. You sell it to me
#
at 150. You've made some money. The company has now made 15 rupees of profits. I'm also paying 10
#
times earnings. You also paid 10 times earnings when you started. Now you've made 150. Your 100
#
has become 150. You made 50 rupees. I have bought it at 150. It grows its earnings to 200. I sell
#
it to somebody else at 200. Who has lost? Nobody has. The stock market is not a zero sum game.
#
Therefore it's better than gambling or better than casino, which is another feeling
#
why people feel that they can go in and say, listen, if I bought the right companies,
#
I would make money. Now add this to the casino-ish concept of the markets trades every day.
#
You get a price every day. You get a report card every day. When you get a report card every day,
#
some days you've won and some days you've lost. The guys who win every day show off on Twitter
#
saying, I won. The guys who lose talk about politics and other stuff. So you get a bunch of
#
different sorts of people, but you're getting the information of people winning,
#
which is exactly the way the casinos highlight. They want to highlight the winners all the time
#
and the losers are like, huh. The same behavior that triggers those dopamine effects
#
affects a person who is walking into the market for the first time. So they feel that they can,
#
and in all honesty, anybody can become rich in the stock market. It's like that
#
ratatouille statement of anyone can cook. It does not take a special kind of skill
#
that can be learned or a special kind of inheritance that can be genetically modified
#
in order to make great money from the stock market. A lot of stock market is just behavior.
#
It's about greed and fear. It's about panic and sustenance. And it's more important about
#
the analogy of writing that you just said. The statement that you made in the beginning was that
#
you have to instill in yourself a sense of rigor and discipline. 90% of the returns you'll make
#
will come from that rigor and discipline. It's only 10% will come from your brilliance in
#
discovering which new stock was fancy. I'll give you an example of why. You say you bought a stock
#
at 100 rupees and it went to 200. And you said, dude, that's 100% return. I'm going to take it out.
#
In all your life, you're going to invest in maybe a thousand or two thousand stocks.
#
Only about 10 or 20 will give you phenomenal returns. I'm talking really phenomenal,
#
like a hundred X returns. If you get out of those stocks, when they give you a one X or a two X
#
return, you're effectively losing the possibility that they can give you a hundred X or two hundred
#
X return. And over time, those losers which you were anyway going to invest in and lose money in,
#
they're going to keep losing you money, but you've stopped yourself from winning the big wins.
#
The whole concept was behavioral because you thought I'll take the profits when they're there.
#
That behavior is what made you lose this money. In fact, this is where it slightly differs from
#
poker because in poker, there's literally an upper limit to what you can win in a pot. There's an
#
upper limit for the pot. There isn't such an upper limit for the stock market. In a sense,
#
you can stay invested for a really long time without having to make a decision to get out.
#
So this is where that discipline and rigor comes into play. And I think the same discipline and
#
rigor comes in poker because you need to know when you're out. You can't keep buying pots and
#
losing and saying that, dude, my next pot will be the victory. That's a short way of losing
#
everything you have. It's the same way in stock markets. You have to know when to stop your losses
#
and you have to know when to keep staying with your gains. And most of the time, this is a fight
#
with your own behavior. That's why the stock market investors that make the most amount of money are
#
usually dead because they didn't act on the various panics and manias that happened in the middle.
#
And suddenly their kin discovered that, oh, you know what, my father, and somebody came on TV and
#
said this, my father bought a bunch of MRF shares. I think I have like 200 of them. What can I do
#
with them? Now MRF, at the time his father bought it, was about maybe 500 rupees per share. So 200
#
rupees adds up to a lakh. So this guy is thinking maybe it's worth two lakhs now. MRF was at 68,000
#
rupees per share when he made this statement. So he was actually worth nearly one and a half crores.
#
So he had no idea he could have made that much. And I'm telling you, if he knew he had that many
#
shares, he would have sold it the minute that one lakh had become two lakhs. It was the sleeping that
#
earned him the money, but he did it involuntarily. Very few of us are able to do it voluntarily.
#
And I hope I'm one of them, though I have proved myself wrong many times that I'm not one of them
#
in many ways. But I would say this, because anyone can make money in the stock markets,
#
everyone wants to get in on the pie when the markets are going up. And of these people who
#
get in, 80% of them lose their cool when the markets correct very naturally in a correction.
#
That is brought about by factors way beyond their control, like Putin is having a bad day
#
because he woke up on the wrong side of the bed, and therefore you've lost 10% of your money
#
just in one day. This is not acceptable to a lot of people, and they walk away saying this is just a
#
scam. But it involves discipline. How do you kind of tell them that? So therefore,
#
there will always be a bunch of new, well, I shouldn't call them bakras, but unfortunately,
#
that's the only term that kind of fits that come in. Some people stay and become sage, old wolves,
#
if you may. The other just go and find less useful pastures to venture into than compared to the
#
stock market. That's how unfortunately the market is. Yeah, and there's a term for this in poker
#
also, where typically what you should do is that if you're losing, cut your losses at some point.
#
And if you're winning, if you feel you have an edge in the game, go with it, don't cash out.
#
And the phrase is that people who, for example, somebody sat down with 50k, he takes it to 80k,
#
and he gets up. But if he loses a 50, he'll put in another 50, another 50, another 50, lose maybe
#
three lakhs at the end of the day. And the phrase is, eats like a bird and shits like an elephant.
#
So if you keep eating like a bird and shitting like an elephant, it's not good for you.
#
And that point about loss aversion is also interesting, and I've seen that in poker also,
#
where losing a lakh on a given day will hurt way more than winning a couple. Though the interesting
#
thing is that a lot of experiments in behavioral psychology are now, they're found are not
#
replicable. So a lot of these concepts are actually suspect. I think loss aversion is one of them,
#
but it seems to make intuitive sense to us. At least it certainly goes with, you know, your typical
#
Indian conservative sort of approach to things. Let's kind of, you know, in your starting chapter,
#
where you talk about start in the beginning, you share a number of lessons. And I want to go
#
through these lessons, because I think that they are foundational to, you know, how one approaches
#
money. And you've already actually, in a sense, mentioned a couple of them. But the first one
#
is something deeply unintuitive, where you say, let the money compound, right? And our minds don't
#
really, you know, understand compound interest, you have to force yourself to understand what the
#
hell it is, do the numbers again and again, and then you begin to figure out. And the interesting
#
thing is, you spoke about when your dad passed away 25 years ago, all his papers were in a mess,
#
and there was really nothing and his investments were crap, and everything went to hell. But there
#
was one aspect of it, which turned out to be incredibly profitable. And that was because of
#
the compounding effect over the years. So tell me a little bit about sort of this lesson and, you
#
know, how you'd like to speak about compound interest. Oh, this is actually, I mean, it was
#
fascinating to me because I was doing the numbers. So when my father passed away, there was a bunch
#
of stocks that he had invested in that he had kept as a pledge to the bank for a loan that he had to
#
take to top up the housing loan that he had taken, because the house wasn't delivered on time.
#
So there was a bunch of stocks which he hadn't touched because, so now the stocks have already
#
gone up like 4x from when he had bought them. And I was surprised because the other stocks my dad
#
would have bought and sold on a regular basis, so he might not have kept these shares that long.
#
But these ones he just kept and it was kept pledged. It helped him because he couldn't sell
#
those shares because they were pledged. So the bank effectively had the shares, and so he couldn't
#
sell them. So some of these stocks were, for instance, he had applied in the IPO of some of
#
these companies in 1985 and 1986. So by the time he passed away, they had already gone up four or
#
five times. Now when we got it, the smartest thing that happened to us was that we were dumb enough
#
to not know how to sell these shares, that we didn't even try to discover it. And my mother had,
#
because of this, her feeling was, inaction is better than action. Let's just keep them.
#
This was not much in terms of stocks, but there were 40 or 50 different companies,
#
a bunch of physical shares, because they were all paper shares that came in. Only seven or eight
#
survived, to be honest. The rest of them are zero. The companies are zero, for the most part.
#
To this date, my mother cannot get over that, in the sense that she feels that how can we let go
#
of 33 companies going bankrupt? How could my father have not seen that this was, in a sense,
#
she didn't know what it was. She's like, he invested in all these companies, he had no idea
#
what this was, he just bought them. I'm like, Mom, the seven companies or eight companies that
#
survived have actually gone up 40x, and not 40x of what they were, 40x of what all the 40 companies
#
were worth. So the entire portfolio went up 40x because of this small percentage of companies?
#
Company, which gives you the Pareto principle right there. For me, it was like, it's not Pareto
#
principle, it's my dad's principle. For me, it was not more visible, the concept of compounding,
#
but not just the concept of compounding. Now, what is 40x? 40x sounds like a huge number.
#
If something doubles, and then doubles again, that's 4x, and then if it does that two more times,
#
it's 16x. And if it does that one more time, it's 32x. So you're essentially doubling your
#
money in so many times. Now, let's say, for whatever reason, you're able to double your
#
money every five years. Every five years, your money doubles. So in 25 years, you get 32x your
#
money if you're able to double your money every five years. Now, this sounds like, come on, Deepak,
#
doubling your money every five years is a ridiculously difficult thing to do. Agreed?
#
But was it difficult at the time that I came through? India was running at about
#
seven to eight percent inflation, for the longest part. We were having six to seven percent
#
economic growth. So we're getting 15 percent growth. Inflation plus real growth is your
#
nominal growth. Fifteen percent growth in the economy was happening on a year-on-year basis
#
almost every year consistently over a period of time. So what I was getting was 15 percent a year.
#
If you get 14 to 15 percent a year, your money doubles every five years.
#
In fact, the number is about 14 percent, closer to 14 percent. So if you got the returns of the
#
economy itself, you were able to double your money every five years, which means you would get 32x
#
returns if you just had a pulse and stayed alive, as long as you didn't do something really stupid.
#
So this 40x does not sound so incredibly huge in comparison. Now that I put it in context,
#
there's something more to it as well. So the important thing was to not sell and to not take
#
it out and put it into a fixed deposit. We did do that after a while because there was too much
#
equity in comparison with everything else. But despite that, the portfolio went up quite
#
considerably. Now the issue really was that we didn't give in to those behavioral emotions
#
that resulted in this. The compounding could be achieved. That means you could allow something
#
that becomes 2x to become 4x, 4x to become 8x. Sometimes it's not visible why this happens.
#
So for instance, you might always look at me and say, Deepak, you bought this stock at 300 rupees,
#
it's at 3,000 now. If I buy it now, I've lost everything. I mean, all the gains have gone.
#
But what are the chances that the 3,000 becomes 30,000? It can become 30,000. And of course,
#
it may not be 30,000, the stock may split. But you may actually get 10x your returns,
#
even in a stock that has gone up a lot. And that is why our behavioral challenges for compounding
#
come in. Compounding is very difficult to fathom because of how many years it takes to double.
#
Let me tell you going forward, the past was the past. Now you can say that India is going to grow
#
at 6% a year. We may have 5% inflation because the economy gives us only 11%. So if you got 11%
#
returns on your investments, what would the same thing look like? Now, if you're 35 years old,
#
you have another 25 years left for retirement. If you get 11% a year, your money will double
#
every six and a half years, let's say six years. So in a 25 year period, your money will go up 16
#
times if you get just the same returns of the economy. Now, this is not the same thing as
#
putting in a fixed deposit. But if you put it in a stock market, over a period of 25 years,
#
you should get roughly that much. So getting a 16x return in a 25 year period should not be a big
#
deal. But we don't get it. That means it literally says that a small amount of money invested every
#
month can actually result in crores of a portfolio simply because it stays invested that long.
#
On the other side, it is the aspect of saying if you micromanage your investments too much,
#
you might end up taking those behavioral, doing those really behavioral bad things,
#
which means you'll end up. So I would say in a poker parlance, it's like if you're having a great
#
streak going on the way up, would you just walk away from it? It may be because you're playing
#
with some really bad players and you know more than them. It may be because you're just lucky
#
and you're getting your hands in. But if you don't stick around at those times, you're probably going
#
to only, like you said, eat like a bird and poop like an elephant. In the end, the metric is always
#
about if your odds are better. Warren Buffett apparently once talked to Peter Lynch and said
#
he wanted to use a quote from one of his books. And Peter Lynch had written in one of his books
#
which said, selling your winners and keeping your losers is like cutting off the flowers and
#
watering the weeds. So that I think is true for everything. So compounding will only happen if
#
you water the flowers, not try to take the flowers off. That's beautifully potent. In the poker
#
context, I think first of all, I would say that a streak is something that you call a streak only in
#
hindsight. And I think in any given moment, you evaluate the expected value of that decision
#
there. So if I'm sitting with a bunch of players where I know I have an edge, then I'll continue
#
playing whether I'm down or up. But if I feel I'm very tired and that affects my EV, I'll factor
#
that in. But every decision has to be according to that particular moment, which in a human way is
#
hard. You could actually be down a lot because you're running really bad, but playing really
#
well. And then that affects your judgment. Or you could get overconfident at a table where you are
#
the fish on the table. But that can affect your judgment. And just going back to that, that
#
hypothetical example of there's a shared has gone from 300 to 3000. And now this guy comes and says,
#
I missed all this thing. And I'd again say that I think the human tendency is to see
#
that journey that a stock has made from here to there and say, oh shit, I missed out on all this
#
much. But I think at any moment in time, what you decide to do is a judgment call that you're
#
making at that point in time. So if it's 3000, your question is not what it was yesterday,
#
except in the sense that if there is a trend happening there and that trend could factor into
#
your decision. But your judgment is, is this a goodbye right now or not? Right? And so,
#
you know, and that's just a way that people are not hardwired to think in a similar way. If,
#
you know, a stock falls, if it's 100 and it goes to 80, you know, the correct decision to ask
#
yourself is, would I buy this for 80? Right? Otherwise, otherwise, why hold it? Holding
#
onto something is equal to buying it. If you wouldn't buy it at that price, why would you hold
#
on to it? Then let it go. Either it's worth 80 or it's not. Whether you already have it or not
#
is irrelevant to that. This I think is where I think I would disagree over here, because
#
again, I know there's a behavioral aspect to having owned and not having owned it. But there
#
are actually, there is a concept called a hold, which is don't buy, don't sell, but hold. There's
#
a reason you want to do this. Now, this is a difference between looking at an individual
#
stock and looking at a portfolio. When you look at a portfolio, which is a bunch of different
#
things, every action that you take at any given point in time introduces the need for another
#
action to counterbalance something else. Because if I sell something, I want to buy something and so
#
on. That is one reason why you might want to continue to hold. Second is that, let us say
#
there is a, there is, I'll give you a real example of some stocks that happen. There are sometimes
#
these international funds. These international funds want to exit. Now, you are looking at them
#
exit and you're saying, listen, there are only two reasons why they can exit. One is they know that
#
something is sinister underneath. And B is that they're actually exiting because maybe they need
#
to move out of this stock and into some other stock and they're just artificially depressing
#
the price. You don't know which one is what. You have a certain position. That position is supposed
#
to be, is relatively small today. You could increase the position saying, listen, I know
#
what's right with this company. I know everything's right with this company. And the minute you know
#
that everything is right, you could increase that position. We don't know yet. On the other side,
#
on the other hand, if the company is really bad, then you should be selling everything,
#
but you don't know that yet as well. You might want to wait for that further information before
#
taking that call. The only constraint is you have a portfolio. This is about 2% of that portfolio.
#
Are you comfortable with it being 2% or do you want to take it down to 1% and make that decision
#
at a later point in life? This is the portfolio level thinking that should drive whether you hold,
#
buy or sell a stock. And many times these are not relevant to the individual stocks,
#
gyrations or movements, but to your thinking of the portfolio as a whole. The other important
#
point of this is why you need a hold sometimes is when a stock is purchased, you may be buying it
#
over a long period of time. That means every month that I get more money, I will add on to it over
#
time. That means I may want to buy this stock, but not now because my money comes in the future.
#
I'm only going to put in more money at that time, at which point you're not going to sell today,
#
but you don't have more money to buy it. You would buy it if you had it.
#
So yeah, I mean, you could make that argument that if I didn't want to buy it at all,
#
I wouldn't. In most cases, I feel that catching falling knives requires a lot more experience
#
and a lot more knowledge because all companies tell you exactly what you want to hear. So if
#
you like the company, they will tell you, no, the next quarter will be good. So the check is in the
#
mail. It's always going to come to you like that. So if you're looking at the price and it's falling,
#
most likely the reasons why that they're giving you for the underperformance is it's likely to be,
#
come on, are you out of your mind? Because if everybody believed that story, the price would
#
not be down. There's another reason that the whole market could be down. Why does Russia attacking
#
Ukraine affect when an Indian guy selling toothpaste? I mean, are we not going to brush
#
our teeth tomorrow? But chances are that was just an excuse. And somebody had bought too much of
#
toothpaste company and taken it to a high that was too high. And now they're just correcting back to
#
a point where it trades like a toothpaste company, not like a company that mints gold. So today,
#
you what the reason for its downfall may sound like Russia's attacking Ukraine, but it's actually
#
you're paying a company that makes toothpaste as if it was making gold. Now we're going to value it
#
like it's a company making toothpaste, at which point your decision making would change into,
#
okay, dude, I think I don't like this company making toothpaste valued at this rate. I'll wait
#
till it comes to a valuation that reflects it's making toothpaste and then only buy.
#
Great decision making requires a lot more depth of knowledge to think about it. Sometimes the best
#
thing to do is just asset allocate and hold, which means I have so much money in equity,
#
I have so much money in debt. I don't, I focus on that more than I focus on which exact company
#
have I got more ownership in. And therefore, you know, kind of, but like you said, the hands matter
#
sometimes. And the more knowledgeable you are about the hands, the specific stocks, you can make much
#
more informed decisions about them. Generally, you want to have the ability to identify bullshit. So
#
in poker, I'm sure there are a lot of ways to identify whether a person is bluffing. Most
#
famously in the I think Casino Royale, there was this guy's eye twitching. Those are very cinematic
#
depictions in the real world where poker right now is that any good player will mix it up to the
#
extent that it's as close to game theory optimal as possible. So, you know, like just to give you an
#
example, let's say there is 200 rupees in the pot, and I bet 100 rupees and now you have a decision
#
on the river. So you are you have to call 100 to win 300 because it's 300 in the pot, you're going
#
300 because it's 300 in the pot, you're getting three to one odds, right. And therefore you should
#
call if you know 25%, you know, depending on how often I bluff, if I if I'm bluffing too much,
#
you should absolutely call. But if I'm bluffing too little, you should fold. And the idea there
#
is that I construct my range in such a way that when I give you three to one odds, 25% of my hands
#
are bluffs and the rest are value hands. So it doesn't matter what you do. It doesn't matter what
#
you do. If you play perfectly, I break even. But if you call too much or fold too much, I make money
#
in the long run, you're looking at everything in the long run. So it's a it's a whole different
#
kind of game, that whole Casino Royale romance that you'll see somebody's nose twitch and all
#
that and you'll get a tell and you'll do all that. No, like at any decent level, it's like fairly
#
mathematical and that doesn't really happen. But let's move on to your second lesson now,
#
which is in fact what you nicely segued into yourself. And your second lesson there was money
#
is made largely when you sleep. Right. And explain this a little bit, because again, I think romantic
#
notions of stock market investing, just as in poker, are often very far from the truth,
#
where the notions are that you know, you've got your flickering screens in front of you,
#
you see something happen. Russia has invaded Ukraine like so Russia Ukraine is very much
#
the topic of the day. So you know, they look at like Russia Ukraine me yeh hua hai, wahan
#
assault mine me strike chal raha hai, isko beshte hai. You know, that's a romantic notion of whatever.
#
But at the level of nitty gritties, it's not quite that dramatic. So you know, so tell me a
#
little bit by what you mean when you say money is made largely when you sleep. So this actually
#
comes down to that very point, because the attraction that your skill is in identifying
#
those opportunities when they happen, it's less relevant than just having a simplistic whole
#
set. I'll give you an example. I mean, a lot of people tell me this. Deepak, I have made 200% on
#
the stock. And I'll say, hey, I have the same stock, I made only 10%. And then I asked them,
#
how much have you invested in the stock? I put 10,000 rupees. So I'll say I have put 5,00,000
#
rupees. My 5,00,000 rupees, I've made 50,000 rupees, your 10,000 you made. So it's not like
#
you didn't have 5,00,000 rupees, you just chose to put 10,000. So how much money you put into the
#
opportunity is another reason why you might make more or less on. He might have 4,90,000 rupees
#
sitting in a fixed deposit, which didn't give him anything or give him three and a half percent
#
post-tax. So I would say a large part of what money you make is how you allocate money to this.
#
The more money you allocate to opportunities, and then the more you're feeling of wanting to act as
#
well. And if you start acting too often, the chances are that you are going to either exit
#
an opportunity too soon, or and not allow it give time to breathe. Or even worse fashion,
#
you're going to generate stress by owning that investment and looking at it on a daily basis.
#
If you take these two aspects and then say what happens if you just hold the stocks. Now,
#
I did an experiment. I said, okay, 2006, I take all the stocks of the nifty,
#
and I put an equal amount of money in every single one of them. 10 years later, what happens?
#
So I find out that 10 years later, four stocks had fallen more than 95%. That means these were
#
nifty stocks, the top 50 stocks of the Indian exchange. Four of them have actually fallen 95%
#
plus, some was 98, some were 96, Unitech and this. Around another 14 of them had negative absolute
#
returns, which means whatever I'd invested in 2006 would actually be less in 2016 on an absolute
#
basis. Another 14 or 15 of them roughly made positive returns, but less than inflation,
#
which was roughly 7% average during this time. So you're saying 37 to 39 companies made less
#
than inflation and some of them lost severely out of 50. And yet the whole amount of money,
#
which is let us say 10,000 rupees per stock into 50, 5,00,000 rupees, made a total return of over
#
12% per year, not counting dividends in those 10 years, which means the 10 or 11 stocks that
#
actually made money made so much money that they were enough to kind of, what did I do differently?
#
I didn't sell anything, not the winners, not the losers. I just left them, let them all be.
#
I'm saying, what are the flowers and the thorns? It doesn't matter because in the end, whatever's
#
bad will just die, but the stuff that remains will be enough to take you for a long time.
#
That was what I meant when I said money is made when you sleep, because if your concept of action
#
is that if I'm not sleeping, I need to be finding the bad stocks and selling them. My answer to that
#
is it doesn't matter if you sell them. And in the surreal garden of happiness, what appears to be a
#
flower today could be a thorn tomorrow and vice versa. So just hold the damn thing and see where
#
it goes. For the most part, if you've made your decisions large and diversified, I built something
#
called a random portfolio. So I said, at any point in time, choose a bunch of stocks, randomly 10,
#
it's like monkeys picking stocks. Is that monkey picking stocks better than the stock market?
#
If consistently monkeys picking stock becomes better than the stock market, it's a bull market.
#
If it is not possible, that means you're half and half, sometimes you beat, sometimes you don't,
#
then it's not a bull market. It could be a bear market, it could be a sideways market,
#
but it's not a bull market. That means the stocks are not going up. In a bull market,
#
no matter what you do, you will make money. It's like being blind. It's not your skill,
#
it is the monkey. In a bear market, there is some skill involved, but the bear market players will
#
only make money in a bull market. That means if the markets stay bearish for a long time,
#
doesn't matter what skill you have, you will not make money. You need a bull market to make money.
#
And if you survive long enough, you will see bull markets because bull markets are a function of
#
greed and fear, fear of missing out and the greed of making money. And that is so human
#
that no matter what happens, at some point in time in five years, there will be a layer of greed that
#
will drive the markets up. India's entire market history from 1992 to now, post liberalization,
#
can be classified into four great years, 2004 to 2008, January, roughly, and two great years
#
between 2020 and 2022. That is it. That is our bull markets. In the middle, there was some bull,
#
some bear, some bull, some bear. But these are the years where if you had stayed invested in
#
the markets and not done anything, you would have made out like a bandit. You miss these six years
#
and it would take a lot of skill to make money. Do these years correlate with easy money coming
#
in from the US quantitative easing and so on? There was no quantitative easing in 2004, 2007,
#
but you had low interest rates. You had low interest rates and all that, right?
#
Actually, US started raising interest rates in 2005. We don't miss that. So it was not the
#
low interest rate started off at 2008, but it was easy money in the sense the money was coming in
#
from the US. They were buying anything that was possible because relatively we were so small.
#
2020 also was a function of, but there has been quantitative easing in the West from 2008 to 2018.
#
Yeah, it didn't affect us. At that time, the market was growing only at 10% a year,
#
which is great, which is not that great. But I'm talking about the last 20 to 22,
#
we grew more than 50% in the stock markets. Well, I don't have the exact numbers, but 2004 to 2008
#
was just phenomenal. I think the market doubled, went from 1,300 in the nifty to 8,000 in those
#
four years. Sorry, 6,000, 6,300 in those four years. So roughly 4X in four years.
#
So anybody who invested would have felt so skillful.
#
That's when I wrote this post about Gazals, which was,
#
That's what the- Lovely.
#
Do you sing? No, I don't. I'm terrible as a singer.
#
I would have asked you to sing it.
#
Pankaj Udaas will sue your show and mine because we're cross-proceeding it, but you know-
#
He's already Udaas. But this was the point, but because, and there's another Jagjit Singh
#
Gazal that actually says it, it's, which is, this is it, right? You don't know why markets
#
are going up like this, 4X in three years, every old timer is telling you guys this time will not
#
last. And yet it lasts another year. It sits on your face and, you know, beats you up. And you
#
have no way to, you know, counter the bullishness or anything like that. Eventually the naysayers
#
are right, but that eventually has probably made a bunch of people so rich that they walked away
#
from the market with a fairly reasonable amount of gains if they're smart enough.
#
Was it Keynes who said that the markets can stay irrational longer than you can stay solvent?
#
So if you're betting on, you know, markets crashing, yeah, sure they will, but when?
#
Yeah, Alan Greenspan, and I keep using this example, so I'm sorry if I've used this before,
#
he said in 1996 December that the markets were irrationally exuberant. Now, this is the
#
most famous central banker of our time, the guy who's presided over the largest amount of
#
easier money policies and therefore the largest amount of stock market excesses.
#
He's telling you the markets exuberant in December 1996. The market proceeds
#
to go up another 50% from there. Crashes 30%. At the time it crashed, the lowest point of which,
#
it took two and a half years to crash. And when it did, the lowest point of the crash was still
#
above the point at which he had said the markets were irrationally exuberant. So he was right,
#
but he was wrong. And this is the most celebrated central banker of all time. So I'm like, if he
#
couldn't get it, what are the chances anyone else can with the data information we have at hand?
#
We can be, you can be, so Dave Barry writes about this in his book. He talks about Florida
#
and old people, and he says there are people who put their left indicator on as soon as they get
#
out of their house and it stays on for like forever. So he says that it's called an eventual left.
#
So at some point in life, this guy's going to take a left turn and you just don't know when.
#
So when you drive behind such a person, you have to know that this is an eventual left kind of driver.
#
This is the point about naysayers in the market. They will eventually be
#
right. But you know, when is the question? So, you know, like that old saying that,
#
you know, so and so who predicted the last three recessions predicted a total of 15 recessions,
#
right? And I guess the same could be said for stock market crashes. Your lesson number three
#
is very interesting. And you demonstrate this in such detail that I have to just ask people to go
#
and look at your book for the lucid explanation of this with the actual numbers where you say
#
you don't need that much money to make money, right? You can start small, let it compound,
#
be disciplined, you know, let it earn while you sleep and so on and so forth. And then you make
#
a really interesting point about the first crore, where you say, quote, the first crore you make
#
will largely come from your income from the work you do, your profession will pay you a salary,
#
or your business will generate the cash, or you'll join a startup which is acquired and voila,
#
you have some money, right? Which, you know, is again, many people won't kind of think in
#
these terms. Everybody wants to, you know, get rich super fast and so on. And there is this old quip
#
about the easiest way to make a million dollars is to start with 10 million. So and now you then,
#
you know, go into a bunch of sort of you give these bits of advice and the first of those is
#
make money not returns. So, you know, explain this. This is actually, okay, let me start with the
#
first part. How much money do you need to make money is a question. And I told you about this,
#
I said the difference between making the same amount of money with a high return mechanism,
#
and the low return mechanism may be of the order of say 20 or 30,000 rupees per month.
#
If you find it a little more comfortable to do the more risky one, sorry, the less risky one,
#
then you just have to find out 20, 30,000 rupees more. Now, the first crore that you make and
#
because you are, you know, you're going to be squeamish about investing most of your money,
#
because it's hard earned money, you've just started to earn it and all that stuff. When you
#
make your first crore, it will largely come from the income that you make because your make,
#
your make, I'll give you just the simplest of example. Let's say you're starting off your
#
career with about a five lakh per year salary. At this point, the amount you're saving is probably
#
of the order of 30, 40,000 rupees a year, I'm talking 3000 rupees a month. You work really hard,
#
build yourself a YouTube course on SEO, I don't know, whatever it is, YouTube algorithm course,
#
you get yourself an additional five lakh rupees a month. You've made a 100% return on the time
#
that you've invested from the five lakh to 10 lakh. This 10 lakh allows you to save from 50,000
#
to maybe two lakhs per year, your savings have gone up. But you know what, most of these returns
#
have come because you've increased your income, not because your earnings from your, even if you
#
had invested those amount you had saved 50,000, do you think that would have ever resulted in a
#
five lakh rupee payout? Chances are zero. Do the same thing, 10 lakhs becomes 20, 20 lakhs becomes 30.
#
Your income can keep growing by the experience you gain, the courses you do, the skills you have,
#
up to a certain point. So you start saving from there and slowly build up your corpus.
#
After a few years, you're earning 25 to 30 or 30 lakhs, maybe 10 years later. And you've got
#
savings of about 50 to 60 lakhs. Most of these savings, if you look back about it, it will be
#
coming in from the increased amounts of money you've been able to put in, largely because your
#
incomes have increased, income has increased. And when you get up to the first crore, you'll find
#
that most of the money has started to come from that, the amount you've saved. It is beyond the
#
one CR, is where your impact is more significant of the money you've saved, that overshadows the
#
incremental income that you earn from your salary. Because at some point, we all stagnate in terms
#
of salaries. Of course, in Bangalore, there's no such thing. But everywhere else, I think at some
#
point, you kind of start getting to a point where you're getting the 5%, 10% increases, not the 50%,
#
60%. And because of that, the amount you're going to gain from the investments you make will start
#
to look much better. So that's the early point of this. But if you focus your attention on growth
#
and your attention on growing your income in the early years, not what, where you save, you will
#
get there in a much faster fashion, get there being to figure out where you want to get to in
#
the first place. But whatever that there is, you'll get there faster by just focusing on making more
#
money from what you actually do, rather than earning money from your investments. That means
#
I would say, take Amit Verma's clear writing course. It will have a greater return on investment on
#
you pay Amit. Then any stock that you can buy for that same amount, and I can guarantee you this,
#
that anything you earn from the clear, and the way your clear writing, the clear writing helps you
#
is because it clarifies your thinking and your thought process. And this helps you no matter
#
what job you have, whether your job involves writing or not, has no relevance. You will write
#
eventually for the pure joy of just discovering what the hell you've just, your mind has just told
#
you. And that is a valuable skill to have, and that will earn you more of a salary, more of an
#
income, more of a... And you might eventually get a career as a writer as well, because you've chosen
#
a skill which is valuable enough. Because, you know, I know that there are not that many great
#
writers in India or the world. And anyone who's a great writer will eventually make, hopefully,
#
at least this is my... This is one part of the show where I'm looking at you damn skeptically
#
and saying, stay in your lane, bro. Great. No, but, you know, one of my favorite pieces of advice
#
in the book, and which I want to underscore, because I think that this is absolutely spot on,
#
as in what you just said, where you've written in your book about the importance of investing
#
in yourself. Do online courses, get a degree and all of that. And I'd like to double down and say
#
that, you know, earlier we spoke about time is also a scarce resource. How do we invest time?
#
And I would say, in terms of both money and time, when you're young, the best investment you can
#
make is in yourself. And another way of thinking about it is that every action you make today
#
is an investment in your future self. You're shaping your future self. You sit and play
#
Candy Crush for an hour. Congratulations, you just made your future self a little stupider,
#
right? But you sit and read a good book for an hour or do my clear writing course or whatever,
#
you know, listen to a Deepak Shenoy podcast, listen to the binge on the Capital Mind podcast,
#
then you, that's an investment in yourself. In subtle and unseen ways, it will pay off.
#
So that's just sort of a fantastic piece of advice. And in that chapter, you then go on to
#
give such detailed advice that I, you know, I think people absolutely have to read it. One is
#
what you spoke about earlier about the importance of allocation. Think about allocation and it
#
need not be that one size fits all. Different people have different priorities and you allocate
#
according to that. You know, if someone really loves to travel and it means something to them,
#
you allocate some money. In your book, you use the example of going for a holiday to Croatia.
#
I don't know why you picked Croatia, but yeah, there you go. And, you know, think about allocation
#
and, you know, plan for your necessities and, you know, with the rest, enjoy your life as you put it
#
and build personal leverage, you have also said. So what do you mean by build personal leverage
#
and how is it different from the kind of investing in yourself that we spoke about?
#
Okay. So personal leverage is a complicated concept to understand, but think about it like this.
#
Okay. When you invest, when you do something as a job for someone, they pay you a salary
#
and that is it. You stop working, the money stops flowing in. So it's like you're a hamster in a wheel
#
that's giving you water. As long as you're running, the water's coming. The minute you stop,
#
the water stops and you die of thirst. This is terrible because the typical advice now is,
#
oh, you're getting a lot of water today. Take that water and store it somewhere and let it keep
#
growing. And eventually when you'll get tired enough and stop and the water stops, you have
#
a storage of water somewhere else that you can use for your future needs. Fantastic, very great advice.
#
But there's another way and this is a better way, according to me. This is the idea of building
#
personal leverage. Now it comes back to the creator economy in ways that perhaps are
#
interesting for this episode, but anything that you build that is an asset
#
helps you in the long term. Now what that does is, for instance, if you wrote a book,
#
now it's a very bad idea because you won't get anything in royalties nowadays, but let's say
#
it's a wild chance. There's an optionality of it being a best seller. That optionality is one in
#
500. You make a YouTube channel, it can get you some income, but it'll get you that income 10
#
years down the line. This at some level is a flywheel that can operate by itself. Well,
#
not entirely by itself, but some part of it can operate without you needing to work for it at a
#
certain stage. Start a business, employ people to do the work you do. You can reap the benefits
#
while paying them a salary. Get a house. I don't recommend this because in India it's a terrible
#
idea because the returns are not great. Or build a stock portfolio. The stock portfolio pays you
#
dividends. The dividends take care of you regardless of whatever, and they kind of grow on
#
their own separately. I think building personal leverage is a concept of saying you're not just
#
investing in yourself to be able to get a better salary, but you also want to build something that
#
sustains itself even if you aren't working. The more personal leverage you build, the better it
#
is. This is also the way the world thinks of you. For instance, the tax department thinks of you.
#
You have no personal leverage, you're an employee. You're an employee, you get a salary. That salary,
#
they take the tax out, you get the remaining, you spend it. You own a business, you make some
#
revenue from something, you get to spend money from it, and only on what's left do you pay taxes.
#
Even better. You build a private limited company, the taxation is not 33%, but it's 25%. I've been
#
telling you about this as well, that your tax suddenly falls to 25% if all you do is take the
#
extra effort of creating a private limited company in India and doing the exact same thing.
#
The money that stays, of course, stays in your own little private limited company, but that
#
money is effectively yours to use at some point. The CAs may disagree, but by and large,
#
it's a better way to allow your money to compound than to have to earn a salary.
#
The tax department recognizes the more personal leverage you have, the lower we should tax you.
#
Maybe listen to the tax department. This is a form of investment, but personal leverage also
#
has different layers. If you build reputation, that's personal leverage. Because people in this
#
world, trust is a deficit. It always will be a deficit. The more trust you can generate by
#
being who you are, whether you're a creator or whether you're a speaker or someone who just,
#
I don't know, does a bunch of things that make your face as recognition in a certain field that
#
you really love to operate in. I know a bunch of people who, for instance, are super trustworthy
#
for just knowing the historical sites in Bombay or Bangalore or Delhi, because they do it as a
#
hobby. They just take people for a walk every Sunday. This is personal leverage at some level.
#
They're not realizing it right now. They're probably doing it for free because they enjoy
#
this stuff, but they're building an aspect of personal leverage that gives them the optionality
#
that tomorrow, this could be a business. When I start that business, I already have the trust
#
and the recommendation of hundreds of people who love what I have done and will recommend me for
#
getting more business or perhaps pay me directly as well. That personal leverage is something if
#
you focus on, it is way more satisfying emotionally and personally, but it's also something that will
#
build you financial leverage at a later point in time. I think what many people don't realize
#
is that they have, like the guy who takes people for walks, for example, they have personal leverage
#
in ways that they are not using or monetizing or whatever. You could have some skills that people
#
value, but you are not giving them a chance to pay you for it and you're not giving them a chance
#
to benefit from it. It's like it would be a positive sum game if you do so. If this person
#
with this deep knowledge organized tours and took money for it and all that, I'm sure people are
#
interested, or if you, for example, were to teach a course on how to invest,
#
people would pay a massive premium. No question about it. You see in the creator economy,
#
people are realizing it. Like there's a great video I'll link from the show notes by Ali Abdaal,
#
where he talks about how last year he made 2.7 million dollars in income,
#
right? And what I love about many of these YouTubers is they're very transparent. They'll
#
do a full video where they'll tell you, I made so much. And because people love such videos,
#
they'll make even more. But, and it is such a mix of nice things. So he's got passive income
#
coming from courses and Skillshare, where he's got courses on YouTubing and creating and this and that
#
productivity. And that's passive income and coming down to the equivalent of crores of rupees,
#
just from there. He's got a live cohort based YouTubing course, you know, charging a premium
#
because it's live and you know, personal mentorship and all that, and making tons of money from there
#
and so on. So he breaks it all down where the 2.7 million is coming. And that's, and what a person
#
like that is doing is sitting down and saying that, okay, what is valuable about me? You know,
#
and these are the many things which are valuable about me, the little silos of knowledge in which
#
I have something and I can help people or whatever. These are the different ways in which I can express
#
them. So online course, cohort based course, blah, blah, blah. And then you kind of do that. And I
#
think too many of us have value locked up inside of us, you know, have that personal leverage
#
already, which we don't do enough to monetize, you know, and we are stuck in the old paradigm
#
that someone will give you a job, salary, the economy goes down, we get laid off, you know,
#
we're like, shit, I'm worth nothing. Nobody's worth nothing, right? So that's, but to get back to your book.
#
No, no, but you have a point. There's a reason why people don't like to build personal leverage,
#
because there's a risk involved. That if you put yourself out there, what if you fail?
#
What if you fail? According to me in today's world, there should be no consequences of.
#
If today there is a failure, what's going to happen? Nobody going to drive us drive a stake
#
into you and you know, put you on this thing. But the problem is we think like that. And the
#
cost of failure today is lesser and lesser. And what happens if your YouTube channel fails?
#
Almost nothing. There will be no graveyard and there will be no tombstone. You don't even have
#
to think of it and it will just vanish into the ether like it never existed. There will be no, you
#
know. So why are we then so fearful of failure? I don't understand that. But I think a lot of it
#
comes down to, you know, this is why Indians like government jobs is because you can never fail in
#
those government jobs. They can never fire you. And therefore, you know, the risk taking is
#
non-existent. And yet India is a country that has more entrepreneurs than most of the Western
#
countries. And from a numbers perspective, even if you add up all the Western countries,
#
all the small entrepreneurs in those countries won't add up to even half of what India has.
#
India is a very tiny part of our economy is actually salaried. Most of our economy is
#
entrepreneurial or by nature or by force. So we get risk, yet we are afraid of taking those risks.
#
I think one of the reasons that so many people apply for government jobs and that charm of the
#
government job still remains where there'll be some lowly railway linesman position open at
#
20,000 a month and there'll be 8 lakh people applying for it and, you know, with PhDs and
#
all of that. And it's a sad and poignant reason and you can't blame them, which is that we are
#
a desperately poor country. Those opportunities really aren't there. It's been 70 something years
#
of economic mismanagement where bad policies have kept millions of people in poverty.
#
Where I am hopeful is not that governance will change. You know, I have no hope there.
#
Where I am hopeful is that technology in interesting ways can actually empower people.
#
Like I tell the, I've told the story, I think a couple of times on my show of this vlogger
#
called MSK. Have I told you about it? Let me quickly go through it. There's this guy called
#
Mohammed Saleem Khan and born in a village in Bengal. I'll link to the talk where he talks
#
about all of this as well. Born in a village in Bengal, comes to Mumbai, staying in a slum in
#
Dharavi and his mother is, you know, a domestic help in various houses and his father is a watchman.
#
And when he's 15, he, his mother, his siblings, they go back to the Bengal village for a holiday
#
and then they get a phone call saying that your father's gone mad, come home. So they come back
#
to the slum in Dharavi and as they're walking towards their home, things from their house are
#
all outside and inside the house there is nothing. It's an empty house and the father is just inside
#
and he's lost it. But anyway, they control the situation, they get him treated and after they
#
get him treated and he's back to his senses, his mother asks his father that, you know,
#
over 15 years everything we saved, we kept it in this little trunk, you know, where is that trunk?
#
And he says, oh, I was going somewhere by auto and I didn't have change, so I gave the auto driver
#
that trunk. Right? So 15 years working like this, lost everything. And MSK, Mohammed Saleem Khan,
#
he's a 15 year old kid. And at this point he says he made two promises to himself. Right? One of them,
#
as you would understand, is I will buy my parents a house in Bombay. Right? And the other one is
#
what, because he's 15 and I'm really glad he made this one. He said there is that super bike I like,
#
I will buy myself that super bike. He does both. Okay. He goes on YouTube, starts shooting stuff
#
with his phone, eventually becomes, you know, hugely popular vlogger. And if you see any single
#
video of his, you won't get why he's popular. But if you see a bunch of them, you begin to feel that
#
connection, again, the economy of intimacy. Right? And he does all that. And this is a terribly
#
inspiring story to me, because so far in our history, you have to be, even no matter how
#
creative you are, you've had to have some kind of privilege to just get into the starting door.
#
Right? You just have to. And today that's changing. And I'm not saying it's changing for everyone or
#
it's super easy, but you saw an element of that with TikTok. And you see an element of that with
#
people like this. And God knows how many kids in how many parts of this country are watching
#
MSK's videos. And he's a cult. So he's got, you know, his followers are called MSKians wherever
#
he travels, somebody or the other will recognize him, come to him, show him around. Right? And he's
#
an inspiration to so many and God knows what the unseen impact of that is. So that gives me hope,
#
but that's anyway a digression. So to get back to the book. Your second chapter, I found really
#
interesting where you sort of talk in detail about mutual funds, the different kinds of mutual funds
#
and how one picks a firm, all the parameters and all of that. And at this point, I want to tell you
#
the story of an interesting scam that it's a thought experiment. So it's not in your chapter,
#
sucker. It's just a thought experiment, but it's a game theory thing. Let's say that you and I
#
decide that we will write to 1000 people and tell them that I must have shared this with you. I wrote
#
a post run it ages back. You and I will write to 1000 people and we tell them that we'll tell you
#
the result of the next India Australia match or whatever the series is. And we won't charge you
#
anything. We'll just tell you and you see over a period of time what our track record is. And we
#
say India will win. Right? Now, but to 500 people, we say India will win to 500 people, we say
#
Australia will win. No matter what happens, we got it right for 500 people, rinse and repeat.
#
We get it right two times in a row for 250 people, three times in a row for 125 people.
#
And finally, once we get it five times in a row, the people who are left are thinking, gosh,
#
these people are geniuses. And then they're paying us a subscription and we've made out like bandits
#
and we get the hell out of there and you know, go somewhere else. And I hope Ashneer Grover is not
#
listening to this. It's an idea. And this in a sense is also, this is reflective of the survivorship
#
bias. I had a variety of different strategies, which were India, Pakistan, India, India, India,
#
or India, India, India, Pakistan, India, or I don't know where Pakistan came in an India Australia
#
series, but you get my point. And similarly, the point that you've made with mutual funds is that
#
you have to watch out for the survivorship bias as well. That there'll be many, many funds with
#
many different strategies doing many different things. And there is no way of knowing if someone
#
who's, you know, got the best results over three years, whether they got kind of lucky or not.
#
And the conclusion that I seem to get from your entire chapter is that the best kind of fund is
#
the index fund, because the index fund will outperform most other funds. And I'm guessing
#
the ones that doesn't outperform, you don't know whether they got lucky or not, because somebody's
#
going to get lucky. So is that like a correct summation? Because in the past, I vaguely
#
remember that you had some nuances, I forget in which conversation, but you had some nuances
#
to add about this. And it was like, no, no, it's not all survivorship bias.
#
It's interesting that you put it that way, because it's not only survivorship bias, but there's a
#
couple of other reasons why I think index funds are doing very well or will do very well. It's
#
about, let me put it another way. There are regimes, so certain regimes suit certain kinds of fund
#
managers. So they become celebrities in those fund manager times. There was a guy called Peter Lynch
#
in the US, and he ran a very successful fund called the Magellan Fund. Before him, there was a guy
#
called Jerry Tsai, who during his time was reasonably successful. Peter Lynch was quite
#
phenomenally successful, but then since then, the Magellan Fund hasn't performed quite as well.
#
Warren Buffett himself for the last 10 years or 15 years, his stock hasn't performed quite as well
#
as the S&P 500 itself. It's interesting, because you see in India in the 2004 to 2008 time frame,
#
you could ask anybody in India, which mutual fund should I buy? They'll tell you HDFC Mutual
#
Fund. And there's a reason for that, because it was doing the best. It had a bunch of funds. They
#
were all doing really well and so on. In the 2010 to 2011, 12, 13 kind of time frame, you would get
#
IDFC Mutual Fund. The fund manager was a star and he did really well for a long time and so on.
#
Then from 2000, maybe 15 to 17 or 18, there's a bunch of other guys. From 2018 to 2020 specifically
#
was Axis. None of their funds could get anything wrong. There's a company called Mire Asset. They
#
were doing really well. You look at their performances today, they are less than Stellar. So the order of
#
the top has changed. The HDFC guy has started to come back today. If you chose just based on the
#
best, they were those regimes which worked for a few years and then they stopped working. And if
#
you stuck along with those people who had stopped over a 10-year period, you found that their good
#
first two, three years not withstanding, a 10-year return is less than what I would have got given in
#
an index fund. Now, because they're selling so much, they have to charge higher fees. They end
#
up charging 1-2% as fees. The index fund charges 0.15 or 0.2% as fees. So if your performance just
#
ends up being average and you charge 2x the fees, chances are you will underperform just because of
#
the fee differential. Why do index funds charge lower fees? Because they don't make any decisions
#
on the stocks they buy. They just have to buy whatever's in the index, in the same weightage
#
as the index. So they don't have to think too much. And you pay the money for the thinking,
#
so you put a much lower fee in there. This is very, very interesting. From a point of view of
#
person who's investing in the markets, it comes down to this. If over long periods of time,
#
indexes tend to outperform, if that is true, no matter when I look. And I don't need to outperform
#
if I rank all those mutual funds in a certain list. And if I find that these index funds are
#
in the top quartile or maybe even the second quartile. So I call the second quartile thinking,
#
that is, if you were in the second quartile, that means between 26% and 50% of the range of any large
#
list on any given year, but you were always in the second quartile. And all of the other guys
#
were sometimes in the first, sometimes the third, last, and so they were randomly in all of them.
#
The guy who's consistently in the second quartile will outperform everyone on a 10-year basis.
#
So unless you got somebody who's consistently in the first quartile, the second quartile guy
#
always wins. So the second quartile thinking is what drives my behavior towards index funds. It's
#
saying, all you have to do B is a little bit better than average. You'll be a little bit
#
better than average simply because of the fees. You're charging lower fees. Chances are over a
#
10-year timeframe, you will outperform. Now, if you said, no Deepak, I want to find who's in the
#
first quartile. Now that takes skill because you're going to say, this guy's going to outperform in
#
the first three years, then there's going to be another bunch of guys that will outperform in the
#
next three years. That takes skill to identify. It requires you to understand, oh, I have to
#
find the right kind of managers, what kind of stocks they're picking. Is their philosophy
#
consistent with my view of the market? Is my view of the market right? Also, if I was so good,
#
why don't I invest in the stocks directly, et cetera. These are the questions that come in.
#
But let's say whatever that questions are, the answer is, it takes a certain amount of skill
#
and luck. To reduce the need for skill and luck, you want to go to the index fund. The most
#
important thing that people don't have is time, which means time to understand these various funds,
#
time to understand the market, time to understand whether you should be adding more money to X or
#
Y and making those decisions. Every decision you make is a gray hair. If you don't want that
#
many gray hair or you have enough decisions in your life already, I have enough decisions to make
#
about what time each kid wants what. Because you have that many decisions already to make,
#
adding to decision fatigue is a waste of time, then you want to choose the index fund.
#
Now, we are crazy people who like the market so much that we go and analyze everything that's in
#
the market. We say, skip the mutual fund, we'll go directly down to the stocks and buy the stocks.
#
We want to find a bunch of stocks. I have the inherent feeling that if I am not able to beat
#
the indexes over a very long period, then it is in my own best interest and my customer's best
#
interest for me to tell them, don't invest with me or give me money, I'll put an index. I will not
#
buy stocks based on my own thinking. But like every candidate who gives the IIT exam, and
#
every average person in India does not make it to IIT, you have to aspire to be above average.
#
But at the same time, you have to realize the limitations that this is not my time,
#
inclination or skill. Maybe I will give an exam if I want to get into the top colleges of the country,
#
but if it is not my inclination or my skill to do so, I would rather just leave it out there and
#
say, you know what, I'll outsource. I will give it to an index instead. The point over here is
#
reduced decision fatigue, bank on the fact that the lower cost is going to make these guys above
#
average over the long term, and simplify your investing life. I choose a simple strategy,
#
but I mentioned this in the book, saying you got a top 100 India, top 100 US,
#
simple ways to access them. Of course, right now, everything sucks, because everything has fallen in
#
the last two or three months, but that doesn't matter. Over a period, long period of time,
#
these things will still make a lot of money for people. And I believe that this might be
#
a simpler strategy for most people to follow. It sounds so bad because my pure business is that
#
we tell people that we're good at identifying stocks. At the same time, we tell people,
#
and we're probably the only people to have something called an index strategy where we charge a very
#
low fee, to just be able to tell people in a disciplined manner, invest in the top 100 US and
#
top 100 India, we'll do it for you. So I think our ability to do or to get that done is valuable
#
because it's advice that's actually good for a significant number of people in the market.
#
But we're also at the same time saying, listen, we have some problems, we need to
#
keep saying, listen, we have some stuff that we think can beat it. And so we'll have to prove it
#
to you over time. But if you are able to prove it, then we want to be consistent in that first
#
quarter and not even in the second quarter. You know, we have like, maybe another 40 minutes
#
to talk, which is really not much. So we can't go through your book in the kind of detail I would
#
have liked. So, you know, one day, Deepak, I'm just going to have to do eight hour episodes and
#
nine hour episodes because every freaking four hour episode I do, it ends with this lamb in that
#
shit. We didn't discuss half the things we wanted to. And then, you know, listeners will also write
#
in saying, hey, you know, you didn't cover this, you didn't cover that, you didn't cover this,
#
you didn't cover that. I'm not going to feel squeamish about not covering some of your book
#
because I just think it's one of those essential books everyone should have, frankly, that, you
#
know, you're making money for what you owe it to your money to understand how you spend it.
#
Actually telling my listeners that invest with Deepak, that's a good idea. But I am telling them
#
that for understand, get a conceptual framework through which you can look at your money and kind
#
of talk about that. Now, your chapter on mutual funds is actually very illuminating the kind of
#
detail you've gone into. I absolutely haven't done justice by asking this one question and kind of
#
lumping everything, you know, you've described the different kinds of mutual funds you've described
#
the different sort of parameters, which one uses when one makes a judgment. And, you know, we've
#
got different juicy stories like the Franklin Templeton saga and all that. So there's a lot of
#
funky stuff happening there. Now, you know, moving on from that in your next chapter,
#
you spoke about a practical approach to investing and why it's important to plan for after you die.
#
And the best part, you know, the best part of all this was figure out who you are,
#
where you're right, and I'll quote this because I think it's such an important line,
#
where you write, figure out who you are, a strong fundamentals based investor, a price based
#
technical investor, or simply a person who prefers to stay passive because man, you have better
#
things to do with your life, stop quote. And that's important, because it's not as if there is
#
one alpha male approach or one particular kind of approach which works. The point is, whatever you
#
do has to be in sync with your personality and your expectations and your needs and all of that.
#
And you've handled each of these really separately in different parts to kind of talk about that.
#
And I sort of found it illuminating. And you also in this shared a couple of aphorisms by
#
Larry Height, one of which is if you don't bet, you can't win. And the other one is if you lose
#
all your chips, you can't bet. So I sort of like this, your next chapter is about, you know,
#
shares your own journey and all of that. And one of the interesting points that you make
#
in your own journey is a fantastic point where you say that working a job is just crazy. And
#
you write quote, you work on a job and you get paid a salary, you stop working, the salary stops.
#
But that's crazy, because a lot of the things you help to build will continue to serve the business
#
you worked for, stop quote. So elaborate on this a bit because people often think of working a job
#
as a safe route and doing other things as a not so safe route. But actually working a job when you
#
see it under the seat by this lens is incredibly wasteful. Well, unfortunately, it's the way it is.
#
Okay, I'll give you an example of when you build things. So when you're working for a business,
#
you're usually helping build something now that something could be whatever asset it is. So if
#
you're a customer service executive also, that customer service that you're doing is helping
#
build confidence and trust in that company. And you're you know, when you leave that trust still
#
remains in that company that you were there that point and tell all that stuff. The issue with
#
not having any ownership in what you've built is that you lose it all when your job stops.
#
But if you had a bit of ownership, that ownership would help you realize some of that potential in
#
the longer term, in years to come, you could own it as a piece of your own business, you could own
#
it as a piece of someone else's business. And whether you help it or not is a different aspect.
#
But this having a job and hoping that it will make you those big amounts of money,
#
I think in the future will become less and less less viable. That's because employers are out here
#
and you know, honestly, we write we do stock market trading and we write today there's an
#
artificial intelligence algorithm that can write and there's an artificial intelligence algorithm
#
that can trade the markets. These guys are going to come and wipe me out at some point in time.
#
I know that if I were thinking of this entire business as a job, I would be threatened.
#
If I am thinking of it as a business owner, I want to find that intelligence algorithm, make it
#
right and make it trade and reap the benefit. Instead of saying I'm employed with an organization
#
where I should be writing and I should be trading. And if they replace me with an algorithm, I'm
#
finished. To think like a business owner, you want to replace yourself. You think like an employee,
#
you hate to be replaced. So that's the point I was trying to make is that it's crazy because
#
you get to not participate in the benefits of what you build, you get to not make yourself
#
redundant, because all the incentives are against you to make yourself redundant.
#
When you're actually adding value to the business that you've created by making yourself redundant
#
in the first place, very few businesses recognize this and the ones that do promote you.
#
So I think the interesting point about this whole part of this book was to generate a feeling
#
that you have to have a piece of ownership in a business. And that is what gives you
#
the eventual satisfaction of having participated in that business. As a shareholder, you may not
#
participate in helping the business in any meaningful way, but sometimes you will be
#
surprised how little public companies even know of how to handle the simplest and silliest things
#
that for you may be. I'll tell you this, your knowledge of podcasting itself is so valuable
#
that if any of the top 50 companies started to do this, like literally any one of them,
#
saw some of the senior leadership even build a podcast around their own company,
#
I would probably buy their shares. Their knowledge of this business is so clinically,
#
so little that just my recognizing that there is a pulse somewhere that has shipped itself
#
in this direction. Why aren't our biggest technology companies? Why don't they have a
#
podcast on technology or anything like that or anything of the sort? Whereas in the US,
#
you find people in large companies very easily adapting to podcasts, newsletters, the works,
#
they put themselves out there. There is a political scientist who analyzes newsletters produced by
#
the US Congress. They just analyze the number of times any word and you can search for Narendra
#
Modi and you can search for X and Y and Z and Putin and all that stuff because they just do an
#
analysis of the list of newsletters produced by the US Congress. Our parliament barely produces
#
words of coherence, which are not in a newsletter format, but I'm just saying that it's kind of
#
amazing and surprising that you don't get anything of this sort in any other place.
#
But what I'm trying to really say is that you could help a business by giving them a way to
#
podcast, but you could own their shares and benefit from the amount of outreach they get
#
from that podcast itself. And the second one is quite as important as the first. The first will
#
earn you an amount of money for a limited period of time. The second will probably earn you money
#
at a later date, but a much larger amount for a much longer period of time.
#
Exactly. So a question that I was saving for close to the end, but since you brought it up
#
is about AI. Now my sense is exactly like what you said that at some point AI will make even
#
my writing redundant, frankly. I used to think till a while ago that there are certain things
#
that are a bridge too far for AI. Can AI write a novel that will make me weep and so on?
#
I think it will. Today I think it will. I think we should have had more humility. We've underestimated
#
what AI can do. And whatever I see on the frontiers just kind of blows me away. And I think
#
that's a damn good thing. It fills me with happiness. If AI takes over all of this,
#
it kind of means that one, we have more good books to read, right? And we have a far higher
#
quality of life, the kind of value that will be saved. If AGI ever comes, artificial general
#
intelligence, for example, people paint a dystopian vision of the future. I'm not worried
#
about it because at least in the short term, I think in the extreme short term, yeah, sure,
#
there is that kind of displacement, which new technology does. But always when that happens,
#
the benefits are way more than the costs are. And this could just be something that
#
eliminates poverty. Now in your field, it's kind of inevitable that when you're dealing with large
#
flows of information with patterns and trends that are beyond human comprehension, that eventually
#
AI will completely own the scene. Now you've taken the pragmatic view that of course it will.
#
So I will be the business owner who will use AI in the best way possible. But taking an even
#
longer view than that, isn't it kind of inevitable that at one point, not just the employee,
#
you know, say an investment firm, but the investment firm itself will be redundant,
#
because people will be, you know, just able to kind of do it all themselves. And also,
#
you know, as a related kind of question, because this is not really a question,
#
it feels like an observation. I feel like one of those old men at this book launch,
#
who will stand up at the end and say, I have a question, and then they will ramble for 10
#
minutes and not ask anything. I think I'm turning into one of those uncles. But my actual question
#
is that, you know, whatever the state of the world is, at any point in time, you know, it normalizes,
#
and then we assume this is a natural state of things. And we are looking at stock markets and
#
our financial system like that, where the basic paradigms, you assume it will stay like this
#
forever, that this is why stock markets came into being. And, you know, those purposes will always
#
be served by something that looks like this. But if you peer into the future, you know, if you sort
#
of look at the wild west forming around us, and any wild west like, you know, crypto and Web3 and
#
all that is initially full of frauds and very nebulous and all of that. But there is something
#
there to look at, which could look completely different 30 years from now. So do you see in a
#
way that these ramparts itself changing, that, you know, a future where the things that we achieve
#
through stock markets or the financial system and all of that are achieved in a very different kind
#
of setup? It's possible. I mean, we've always seen, we've seen financialization only in the
#
last 100-150 years. Before that, there was a lot of other stuff that was happening, barter, for
#
instance, and all that stuff. The way the financial economy is today can easily change to a different
#
kind of financial economy in the future, where you're, the crypto, in crypto, if you put the
#
non-scammy part of crypto is like this. I pay you with something that can appreciate in value.
#
So instead of paying you 100 rupees, which you know is worth 100 rupees now and 100 rupees tomorrow,
#
I pay you in the form of 100 coins and those coins can go up in value in terms of rupees tomorrow.
#
You want to deal with me because you think that the value of these things, so for you,
#
it's a double-edged thing. It's not only that I am paying you for the work that you do,
#
but also that I'm paying you in something that can potentially grow by itself for some.
#
This paradigm is interesting. It's like me paying you by the shares of my company,
#
rather than by cash. Shares of my company, I can still print and give it to you. Today,
#
there are regulatory frameworks that don't allow me to do this very easily, but assuming I was
#
able to do it, I could have created another company that owns a bunch of my shares and I can
#
pay you through that company whenever I want. Instead of paying Amit one lakh rupees worth
#
this thing, I'll pay him one lakh rupees of my shares and effectively print my own money.
#
If I was able to do this, then a lot more avenues open. Banks are currently the only guys allowed
#
to print money. Banks print money by nature, but banks are heavily regulated, so they have
#
certain things. But companies are not, so they could issue shares at whatever valuation to
#
somebody else. Issuing shares, you could replace the word share by a coin and you would be
#
roughly the same. Building a framework like this out of crypto and into the real world
#
is not very difficult. We can absorb that stuff and build it here. We can use the same concepts
#
that crypto is doing. Crypto is something called automated market making, a form of saying that
#
if you pay me one share of Reliance, I can pay you back a hundred rupees or two thousand rupees
#
or whatever that number is. That is discovered by the market today, but what if I told you I'll
#
exchange your one share of Reliance for one share of TCS? The difference between the two is that I
#
don't even have shares of Reliance and TCS. Somebody else has given me shares of Reliance
#
and some other person has given me shares of TCS. I am just building a balanced pool of them too,
#
so when you give me a Reliance, I give you a TCS for a predefined exchange rate that's currently
#
ongoing. This can be completely automated. The net result of this is you can trade with me
#
and I don't need to be a human being. I can be a complete algorithm that is determining the
#
prices dynamically based on supply and demand. This is already happening in the crypto world.
#
This has been happening in the forex world for the longest amount of time. So you can give me USD,
#
I'll give you INR. They're almost all run by computers, 97%. Has this removed the need for
#
a human being to exist? I think no, they just go one level higher, which means instead of the guys
#
who are trading, they are the guys who are designing these algorithms. They are the guys
#
who are figuring out how to get more done through these algorithms to the extent where some today,
#
it has helped a lot of people. For instance, when you travel, you use a card, they charge you a 3%
#
fee, then a 0.5% fee, then something else and GST and so on. So you end up paying some four or five
#
percent as a transaction fee. There's a startup that's come and built an algorithmic trading
#
framework that says when you swipe the card, we'll give you the best price possible because
#
we've eliminated all the intermediate bullshit that happens in this whole picture. And you can
#
swipe a card for a hundred dollars and we'll charge you only 75 rupees when the going rate is 74.80.
#
So the only 20 pesos spread versus 76 rupees, which you would have had to pay otherwise.
#
So this is technology where the actual trading, which would otherwise have been done manually,
#
has been done by a computer. But the benefit that's being provided is being intermediated
#
by a human being who's telling you, listen, I have the tech to do all this stuff. I'm going
#
to simplify your life. I want to make it cheaper for you to travel. And guess what? This allows
#
you to travel more, more destinations, less painful to do all these transactions and more
#
deterministic. So he can actually tell you that if you swipe right now, this is the price you'll get
#
on an app versus otherwise you'd have to call somebody and say, and you know that stuff.
#
So I think we'll just kick ourselves one level higher. Instead of writing the books, we'll be
#
doing something one level higher, which is not writing the books, but finding ways to
#
distribute them, finding ways to get them across. Whether it is the context in which those books are
#
written or whether it is something else, I don't know. I can't foresee it that much, but all I know
#
is that we will be one level higher. Humans have always found a way to evolve to a point where
#
their need is, or not just that their need is. It's like saying, just because we bought a harvester
#
doesn't mean people stopped farming. It's the same people that were otherwise
#
ploughing. The fields that are now using harvesters, there are more fields to plough.
#
So we'll find more fields within the same thing and do things better. Tomorrow, it may be that the
#
same concept can be used for five different things rather than that one thing, which is writing a
#
book. I mean, it's already happening, right? Earlier it was only books. Now it is books, blogs, videos,
#
podcasts, X, same content delivered or rendered five different ways. Maybe that's what
#
the AI will end up helping with, which is what's the best way to produce this format that allows
#
you to visualize and see this. Books will come to life in more meaningful ways than us just having
#
to write them. Yeah, I think there'll be unknown unknowns. I think we'll also write, but I once
#
said about Trump that Trump would fail the Turing test. So I think humans should have a little bit
#
of humility about their own natural intelligence, so to say. So my next question is also a broad one,
#
and this is again, at one level, it is me thinking aloud and also asking a question,
#
which I've chatted about with the two guests I recorded with over the last two days.
#
And here's the thing, earlier we spoke about how the mainstream is dissipating. Media is
#
dissipating, music made the mainstream is dissipating, everywhere the mainstream is
#
dissipating. What you're having is a certain kind of decentralization, right? Now in the context,
#
like I was chatting with the former Foreign Secretary and Ambassador Nirupama Rao day before
#
yesterday, she's written an excellent book on China, The Fractured Himalaya, and she was talking
#
about how in Tibet, earlier when they would make maps, they would not put those lines of nation
#
states. A mountain was a mountain, a river was a river, those are the maps they would make.
#
And her additional point to that, which I feel is so true, is that, you know, when you look at
#
peoples, it's almost as if peoples with exactly the same culture, with cultural continuity,
#
have been divided by these artificial lines of nation states. Now, I think you and I understand
#
data well enough to know that a sample size of years for which nation states has existed
#
is really too low to come to a conclusion about them or say that they're inevitable or they're
#
always here to stay. In fact, many modern problems come about because of our rigid notions of nation
#
states and these artificial boundaries, which divide us where no divisions need exist.
#
And I'm again thinking, you know, one of the things that people who talk about crypto say that
#
decentralization, that, you know, it's one way to get away from the tyranny of nation states,
#
from the oppressiveness of, you know, parasitic nation states, and so on and so forth. And I
#
find it interesting. So this is not really a question about finance, per se, for a moment,
#
we've moved away from your book. But is this something that you kind of think about that
#
we take it for granted, but is the primacy of nation states in our thinking that even if they
#
exist, maybe they won't be so important. Maybe they won't be such a big deal. Maybe by necessity,
#
borders become more fluid. Maybe physical borders don't become more fluid, but other borders do.
#
I'm just kind of thinking about it because it seems to me to be this secular trend of
#
decentralization across everything that you can think of. So, you know, isn't that, you know,
#
just as a mainstream media newspaper or a Hollywood studio might at some point become redundant,
#
why would central banks not become redundant and so on? Well, it's true, it could happen even now.
#
Let's not take crypto. Let's say we were all playing, I don't know, Minesweeper or, I mean,
#
some game, Minecraft. And you earned a few things in that Minecraft. You had a bunch of chests and
#
it had certain objects in it. And you could trade those objects with each other. And all those
#
objects had very nicely predefined values. So I could trade with you. You can then surpass the
#
trade nation state by just playing Minecraft. You could say, I want this particular thing. And I
#
don't care if you're in Croatia or Serbia or, you know, South, Southern Sudan, but I will give you
#
something worth five sickles if, you know, you don't need crypto for this. Crypto is a nice way
#
to do it, but barter existed for centuries. The reason we've stuck on currencies is because
#
nobody can agree on the value of anything. In the end, it comes down to, listen, I got to know what
#
one dollar means. And if I know what one dollar means more than I know that what one sickle means,
#
I'll go to the dollar. So the dollar has been a medium of exchange. The rupee has been a medium
#
of exchange only for that reason, that people could not agree on the value of something. If
#
they're able to find something else where they agree with the value of, and one of the biggest
#
things they agree on the value of is gold, for instance. But gold comes with these challenges
#
of being used as a currency because of its nature. You can't cut it beyond a certain point and all
#
that stuff. But digital things like sickles and all that stuff can be, and I can buy one fourth
#
of a sickle. Somebody has just put something in code to do it. I think it's a very interesting
#
construct, but don't you think that the separation of nation state and economics has already
#
happened? We consume Google or Amazon, well, Google to some extent, Facebook. Anybody in the
#
world can advertise to us. They have surpassed the nation state by saying, we are Facebook.
#
You can find a guy in India. And if you're a person in Denmark, you can advertise to that guy in
#
Bangalore. This is amazing because earlier you needed the physical approach. You needed to send
#
something over here and then get it out. Now you can do this worldwide. We have surpassed the nation
#
state through technology in many, many ways. I could now order digital goods from the Kindle store,
#
which is produced anywhere else in the world. In any language, I could buy a Swahili book.
#
Earlier it was impossible. So once you've got past the, I mean, even within the nation,
#
the state boundaries of whatever they were, I'm a weird guy when it comes to shoes. So in a sense,
#
hate buying shoes. But I find it fascinating that today I can buy something for 499 rupees. That's
#
made in Punjab. That the guy is making a 50% profit on by selling it to me at 499. And yet I
#
could not find that thing in a shop in Bangalore for the last 15 years. I can go to Amazon today
#
and pick it up or Flipkart today and pick it up by just going online and seeing it. Because for him,
#
the logistics of bringing it to Bangalore have been sorted out by multiple third parties in the
#
middle. So that his 499 price point also yields him a 50% profit. I find this fascinating that
#
has already been done within India. But because of its physical nature, it's not transcended
#
in the nation state. But the digital good has. Today I could read books. I could read anything.
#
I could, if it was possible, invest in stocks abroad, if they were willing to take my rupees.
#
And outside of India, the other nation states have figured out how to deal Neeta Jha's currencies
#
seamlessly. We have our own little RBI sitting on our head with a hammer. But you could buy
#
stocks of any country sitting anywhere else in the world by just using the internet today.
#
This is a way we've surpassed it. We've just not found the right ways to pay for things
#
worldwide. But eventually, if Facebook were to issue its own coin and people were able to
#
pay each other with Facebook coins, that could become a currency of the world. And by the way,
#
this is not just me saying it. They're thinking it actively. They're going to build something
#
called the metaverse where they're going to do exactly this, which is to have their own world.
#
Because they can't have a real one, they're going to make a virtual one. In that, all the currencies
#
will be Facebook's own currency. The minute you're in it, and because there are other people in it
#
from God knows which other state, or nation state, they're all going to want to interact
#
with each other. They're all going to pay a Facebook a tiny piece of that pie. Not tiny,
#
it's going to be a big piece of that pie. But their fascination is to do that. The minute
#
this dream comes close to becoming a reality, you can bet that the guys with guns will react
#
violently and take down some part of this operation. And the same with crypto.
#
At some point, the guys with guns will come in and say, no. So I don't know what that point is.
#
And maybe I'm getting it wrong. And maybe the guys with guns are the ones that already own these
#
bitcoins and all of that stuff. And they're laughing all their way when we are saying that
#
there. But I'm just saying that the paradigms will shift. It will change. And it's already
#
transcending the nation state in ways we can't imagine. I think the guys with guns will get
#
together with the guys with money. That's how it always happens, right? So there's a good friend
#
of mine. I won't name him, but we used to play together a lot in Mumbai when I was playing
#
live cash games. And then, of course, I retired. And he went on to become perhaps the country's
#
finest player based in Delhi, but now taken permanent residency in Dubai, where he once
#
played a nine-crore pot, equivalent of that. But anyway, gossip about all of that is offline.
#
So I was hanging out with him recently. When I went to Delhi, he also happened to be there.
#
And I was kind of chatting with him about what the poker economy is like. And so much of the poker
#
economy is now crypto, right? So he's in Dubai, no taxes. Some of the money is whatever currency
#
you want it in. But a lot of it is crypto. And then he can use that crypto to deposit money
#
in US gambling sites, where he can play poker. And he can withdraw from there in crypto, right?
#
And the complexity of it all, like from the outside, we sometimes get the impression that
#
ye crypto wale to matlab kya chal raha hai. It feels like it's a wild west and all of that.
#
But there's a very sophisticated economy kind of running in there, which is fascinating. And
#
everything you say resonates, like how the nation state is actually so much less relevant in our
#
lives today than it was 30 years ago. That is kind of just mind blowing. So we have 12 minutes to
#
go. So I'll ask my final question. I think that alone is something we can iterate on a bit,
#
which is that supposing a person like me, and although I will never get down to it,
#
but it's an intention. Supposing a person like me comes to you and says that, boss,
#
you know, I really respect your knowledge of finance and investing and all of that.
#
And I find it fascinating, just at an intellectual level, I also want to learn,
#
right? But what are the resources? How do I learn this?
#
This is a very good question, because the question isn't, it's like saying I want to learn music.
#
Because then my first question would be what kind of music, because there is the Carnatic and
#
Indian classical, there's Western classical, there's hip hop, there's rock, there's pop, there's a
#
bunch of others. And then there's new paradigms like EDM that...
#
Okay, let me clarify that and pause that because I recorded recently with Warren
#
Mendoza of Blackstrat Blues. And he told me that increasingly as he listens to different kinds of
#
music across the world, he's coming to the conclusion that they all have something in common,
#
which could be the pentatonic scale or whatever, you know, but they all have,
#
there's a universal pentatonic as it were. Is there something like that in...
#
There is. I mean, in the end, the similarity with almost all forms of investing is that if I put in
#
X, I want to get more than X out of it. If X was a commodity of some sort, there was no chance you
#
could get more out of it. For instance, when you invest in gold, you take the gold, you can't get
#
more gold out of it. It's never going to produce anything more than just the gold that it is.
#
But when we invest in certain other things, like a house, you want to invest in a house,
#
somebody is going to pay you some rent and the house is going to be worth more when you sell it.
#
If you invest in a stock, you're expected to pay some dividends and give it. So I think this is
#
universal as a phenomenon that you want to achieve out of it. But there are concepts that remain.
#
If you divide this world into people who have the skill, inclination and time to invest and
#
people who don't. So just to the people who don't necessarily have to find someone else who does and
#
hand them over their money or choose something as safe as a government bond or a fixed deposit to
#
invest. So for them, the choices are very clear. Find the right person who will make the right
#
decisions or, you know, so that is, that is, I think a universal phenomenon, no matter what.
#
So if you want to learn about it, your idea would essentially be, how do I learn about the various
#
forms of investing that's out there that I don't want to do myself? I want to use a vehicle like a
#
mutual fund to do. I just need to be able to select the right kind of mutual funds to do it.
#
You can go to varying degrees of complexity here, similar to music, where you could do
#
something in X degrees. The simplest form would be passive funds that are spread broadly across
#
the world. The more complex would be, I want to invest in different sectors and I want to find a
#
manager who will do the best in each sector and so on. Another form would be directly investing in
#
stocks or not. Well, since we're still giving money to other managers, we're just finding the
#
right managers. I find a guy who can invest in startups that have a potentially large return.
#
I give him 5% of my money. My job is to figure out, should I give him 5% of my money or 20% of
#
my money? That's my allocate. I'm an allocator. So my knowledge goes to the aspect of saying,
#
I understand which asset class I want to invest in. My job is to find the right managers and give
#
them money. I could be on the flip side of the table where I have the time, integration and
#
skill, where I say, listen, I'm directly going to invest, which means I'm going to take my money.
#
I'm going to allocate it to some startups, some which I understand and analyze, some stocks which
#
I analyze or something else. So there is a bit of the passive and the bit of the active in each one
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of us. So while I typically suggest the path should be start with passive and go down to active,
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a typical person's path is like this. He starts with active, goes to zero, then comes back into
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passive, then gets excited a little, goes into active, puts a little too much into active,
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then figures out passive is better and then starts balancing the two. So it's a little bit of a
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lizard's walk or a snake's walk across these two paradigms. Random lizards walk down Wall Street.
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There you go. So this is unfortunate, but this is how people are by behavior and I think we
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should promote that because if you tell them that there's only this path to go, they will never do
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it. So I hate to say this, but if you force people down the virtuous path, they will shun you.
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So you have to give them the bad path, make them learn from their mistakes and then, I mean,
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you're to give them the option of the good and the bad path and they'll take the bad path and
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come to the good path eventually. Or when I say good, I mean, it doesn't necessarily mean good
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from my perspective. I'm looking at averages here. So there will always be some people who shine at
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what they do right from day one. But having said that, I think the point over here that you have
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to look at from an investing perspective is, do you understand what you're investing in? And are
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you taking the active path or the passive path? And be very clear about the two difference between
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the two. For instance, if I choose a mutual fund manager, and then every month I look at which
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stocks he's bought and call him up and say, why have you bought this stock? Like boss kar kya rahe?
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Are you trusting the manager or you want to do it yourself? Why don't you buy the stocks directly?
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Take the active route. Why are you going on this passive route and haranguing the fund manager for
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this? On the other hand, if you're taking the active route and then trying to take the active
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route, trying to feel miserable, feeling miserable that the passive guys are doing so much better
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than you are, then you're doing the wrong thing. You should just be putting in more money into the
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passive route. I don't know if there's any commonality over here, but I think this would apply to whether
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you're investing in real estate, whether you're investing in crypto, whether you're investing in
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stocks and debt and mutual funds, or in fact, investing in art. There are some people who just
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get out. There's some people like me who can look at an image for hours and say, I still think it's
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a banana taped to a wall and I will not get it. So you're like the security guard in Russia. You
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heard about him. So some big museum in Russia or something and the security guard is left there
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and it's his first job and he's feeling really bored. So there's a painting there, which has
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all these people with, you know, round faces and no eyes and all. And he went and painted eyes on
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all of them, destroyed a few million worth of value. So you're like that guy, Deepak.
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Inclination, maybe not behavior.
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Yeah. I don't know, man. I mean, that would make me a person who wants to be an artist.
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I don't think I have that kind of level of inclination.
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So, you know, just now when you were talking about how you can tell somebody what to do,
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but this is a path they'll take, they'll make the mistakes, right? You almost sounded like
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a resigned parent. You're practicing like maybe for what you will say 15 years later,
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that might, you know, I gave good advice to my kids, but they have to make their own mistakes.
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I can't do anything now. You kind of sound like that. I hope it's not like that.
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If, you know, Deepak's kids are listening to this in future, kindly, you know.
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Well, they'll probably tell you that the first part, which is my dad keeps giving sermons,
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but they'll probably not admit the second part at any point in life, which is fine,
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because I never admitted in my life that my parents were right about a few things,
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which I'm fine with because, you know, at some point you speak from, you're a victim of your
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own experiences, which is why I can't deal with crypto. But if I was not a victim of my
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own experiences, then maybe I would have accepted crypto a lot easier, like the younger kids do
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nowadays and found the virtue in it before I find all the scams.
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I won't even say we are not victims of our experiences. We are products of our experiences.
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You know, let us not be like those people who embrace narratives of victimhood.
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You know, one complaint I have about this latest answer of yours is that, you know,
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I keep telling my writing students that, you know, avoid the abstract, go for the concrete.
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So I asked you a question about what can I do to learn and you give me a long abstract
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answer, which is very illuminating and I conceptually, I agree with it. It's very clear.
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But now I will ask you right at the end, as the last part of the last question,
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let's get concrete here, like which are the best books to read on this?
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Which are the best videos to watch on this? Is there a series on YouTube?
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Is there a course I should do? Who are the good thinkers?
#
So I think Zero Da Varsity and that is one of the best things that go around for Indian.
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So the Indian stocks, Indian macroeconomics, bonds, mutual funds,
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they have great content for a beginner. So I personally think that that is one of the
#
best resources for investing in India. If you're looking at more such content,
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go to fool.com, which is Motley Fool. They have a great set of content around
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stocks, stock markets in the US in general. So the book itself contains a primer into what
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my book itself, Moneywise, contains a primer into what stocks are, what mutual funds are
#
and how to build your own personal financial plan. Because there's two parts of things, right?
#
One is which stocks to buy and which this thing, but more broadly, how to handle your own hygiene,
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your own stock asset allocation and handle the fact that you have to invest regularly every month.
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That would be one. There are a bunch of videos on YouTube and
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every day YouTube is evolving with this kind of framework.
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But I would say depending on the kind of content you want. So if you want
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stock specific content, there are a number of YouTubers who specifically talk about certain
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stocks, whether it's in the pharma space or they actually uncover those stocks.
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For instance, I mean, right now I could think of there is a lady called C.A. Rachna Ranadi,
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who talks a lot about investing per se. There is Ish Mohit, who built a YouTube channel called
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The School of Entrancing Compounding. There are a bunch of interviews by various people
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and by the CNBC and the money control people. They've interviewed a lot of the older investors
#
who've given master classes on how to identify interesting stocks and look at them.
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If you send me links to some that you liked, I'll put them in the show notes.
#
I'll put these up there. We have a bunch of older videos around mutual funds as well that
#
talk about the basics of mutual funds, concepts of bond yields, what are the different things around
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it. So I think the YouTube universe itself is very dynamic and changing, but it's a very
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interesting set of courses. My problem with most of my studying or reading has been that it has been
#
so, you know, so to give you some books, for instance, all my books tend to be the books I
#
mentioned tend to be not self-help by Nietzsche. So most of them we'll talk about. So I'll give
#
you an example of there's a book called Liar's Poker by Michael Lewis, extremely good book built
#
around Salomon Brothers and their trading of junk bonds in the early 80s to the 90s.
#
This was a brilliant book because of the way it was written and it emphasizes the greed and fear
#
that existed in bond markets, junk bond markets specifically at the time. There's a book called
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Buffett by Roger Lovenstein. Now, this is one of the few books that does not eulogize Buffett,
#
but gives it a more even look. And maybe it appeals to me as a person who has read so many
#
books about Buffett that he wanted a more, you know, even kind of... And Lovenstein also
#
wrote When Genius Failed about LTCM, right? When Genius Failed is one of his biggest masterpieces
#
in terms of the... But apart from that, there's a book called Walk Down Wall Street or something
#
by Peter Lynch, where it gives some very basic ideas about how to beat them, how to talk about
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the market. There is a book called, I mean, this is interesting now more esoteric and the interviews
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of traders. Larry Haidt, a quote I got from a book called Market Wizards by Jack Schwager,
#
and he has written four series. So Market Wizards, New Market Wizards, Stock Market Wizards.
#
I think you recommended it last time and then I downloaded it. It was in my show notes and
#
I was reading some of it. See, we are so old, we forget that we've already...
#
No, no, no. But there what you had done is you had said that you guys had done some
#
blog posts about your favorite books within Capital Mind and I'll just link to that.
#
That's it. But I'm enjoying this more because it's like it's coming out of US personal.
#
Yeah, so the interesting thing about those books is they're interviews of traders who,
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some of them have been extremely successful, some of... And most of whom you never have heard
#
of. I mean, you've heard of a George Soros or Stanley Druckenmiller because of their fame and
#
they're bringing down the British pound and all that stuff. But you wouldn't have heard of Larry
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Haidt for some... Many people wouldn't have heard of him. You wouldn't have heard of a story of
#
something called the Turtles. The Turtles were, if you remember, trading places. Trading places
#
was a place where two rich guys say that, you know, trading in the stock market can be learned.
#
The other guy says, no, it's a bond and innate skill. And they sort of make a bet. It's a bet
#
of a dollar. And one guy says, I'll just pick a random guy off the street and I'll teach him
#
how to win in the market. And he picks up this guy and eventually it becomes very famous.
#
He becomes a big stock market trader and the guy wins. There was a real, actual world example of
#
this, where there was this guy called Richard Dennis and another guy, I forget his name.
#
They had a bet that Richard Dennis said he could train people to trade like they
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breed turtles in Singapore. So these people he hired and he trained them were all called the
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Turtles and all went on to make very, very, it's like teaching people poker the scientific way,
#
which is to always work with odds and, you know, probabilities and eventually you'll win if you
#
just play enough. So his fund was the stock market is similar. You just play by the rules.
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So he found people who could play by the rules, who had the behavioral structure to play by rules.
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And those people eventually actually made a lot of money. Some of them retired very early. Some of
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them didn't do so well, but a good portion of them did. Turtles was a very interesting example and
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he's interviewed a lot of the Turtles and Richard Dennis in this book as well. So it's fascinating
#
because it gives you a ringside view of all of this. And of course, this was the 80s and 90s.
#
Today is, well, I don't know, I don't read quite as much nowadays and perhaps more content comes
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in YouTube and podcasts, but if you like podcasts, then this is strictly invest. No, not strictly
#
invest. What is it called? Invest like the best. Invest like the best Patrick O'Shaughnessy.
#
This is a brilliant podcast of only people. He invests only people in the investing world,
#
mostly American. I like that podcast because it makes you think and it has a very interesting
#
investing insights as well. So I'll stop there because there's too many resources.
#
Yeah. And I'll add one book to this. I don't know if you've heard of this guy called Deepak
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Shanoi, friend of mine. He's written this book called Moneywise, Timeless Lessons on Building
#
Wealth. So do pick up Moneywise from Deepak Shanoi and you will learn a lot. Deepak, dude,
#
thanks so much, man. You've been so patient. I just want to tell my listeners that we are recording
#
this. I came to Bangalore to record a bunch of episodes and Deepak has this really swank
#
YouTube come podcasting studio in his office. It's mind blowing. And so we started recording
#
at 10 and we had like lunch in between and coffee in between. And it's now 5.30 that we're kind of
#
wrapping everything up. And all day he's been fielding frantic calls from people saying Russia
#
has invaded Ukraine. What now? The market is crashing all over the place. Three people have
#
already jumped off the top floor of this building. It's chaos outside. And Deepak, you've been so
#
kind. Thank you so much. This was brilliant. In fact, great to have you here. Great to have
#
done this. I think thanks for all the comments in the office as well. This is like the whole
#
team has been building this for the last year. It's been fantastic. But more importantly, I've
#
had fun doing this episode. I hope you've had fun listening to it. I know that probably a good
#
portion of this deserves to be chopped off just simply because there's hours and loops. We don't
#
chop nothing off. Listen, there'll be people saying you do another five hours with Deepak.
#
I'm guaranteeing you it'll happen. It'll be fun. One of these days we should do like a late night
#
session if you're not in Bangalore. I think what is left is stream. You know what? You and I should
#
do a stream and do an Ask Me Anything. Yeah, that's a fantastic idea. We'll do it on YouTube and then
#
it's up to others to make it last as long as you want. As if you don't have a life. You know,
#
I can afford to do it, but your time is worth a little bit more than that. However, having said
#
that you are buying 499 rupee shoes, I don't know why. I hate buying shoes. So I just buy this for a
#
fascination of mine. But dude, thanks so much. Amit, this has been great. And, you know, welcome
#
again to the Scene in the Unseen. Yeah, and thank you so much for coming on the CapitalMind Podcast.
#
If you enjoyed listening to this episode, hey, hop on over to your nearest bookstore online or
#
offline and buy Deepak's wonderful book Moneywise, Timeless Lessons on Building Wealth. You can
#
follow Deepak on Twitter at Deepak Shinoi. That's one word at Deepak Shinoi. And you can follow me
#
at Amit Verma, A-M-I-T-V-A-R-M-A. You can browse past episodes of the Scene in the Unseen at sceneunseen.in.
#
Thank you for listening. Did you enjoy this episode of the Scene in the Unseen?
#
If so, would you like to support the production of the show? You can go over
#
to sceneunseen.in slash support and contribute any amount you like to keep this podcast alive
#
and kicking. Thank you.
