Have you wondered what is the connection between creating a portfolio, ghee, life and Hindu mythology? Have you wondered why we use ghee as a ‘purifier’ in all our poojas that we do?

Have you wondered why many Indian communities take a small portion of ghee in our day to day meals even though we have doctors saying that ghee creates heart trouble? Ghee is got by a process – somewhat similar to the portfolio creation process. When you get milk you want to keep it with yourself for life –well it is not possible. You and I both know that!

So you need to heat the milk, and reduce the water content in the milk. Then bring milk to boil.
Similarly in your portfolio, you need to research a lot of stocks, read about it, meet the management, and then buy it. Then you do bring it to boil. You sell not only because the company is not performing to potential of what it said, but also, because you have other opportunities. Bad luck! Who said life is fair?

This is just boiled milk. Then you cool it, add a little bit of curd and ferment it. The whole thing turns to curd. (the only useful derivative is curd – it is a derivative of milk and I do not know of anybody who has lost billions or even millions by this derivative).
Then you skim the curd (of course you could have skimmed the milk also) and remove the ‘fat’. This fat is then churned – and some more water is removed. What you get is butter.

This butter is very pure and on the day it is produced it is called ‘Navneet’ – and is said to have been the principal food of Lord Vishnu during his avatar as ‘Lord Krishna’.

This ghee still has some water and some impurities which have to be removed.

So this BUTTER is brought to boil – and you find some black particles floating on the top. This also has to be removed.

Once all this process is done, you have ghee. Just like some portfolios that I have seen. Hindalco held for 50 years, Tata Steel held for 35 years, Colgate held for 33 years, Reliance Industries for 32 years, P&G for 30 years Hdfc for 30 years, Hero Honda held for 25 years, Infosys held for 16 years, EID Parry, Cholamandalam, Coromandel Fertiliser, Larsen & Toubro, Tata Power, Tata Motors, Tata Chemical, Grasim, HUL, Cadbury, Kodak, Franklin India Bluechip held for 12-15 years, Top 200 (not sure whether to call it Zurich Top 200 or Hdfc Top 200) held for 12-13 years.

During the process you make mistakes like acquiring Orkay, Pentamedia, Silverline, Indiana Dairy, ….and many others. Use the process to get rid of water and the black particles. Faster the process, and greater the rigor, greater the ghee that you and your family can use. For your own consumption and for friends and loved ones’ consumption.

This is ghee. After the milk has been boiled, churned, cooled, etc. This ghee can feed you for a long time – as long as you are sure that you choose to watch Animal Planet (or Discovery) and take only one spoon of it a day. Too much ghee creates health problems, I agree with the doctor. Live only off the dividends. Even your grandchildren can. Somebody needs to keep repeating the process. Hindalco may have to be replaced by Gillette, ABB maybe taken private, some gold company may turn out to be mud, teach your kids the process of creating a good portfolio. Managers cannot do it for you.

"CA P V Subramanyam is a Trainer and runs www.subramoney.com "

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e-mail: PV Subramanyam

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