Marketing and use of education

education, Marketing

I have written a few posts on this subject earlier also. What is different in this post is that I have been seeing which industries do more of this and which not so much.

What I have observed is that in India, its the financial industry – specifically Portfolio Management Companies and Equity investment houses and to a certain extent Mutual fund companies that do a lot of work towards educating their customers, in their own different ways.

So you could have representatives of fund houses come on business channels and on internet properties and talk about their view of where the market is going. Generally the underlying point of the discussion is related to the kind of fund they are launching.

I have already written earlier also about the enormous amount of knowledge that Raamdeo Aggarwal of Motilal Oswal spreads free of cost with his Wealth Creation studies. Its an enormous amount of effort these people would be going through to create these wealth creation studies. The amount of knowledge I have got through reading these free reports, of the Indian stock markets, is more than all the knowledge I have gained over the years by buying and reading books from international authors. to be fair to the international authors, there are certain nuances about the Indian stock market that are different than the more matured US stock markets.

An author whom I have written about earlier also is Saurabh Mukherjea. He weaves interesting stories in his books and includes a lot of background information about the Indian stock markets. He runs a company by the name of Marcellus Investments. You could read the books to gain the knowledge that he is giving or you could also understand the philosophy of their investment process. If you like it, you could actually also park your money with them. He has recently come out with a book Diamonds in the Dust:Consistent Compounding for Extraordinary Wealth Creation, again with a lot of in-depth examples and case studies.

All this education , in all the three examples, is given on absolute neutral basis, but all of them do inform about their philosophy and how their funds work, in passing. So if you like their philosophy you could decide to use them for your financial goals.

So as an example, since I had gained so much free education from Motilal Oswal, I felt obliged to open my demat account with them , when I wanted to enter into the stock market. Indirectly that investment in freely educating me, by Motilal Oswal, has resulted in consistent business for them.

See how you can utilise education to indirectly influence your prospects.

Till next time then.

Carpe Diem!!!

Asset Allocation – concentration within an asset class

Abundance, compounding, Financial Independence

Today I am writing on financial advice after quite a long time. I have written multiple times earlier also about how asset allocation is important to buffer you against shocks in one asset class. Especially when you look at it, when you are in a debt instrument like a Fixed Deposit or Term Deposit with a bank then the amount promised (or interest rate promised) is almost guaranteed.

On the other hand prices of stocks and commodities keep going in cycles and real estate also moves in cycles. As they move in cycles they also have a tendency to go down multiple tens of percentages during down markets. On the other hand they also spike up multiple tens of percentages and can over many years give a massive inflation adjusted return.

But keeping your portfolio balanced between different types of assets is critical because being concentrated in one asset class can totally destroy your wealth.

Today however I will talk about why it’s important to concentrate your allocation within an asset class.

As Garrett Gunderson says, being diversified means lack of knowledge / conviction. If you are not confident of the items within an asset class on which you are confident of growth then its better to invest in ETFs or mutual funds for that asset class. These are designed to generally be diversified so that the individual risk is avoided an average return can be delivered. These are however also at risk of market fluctuation.

On the other hand if you see when the news reports talk about a market being at a high or low, they always talk of a certain “bucket” of stocks. Which means it is the average of all the stocks in that bucket.The Nifty or Sensex or the S&P 500 are all examples of buckets in different markets . These buckets are also called index.

As in any average there are things which are way above the average number as well as way below. If you have invested in the stocks which are way above the average, then you can make returns which could even be more than 10 times the index over a period of time.

However the amount your portfolio can grow is determined by the quantity of these “peaking” stocks that you have in your portfolio. If these are only say 1% of your portfolio then even the growth of the 1% by leaps and bounds will not be helpful if the remaining 99% is not growing. If you want to get compounding to work for you, to help you create abundance, then the stocks that you have should be the ones that have the ability to grow faster

I learnt this lesson when I was reading the Motilal Oswal Wealth Creation studies and its a critical aspect for your investing, of you are doing it on your own. If you don’t have the conviction or heart to do this kind of work to build your portfolio then its better that you focus on mutual funds and / or ETFs.

Till next time then.

Carpe Diem!!!

Marketing is Education – Part 3

education, Marketing, Methodologies, Technology

In this part today we will look at another set of great marketing successes who have used education as a method to differentiate themselves and made me their customer.

Example 1: Jay Abraham. I referred to him in the first part of this series. He is big time into giving away knowledge free of cost. There’s so much knowledge which I have gained from him, that when I could afford I started investing in his programs. Due to him I learned that there are only 3 ways to grow a business. The strategy of pre-eminence. The marketing Parthenon etc.

Example 2: Motilal Oswal.This is one of the biggest brokerages in India. When I was starting to learn about the stock markets, I read a lot of the Berkshire letters to the shareholders by Warren Buffet. I read a massive amount of books on the subject. The only challenge was that all the content was international. I was looking for content specifically for India.

That’s when I found the Wealth Creation studies that have been authored by Raamdeo Aggarwal each year for the last 20 odd years. These studies don’t talk about their company at all except maybe for the methodologies they use. Due to that, you gain trust.

When I read those twenty odd reports, I was able to understand the Indian stock markets. So when I had to choose my brokerage, I chose motilaloswal. There were others who were offering cheaper options but because I had trust in motilaloswal, I took them.

Its however difficult to create pure education based content and put it out. Even though I am so much in favor of creating educational content around your offerings, its especially tough when you are in the technology space where there’s so much happening. So I also struggle to get this to happen.

Having said that, I would still think its the best way to build trust with customers.

Till next time then.

Carpe Diem!!!

Diversification is admission of ignorance

B2B, ideal customer, Marketing, messaging, prioritizing, Product Management, segmentation, single target market

A few posts back I had written a post on how giving too many choices actually reduces the chance of success.

I used to hear a lot of gurus in the stock market talk about being focused with not more than 10-15 stocks to get the best returns. If you read the Wealth Creation studies by Raamdeo Aggarwal, he gives a lot of examples of how being focused can give much higher returns. If you want average returns then you can just take an Index ETF.

The other day I was listening to an interview of Garrett Gunderson with Joe Polish on YouTube. And he happened to mention this term in passing and it kind of stuck with me. Garrett has written a very nice book Killing Sacred Cows: Overcoming the Financial Myths that are Destroying your Prosperity.

Even in marketing if you try to do too many things trying to see which will succeed is because you are not sure of yourself either on your offering or on your market or a whole lot of other things. Most of the time we try to do multiple things at the testing stage to see what sticks and what falls. But once you start seeing what sticks you need to start improving on that. You can’t be testing multiple variables simultaneously. It never works.

You cannot be testing multiple offerings in different markets and also seeing which message works. I have done this at different times and flopped badly. Sometimes these were done because I fell in love with multiple brands and thought I could get them launched at the same time but then eventually realized I could not do justice to all of them. It was definitely my ignorance then. At other times I was in a tight spot and had to somehow get something moving and thought at least if a try so many things simultaneously, I will be able to get success somewhere.

Eventually I have come down to some very specific things for B2B marketing. I need to identify only one target market and niche it as much as possible when I am launching a new product / service. If your segmentation is done well and then you get your database / list based on that you have already come a long way. After that you test your messaging.

The 80/20 that I have been talking about in the last few posts is exactly the opposite of diversification. Its about focus and the knowledge which comes from focus. Like the image above, a few colors in a pattern can give a good look but putting too many colors on the same rug, assuming some one will like some color is ignorance.

Whether its finance or marketing or even other areas of your life you can spread your self, diversify and be shallow and ignorant or go deep, focus and be knowledgeable and get great results.

Till next time then.

Carpe Diem!!!