The Hindu Business Line : Money Talk

Mr Pramod Jajoo is Managing Director of India Operations and Vice-President of Engineering at Xora, a company which delivers mobile workforce management solutions. With a B.S. in Computer Science from BITS Pilani and an M. S. in Computer Science from Rensselaer Polytechnic Institute, he was earlier with companies such as Sun Microsystems and Healtheon. Mr Jajoo shares his experience on investing, with Business Line.

When did you start investing: Did you start at an early age?

I started investing reasonably early. I was 23 years old at that time and had just started my career at Sun Microsystems in the US. In my opinion, the earlier you start the better it is. Though I started investing only after I started earning, if one has the luxury to invest earlier, he or she should.

What asset allocation did you start with and how has it changed over the years?

I started with stocks and that too with those that I was familiar with, such as the technology stocks. Over the years, my investment profile has changed from being `aggressive' to `moderate' and I have added diversified mutual funds and non-equity investments such as bondsand certificate CDs to my portfolio.

Which was the first stock you picked, at what age and did you make money on it — any learning from that experience? Are you systematic in the allocation of finances?

The first stock I picked was a company called Zycad, which I believe, does not exist anymore. I must say that it was not based on any major research. As beginners luck would have it, I made profit of about 35 per cent within few months of holding the stock. Even though I made money on it, I realised that some research must be done before you invest in specific stocks and one must understand ones own "risk tolerance" and not get carried away with what others are doing. I wish I were more systematic in the allocation of finances... I was heavily into the technology stocks during the "Internet bubble". Many of these companies had wild swings in the stock prices, — so a lot of profit evaporated before realising it.

What is your return expectation?

In my opinion, if you consistently get 6-8 per cent more return than the inflation rate I think you doing great. In general, the longer one has for investment to work, more the risk one can take and more the return one can expect. I expect my portfolio to help me pay for my kids' education and my retirement.

Do you prefer direct investing to mutual funds?

Initially, I was doing only direct investing — buying the stocks of the companies that I understood (mostly technology companies such as Microsoft). However, because of lack of time, I have done little direct investing, of late, and rely on SIPs in mutual funds. With experience, I realised that for an average investor, it is hard to time the market and pick the right stocks. In my opinion, mutual fund SIPs provide a less risky and unemotional way of handling the investments.

Any books on investing that have impressed you?

I liked Peter Lynch's Beating the Street and One Up On Wall Street. It was good to know the thoughts of perhaps the most famous and successful of the mutual fund managers. Another good investment book that I liked was, The Millionaire Next Door by Thomas J. Stanley and William D. Danko. I also liked Warren Buffet's investment essays (I have not read all of them), though one cannot hope to emulate his success.

BL Research Bureau

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