Why Moneyworks4me Superstars is the Ultimate DIY Investing Solution

Culturally Indians are not a big fan of DIY, assemble-it-yourself furniture and prefer to buy ready-to-use furniture. And to top it we are not minimalist in our taste.  Then why did Ikea choose to come to India? Pundits on Indian consumer behaviours are already calling it a mistake.

When it comes to investing in stocks directly, pundits in the investing world have had the same view and justify it further by pointing out that investing in stocks is complicated and best left to experts - Fund manager, PMS, etc. They further provide stats like very few people invest in stocks directly, that even fewer succeed and this number is not going anywhere. Till Covid happened. The number of people getting into stock investing has grown multi-fold and still growing strong. Now the question remains how many will succeed as retail investors. We have looked at this differently. Since 2008 we have been focussed on designing a solution to ensure DIY stock investors succeed.  What is required to ensure this? I am going to explain this through my experience with making, getting made and buying bookcases.

Bookcases and what it tells us about investing

My wife and I are avid readers, and once something gets us curious, we are prone to buying several books on that subject. And we have done this for decades now. So, there are books everywhere you go in our house.

We have got all our bookcases except one, made by a carpenter. The first two, more than 25 years ago which turned out to be too unwieldly and the last one about a year ago, which turned out to be too small. We did discuss the design with the carpenter/their boss, who also shared some furniture catalogues to help us chose the design. But we are responsible for the design since we did not pay the carpenters anything for their inputs on the design.  I would call this a Design-it-Yourself or Decide-it-Yourself way of doing things.

This in the context of investing where decision making is everything and executing it is simple, DIY or Do-it-Yourself is essentially Decide-it-Yourself.   DIY investors typically use some information and research sites and services while making the decisions. The interesting similarity is just like I used the carpenter’s inputs, referred to catalogues and their services for free to design the bookcase, a lot of investors use the services of Mutual fund Distributors, MFDs and Stock Brokers Research services to make investment decisions.

What I learned from my attempts of designing my various bookcases is that each bookcase is different and has limitations I wish I had avoided through a better design. And none of them are something I can build upon further without serious cost and compromises.

Now coming to the second option, we bought one bookcase which was fully built. We searched many furniture stores and did not find something that made us go aha, this is what we always wanted. So, in the interest of managing the piles of books we bought one knowing it was not very sturdy but it was cheap so we could get rid of it once we had a better alternative. It is still around. It serves the purpose of holding our books, but it doesn’t really fit. This is a Do-it-for-me, DIFM solution. The furniture seller did not make any changes in the bookcase and we bought it as it was. In the context of investing this is like buying mutual funds or a PMS. They don’t claim to have made it for you, so they are not responsible how well it serves your needs, that’s your responsibility. But you do nothing except buy the solution and hope it works for you. 

The Ikea Bookcase

When Ikea came to India, we thought our bookcase problem was solved. We had visited an Ikea showroom in Sweden, so there was reason to be hopeful. My wife wanted to visit a store before taking a decision. As luck would have it the bookcases on display were not good; too flimsy and looked unstable, too much gap between the doors which means dust would get through it very easily.  So, first attempt did result in success.

A few weeks ago, my wife saw a bookcase in a friend’s house. Though it was an open one it was quite sturdy. So, she decided in the interest of clearing up the littered look in the living room to order one. So, she got on the Ikea site and tried to order one. The colour she wanted was not available in the store nearest to Pune. So, she decided to wait. Nothing happened for a few weeks. I was getting impatient. I checked the site. A darker shade of walnut was available. I ordered two, so that we don’t have to go through this once again.

My concern was should I ask them to assemble it, or do it ourselves. After all it involved glass doors. I am not blessed with good enough skills to do these kinds of things. But we had helped our son assemble a wooden sofa-cum-bed, not Ikea, in the US and it seemed pretty much doable. Moreover, it wouldn’t be an Ikea person, but someone from Urban Company. We decided that we would assemble it ourselves.

A few days later the bookcases are delivered exactly on the day they promised and neatly laid out in the bedroom where we planned to set it up. Now, the moment of truth had arrived. Assembling it. First, we checked out a video on how to do it on YouTube, which was pretty neat, though it was one without doors. It seemed doable.

To cut the story short, my wife and I assembled the bookcases, doors, and all, comfortably, following Ikea’s flawless instructions without any anxiety and more joy that we thought was possible.

The design is perfect for a bookcase. The width and the shelf plank thickness is optimized so that they don’t bend under the weight of the books. The height is just right and we can reach the top shelf with ease. The shelf height can be varied to suit different books if required, seems unlikely that we will require it. The doors fit perfectly. And it can hold a lot of books without occupying too much space especially floor space. They have achieved this by providing a metal bracket that fixes the top of the bookcase to the wall so that there is no chance of it toppling over. However, we had to call our regular electrician to do this and it was completely done.

What does the design logic of Ikea tell us about what makes for an effective DIY investing solution? 
Or what does building an Ikea bookcase tell us about building a stock portfolio?

There are guys (mostly guys), who can design and build home furniture like bookcases from scratch. They are passionate and skilled at carpentry, building things with they own mind and hands, but they aren’t carpenters by vocation. They form the top end of the DIY category. There is a whole industry, mostly in the West, that caters to them.

Then there are regular people like you and me who need furniture to improve the quality of life at home, are not skilled at making them and don’t have the time to acquire that skill. As explained through my personal example, they do not prefer to buy readymade furniture that they just place in their home chiefly because it never completely fits in. Nor they want to bother, for various valid reasons, get a carpenter and get it custom-made. Ikea, and others in this category, provide an alternative.

I think it is fair to say that most if not all retail investors do not have the level of knowledge and skills typically possessed by equity analyst to make informed investing decisions starting from a company’s P&L, Balance Sheet, etc. However, they invest in stocks. They use free data sites and/or subscribe to services mainly online services and go about investing. They are the typical DIY investors. I think they are people looking for an Ikea like solution which includes the following:

1. Ikea does not expect or require you to have any carpentry knowledge or skills to achieve the desired results. 

A DIY solution for the investing in stocks should not expect you to have research analyst level or even a high level of knowledge and numerical or excel skills to arrive at the right conclusion. When I see a table of numbers on a whole host of things that make up the P&L and Balance Sheet of a company, it is not a DIY solution for the masses, it is data. It’s great for an Equity Analyst but it does little to help a ‘regular’ DIY investor make informed decisions. 

Moneyworks4me Superstars is a decision-enabling solution not a data, news, information, or education-only site. It therefore provides all these in a manner that you have the necessary and sufficient information to make informed investing decisions without having to process it any further. So, when you get a recommendation on Superstars, you know why it is a stock worth investing in at that price and are not required to simply act on faith, nor search for supporting data. 

2. However, Ikea does require you to assemble it in a certain way, for which clear instructions are provided. You can’t go wrong if you follow the instructions for which there are detailed diagrams for each step.  

DIY stock investors need to build a portfolio which grows their savings into wealth. So, a DIY investing solution must provide a clear process for ‘assembling’ such a portfolio. The process should be so designed that a ‘regular’ DIY investor can implement it in the intended way and get the desired results with very little chance of going wrong. The choice of the Investing Process is critical in ensuring this despite the cycles and volatility in the market. I was anxious about whether I will be able to fix the glass doors so that they are perfectly aligned, have very little gap between them and open and close properly. The design and the instructions for this were superb and instead of anxiety I enjoyed doing it. 

With Superstars you invest based on Quality-at-Reasonable-Price, QaRP way of investing. This ensures you never invest in risky stocks and never pay a very high price for it. QaRP process is most suitable for DIY investors and enables them to invest confidently as well as stay the course when the market or economy become uncertain or volatile. It eliminates the chances of making fatal, regrettable decisions. As you invest using the QaRP process your ability to stay invested increases allowing compounding to work on your portfolio and create wealth. 

3. All the stuff-screws, hinges, dowel pins, etc required to assemble it are provided for except the screwdriver. So, you can start assembling right away and complete it.  

A DIY investing solution must provide all the data, information, research, recommendations, reports and tools which must work in a fully integrated manner so that the investor can implement the process completely and easily. Investors should be able to build and manage their portfolio by making an informed decision right away, every time, any time. This requires up-to-date decision-enabling data be available in real time. A service that provides one stocks idea a month may be a good service provider but it cannot qualify as an investing solution. 

With Superstars you have access to data, information, research, recommendations, and tools, all working in a well-integrated manner so that you can make informed investing decisions with ease. This includes a clear process for identifying and colour-coding stocks for quality which is visible to you and our equity analyst estimating the long-term fair value of the stocks covered/recommended which is also visible to you, many for over a decade. 

You also have access to a complete online program that teaches you how to invest in stocks and how to use everything provided on our site more effectively to implement the QaRP way of investing.  In an amazingly short time you are fully equipped to invest in stocks like a PRO. 

4. Ikea provides options that you can add to build a more complete solution, eg bedroom, living room or dining room sets. 

A good DIY investing solution must enable an investor to build a well-diversified portfolio and add a different set of stocks as his experience and comfort in stock investing grows. 

Superstars plans are designed to help investors build a portfolio like a pyramid, with a strong base that can support a tall structure. By identifying 3 different categories of stocks based on how they perform in a market and economic cycle and deliver returns, they are classified as Core, Boosters and Amplifiers. 

You can start with the Core Superstar Plan and build a strong foundation with robust and resilient stocks bought at reasonable prices. You can then upgrade to Superstars Select to add Booster stocks that can enhance your portfolio returns. Booster stocks are high quality select mid and small cap stocks that can grow faster than the market. Finally, if you have a large portfolio and enough experience you can graduate to Superstars Amplified Plan and add more Booster stocks as well as a set of Amplifier stocks.  Amplifiers boost portfolio returns in the medium to long term through outsized returns. Typically, these companies work on some challenges that are difficult to solve but when successfully solved, can provide strong profitable growth for significant time in the future.

5. Building the Ikea Bookcase makes you a co-creator and this transforms your relationship with furniture that cannot be matched by buying ready-made furniture. 

This is a huge differentiator for Ikea. The act of assembling and building the final piece of furniture from mere planks of wood transforms you from being someone who just paid to own the furniture to some who play an important part in building it up – a co-creator who knows his creation intimately. It also gives confidence to do even more sophisticated furniture you wouldn’t imagine you could do until you ‘build’ the first one. 

A DIY stock investing solution becomes a great solution when it gives you this Ikea experience. There are many ‘DIY” solutions where stocks and even portfolios (model portfolios) are provided and the retail investor is expected to act upon it without having to apply their mind to it. To prevent this SEBI’s proposed changes asks for ‘Factsheet’ to be provided, which is step forward. However, it remains a substitute for a mutual fund and a ‘poor’ man’s PMS (as it does not require you to commit 50 lacs to it) and is in effect a DIFM, Do-it-for-me solution.  

DIY stock investors are and want to be the decision maker on which stocks they invest their money as opposed to investing in a Mutual Fund. The DIY solution role is to enable them to do this successfully and with a lot more ease than having to analyse a stock like an equity analyst. It is therefore co-creation with the investor taking the lead. A big benefit from a great DIY solution should be that investors know more about their investments, take informed buy, sell, and hold decisions and have confidence to stay invested. This ensures that the investor benefits from compounding in a big way. 

In contrast, DIFM solutions require you to let go of control and influence over how your money is invested, and you do not know or learn about stock investing enough to navigate through the ups and downs in the market. All you can do is either trust the agency investing your money or exit. Even when you succeed, the joy is limited to having more money. If this is okay with you, you should invest in Mutual funds and forget about stock investing.

Moneyworks4me Superstars is designed to give you the ‘Ikea experience’ of being a creator and owner of your stock portfolio and managing it successfully to create wealth.

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