GL – Mr. Vikas Kasturi
Guest Lecture – Mr. Vikas Kasturi
Date: 17th Nov. 2019
Title: 8th Wonder – “Compound Interest”
Speaker: Mr. Vikas Kasturi
Designation: Portfolio Manager
Program Coordinator: Prof M S Prathibha Raj
Warren Buffett is not only one of the world’s best investors of all time and one of the richest men but also a great human being, a philanthropist and teacher. In this session, students learnt to think and invest like him. Mr. Vikas highlighted the importance of Compound interest in one’s life. “One who understands it earns it. Who doesn’t, pays it. He mentioned buying and selling is a zero-sum game where the buyer can become richer and the seller can become poorer or vice-versa. He clubbed it with real-life examples like Warren Buffet and his investment in compound interest, who turned his life using the formula and now has a net worth of over $80 Billion.
He explained:
- The difference between earning in Simple Interest Vs Compound Interest.
- Rule of 72
- Time – More time, more returns.
E.g.: He gave students a business model where –
- Input => Machine => Output
- Capital => Business => Profit
- Output/Input = Efficiency of the machine
- Profit/Capital = Return
He said, the above can be used for Branding, Network effects, Game theory to the stock markets, and everyone should try and learn, how to identify opportunities for investing for the next 10/20 years that can make them rich. He gave formula:
- High rate of compounding + High reinvestment + Long time = Wealth creation.
- Low rate of compounding + high investment + long time = Wealth Destruction.
“Time is the friend of wonderful company and the enemy of mediocre”
– Warren Buffet
Mr. Vikas gave students a checklist which they needed to complete for wealth maximization –
- Principal:
- Save before you spend
- No debt/ No Credit card
- Rate of return:
- Simple business
- High quality, Profitable Company
- Time + Patience
He ended the session with a valuable quote:
“Price is What You Pay, and Value is What You Get.“
At last, we thanked him for sharing his valuable experience and knowledge with us and presented him a memento as a mark of our gratitude.
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GL – Mr. Vikas Kasturi
