Paul Mampilly, Wall Street mogul turned research and investment analyst, has left the fast pace of billion dollar dealings and currently tries to help everyday people make money. He began as an assistant portfolio manager at Bankers Trust and worked his way up the ladder as an investor for multi-billion dollar companies. Thanks to Paul Mampilly, Kinetics Asset Management enjoyed the benefits of the “World’s Best” hedge funds. Eventually, the stresses of Wall Street got to him, and he decided to focus his efforts on helping common individuals make the most from their money.
Mampilly started his career in 1991, as a research assistant for Deutsche Bank. From this starting point, he made his way up the ladder through positions at companies including ING and Bankers Trust. In these roles he was given the opportunity to manage multimillion-dollar accounts of all kinds. By 2006, he had already been recruited by a firm worth $6 billion. He became their key hedge fund manager, and soon after his arrival the firm’s assets exploded from $6 billion to over $25 billion in total value. The fund was named one of the world’s best by multiple outlets, and Mampilly’s star quickly began to rise. Since then he’s held a variety of positions, and now focused primarily on offering financial counsel to individuals around the world.
Listening to the answers that he gives to various questions offers great insight into his successes and provides solid advice to people who want to make sound investments. While each story is different, Mampilly’s background and his responses to these key questions can help investors of all experience levels learn and develop their skills while learning to understand this volatile and fascinating market as a whole.
After leaving Wall Street, what are your ultimate goals?
Wall Street was very exciting. However, I always felt that it doesn’t help everyone. It is geared toward the elite class. When I left, I began my “Profits Unlimited,” a newsletter that explains to regular Americans how to invest their money. Besides giving them helpful tips, I hope to introduce the investment world to individuals so that they have a better impression of where to put their paychecks and enjoy more fulfilling lives.
People sometimes speak badly on the financial advice sector, considering it some type of get-rich-quick industry. But for me, it’s never been about the money itself. It’s about the peace of mind and lifestyle that financial security and responsible investing can provide. I’ve seen people benefit from my guidance not by becoming multi-millionaires, but by being able to put aside their nonstop workweeks and spend more time doing the things they love with the people they love.
For me, that’s the ultimate goal—to help more people access the kind of financial independence that can change their lives for the better. Many people make unwise financial decisions not because they’re foolish or stupid, but because they simply haven’t been taught the best approaches or how to make smart financial moves. That’s where I come in, and it’s been an incredibly fulfilling experience beyond my time on Wall Street managing billion-dollar funds.
What is the best thing about retiring from Wall Street and following your current entrepreneurial path?
Wall Street is filled with pressure. Transactions that are worth billions of dollars are on your shoulders. It is essential to have faith and to ride out the negatives. Making good decisions makes you a hero, but making mistakes makes you a zero. Being out of the direct spotlight makes things less stressful. However, I am still committed to providing solid investment advice.
When you’re on Wall Street, it can be easy to get so caught up in the numbers that you lose sight of what’s behind them. If you’re not careful, it can all become data on a sheet. But there are actual lives attached to that money, people who’s lives can change for the better if you make a smart move or for the worse if you make an ill-advised decision. For me, one of the best things about retiring and following my current entrepreneurial path is that I’ve gotten back in touch with the human element behind investing and financial guidance. I’ve talked to real people who have benefitted from the advice that I’ve given, and that’s one of the most satisfying feelings in the world. That’s as opposed to my time managing huge funds, where successes were met with acclaim and rewards but rarely gave me the opportunity to see directly the outcome of my actions.
All that said, I’ll always have love for the thrill of trading and managing on Wall Street. It’s an experience I’ll never forget, and certainly one I look back on with no regret—only fond memories and gratitude for all the experience I received as a result. Without that experience, I wouldn’t be able to offer the financial and investment advice I now give.
In your opinion, what is the worst part of Wall Street?
Wall Street’s catalyst is fees, not the success of investments. Middlemen always take a cut of a person’s successes. Hedge funds are the only parts that are driven by investment performance.
That never sat right with me. I always struggled to reconcile the fact that success wasn’t rewarded strictly by successful investments. If you’re a teacher, your success should be measured by how much your children actually learn—not some arbitrary measurement or dictated score set. If you’re a surgeon, you should be measured by your surgical success rate. In investing, I believe that success should be dictated solely by an investment’s success or failure. If I advise you to make an investment and that investment turns out to be a bad one, I shouldn’t still be able to collect fat fees from the money I invested. While I understand the reasoning behind it, it still never sat right with me. If I were ever suddenly elected ruler of Wall Street, that’s one of the first things that would change—people who made successful investments would be rewarded. Those who didn’t, wouldn’t. End of story.
Do you think the market is rigged in any way?
In certain ways, the market is rigged. Insiders have more access to information and experience. That is why I started my business. I am trying to help everyone gain knowledge that will help them enjoy success in the market.
Some people hear that and they don’t believe it. In this internet age, people believe that all of the information that exists is available to anyone with a computer and an internet connection. But the truth is that when it comes to investing, a lot of information is still very carefully guarded. People in the financial sector hold the incorrect belief that if they give their information up, they’re only helping the competition. But the opposite is actually true. The more people are informed enough to make smart investment decisions, the better the economy performs as a whole. That results in more people enjoying returns on their investments. Many can’t see that, and in that way the market is still rigged. Insiders tend to hoard their information, which makes it nearly impossible for beginners to get a leg up. That’s why I do what I do. It’s what my business is built around.
What do you do before you give investment tips?
I always think about ways that I can be wrong. When I make recommendations, I try to look at both positive and negative aspects. It is vital to get viewpoints from all angles and different individuals. Having tunnel vision can get you into trouble fast.
Many financial advisors have a few successes, and it blinds them. They begin to think that their instincts are infallible, so they begin believing their own hype. They want to think that they’re always right, and so they stop looking for potential ways that they might be wrong. The result? The people who depend on their advice receive sub-par guidance that hasn’t been researched effectively.
That’s why it’s so essential to always stay aware, and never assume that your success is the result of some innate gut instinct. That’s certainly a part of it, but research and information are the most powerful tools an investor has in their playbook. Without them, they’re just making guesses and hoping they prove correct. That’s too big a gamble to take when you’re talking about other people’s money and investments. You need to treat that responsibility with the utmost care and respect, as you would want someone else who was telling you what to do with your money.
What strategy do you use to grow your business?
I try to keep my priorities straight. With my newsletter, I put by readers’ needs ahead of anything else. When a person puts his or her own needs ahead of doing what’s right for his or her clients, the entire business model will fall apart.
What that looks like in real terms is that I don’t come out with newsletters and information that will make me look smart, or that will grab attention by addressing hot trends or passing fads. That’s the route that many financial bloggers or advisors take—they look at whatever’s hot right now and grab new subscribers or readers by talking only about that.
But everything I know about investing teaches me that the best investors look at what’s not grabbing headlines. That is where the best investments hide, and so I scour the market looking for these opportunities in order to pass them on to my readers. That mindset is what has allowed me to achieve success—not passing popularity, but stable success as a trusted financial advisor.
Click here to read Paul Mampilly’s articles on investment and stocks.
How do you make money in today’s crazy market?
I keep things simple and follow a few basic principles that address different buying and selling patterns that keep me in control. As the market swings, it is important to have a solid plan of action so that I know how to react.
Like I mentioned above, many investors start off with a plan that works for them. But they get enough success that they start believing it wasn’t their plan or the principles behind it that brought them success, but rather their internal gut instinct or bravery when it comes to making bold moves. And that is their downfall. So I always stick to the simple principles whenever I can—the approaches and investment strategies that have been proven to work. That’s not to say that I don’t ever use my instincts, but my instincts are always backed up by actual research and a dedication to having all of the information and knowledge I possibly can before making an investment, or recommending an investment to someone else.
It is easy to fail in the market. How do you overcome the down days?
Investing certainly has its ups and downs. When you fail in this industry, it is crucial to change what you are doing. The market constantly changes, and you have to be ready to adjust. Remaining fluid helps me to overcome my challenges.
One thing that you simply have to accept as an investor is that you’ll never be able to predict absolutely everything. The market will be dictated by many factors, some predictable and some that we are completely blind to. Somewhere in a basement or garage, a high school kid or a group of them is designing a new product or company that’s going to absolutely transform the world. We have no way of knowing what that product or company is until it arrives on the market. It could arrive today, or next year, and we never know how many or how dramatic they will be. So it’s important to remember that failure in investing isn’t always the failure to predict the predictable. At one time or another we all become victims to what is impossible to predict.
If you could turn back time, is there anything you would do in a different manner?
I don’t know if I would attend college. Although my degree was probably the main reason that I got my first job in the industry, training for Wall Street can’t be learned in the classroom. It’s a hands-on experience. If I had to begin again, I would probably start trading stocks and reading books. To me, that’s one of the most effective ways to learn.
As far as we’ve come when it relates to how different people learn, we as a society still underestimate the power of self-guided learning. We still think that to follow a certain path, you have to sit down in a classroom for a few years or more in order to learn. But the most powerful and memorable learning doesn’t happen in a classroom, it happens when you get your hands dirty and get to work. It happens when you make mistakes, when you have failures, and then when you translate those failures into success the next time around. I didn’t quite understand that back then like I do now, and I wish I could go back and tell myself that. You don’t have to focus so much on what happens in the classroom—you’ll do plenty of learning out in the real world.
Can you recommend any good books for budding investors?
Since I love to read, I spend a lot of money on books. “How I Made $2 Million in the Stock Market” has greatly influenced my life. It’s a wonderful story of a man who was a dancer and managed to turn next to nothing into $2 million. The book’s tips are very relevant, and they have shaped the way that I invest my money. Anyone who is interested in learning some winning strategies should definitely pick up this book.
I also recommend that investors read about books that aren’t directly related to investing. Read books about emerging industries, new technologies, the future. Because that’s what investing is really about. The money is secondary. You invest in what you think will matter in the future, and if you’re not well-rounded about where the world is headed, you’re doomed to fail.
Can you give one final tip that will help investors enjoy success?
Look at the big trends. This is what I have done and will continue to do. These trends are the things that drive bull markets or the stocks that are tied to the trends. My best advice to entrepreneurs in today’s environment is to focus on technology. Technology is a big trend that will fill the market for many years into the future.
That will require you to step outside your comfort zone of dollar signs and figures and learn more about the world at large. What do people need? Which companies are coming up with the most innovative and lasting solutions to these needs? Those are the things that are going to matter most. Those are the factors that should guide your investments.