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BIO: Pankaj Jathar is the CEO of Prione, a company established in 2014 which enables small and medium businesses to grow in e-commerce.

STORY: About 12 years ago, Pankaj invested in a company he saw journalists recommending on TV. He didn’t do any research and believed the reporters 100%. The stock price tanked a month later. Pankaj sold his stock a year later after taking a 75% capital loss.

LEARNING: Be skeptical about the advice you receive, especially from the media. Learn and understand some of the basics of personal finance and investing. Be your own financial adviser.

“Educate yourself and be skeptical about what you read or see. Do your research, which will come once you learn.”

Pankaj Jathar

Guest profile

Pankaj Jathar is the CEO of Prione, a company established in 2014 which enables small and medium businesses to grow in e-commerce. He has 10+ years of e-commerce experience, starting with Amazon in 2011. Being part of the India launch team and working in multiple roles, he has a deep understanding of the e-commerce value chain. He might be a white-collar worker on weekdays, but he enjoys writing his blogs on weekends, and that blog is Stacking Beans which he has been writing for more than a year.

Worst investment ever

About 12 years ago, Pankaj would watch CNBC for the stock tickers and conversations, which got him a little interested. But he had not yet started learning about either personal finance or investing. So Pankaj kind of believed the experts and the pundits on TV, thinking they knew what they were talking about, and their advice was to be taken 100%.

They did a company profile they recommended as an investment option for the short to medium-term. As the naive newbie that Pankaj was, he put a fair amount of money into that stock. A month later, it tanked and stayed there for a long time. He sold the stock at nearly a 75% capital loss.

Lessons learned

• Be skeptical about the advice you receive, especially from the media. Don’t listen to experts on TV. They are probably experts in their field but necessarily financial experts.
• Not all journalists do their homework or do the deep dive level you would expect. Journalists are paid to generate interest, talking points, news, etc.
• Listen to everyone, but do your research before you put your hard-earned money on the line.
• Understand what equity investing is about before you start. If you don’t have either the skill or the time to do an in-depth analysis on a particular company or stock to understand the nuances, then just don’t invest in it.
• Question all advisors. Try to understand their motives. Is that person on your side, or is it just about their benefit?
• Don’t confuse your circles of influence. For example, don’t ask your mom for stock-picking advice. Don’t ask your financial advisor for cooking tips. Those two circles are different.

Andrew’s takeaways

• The media is not on your side; they are trying to generate income from you.
• You have to be your own financial adviser.
• You have a right and an obligation to investigate and ask questions. If you’re not satisfied with the answer you get, you have a right to ask again and again until you’re happy.
• If you’re going to own individual stocks, start with about 10. Holding less than 10 stocks exposes you to individual stock risks. More than 10 will just be similar to owning an ETF.
• Unrealized...