Continuing A Legacy: An In-Depth Conversation With Neil Parikh On Investment Philosophy, Market Realities & Building Trust

In a heartfelt and insightful interview, Neil Parikh, Chairman & CEO of PPFAS Mutual Fund, son of the legendary stock market stalwart Parag Parikh, joined veteran journalist Vivek Law on the Simple Hai! show to share his perspectives on investing, legacy, and the evolving landscape of asset management in India. The conversation unfolded personal reflections, market wisdom, and practical advice, offering investors a rare glimpse into the mind of a fund manager who balances tradition with modernity.

Remembering Parag Parikh: Foundation of a Philosophy

Law began by reminiscing about Parag Parikh, an iconic figure in Indian investing whose principles shaped the way many approached the stock market. "When I started covering the stock market in 1997 and moved to Mumbai, I met Parag Parikh. Everything I learned from him is the reason I am here today," Law reflected.

Parag Parikh was a pioneer in investor education long before social media or television popularised financial literacy. He and his wife went to great lengths, even selling personal jewellery, to educate and empower ordinary investors. Neil Parikh honours this legacy, emphasising how he took up the mantle after his father's untimely demise in an accident.

As Neil Parikh put it, "My father's legacy was a responsibility, and despite the challenges, I promised to continue his work. Today, we have managed to keep that promise."

The Timeless Investment Principle: Buy Low, Sell High

When asked about the core of successful investing, Parikh reiterated a simple yet powerful rule his father lived by: "If you want to make money in the stock market, the only thing is to buy a stock at a low price and sell it at a higher price. This was true 100 years ago, it remains true today, and it will be true 100 years from now."

This principle underscores the importance of patience and valuation over speculation or noise. Parikh explained that investing is more like a marathon than a sprint, akin to a Test cricket match rather than a T20 game. "You don't need to hit every ball for a four or six. Sometimes, you just need to leave a ball outside the off-stump. Similarly, in investing, it's okay to sit on cash when valuations are high and wait for the right opportunity."

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Parikh agreed with Law that long-term investing requires emotional discipline, avoiding knee-jerk reactions to geopolitical news or daily market fluctuations.

Navigating Pressure: Carrying Forward a Family Legacy

Law asked Parikh how he dealt with the pressure of stepping into the shoes of a revered father, especially when Parag Parikh was a celebrity figure in the stock market. Neil Parikh shared that he acknowledged the challenge but credits open communication within the family as a key factor in overcoming it.

"First and foremost, there has to be clear communication between the first and second generation," Parikh said. "My father was very passionate and always talked about values and philosophy at the dinner table. I didn't always understand it then, but later realised it was his way of guiding me."

Parikh feels second-generation successors should not feel compelled to reinvent the wheel or make radical changes. "If the foundation is strong, sometimes the best action is to stick to the path laid out and avoid unnecessary risks. And above all, reputation and trust are paramount when dealing with people's money."

Simplifying Investing: The Swiss Army Knife Approach

One of the standout topics in the discussion was Parikh's explanation of their flagship mutual fund scheme, which has surpassed ₹1 lakh crore in assets under management (AUM), a remarkable feat in an industry comprising over 50 mutual fund houses and numerous schemes.

Parikh explained the philosophy behind this success: "We wanted to simplify investing. Why have 100 schemes when one can do it all? Our fund is like a Swiss Army knife, multifunctional. You can invest across market caps, sectors, and geographies, including international stocks, all within one scheme."

This approach was born out of the confusion he experienced earlier in his career, when he faced numerous funds with overlapping portfolios but different names. "We aimed to provide a simple, transparent solution for investors who want diversified exposure without juggling multiple schemes."

The Market Today: Opportunities and Caution

When Law asked about the state of the Indian market and future outlook, Parikh remained bullish on India's growth over the next decade but highlighted the importance of stock selection and valuation.

"We believe India will do well, but not every company will benefit equally. Our job as fund managers is to identify the right opportunities, not just ride the growth narrative blindly," he said.

Parikh recalled the telecom and real estate booms of the late 1990s and 2017, respectively, where many investors lost money despite sectoral excitement. "Sometimes, it's okay to underperform during booming times if valuations are stretched. Better to keep your wicket intact and wait for the loose ball."

He also discussed the value of global diversification, pointing out that 97 percent of investment opportunities lie outside India. "If you want exposure to companies like Google, Amazon, or Facebook, you need to look beyond borders."

The Role of Technology and Customer Service

While discussing the evolving asset management industry, Parikh highlighted the dual role of technology and human touch. "We use AI and other technologies, but ultimately, investing is a human-to-human business. You need trust, communication, and transparency."

Parikh also emphasised excellent customer service, including quick resolution of queries, as important aspects for retail investors who experience anxiety if transactions don't reflect promptly.

Transparency is maintained through annual general meetings (AGMs), which are open to all investors, where any unitholder can ask questions. "This openness aligns investor expectations with our long-term, conservative approach," he added.

Handling Scale: Debunking Myths About Large Fund Sizes

When Law asked about the common belief in the industry that as a fund grows larger, delivering returns becomes difficult. Parikh addressed this head-on: "It's partly a myth. There are regulatory limits on how much you can invest in one company across schemes, so we buy everything within one scheme."

As the fund grows, diversification naturally increases; what was once comprised of 25-30 stocks becomes around 40, with a greater allocation to large and mid-cap stocks and a smaller share to small caps. "We're not launching multiple schemes to chase every theme but sticking to a diversified, core strategy." he shared.

Advice for New Investors and Work-Life Balance

Parikh encouraged new investors to start with diversified funds such as index or flexi-cap funds, which reduce manager-specific risks. He noted the rise of SIPs (Systematic Investment Plans) as a positive trend in increasing market participation among younger generations.

On work-life balance, Parikh shared a principle inherited from his father: "If you spend 8-9 hours at work, you better be happy doing it. We encourage our team to leave the office by 5 PM and spend quality time with family. Low stress leads to better productivity and happier employees."

Patience, Discipline, and Saying No

The conversation closed with profound life and investment lessons. Parikh quoted Warren Buffett's advice on the power of saying "no" to distractions and unnecessary commitments. "You have to learn to say no 99 percent of the time to be successful."

He also shared his father's favourite teaching, the Law of the Farm: "You cannot harvest benefits immediately. Just like a seed takes time to grow into a full tree, investments and life require patience."

Despite challenges over the years, including the tragic loss of his father and market downturns, Parikh remains committed to integrity, steady performance, and carrying forward a legacy that values trust above all.