Bitesize: From Zero to Hero: Beeneet Kothari’s Inspiring First Investment Story

Alec: [00:00:06] Welcome to bite sized on Get Started Investing. In this series we feature some of our favourite lessons, quotes and moments from the podcast. If you'd like to listen to the full episode, we've included the link in the shownotes. We love to start these conversations by hearing about people's first investments. We generally find there's a good lesson or a good story that comes out of it. So to kick us off today. Can you tell us the story of your first investment? 

Beeneet: [00:00:35] Gosh. So, you know, just by way of background, I don't come from an investing family. I was born and raised in India. I'd never owned a stock in my life. My parents didn't own stocks. I graduated college with debt. And my first job in the investment world was working for a legendary investor named Stan Druckenmiller at Duquesne. And I still remember to this day that my first interview with him, you know, I had no idea who he was. And as embarrassing as that is, it was incredibly intimidating. Once you figured out who he was and you had the investing background that I did or the lack thereof. And every day you sort of, I think, had that feeling that we've all experienced of, you know, imposter syndrome. We kind of felt somewhere between lucky and you felt like you didn't really deserve the job. But the guy I worked for, so this is the year 2005, 2006, you know, a year out of college, the guy I worked for sent me off to an investment conference. There's a big gaming conference called E3. Used to be held in L.A., probably still is. And he sent me off there to figure out between Sony and Microsoft who was going to win this round. The console upgrade cycles in the gaming industry occur every five or ten years, and we were approaching the next big one. And it's exactly the kind of thing you send your most junior analysts off to do, because rarely can you just show up at a conference and figure out the answer. And, you know, he didn't want to go. Understandably, he sent me off to it. And he had a very clear mission and very clear direction. He said it's going to be either Sony or Microsoft. Those are the two big dogs. Just go figure out which of those two looks like it's got a higher chance of success. The instructions couldn't have been clearer. I was maybe six months on the job. I show up there, I try it out for Sony systems attire, try it out for Microsoft systems. You know, if you played PlayStation and Xbox, it's kind of more of the same. And on my way home on that first day of the conference or way back to the hotel, I ran into the guys over at Nintendo. And the line at the Nintendo station started off small in the morning and by the end of the day, it was wrapping around the block. You know, I'm the kind of person when I see a really long line at a restaurant, I want to get on that line. Right. I'm never the kind of person who wants to go to the restaurant where you can get your sandwich really quickly, because that makes me sceptical. And so I got on that line. And back then, this was so early that their console system hadn't even been called the Wii yet. It was called Nintendo Revolution, and it was truly a revolution. It was something completely different. And I tried it out and I thought it was the most amazing thing I'd ever played. And I grew up as a PlayStation kid. I grew up in college, staying up late, playing Halo on the Transact Xboxes. I had a PS3 playing every countless hours of GTA. And so I was a hardcore gamer, PC gamer, all of it. And the Nintendo system was anything but. But I remember just thinking this had the potential to beat out Sony and Microsoft, which at the time was such a heretical thought that the next day my boss called me and he said, Well, which is it? Sony or Microsoft? I couldn't muster up the energy to tell him I thought it was intended. I did my work that day. On What is the story behind Nintendo? And I had concluded by the end of this trip that it was not Sony or Microsoft, that I thought it was worth putting all of our chips on. Nintendo, I got back and it's hard to describe the feelings, but, you know, not only did you have to have the courage to make a big stock pitch when you were already kind of insecure, not having the kind of background people around you had. But you were now also pitching a stock that was neither of the two that your boss distinctly told you to go out and research. And describing it was also a little bit counterintuitive because it was, you know, you hold the controller and you whack things around and it was nothing like what we'd been used to. The stock at the time was about ¥14,000 and we bought about $100 million worth over the next year and a half. Nintendo went to ¥70,000. It was a five fold return. And, you know, I'll take some credit for getting us in the stock. I'll take zero credit for getting us out. That was the genius of the people that I worked for. And so more or less, we bought the stock Nintendo at its low when no one expected these guys to do anything because for 20 years they had always been kind of a third tier, not even the second tier, third tier behind Sony and Microsoft to a five fold return. I'll never forget the whole experience because it's a reminder of how important luck is. But, you know, it's like that old story where you got to sort of be there. A lot of other people, you know, probably didn't go to the conference. I think if you had just been to the conference, you would have seen the product. But it also was a reminder that no matter how young or inexperienced you are, you know, you shouldn't sell yourself short. I think it would have been too tempting. And I've run into this temptation many, many years thereafter, which is, you know, you often when you've got doubts in your head, you will cede to the person in the room with experience. There's nothing that pains more as an investor to have not followed your instinct. 

Bryce: [00:06:15] If you enjoyed that bite size, you'll find a link to the full episode in the show notes.