Parag Parikh
Parag Parikh (born 1954) is an Indian entrepreneur and author. He is the founder and chairman of PPFAS a leading Investment Advisory Firm in India.
Foundation
Having obtained Masters’ Degree in Commerce & Economics from the University of Bombay, India, Parikh always looked to do something beyond the ordinary. He enrolled at a one-year Entrepreneurial Management course in Bombay (now Mumbai). At this course, the only project to fail was his, as the product, which he envisioned, was supposedly ahead of its time. Seven years later, a corporation made such product and has created a lot of wealth for its shareholders.
After this episode, Parikh started thinking differently. He thought, if he were to set up an industry he would have to subject himself to the whims of the government officials, bureaucrats etc. for the needs of electricity, raw materials, labor problems, municipal laws etc. Instead, if a good study on a business was made, one could enter this business by buying the stock and exit by selling the same. No hassles. Thus came his entry in to the stock markets.
At first he started as a sub-broker in 1979. Then, in the year 1983 he was able to buy the membership of the Bombay Stock Exchange thanks to his mother and wife who were gracious to sell a part of their jewellery to finance the same.
Parag Parikh always wanted to be a stockbroker with a difference. He did a lot of study on various businesses. By now he had a lot of individuals as his clients who benefited from his study.
Parikh's next aim was to enlarge the scope of this work to Institutions who were investing in a bigger way. He started doing formal Research on companies. He shared this Research with Institutional Investors. This became his competitive edge. Parag Parikh was the first member of a Stock Exchange to start formal equity research way back in 1985. Then, in 1991 when India opened its doors to Foreign Institutional Investors (FIIs) as part of its liberalization process, it was this research, which got a lot of FIIs to become his clients. His firm, Parag Parikh Financial Advisory Services Ltd. PPFAS had already established itself as a brand name in the field of Research.
The need to seize advantage from the government’s liberalization process as well the desire to fulfill his quest for knowledge and new learning made Parikh join the Owner President Management Program at the Harvard Business School which he attended from the year 1994 to 1996. This boosted his confidence and gave him the new vitality to take on the competition emerging in the financial sector.
At the time of the technology boom, something happened. When all and sundry invested in the tech stocks, his firm, PPFAS, stayed away from the same. They were surprised that the stocks were going up despite crazy valuations. Every day, the stock market would prove him wrong. They were branded as anti-tech brokers and lost some clients to competitors. Parikh was confused. He wanted to find out where he was going wrong. This pursuit led him to the study of “Behavioral Finance”. In April 2001, when the Kennedy School of Government at the Harvard Business School conducted a two-day course on Investment Decisions and Behavioral Finance, Parikh enrolled himself and proceeded to the US. This is a decision he never regrets.
Today, PPFAS clients include most of the major Indian Financial Institutions, Foreign Institutional Investors, Mutual Funds and Corporations, not to forget the individuals. Its strength lies in giving investment advice to clients based on ideas, insights and business acumen rather than churning out detailed company or industry reports, which are primarily based on information freely available in the public domain.
Behavioral Finance has been a subject so close to Parikh's heart and for the last five years he has done extensive reading and research on the subject. In fact, today Parikh is of the opinion that no analysis works in the markets alone by itself. Unless due regard to the behavior of the people is given together with understanding the emotions of the crowd behavior, success in investments will not come. PPFAS has been doing extensive study and research and applies the techniques of Behavioral Finance. PPFAS has held a series of seminars on Behavioral Finance for their clients both individuals and Institutions.
To satiate his need for learning up-to-date perspectives and to develop, learn and grow, Parag Parikh enrolled at the Harvard Business School alumni program for Lifelong Learning. In May 2002, Parikh attended their program “Breakthrough Insights”.
In 2003, Parikh was awarded the “Certified Financial Planner” certification by the Association of Financial Planners, India.
In 2005, Tata McGraw-Hill have published the book authored by Parag Parikh, “Stocks to Riches – Insights on Investor Behaviour”. Through this book Parikh has attempted to introduce the concept of behavioral finance to the investment community.
In 2006, Parag Parikh attended the program on ‘Behavioral Finance’ as well as ‘Behavioral Corporate Finance’ conducted by Master Professor Hersh Shefrin at the Amsterdam Institute of Finance, Amsterdam.
Parikh's second book, Value Investing and Behavioral Finance – Insights into Indian Stock Market Realities was published in 2009 and became a best-seller within one month of hitting the stands. The book attempts to guide the investor in to making wise investment decisions and not be carried away by the noise of the markets. He has, in fact, gone a step further to bring out the inherent fallacies of the stock markets to bring home the point that most of the innovations of the financial markets are against the interests of the users of the products.
Finance
Parikh's firm, Parag Parikh Financial Advisory Services Ltd.PPFAS is a member of the National Stock Exchange of India both on the equity and the debt market segment and a SEBI (Securities & Exchange Bureau of India) registered Portfolio Manager.
Value Investing based Equity Research, and application of Behavioral Finance concepts form the core of the business model of PPFAS.
Leveraging on its rich experience in value investing,PPFAS, in 1996 launched "Cognito" a portfolio management scheme - The first one launched in India Their Wealth Management team advices clients on Asset Allocation & Financial Planning.
As Chairperson of the company, Parikh leads and motivates his organisation. He infuses new ideas and encourages positive changes while giving courage to the organization to embrace the future.
Family
Born February 12, 1954, in Mumbai, India. Married December 8, 1975, to Gita. Two sons: Sahil and Neil. Daughter-in-law: Sitanshi, wife to Sahil.
Self development and renewal
Parikh believes that development and renewal of physical, mental, social and spiritual endowments is the key to living a fruitful and a balanced life.
On the physical front despite an attack of polio in childhood, Parikh is a reasonably good golfer and devotes weekends to the game. He enjoys swimming and even jogs and exercises at the gym regularly.
Parikh constantly updates his knowledge by reading on various subjects, writes for various business publications and newspapers and attends various courses and seminars to keep himself updated with the latest trends. He recently attended TEDIndia Talks at the Infosys Campus, Mysoreand found it an intellectually enriching experience.
On the social front Parag Parikh is a member of the Rotary and attends various social engagements.He also enjoys travelling and meeting new people. He shares his learning by giving honorary talks and presentations at various institutes and gatherings.
A spiritual person ,Parikh practices “Vipassana” Meditation daily for a minimum of one hour a day . He also reads spiritual books and attends discourses on the Bhagvad Gita.