Did Gajendra Kothari stop his SIP in 2026? | The 99% Club

ELI5 / TLDR

Most people lose money in markets not because they pick the wrong fund, but because they behave badly — they panic when prices fall, they chase whatever just went up, and they check their portfolio too often. Gajendra Kothari, a fund advisor with 22 years in the business, argues that 90% of your returns come from boring things (goals, plan, allocation, behavior) and only 10% from which fund you pick. His own headline move: he ran a SIP into a single beaten-down sector for four years, watched it do nothing for three, then sat through a sudden run-up and pulled the long-term gains out near the top — not by predicting anything, just by noticing his own returns had gotten silly.

The Full Story

One percent intelligence, ninety-nine percent temperament

The show is built around a line: investing is 1% intelligence and 99% temperament. Kothari extends it into a claim that sounds bleak but is hard to argue with.

“5000 years ago, 1% of people were wealthy. Today 1% are wealthy. A hundred years from now, 1% will still be wealthy — in spite of so much information and knowledge.”

His point is not that wealth is rigged. It is that the bottleneck has never been information. Free knowledge is everywhere; the limiting factor is behavior. Even with good skills, he says, there is an 80% probability you still do not make money if your behavior is wrong. The data, not his opinion, says so.

He lists the usual ways people sabotage themselves. Half-knowledge (“fifteen-twenty percent right, which is dangerous”). Refusing to pay for professional advice because knowledge is free — being penny wise, pound foolish. Loving the word “guaranteed” so much they ignore the risk hiding behind it. Unrealistic expectations, born from 2020-21, when money doubled in months and people assumed that was normal. Over-confidence (“I watched two podcasts and now I think I’m an expert”). And fear — the kind that freezes you exactly when markets fall.

The real pyramid versus the imaginary one

Kothari’s central model is two investment pyramids.

The imaginary pyramid, which most podcasts obsess over, puts investment selection at the base — which fund, which scheme, which sector — and stacks return-maximisation, market-timing, tax-saving, and daily prediction on top. People spend their days guessing what Trump will do to a portfolio meant to fund their daughter’s education twenty years out.

The real pyramid inverts it:

Goals at the base. Not “I want a hundred crores” but a real number tied to a real life.
Plan — how much SIP per month to get there.
Allocation — anything you need within three years goes into safe assets, not equity.
Behavior — following the plan without interfering. “The best thing I can do once I have a good plan is to not interfere in it.”
Investment selection sits at the very top, and accounts for only 10%. “Unfortunately, people turn the 10% into the 90%, and that’s where all the problems start.”

Why money makes everyone a little crazy

A long, human stretch of the conversation is about money being an emotional object, not a rational one. A three-year-old will hand back any toy but never the cash you put in his fist. His ninety-year-old grandmother guarded a key to a chest with nothing in it. Childhood scarcity, a father who lost money in the Harshad Mehta era — these wire us for life, and no podcast un-wires them quickly.

This explains a specific bias: we unitise the assets we hold calmly and price-track the ones we panic over. Gold you buy in grams — “I have 100 grams now” — never in rupees. Property you count in flats. But mutual funds and stocks arrive as a daily account statement with a price and a buy/sell button, so you track them obsessively and bail at a 10% dip. His proof: his firm once removed the daily gain/loss number from its app. Investors protested for 45 days, then went quiet. A month later they were calling to thank him — “I don’t even open the app anymore.”

“If gold and real estate showed up as account statements you could trade daily, you’d stop making money there too. I can guarantee it.”

Buy low, sell high — and how he actually does it

Kothari is blunt about his own lane: 15-18% from mutual funds is enough, so he never bothered with direct stocks despite being a chartered accountant. His one principle is the oldest one — buy what’s cheap and unloved, sell what’s popular and crowded.

“If you’re part of the crowd, you’re safe in the sense of being normal — but you won’t make money. To make money you have to be part of the unpopular minority.”

He reads the AMFI flow data: in 2024 retail money piled into defence and PSU funds; in 2025 it rushed into gold and silver. A sensible person, he says, does the opposite of where the herd is flowing. He didn’t own gold or silver during their 100% run because gold has historically returned 7-8% a year — a one-year double told him the trend couldn’t last, so he refused to participate “in the madness.”

This is the SIP story in the title. From 2020 he ran a SIP into a PSU fund. Three years, nothing. In the fourth year it ran so hard his four-year average SIP return hit ~50% and a roughly 1.97-crore corpus appeared. His tell was his own portfolio: a four-year SIP does not normally average 50%; the NAV chart was vertical; the same recommendation was in every newspaper. So he did not stop the SIP — he kept it running — but he booked the entire long-term-capital-gains portion (leaving the last year’s short-term gains untaxed) and rotated it into 2024’s then-unloved theme, banking. The calibration rule he gives: don’t try to catch the exact top, sell in two or three tranches of ~25% as things get frothy.

Volatility is not risk

The most useful reframe for a generalist. People treat a falling price as risk. Kothari separates the two:

“Volatility is not risk. It is only a temporary fall. Risk is the permanent loss of capital.”

In a single stock, permanent loss is real — the company can delist and your money is gone. India has ~8000 listed companies; 90% sink your capital, 8% barely beat an FD, and 2% are the multibaggers that drag the whole market’s average up to 12-13%. Stock-picking is hunting a needle in a haystack. A mutual fund holding 15-20 diversified stocks, he argues, cannot permanently lose your money — those 20 companies are collectively a thousand times bigger than your own business, spread across sectors. Many funds have fallen 70-80% from launch NAV and still recovered to multiples of it. The only way to convert a temporary fall into a permanent loss is to press the sell button yourself.

“The market is incapable of giving you a permanent loss. Permanent loss can only happen by your own trigger.”

The amateur’s game

Borrowing Charles Ellis’s “Winning the Loser’s Game”: amateur tennis is won not by hitting winners but by not making unforced errors. Just get the ball back over the net; your opponent will lose it for you. Professional tennis (Nadal vs Djokovic) is a winner’s game requiring real skill. Retail investing is amateur tennis — your whole job is to not make mistakes. Don’t buy the four-rupee small-cap you don’t understand. Let the fund manager, who has made and learned from 25 years of errors, take the swings. A good fund manager’s only two jobs: beat the benchmark, and stay out of the bottom quartiles for as long as possible. Be the kid in the spoon-and-marble race who walks slowly without dropping the marble while everyone else rushes and falls.

Knowing what a correction actually is, and who you are

Kothari objects to calling every 10% dip a “crash.” Borrowing blogger Ben Carlson’s scale: 5% is a pullback, 10% a healthy correction, 15% a real correction, 20% a bear market, 30% a collapse, 40% a crash, 50% a crisis. The Indian market averages a ~20% intra-year fall over 30 years — but anyone who started after March 2020 has never seen 20% and mistakes it for the end of the world. (2008 saw the Sensex fall ~50%, mid-caps lose half, small-caps drop ~70%.)

His deployment rule, via Morgan Housel: don’t lump-sum until a ~20% crash; deploy in tranches sized to how rare the drop is (a lot at 20%, less at 40%, because 40% drops come once a decade and waiting for them leaves your cash idle). He’d deployed 40-50% of his dry powder in the current ~15-20% dip.

He closes on risk profiling. You don’t know your true risk appetite until you’ve lived through a real decline — answers given in a bull market are worthless. And on a Buffett-flavoured note: “Investors don’t get what they want or expect from markets; they get what they deserve.” His own wealth over fifteen years, he says, was made by sitting still. Livermore made big money three times and shot himself the fourth — “money was never made by my thinking, it was always made by my sitting.” Even his worst-performing fund returned 12%, because he simply stayed in the chair.

Key Takeaways

90% of returns come from goals, plan, allocation, and behavior; only 10% from fund/stock selection. Most people invert this.
Volatility (temporary price fall) is not risk. Risk is permanent loss of capital — which in a diversified fund only happens if you sell.
We “unitise” assets we hold calmly (gold in grams, property in flats) and “price-track” the ones we panic-sell (funds, stocks with a live NAV and a sell button).
Removing the daily gain/loss number from an app made investors calmer and richer over time.
Buy low / sell high operationally = move against retail herd flows (AMFI data shows the herd: PSU/defence in 2024, gold/silver in 2025).
Sell in 2-3 tranches of ~25% when your own returns get implausible (a 4-year SIP averaging 50%), the NAV chart goes vertical, and the same tip is in every newspaper.
He kept his PSU-fund SIP running but booked the long-term gains near the top and rotated into then-unloved banking. He did not stop the SIP.
Indian listed market: ~90% of companies lose you money, ~8% barely beat an FD, ~2% multibaggers carry the index to 12-13%.
Retail investing is amateur tennis — win by avoiding unforced errors, not by hitting winners.
Correction scale (Carlson): 5% pullback, 10% healthy, 15% real, 20% bear, 30% collapse, 40% crash, 50% crisis. India averages ~20% intra-year over 30 years.
Housel’s deployment ladder: deploy more cash at shallower-but-common drops (20%), reserve some for rare deep drops (40%+) — but don’t hoard so much that cash sits idle waiting for a once-a-decade crash.
You only learn your real risk profile by surviving a real fall; bull-market questionnaires lie.
“Get rich slow” is unpopular precisely because nobody wants to. Buffett compounded ~20% for 50-60 years by holding, not by being clever.

Claude’s Take

This is a genuinely good behavioral-finance primer wearing a slightly cheap costume. The framing — “did he stop his SIP?”, the heavy subscribe-begging intro, the “99% Club” branding — is YouTube-thumbnail engineering, and the transcript is machine-mangled Hindi-English that takes effort to parse. Look past that and Kothari is the real thing: a 22-year practitioner who reasons in mental models (two pyramids, volatility-vs-risk, amateur tennis, the marble race) rather than tips, and who is refreshingly honest that his own edge is patience and a 15-18% target, not stock-picking genius.

The strongest material is the unitisation insight and the app experiment — those are concrete, falsifiable, and not the usual platitudes. The weakest is the inevitable conflict of interest: he’s a mutual-fund advisor whose entire argument funnels toward “use mutual funds and an advisor, don’t pick stocks.” Self-serving, but also… mostly correct for his audience, which is the point of the “99%” framing. His PSU-fund timing story is presented as repeatable process when it’s at least partly survivorship — he happened to be in the right beaten-down sector. He says so himself (“buy low”), but the clean narrative flatters the outcome.

Nothing here is wrong, and the behavioral spine is solid enough that a non-Indian investor would get value too. Docked points for the padding, the sales undertow, and zero new ideas for anyone who’s read Housel or Ellis. A 7 — a clear, well-structured restatement of durable truths, not a discovery.