Ep479: Manuj Aggarwal – There Is No Sure Shot When Investing

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win in investing, you must take risks but to win big, you've got to reduce it. Go to my worst investment ever.com and join our Facebook group to connect with our community of guests and fellow listeners. Fellow risk takers this is your worst podcast hose Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, my news, I go wall Manouche. Are you ready to rock?

Manuj Aggarwal 00:34
Yeah, I am. Thank you so much for having me.

Andrew Stotz 00:38
Yeah, I'm glad to have you on. And I am excited too. We had an interesting talk before we turn on the recorder. And I'm excited for the audience to get to know about you and particularly to get to know about also your podcast. So let me introduce you to the audience. Manouche is an engineer, inventor, author, and entrepreneur. He is currently working on a groundbreaking AI based technology that builds meaningful relationships and establishes thought leaders at scale on autopilot. He uses behavioral science and AI to help companies solve complex problems, gain traction, and most importantly, increase revenue. He is also the CIO and founder of Tetra noodle technologies, which is a boutique Big Data consulting company that provides strategic insights and develops problem solving digital solutions for businesses of all sizes. His popular entrepreneurial podcast is bootstrapping your dreams got ranked as top 100 Next to Tony Robbins, Gary Vee and Tim Ferriss. Manouche, please take a minute and fill in further tidbits about your life.

Manuj Aggarwal 01:50
Well, thank you so much for that intro. Yeah, tidbits. You know, I, one of the things that a lot of people know me, as I started my career working in a factory in India for $2 a day. And from their life. Journey happened, a lot of events, ups and downs. And now, I work with some of the top people in the world. Top fortune 500 executives, Olympic champions, some celebrities, movie stars and things of that nature. And, yeah, it has been quite a roller coaster ride. And when I look back, it's it's been very, how can I say, you know, it's almost fuzzy how I got here, because, you know, you don't remember all the events that that happened. But somehow I got here. And now, what I do is I sort of try to package all the key learnings that I had in my life, and build systems around it. Because, you know, one of the things that I'm really fond of is Systemising, everything and being a software engineer, I utilize my power of knowledge of automation and AI to help others as well, like, you know, replicate these systems in their lives and their businesses.

Andrew Stotz 03:09
Interesting. Well, for the listeners out there, this is a great lesson, if you're young, even if you're middle aged, and even if you're old, you never know where you're gonna go, you know, from $2 a day in a factory, to working with, you know, successful people all across the world, it's a great story. The second thing that I take away is the Systemising. You know, this is something that I, I have a real passion for I studied with a man named Dr. W. Edwards Deming in 1919 90, in 1992, and he was 90 and 92. And he talks so much about systems and thinking about the output of systems and how we focus our efforts on the people within the system. But they're just a tiny part. It's the design of the system. And the structure of the decision, the system that determines maybe 90 plus percent of what actually comes out and instead we go chasing around the people in the system, when in fact, it's the structure of the machines and the equipment, the raw material that goes in there to get there. So it's a systems is really something very powerful that people can think more about that I believe it can solve a lot of problems

Manuj Aggarwal 04:22
yet good guy, good guy. I mean, I watch, I recommend a movie founders, which is about how McDonald's was founded. And there's a scene in there where they tweak the system multiple times before they actually launched the restaurant. And that system actually is the secret behind the success of McDonald's.

Andrew Stotz 04:45
Yeah, and it's amazing what McDonald's has been able to do is, you know, for anyone who's traveled the world or even throughout your own country, it's the exact same tastes at every single branch. And they're doing that in America. They did it with no 16 year old kids working on summer breaks and stuff like that. They realized that the system was their ultimate value. Let me ask you a fun question. I'm thinking about myself. And my question to you is, and I'm going to answer my side first and then let you think about it while I'm answering. What's something that you have systemize in your life that most people probably would be surprised or that they wouldn't even thought about Systemising and I think about it for myself. I created with the help of my business partner who's crazy about Systemising I created an Excel file that automatically sends emails, personal one on one emails to people that I want to keep in contact with. And it does it with the press of a button and you know, you there are email providers out there and other things that can done it, but this one does exactly what I want. That's an example of something that I've systemized I've got a lot of other things, but what would be something in your life that you have systemized?

Manuj Aggarwal 05:59
Yeah, I mean, you know, you talked about the AI technology we are building one of the things which, as you may know, most engineers are introverted. And we have a hard time explaining things to people in a simple language. And that that wasn't a problem until I wanted to grow my business. And I learned the hard way. Business is not about providing solutions. It's about building relationships. And with an introverted mindset, or introverted personality, not able to explain things in a simple manner, that relationship never went anywhere. I mean, it was very difficult. So now, we are Systemising. This building of relationships at scale. And that is what has allowed me to work with these world class people. I had never, if I had to do it on my own, I don't think I would have found the courage to walk up to somebody like, you know, the former director of the CIA and say, hey, you know, I would love to talk to you about something, you know, but the systems allowed us to do all this. And that, that has been very, very rewarding for me. And that's why I just see, it's life changing. And that's why I'm so passionate about that technology. We are we are building and sharing now.

Andrew Stotz 07:19
And where for the listeners out there that want to learn more about it and understand what you're doing. I know, I have a lot of listeners around the world that are who are engineers, or are introverted, whether you're an engineer or not. Where can they learn more about that from you?

Manuj Aggarwal 07:34
Yeah, you can connect with me on LinkedIn. First of all, send me a message there or visit my website, Manoj? agarwal.com. It's a long name, but my first name, and last name combined.com. Yep. And find out more over there.

Andrew Stotz 07:48
Fantastic. And we'll have all that in the show notes, ladies and gentlemen. So you can follow up. Alright, well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to it. Tell us your story.

Manuj Aggarwal 08:06
Well, okay, so this, this is going back about 1112 years. So 2008, I think everybody will remember financial crash. And what happened was, you know, I never knew anything about stock market, I didn't know how to manage money. My dad always said, Hey, stay away from stock market. It's, it's gambling. So that fear of stock market was always there in the back of my mind. And then what happened was, you know, we have savings in North America, we basically just go to a financial advisor in the bank, and, you know, they say, okay, you know, I'll give you 1% Return on some bonds and everything. And if you don't know anything, it sounds like, okay, yeah, you know, just take this money, and then put it wherever you think is best, right? You think they have your best interests at heart. But as I found out later, that is not the case. Anyway, they did their job. The portfolio didn't go anywhere for, you know, about 810 years where I had invested my money and continuously sort of added to it over the years. But 2008 happened, and I lost 50% of it. In two weeks. I'm like, What the hell happened? They're like, you know, I never saw any significant returns and all of a sudden, I lost 50% What is going on? And he goes, the financial advisor, go, no, no, you gotta look at the bright side, we lost less than the market. We lost 2% less than the market. I'm like, how does that help me like I'm still out of, you know, my life saving like, What the hell is going on? So anyway, I mean, that chapter closed, and then I was like, you know, I really need to understand this. I could not be investing my hard earned money into something that I don't understand. And so then, you know, utilizing my, again, you know, knowledge of mathematics, automation, I started building some algorithms started studying the markets, and started investing. And as you know, you know, when you are a novice, you're gonna make a lot of mistakes, right? I was making a lot of mistakes, but I was making small bets, because I knew, you know, even if I lose them, it's okay. And as I was learning about all these, these paradigms in the marketplace, you know, different industries, how they move the price movement, how the demand and supply works, and everything, I came across a dentist, and that dentist was, like me, you know, he, he wanted to understand the markets. And he said, you know, the stock market is boring. We should try forex market. I'm like, Okay, so let's try forex market, I don't know much about it would tell me what do you know about it? He goes, You know, I know somebody. And he knows how to trade Forex. And he says, it's a short system. And, and the other thing is, you can leverage your account, I'm like, what does that mean? And it goes well, in you know how, when you need to buy a stock, you have to have $100 in your account, if you want to buy $100 worth of stock. But in forex, you can leverage your account 100 times meaning you, you may have $100 in your account, but you can buy $100,000 worth of you know, forex or any currency, like wow, that sounds too good to be true. But okay, I mean that. So because, okay, let's, let's do, let's open a Forex account. And let's leverage to the maximum 100 times. And then let's put a bet, which is a short, short, but I'm like, why? What I mean, what do you tell me a little bit more about this? He goes, Well, you know, if we put maybe a few $1,000 We can even if you make on the trade like 10%, on the actual principle, we'll we'll be almost doubling it, tripling it. And I'm like, Okay, that sounds too good to be true. But you know, I mean, we can we can try it out, right? And then I don't recall 911 years, whether that the word was first raid or the secondary, the first raid may have gone? Well, so what I did, I put a lot of money on the second trade. And, and, and things didn't go, right. And since I was leveraged, even a tiny bit of movement against the account, caused the account to be wiped out. Like it was really, really bad. And I was in shock, because I think I lost something like $75,000 in under an hour. And I was like, what I was, I was numb. I couldn't believe it. And I didn't know what to do. And then I was like, and he goes, so I was talking to him. I'm like, What the hell is going on man? Like, you know, this is? He goes, I don't know, either. I even got my dad to invest 40,000 And he's also yelling at me. And I'm like, do you even know what the hell are you doing? He goes, I have I relied on this other guy. And I'm like, man, like, this is just nuts. How am I going to explain this to my family and everything. And I was so tense. I was just hoping that you know, something will work in my favorite I will recover a little bit of it. I could not I, I swear to God, I did not sleep even for a second. And I stared at the screen all night, hoping that, you know, it will recover a little bit, it will recover a little bit. And in that doing it just kept going, going going. And at the end of the day, when I couldn't take it anymore, you know, I just closed it out. And I just lie down on the bed and just try to digest what had happened. Right. I could not believe what had happened. The biggest thing was it was a huge chunk of my remainder of the savings. And I blew it and that was the worst investment ever.

Andrew Stotz 14:47
And how did you feel when you were laying down in that bed? You know, how did you feel about yourself about what you had done? What was your feelings going to your mind?

Manuj Aggarwal 14:57
You know, I felt stupid. I was like How can I be so stupid? To do this? Here, I was yelling at the financial advisor who, you know who lost less than 2%? Less, he only lost half your money. Yeah, exactly. And, and, and I consider myself to be rational thinker, an engineer who can sort of analyze things. And here I was completely, almost like, taken by the market, like, the market just didn't care. Like it's brutal, right? Like you, anybody who, who may have gone through some experience like this. In real life, you think, you know, people will show you some mercy when you're down, they will stock market doesn't care, you know, it just keep going, it doesn't care, it doesn't give a damn. And that was a such a big blow to your ego, you know,

Andrew Stotz 16:02
I'm powerless and power this before this market. So how would you summarize the lessons that you learn?

Manuj Aggarwal 16:10
Well, the biggest thing is control your risk, you know, the thing is, after, after that, I got really good at trading, I those lessons really taught me because once you as they say, once you burn your hand, you know, not to go near the store. And I learned how to manage risk. And then, in fact, I went on to lead a group of investors here in Vancouver. To my surprise, all these wealthy people, you know, doctors and lawyers, they had tons of money to invest. They now know what to do exactly where I was, when I invested that Forex trade, they had no idea how to manage money. And, and I kept every meeting, I kept saying, Guys, you need to learn about money management, you need to learn about money management, and nobody cared. They were like, you know, tell me the most, how do you pick stocks? Tell me the most quickest way to make money. Tell me how to leverage tell me about options. And I'm like, Do you know what this could do to you? Like, if you invest in the wrong option, options are even more volatile, right? So I said before you go into the market, learn about volatility, learn about probability, learn about money, money management. And so anyway, I mean, that made me a better investor. But it also taught me there are so many suckers in the market every day, there are new suckers. And that's how the market is built, you know?

Andrew Stotz 17:46
Interesting story, let me summarize a few things I take away, I've written down, you know, a bunch of stuff. The first thing I wrote down was always know how people are being compensated. There is nobody that is contacting you through an email or through a message through a friend through a bank. Nobody is doing that out of the kindness of their heart. Everybody, and it's true. I mean, it's right that people do need to be compensated, so know, how they're being compensated. The other thing is, you know, I, I laugh because you kept repeating something, which was, it was a short shot. Yeah, yeah, there are no short shots, you know, market experts would take them away from you in an instant. And that's the other lesson is that the market is a self correcting, you know, mechanism. And after 30 years in the market, I can say that even if you it's one of the reasons why AI and machine learning have a hard time with it, because what part of what they're trying to do is identify a repeating pattern. But as soon as a pattern starts to repeat enough that it's observable, then people train on it, and machines and other things trade on it. So they're constantly trading away, I would say, the only competitive advantage that you there's a few little competitive advantage that an individual could have at this time. Number one is a long term view. Yes, most people are driven by short term. So if you could take a long term view, that would be powerful. Second, is control of your emotion, if you can go into the market setting, and then that brings to it the third thing is develop, you know, follow us a framework. And, you know, also I just want to highlight to the listeners out there, be careful about what also is called pump and dump schemes, and that is where somebody contacts you and says, you know, that look, there is a really good but you don't, here's a good investment, but you don't have to trust me just watch the share price of this trade, don't even buy it. Just watch. And then they pump that particular stock because it's got low volume and they've got maybe they get 100 clients, potential new clients looking at it and then they pump it up, and then they go back and then they tell them hey, you missed 20% Return In a day, but you know, check out the next one and the next one they're not supporting. And then they hurt a lot of people. So, always be careful about anybody contacting you about investing. And the last thing that I thought about was how I was, I always tell a joking story. And that is, I was walking down the street the other day, and I saw a dentist. And I went into the office, and I saw the dentist, he had a room full of people holding their faces, you know, pain and all that. And I was like, wow, being a dentist seems like an awesome job. And he's like, yeah, it's great, you know? And like, I was like, I really want to become a dentist, and he's a guy that's, you know, could make good money. And, and I said, Would you mind if I, you know, I see one of your clients out there is holding their face. He says, Yeah, he needs a root canal. And I said, Would you mind if I do that root canal on that guy, just to see if I like them being a dentist? Yeah. Well, of course, he's gonna say, Well, you got to study and you got to work, you got to do this, you got to do your internship, and you're talking about five or 10 years before you actually do your first root canal. Yeah, exactly. But in the world of finance, the less you know, the more we welcome you. Yeah, so so. And that, that is a lesson for everybody to keep in mind that, you know, the financial world is is very dangerous. So based upon what you learn from this story, and what you continue to learn what action would you recommend our listeners take to avoid suffering the same fate?

Manuj Aggarwal 21:32
One thing goes back to systems, you know, after this, after this experience, I sat down and built a system which took all this into account, you know, risk management and money management, how much to invest, when to go in when to get out. And this was all tested on historical data. Testing doesn't prove anything that is going to work short, short, but it gives you some confidence. And it also gives you your own risk tolerance in terms of the actual amount you're willing to lose. And that has been my learning that if you really want to work, and, and manage money and sort of trade, the markets, you have to have a system. And every system needs to be personalized based on your preference.

Andrew Stotz 22:22
So last question, what's your number one goal for the next 12 months?

Manuj Aggarwal 22:29
Well, right now, I'm really excited about this AI that we are bringing to the market. My goal is to share it with as many Fortune 500 companies first of all, but also make impact in individual entrepreneurs or startup founders lives because this is very impactful. That's what I'm working on. That's exciting.

Andrew Stotz 22:54
Fantastic. Well, listeners, there you have it another story of loss to keep you winning, remember to go to my worst investment ever.com and join our Facebook group to connect with our community of guests and fellow listeners. As we conclude my new show, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Manuj Aggarwal 23:25
No, just be careful out there and learn about the market before you get into it. They can be rewarding but if you don't do your research, they're gonna be very very merciless.

Andrew Stotz 23:41
And that's a wrap on another great story help us create grow and protect our well fellow risk takers. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.