Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Investing rules – Maximise money per hour of research

with 3 comments

  1. Read books from successful investors.
  2.  Stop watching TV News Channels.
  3. Nobody knows the future, so stop asking.
  4. Money is only one of the types of Wealth.
  5. Crazy people of like nature enforce yet conceal each others’ craziness. Find your craziness and tone it to saner proportions.
  6. Mean reversion is an enduring truth of market.
  7. Average common man will buy more in peaks and less in trough.
  8. Excesses in under and over valuation is an enduring theme.
  9. Find High Growth Companies in Low Growth Industries.
  10. Stop Finding companies in High Growth Industries.
  11. Find out the type of investor you are, someone who buys on borrowed tips of one who researches on their own.
  12. Find market leaders in small niches, not #3 or #4 players selling cheap.
  13. Thinking in 3-5 year time frames and not 3-4 months / quarters.
  14. Understand the business, competitive forces and ability to predict future of the business.
  15. Stop thinking solely in PE terms.
  16. Stop playing greater fool game.
  17. Bet on four stocks at a minimum, don’t over concentrate, don’t over diversify.
  18. Think independently. You will outperform the majority.
  19. When there is no company worth investing in the country, go all cash, to go out of the country.
  20. Get rich slow-but-sure, don’t buy lotto, don’t play in casino, don’t gamble, don’t leverage.
  21. Maximise money per hour of research, no point buying into a position requiring active monitoring. The person who makes 100 million from stock market by investing 1 hour per day wins over the person who makes 100 million by investing 6 hours a day. Time is finite and limited. Learning and knowledge is infinite.
  22. Make money and stock market both your slave, make money and forget about them.
  23. Never retire, work incessantly.
  24. Money is means and not an end. Money is a slave to free you from your daily routine.
  25. Show you have the creative potential and do something that nobody has ever done.
  26. Have more creative ambitions in life than earning billions, you are more than your body (thankfully) that needs to be fed on money supplied goods and services alone and very soon you will enter a dimension where money will not work. How soon ? Likely before 2500 weekends.
  27. Gradually drift into a field which you are passionate about, otherwise you are a big disservice to yourself and the society in a profession that is not your passion.
  28. Buy damaged stocks, not beaten down companies.
  29. Admit mistakes.
  30. Learn from own and others’ mistakes.
  31. Explain your picks to yourself with four convincing reasons.

 

Written by amitdipsite

March 6, 2016 at 12:30 am

Posted in Uncategorized

3 Responses

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  1. Awesome pointers!! Definitely needed to ground us now and then.

    Thanks,
    Balaji

    Eternal Seeker

    March 7, 2016 at 3:52 pm

  2. Excellent points, gets one thinking deep. And, I didnt get point no. 28 Buy damaged stocks, not beaten down companies… what does that mean? If you can reflect a bit on this…
    Thanks

    abhinav

    March 10, 2016 at 9:57 am

  3. Behind the Stock is a Company.

    Stock price changes 50% per year in general.

    Company valuation does not change that much every year.

    When bad news regarding a company products triggers bad sentiments in humans, they emotionally dump the stock, causing it to get “damaged” but if the company has not been “beaten down”, Margin of Safety increasing due to hammered price.

    This is sometimes a useful game to play.

    Hope this explanation helps

    Amit Arora

    March 10, 2016 at 8:34 pm


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