Restoring Traders/Investors Faith into Investing
- Thread starter Einstein
- Start date
- Tags portfolio tracker value investing warren buffett
Hi there,
I believe your selection is based on price factor alone, it better to buy a good company at average price then buying a bad company at good price.
Talwalker, NLC does not seems to have that glitter what it takes to be a great company, its just below average company, don't invest in mediocre business if you don't want mediocre returns. just remember even if the price is good, it may take many many years before it can reach to its place, this is very complicated to explain, another reason why most analyst fails.
I will also skip lupin at this price, its a good business, i like it,maybe in recession I would buy a business like this, but there will be much better choice if there is recension in near future, don't expect more then 10-20% retuen at best in upcoming years.
I like VHL, because I like Vardhman textiles, but do book profit, its not a type of company which can beat competitors. moat is an important factor in company's growth, but its a good company. VTL.
Skipper seems good, not sure why price down 50%, top tick to bottom, will check it once again, but at first glance it seems like a good investment at current price.
I believe your selection is based on price factor alone, it better to buy a good company at average price then buying a bad company at good price.
Talwalker, NLC does not seems to have that glitter what it takes to be a great company, its just below average company, don't invest in mediocre business if you don't want mediocre returns. just remember even if the price is good, it may take many many years before it can reach to its place, this is very complicated to explain, another reason why most analyst fails.
I will also skip lupin at this price, its a good business, i like it,maybe in recession I would buy a business like this, but there will be much better choice if there is recension in near future, don't expect more then 10-20% retuen at best in upcoming years.
I like VHL, because I like Vardhman textiles, but do book profit, its not a type of company which can beat competitors. moat is an important factor in company's growth, but its a good company. VTL.
Skipper seems good, not sure why price down 50%, top tick to bottom, will check it once again, but at first glance it seems like a good investment at current price.
Talwalakar has good valuations, cash flow is decent, poised for growth though management seems too fixated on improving stock price than the business itself hence the demerger but still I do believe in their growth story. NLC is purely for dividends and stability, anyways does not have much skin here. Other stocks I like are:
Byke Hospitality
Maithan Alloys
Mirza Intl
Nesco
Uflex
Byke Hospitality
Maithan Alloys
Mirza Intl
Nesco
Uflex
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Why I believe stocks like Lupin might be better picks especially during these times are because I think markets might face some pain in times ahead. Best time to enter into undervalued story is during normal phases when the markets are neither too high nor too low, recession I believe is the time to accumulate blue chips. The undervalued stock would also feel the pain like the weaker ones when the tide turns-until then these lupin's, NLC of this world would add stability to portfolio.
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My portfolio consists.
1. Graphite India
2. Sanofi
3. Bata India
4. Dabur
5. Bharat Financials
6. City Union Bank
7. Garware Technical Fibres (Garware Wall Ropes)
8. Tata Elxsi
Planning to Add Page, HoneyWell Automation, PGHH.Bajaj Finance and Birla Cable.
@Einstein I would like to have your opinion on these.
1. Graphite India
2. Sanofi
3. Bata India
4. Dabur
5. Bharat Financials
6. City Union Bank
7. Garware Technical Fibres (Garware Wall Ropes)
8. Tata Elxsi
Planning to Add Page, HoneyWell Automation, PGHH.Bajaj Finance and Birla Cable.
@Einstein I would like to have your opinion on these.
Pramod Kumar, Studying Indian Stock Markets since 1977
Updated Aug 12
My Biggest Loss:
While replying to some other questions on Stock Market trading, I have written about riding your good trades for maximizing profits and using stop loss to cut the losses. Without these two factors you can not get trading profits even by being right on even 80% occasions.
We are human. To err is human. I erred.
The timing could not have been worse. I had quit my well paying job in November 2014 and did full time trading in December 2014. In 3 days of trading, I was up Rs. 65000. My trading capital was about Rs. 200000. Then the reality struck. Profits were gone. they turned into losses. Somehow I managed few good trades and ended the December 2014 Expiry with a profit of Rs. 22000 for the month.
I did not know what was waiting for me in January.
Inauspicious Beginning In January 2015:
The screen shot shows a loss of Rs. 127718.15.
It hurt like hell. I had SOLD CALLS in NIFTY. Most experts will tell you that profits are made by selling options. They also tell you that you can have unlimited loss also while selling options.
I learned the hard way.
NIFTY kept on gaining and my loss kept mounting. Instead of cutting my losses, I kept on hoping that market will turn around . Nothing of the sort happened and the result is recorded forever.
Markets went on to make a record high in March 2015.
Reasons For Loss:
The loss occurred due to :
I got the market direction wrong. And when wrong, I did not cut my losses. I let them run.
Trades were made in specific Strike Price for 12 Scrips, 7 were loss making and 5 gave profit. The losses were big and the profits small.
In all my other answers I have always emphasized the importance of letting the PROFIT run.
What I Did After This?:
I told to myself:
You are not good at selling options. You always made your profits by buying Options. Forget about time decay and all. You can not lose more than the premium paid, but when right you can get profit twice, thrice , six times or more of the premium paid.
And manage the loss at right time.
Experts may be right about profit from selling options, but it did not work for my trading temperament. Every trader has to find own trading style. Advice can only help, but your trades are yours only.
What Happened Next?:
This is the result of the month of February, 2015
In February 2015, the trades resulted into a profit of Rs. 145681.57
What happened in March?:
Profit in March 2015 was Rs. 270241.
You can read about it here:
Pramod Kumar's answer to What is the most amount of money you have made trading derivatives?
What I want to convey through this rather long answer is:
(a) A big loss is a lesson. Learn from it and avoid those mistakes.
(b) Letting the profits run is important. A one big profitable trade can cover few losing ones.
(c) Discover your own trading mindset and trade accordingly. All the trading theories are right. But they may not work in your case.
(d) Trading can be profitable if done rightly.
(e) Option Trading does give good profits. Remember, my capital deployed was Rs. 200000 only.
(f) Take a break from trading. In my case, I got another job in April, got busy with it and almost did not trade in April and May.
I hope the answer is useful to some.
Updated Aug 12
My Biggest Loss:
While replying to some other questions on Stock Market trading, I have written about riding your good trades for maximizing profits and using stop loss to cut the losses. Without these two factors you can not get trading profits even by being right on even 80% occasions.
We are human. To err is human. I erred.
The timing could not have been worse. I had quit my well paying job in November 2014 and did full time trading in December 2014. In 3 days of trading, I was up Rs. 65000. My trading capital was about Rs. 200000. Then the reality struck. Profits were gone. they turned into losses. Somehow I managed few good trades and ended the December 2014 Expiry with a profit of Rs. 22000 for the month.
I did not know what was waiting for me in January.
Inauspicious Beginning In January 2015:
The screen shot shows a loss of Rs. 127718.15.
It hurt like hell. I had SOLD CALLS in NIFTY. Most experts will tell you that profits are made by selling options. They also tell you that you can have unlimited loss also while selling options.
I learned the hard way.
NIFTY kept on gaining and my loss kept mounting. Instead of cutting my losses, I kept on hoping that market will turn around . Nothing of the sort happened and the result is recorded forever.
Markets went on to make a record high in March 2015.
Reasons For Loss:
The loss occurred due to :
I got the market direction wrong. And when wrong, I did not cut my losses. I let them run.
Trades were made in specific Strike Price for 12 Scrips, 7 were loss making and 5 gave profit. The losses were big and the profits small.
In all my other answers I have always emphasized the importance of letting the PROFIT run.
What I Did After This?:
I told to myself:
You are not good at selling options. You always made your profits by buying Options. Forget about time decay and all. You can not lose more than the premium paid, but when right you can get profit twice, thrice , six times or more of the premium paid.
And manage the loss at right time.
Experts may be right about profit from selling options, but it did not work for my trading temperament. Every trader has to find own trading style. Advice can only help, but your trades are yours only.
What Happened Next?:
This is the result of the month of February, 2015
In February 2015, the trades resulted into a profit of Rs. 145681.57
What happened in March?:
Profit in March 2015 was Rs. 270241.
You can read about it here:
Pramod Kumar's answer to What is the most amount of money you have made trading derivatives?
What I want to convey through this rather long answer is:
(a) A big loss is a lesson. Learn from it and avoid those mistakes.
(b) Letting the profits run is important. A one big profitable trade can cover few losing ones.
(c) Discover your own trading mindset and trade accordingly. All the trading theories are right. But they may not work in your case.
(d) Trading can be profitable if done rightly.
(e) Option Trading does give good profits. Remember, my capital deployed was Rs. 200000 only.
(f) Take a break from trading. In my case, I got another job in April, got busy with it and almost did not trade in April and May.
I hope the answer is useful to some.
Vivek Agarwal, Chief Investment Officer and Co- Founder @ Upwardly.in
Answered Jul 21, 2017
2008 was the real tsunami for stock markets.
After markets doing fantastically well from 2004 to 2007, almost all investors were supremely confidant on their investments. They were increasing their investments in the markets and there was a air of invincibility.
When the markets started falling in Jan 2008, investors were still confidant that the markets would recover. Many people were still buying and averaging their costs hoping the markets would recover. They didn’t for while. Indeed the markets tumbled even faster. lakhs and lakhs of investors lost their hard earned money in no time. Almost all portfolios were down 50–60%, in some case even 80–90%. Here are some of the learnings that I had from that cycle.
1.) Never invest all your money in Equity. Never keep all your eggs in the same basket. One must have some investments in Debt Funds, PF/PPF etc as well.
2.) Have a Long investment horizon for your equity investments. People who had long investment horizons for their equity investments were able to ride through the bad phase of the markets and the markets eventually recovered.
3.) Do not leverage yourself for equity investments: A Lot of people took loans against their property or personal loans to invest in stock markets. These people were hurt the most as they not only suffered on their investments but also has to pay interest on their loans.
4.) Do not invest in Derivatives. Derivatives are highly leveraged and are settled daily. losses in derivatives have to be settled daily. Refrain from investing in derivatives.
Lastly and most importantly,
5.) Do not directly invest in stocks if you are not an expert. the worst losses were suffered by common investors who had no clue about stock valuations and were chasing the markets with hearsay tips etc. They had no fundamentals of trading in stocks and were invariably chasing penny stocks or taking wrong strategies. Thus, in my opinion it is much better for investors to rely on advise of experts and invest in equity markets through Mutual Funds. You can read my long answer here.
Vivek Agarwal's answer to Which should I choose - the stock market or mutual funds?
Answered Jul 21, 2017
2008 was the real tsunami for stock markets.
After markets doing fantastically well from 2004 to 2007, almost all investors were supremely confidant on their investments. They were increasing their investments in the markets and there was a air of invincibility.
When the markets started falling in Jan 2008, investors were still confidant that the markets would recover. Many people were still buying and averaging their costs hoping the markets would recover. They didn’t for while. Indeed the markets tumbled even faster. lakhs and lakhs of investors lost their hard earned money in no time. Almost all portfolios were down 50–60%, in some case even 80–90%. Here are some of the learnings that I had from that cycle.
1.) Never invest all your money in Equity. Never keep all your eggs in the same basket. One must have some investments in Debt Funds, PF/PPF etc as well.
2.) Have a Long investment horizon for your equity investments. People who had long investment horizons for their equity investments were able to ride through the bad phase of the markets and the markets eventually recovered.
3.) Do not leverage yourself for equity investments: A Lot of people took loans against their property or personal loans to invest in stock markets. These people were hurt the most as they not only suffered on their investments but also has to pay interest on their loans.
4.) Do not invest in Derivatives. Derivatives are highly leveraged and are settled daily. losses in derivatives have to be settled daily. Refrain from investing in derivatives.
Lastly and most importantly,
5.) Do not directly invest in stocks if you are not an expert. the worst losses were suffered by common investors who had no clue about stock valuations and were chasing the markets with hearsay tips etc. They had no fundamentals of trading in stocks and were invariably chasing penny stocks or taking wrong strategies. Thus, in my opinion it is much better for investors to rely on advise of experts and invest in equity markets through Mutual Funds. You can read my long answer here.
Vivek Agarwal's answer to Which should I choose - the stock market or mutual funds?
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