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November 2017

Investing Thoughts

Weekend Thoughts – 3

 

  • Market corrections, which had been happening in the past, will keep on happening in the future too. You needn’t lose your temper as per the market’s behavior. Rather, they should be seen as opportunities to buy more quality companies which are available at discount.
  • John Templeton has said – People who try to become rich quickly, lose their capital quickly too. The burst of the year 2000 dot-com bubble proved this analogy right. People were buying internet companies shares ignoring other quality companies available at discount and regretted.
  • What I have understood in these many years that the more I keep myself calm when my holdings are down, the more I see appreciation in it once the market recovers from the setback. It’s my temperament & the emotional behavior that works as a strategy, not my brain.
  • If you really want to teach your kids something beneficial, teach them to set aside a part of their income and invest it when they start earning. Not only you’ll help them build a secure future but also make them transfer the same attributes to their kids as well.
  • Investing is something which you do to build wealth. Jumping in and out of the stocks on daily basis won’t do any justice to it. It may make you small profits but won’t make you rich.
  • If you learn to avoid a behavior which leads to poor outcomes, you will always have an edge over other investors. One such behavior is having a blind faith in the company you own. People fell in love with & Anil and saw their investments getting blown up in smoke.
  • During the dot-com bubble, people were rushing towards buying billion dollar valued internet companies. But Berkshire Hathaway was not performing well & Buffet had refused to buy dot-com stocks. Eventually, the internet companies went bankrupt and billion dollars were lost.
  • Heard it from that in long-term, you tend to witness various cycles with maximum returns, lowest returns, zero returns, and negative returns. People don’t want to see other cycles except for the one with maximum returns and thus try to time the market and lose money.

 

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believe in yourself

While Investing, Always Believe In Your Own Judgments

 

I have observed that people have a great fascination for the tips they get from others to invest their money. Without investigating the company’s profile, its financials, management, and growth prospects, they just invest their hard-earned money blindly and regret later when the stock price tumbles down heavily.

 

Ironically, when they buy a  smartphone online, they choose to evaluate its specifications closely, compare its prices on other available platforms, take feedback from the ones who are using it already and then buy it with due diligence. Even if they get a tip that Samsung Galaxy is better than Apple iPhone, yet they choose to do their proper homework before taking a buying decision. Shouldn’t they replicate the same behavior while picking stocks as well?

 

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