Archives for October 2011

The Simplest Way You Can Question a Company’s CEO

One of the rituals of being a stock market analyst is that you must analyze the quarterly results of each and every company that is under your research coverage.

The analysis report has to be sent to clients the very same day, as the target is always to be the ‘first to market’.

I was part of this ritual for 8 years, or 32 quarters. At any point in time during these 8 years, I had around 20-25 large and small companies under my coverage.

In short, over these years, I wrote around 650-800 result analysis reports. If that was not enough, there was a considerable amount of time spent listening to managements through conference calls that were organized after the results came out.
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Infosys and the Funny Stock Market Pastime Called ‘Expectations’

India’s leading software company, Infosys announced its September quarter result yesterday. The company reported an 8% growth in sales during the quarter, as compared to the previous quarter ended July 2011. Its profit growth stood at 11%.

The stock clocked gains of around 7% after these result was announced. Now, if you think the good performance from the company was the reason for the stock to have performed so well yesterday, you are missing the point.

The key reason the stock rose so sharply was not Infosys’s September quarter performance, but the fact that the management raised its ‘forward guidance’ or its ‘earnings expectations’ for the coming quarters.
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Don’t Believe Everything I Write on Stock Market Investing

Do you ever wonder if you’re wrong about certain things that you currently consider to be fact?

Like the way you handle your money? Or like the way you invest in stock market?

Do you ever think that maybe you were wrong about that worthless stock you still hold in your portfolio? Or the advisor who advised you that stock? Or your own habit of making hasty investing decisions that led you to buy that stock?

Do you ever question your beliefs and opinions when it comes to investing in stock market? Like, where they came from? Did you develop them yourself or did you adopt them from someone else, like your father, colleague, or Warren Buffett?
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Why Investing Now is Like Catching a Falling Knife

The Indian stock markets have had a ‘relief rally’ over the past few days. With the Sensex recovering almost 700 points over the past four trading sessions, investors are starting to believe in the ‘end of crisis’ theories floating around.

But the fact remains that the global economy and financial markets remain far from an end of crisis, and investing in stocks is likely to be clouded by high levels of uncertainty in the short to medium term.
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Share Your Investing Story, Inspire Others

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” – Eleanor Roosevelt (US diplomat & reformer)

Some bumps and bruises in stock market investing can be avoided if you heed the lessons others have picked up along the way.

Mistakes sometimes happen when you try something new, when you take a risk, when you attempt to do things differently from others.

Nearly every investor can point to mistakes he made – and the lessons he learned from them.

It’s cheaper to learn from someone else’s mistakes. Your job as an investor is not to reinvent the wheel. You don’t know every answer, but you can usually find the people who do.

Safal Niveshak understands this. And this is the reason I have created this platform of ‘Your Story’ where you can share your investing story – the investing mistakes you’ve made in the past, as also the stories about how your chose your winning stocks.
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The Best Article on Value Investing You’ll Ever Read

Based on my readings of the world’s best investors and also through my own practice of investing in stock markets, I have come to believe one thing.

It is that long-term investment success is a function of two things:

Right approach
Right person

We have discussed these aspects of investing across several articles on Safal Niveshak. However, if I were to suggest you the best article I’ve ever read on this concept, it would be “The Superinvestors of Graham-and-Doddsville”.

This article was written by the world’s most successful investor ever, Warren Buffett, promoting the concept of value investing.
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So, You Want to Become a Wealthy Investor?

The question is – Who doesn’t want to become one?

You save and invest your hard-earned money, all with the aim of living a comfortable life when the salary cheque stops coming.

With your financial goals in mind, you make resolutions and sometimes also show your willpower to achieve them.

But then, is this enough to become wealthy over the long term?

The answer is – No!
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3 Lessons from Steve Jobs That Can Change Your Life as a Human…and an Investor

In a few years from now, my kids will ask me what it was like to be alive when Steve Jobs was the world’s best innovator and businessman.

They will ask me: “Jobs was the best person in business when you were young. What was he like? What did you learn from him?”

What will my answer be?

You see, it is human nature to overlook the importance of those who are here and now. Those who are great and live among us seem more normal because they’re breathing the same air that we are.

But we realize the greatness of such people only when they are gone.
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Survive a Stock Market Panic…And Make It Work for You

“You know how bad I feel seeing my stocks these days?” asked my friend Ravi in a moment of anxiety.

“How bad?” I asked.

“It feels lousy! Every time I log in to my online trading account and see those red numbers, and then compare them with where they were a few months back, I feel really-really horrible.

“And you know what,” Ravi continued, “Wherever I look these days, whether it’s a newspaper or a business channel, or even within my office, I find a lot of voices screaming loudly in my direction and telling me to sell everything.”

“Wow!”

“What wow? You’re happy to see me suffer?”
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Investing and the Art of Discipline

“Half of life is luck; the other half is discipline – and that’s the important half, for without discipline you wouldn’t know what to do with luck.” – Carl Zuckmayer

Warren Buffett once said that the most important quality for an investor is temperament – how he behaves under different situations – not intellect.

In simple words, if you are an investor, your attitude will play a major role in your investing success than your aptitude.

It has been proven time and again that the worst enemy an investor can have is his emotions.

So, during bull markets, your worst enemies are greed and envy.

During bear markets, they are fear and panic.
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