Investing Behaviour

8 Things I Wish I’d Known Before Starting as an Investor

I have been a stock market investor for the past nine years now, and have seen a respectable performance overall.

Why respectable? Because my investments have helped me at several key phases of my life, most important being the purchase of a house property and then repayment of the entire loan on the same within 5 years (though with some support from the family).

Then, apart from a solid support from my wife, I must thank my investments to have given me the necessary “guts” to quit my job and begin on this journey of independence, where all I work for is my passion – to help individual investors like you become independent and sensible in managing your own money.

So even after doing a respectable job as an investor, what could be the things that I still rue I’d learned before starting out nine years back?

An Honest Letter from Your Friendly Stock Market Analyst

Your Friendly Stock Market Analyst Dear Small & Irrelevant Investor,

You must be surprised to receive this letter from me – the ever-so-busy Stock Market Analyst working for your friendly, neighbourhood broker.

But you see I have been enjoying some free time these days because the markets are weak and people are not buying stocks, and thus not reading much of my recommendations.

So here I am, sparing some of my precious time writing to you. I am heart-broken reading all the maliciousness that is being spread these days about me, and my graceful profession.

I’ve even heard that there is this guy called Vishal Khandelwal who’s running this funny, charitable, new website called Safal Niveshak (sounds similar to “Suffer Niveshak”! Ha-Ha-Ha!) and is trying to throw a lot of s**t on my work…but I’ll handle that later in this letter.

I Regret…

Here is what a Safal Niveshak tribesman, Sanjeev Bhatia, wrote in the latest Facebook Jam last Saturday (sorry Sanjeev, but it’s your turn to claim the fame ;-))…

I have a particular Behavioral Problem. You recently wrote somewhere that pain of seeing your picks down 15% is more intense than pleasure of seeing your picks go up 15%. But in my case, it seems to be different. I am now seeing BHEL going up to 232 level, did not buy at 200 because my buy price was 180. Opto Circuit, my buy price was 140, it bounced back from 147 to 155…and with market going up and in strong upward momentum, it does not seem likely to come down soon although you can’t say that with certainty in this market. How to let go off this “being left out” syndrome?

What Sanjeev thought, and as I understood from his question, was that he was suffering from a “unique” behavioral problem – something like the “Alice in Wonderland Syndrome”, which is a neurological disorder that can effect a person’s perception.

But then, as I mentioned in the jam, and experienced investors would vouch for this, is that Sanjeev suffers from nothing more than a “common cold”, like most of us investors.

[Read more…] about I Regret…

Weapon of Mass ‘Temptation’ that Destroys Stock Market Investors

Have a look at this balance sheet…but first stop looking at the left side of the image. 🙂

Well, if you can’t read the numbers above and want to have a “better” look at the complete annual report of this company, click here to see…but please come back to this post soon! 😉

“Isn’t it an amazing annual report?” This is what an ex-colleague asked me showing this annual report sometime in 2009.

3 Big Risks in Value Investing – Part 1

“Who would join a Facebook chat around investing on a bright Saturday morning?” I asked myself while preparing for the latest session of Safal Niveshak’s Facebook Jam on June 9.

I opened the session for questions at 9 AM, but the first question came only at 9.16 AM. So my fears were coming true. But then, the speed at which people came in and the intensity at which the discussions progressed, it was an amazing feeling by the time the jam ended at 11 AM.

Click here to read the transcript of the jam. The next session will be held on coming Saturday, 16th June, between 9-11 AM.

Anyways, the reason I’m talking about the Facebook Jam is that this is one platform where I’ve encountered the best questions around investing over the past four weeks since it all started.

Like in the last session, one of the avid readers of The Safal Niveshak Post asked, “What are the risks involved in value investing?”

Opto Circuits, and Power of Story in Investing

Power of Story If you clicked on the headline expecting to read my view on Opto Circuits, I’m sorry to disappoint you because this post isn’t about that.

The reason I mention Opto Circuits here is because I have received several emails over the past few days requesting for my view on the stock.

Given the number of requests for this specific company, I would definitely work on the same and try to release a report soon via StockTalk. But what intrigues me is – Why are so many people suddenly talking about a small-size company called Opto Circuits?

What’s the story?

Well, that’s what I’m going to discuss today – investing and power of “the story”.

Is this a Good Time to Be a Value Investor?

A reader of The Safal Niveshak Post sent me this email yesterday…

For the last few days, one question is worrying me. As a value investor, even if I choose value stocks after thorough analysis of the business, how do I factor in general macro-economic environment, global slowdown, etc.? How do I know these macro-economic factors will not keep markets subdued for years to come? How do we identify if it’s not great depression again?

Just to add, is there a wrong time for value picking, or is it always the right time as long as there’s thorough analysis and sufficient margin of safety

Very important questions, I must say.

Traditionally, value investors have tended to ignore macro-economic issues and have focused on bottom-up investing.

An Open Letter to My Daughter

My dearest Kavya,

These past seven-and-a-half years seem to have gone by like the blink of an eye.

You’ve gone from a newborn princess cradled in my arms to a small princess experiencing the joy and independence that life can bring.

I can still recall the moment I got the news of your birth. I was not by your side then, but I felt like the happiest father on earth. Your mother and I marveled at your red cheeks, wrinkled fingers, and your intense eyes.

Your birth gave me the experience of my lifetime…an experience that holds the most precious place in my heart.

Some Advice for the Young…and Broke

Young and Broke I generally don’t like offering advice on this platform – Safal Niveshak is all about sharing my experiences and learning as an investor and manager of my own money. So the headline of this post seems a bit awkward to me.

But then, what follows is my response to some common claims that I’ve heard from a lot of well-educated and confident (yet broke) young people…and I was one of them a few year back. (I’m still educated and confident, but have taken care of that ‘broke’ part :-))

Here are some things I’ve been hearing all around from the young with respect to their careers and finances, and my thoughts on their thoughts…

Psychology of a Stock Market Loser

Here’s part of a conversation I had last weekend with a friend who wanted me to help him out with his loss-making stocks. Let’s call him Rohan.

Me: Why are you so depressed?

Rohan: I hate my stocks.

Me: Oh, another member of the pretty big ‘I hate my stocks’ club?

Rohan: I’m sick of looking at my stocks. And given that the markets are falling, I haven’t looked at my portfolio for days!

Me: What stocks do you own at the moment?

Rohan: Don’t want to show.