Investing

Stock Analysis and the Illusion of Control

July 20, 2018 by Vishal Khandelwal | 13 Comments

“The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge.” ~ Daniel Boorstin

The Art of Thinking Clearly is a nice book from Rolf Dobelli. In one chapter, Dobelli shares a couple of instances…

Every day, shortly before nine o’clock, a man with a red hat stands in a square and begins to wave his cap around wildly. After five minutes he disappears. One day, a policeman comes up to him and asks: ‘What are you doing?’ ‘I’m keeping the giraffes away.’ ‘But there aren’t any giraffes here.’ ‘Well, I must be doing a good job, then.’

A friend with a broken leg was stuck in bed and asked me to pick up a lottery ticket for him. I went to the store, checked a few boxes, wrote his name on it and paid. As I handed him the copy of the ticket, he balked. ‘Why did you fill it out? I wanted to do that. I’m never going to win anything with your numbers!’ ‘Do you really think it affects the draw if you pick the numbers?’ I inquired. He looked at me blankly.

Consider my own example. I was once a die-hard cricket fan…or let me say I was a fan of only watching India win (and hated it when they lost).

So, during crunch matches, I used to change my seating places in front of the TV frequently to hit upon one from when India started doing well.

I got up from that place, and the Indians either lost a wicket or dropped a catch, so I stuck to that place throughout the crunch situation.

I thought my seating place controlled the fate of the Indian team, which was such a stupid thought.

What to Do With Losing Stocks in Your Portfolio

July 16, 2018 by Vishal Khandelwal | 5 Comments

VIA Anniversary Offer Ends Tonight: The special anniversary discount of Rs 3,000 on our premium newsletter – Value Investing Almanack – ends tonight. Click here to subscribe now.

I met a gentleman (a friend’s brother) recently who owns 45+ stocks in his portfolio, most of which are bad businesses – he realizes that – and are deep into losses despite the decent run in the stock market over the last few years.

“What should I do with these stocks?” he asked me. And he is not the only one who’s asked me this question in the past. I have met numerous people over the past few years who have held on to bad businesses and losing stocks in their portfolios, and not knowing what to do with them.

One way people look at such stocks is – “Oh, this XYZ stock is already in a deep loss. What would I get by selling it anyways?”

Another way is – “I will sell this ABC losing stock only when I get my capital back. I don’t mind holding it for the long run.”

Safal Niveshak is 7 Years Old

July 9, 2018 by Vishal Khandelwal | 63 Comments

Yep, it’s time to put on the big boy pants…Safal Niveshak completes seven years today. 🙂

I started with a simple idea in 2011, that of helping people become better at their stock market investment decisions. The idea was just that, and I had no clue how I would do it (I still have no clue about the future!)

However, a lot has happened in these seven quick years – and the tribe is reading 50,000 members – but as with any kid of this age, we’re just getting started.

Most of all, I want to thank you for “raising” this initiative to this point — it truly could not have happened without you, dear tribe member.

I know I’ve said it before, but it bears repeating – Thank you so much for reading, for commenting, for your interest and support, for helping this entire movement of creating smarter and independent stock market investors become greater and spread wider.

You are magnificent, and I am supremely grateful for your time and attention.

Just in case Safal Niveshak has touched your life, I would be happy and honoured to read your thoughts in the Comments section of this post.

Thanks again for being there!

With respect,
Vishal

Special Anniversary Offer: Value Investing Almanack (Premium Newsletter)

July 6, 2018 by Vishal Khandelwal | 3 Comments

Safal Niveshak completes 7 years in three days (yes!). A lot has happened in these seven quick years, but as with any kid of this age, we’re just getting started.

Most of all, I want to thank you for “raising” this initiative to this point — it truly could not have happened without you, dear tribe member.

I know I’ve said it before, but it bears repeating – Thank you so much for reading, for commenting, for your interest and support, for keeping us honest, for helping this entire movement of creating smarter and independent stock market investors become greater and spread wider.

Anyways, I take this opportunity to share with you a very special offer on our premium newsletter, Value Investing Almanack, which its subscribers call “the best resource on Value Investing in India.”

Value Investing Almanack (VIA) brings to you the best and biggest ideas in value investing, human behavior, and business analysis, which you must grab to become smarter in your investment decision making.

Investing and the Art of Catching Falling Knives

July 4, 2018 by Vishal Khandelwal | 10 Comments

It was the middle of 2013. I was reading the annual report of Ashok Leyland, the second largest commercial vehicle manufacturer in India after Tata Motors.

The company had reported a 3% decline in sales in the year ended March 2013, and profit had declined by 23%. The stock, as I checked then, had been punished and was trading at Rs 20 when I was reading its annual report. That was P/E of around 12 times, or an earnings yield (E/P) of 8%.

The company had done well in the previous years in terms of growth but was hurt by the overall decline in the commercial vehicle industry, and especially in its core business of medium and heavy-duty vehicles.

Anyways, the stock looked enticing then, not just due to its low P/E, but also because of its absolute low stock price of just Rs 20.