Archives for 2013

How to Generate Stock Ideas

In an interview with Warren Buffett in 1993, Adam Smith, author of Supermoney, asked how the small investor can find good investment ideas.

Warren Buffett: I’d tell him to do exactly what I did 40-odd years ago, which is to learn about every company in the United States that has publicly traded securities, and that bank of knowledge will do him or her terrific good over time.

Adam Smith: But there are 27,000 public companies.

Warren Buffett: Well, start with the A’s.

Everybody knows that Warren Buffett gets his investment ideas largely from annual reports.

Of course, now he has become so influential that companies call him to share their own ideas. But, fifty years ago, Buffett was not the go-to guy if you wanted to sell your company or raise capital for your failing bank.

He was a small investor who was clawing his way up the investing street by reading whatever annual report came his way, and then finding his investment ideas that worked wonders in the subsequent years.

You are probably at the same stage Buffett was fifty years ago. But there’s a big advantage you have over the early day Buffett.

Do You Like Safal Niveshak?

I am back from my Kerala holidays, and can say with great belief that it truly is God’s Own Country. Here are a couple of proofs…

Anyways, after experiencing nature’s beauty so closely, it’s tough to get back into thinking and writing about the stock market right away…so please excuse me for a couple of more days.

In the meanwhile, did you know there’s a Safal Niveshak Facebook page where I share varied content, even when I’m on a holiday?

If you haven’t done it as yet, and if you enjoy what I do here at Safal Niveshak, I’d appreciate it if you gave me a “like” on Facebook. Just click here, log in to your Facebook account, and then click the “Like” button at the top of the page.

As examples of concise content I share on Facebook that I don’t on the Safal Niveshak website, here are a few…

7 Life-Saving Lessons on Investing from a Happy Marriage

Happy marriage Disclaimer: Some ideas discussed in this post may not be applicable to the author. 🙂

As I complete 10 years of my marriage, I can say that a marriage, no matter how good, can be made better.

My experience also tells me that a good marriage has some basic qualities. One, for instance, is that both partners are fully devoted to the relationship. They are willing to invest time and energy to make it grow and flourish.

They also communicate effectively with each other and know how to resolve their differences.

And they learn to be flexible with each other’s behaviour and choices.

You see, there is no right way to be married. Many marriages just work out great. However, there is a wrong way to be married. And it is when you don’t invest in the relationship.

Anyways, a happy marriage can serve a very good example for an investor in stock markets.

I Invest, So That I Live Like a Man…Not a Donkey, Dog or Monkey

In my collection of short stories that I have found on the Internet or in books and magazines, here is one that I believe carries a deep meaning, and a harsh truth, for our lives.

Here it goes.

God created the donkey and said to him:
“You will be a donkey. You will work un-tiringly
From sunrise to sunset carrying burdens on your back
You will eat grass, you will have no intelligence
And you will live 50 years.”
The donkey answered:
“I will be a donkey, but to live 50 years is much. Give me only 20 years.”
God granted his wish.

Why I Don’t Watch CNBC, and Why Even You Shouldn’t

“Hey why don’t you switch on CNBC?” asked a friend who was visiting me after several years.

“I don’t have CNBC as part of my channel package!” I replied.

“What? You don’t have CNBC? You are a stock market analyst and you don’t watch CNBC?”

“Apart from this stock analyst thing, give me one reason I should watch that channel,” I retorted.

“Boss, it helps you make money. As simple as that!” he replied with vengeance, as if he was paid to speak ‘for’ the channel.

“The goal of CNBC or any other business channel is not to make you money, dear friend, but to sell advertising,” I said.

Image Source: politicalhumor.about.com
The conversation ended there and then. But thankfully, our friendship has survived.

5 Things to Avoid in the Current Stock Market

When I thought of writing this post, the BSE-Sensex had just touched its all-time high level of nearly 21,300.

But as I was giving the final touches to this post, newspaper headlines read “Sensex posts worst week in three months”.

As I read now, the bulls are predicting that the worst is behind us, while the bears are advising taking money off the table.

Before my mind goes numb seeing and hearing the noise all around, let me share with you 5 things I think you can safely avoid in the current market.

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Poke the Box: Never Give Up, Never Give Up, Never Ever Give Up

Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few days and weeks…

Peter Lynch said, “Owning stocks is like having children, don’t get involved with more than you can handle.” Here’s a post that brings together diverse thoughts on how many stocks you should own.
Some amazing lessons on life and money I learned from a taxi driver, Kantilal.
Here’s an amazing e-book from Balaji Ganesan, a Safal Niveshak tribesman, on behavioural biases and how they impact you in your financial decision making.
Carried an interview of value investor and blogger Ninad Kunder on what has shaped his life as an investor. Some really amazing stuff here!

Life & Money Lessons from Kantilal

“Wadala Station?” I asked as a taxi approached me while I was returning home from a trip to the Siddhivinayak Temple here in Mumbai today.

“Come, sit,” the driver said, as I thanked my stars because a few drivers had turned my request down.

“I was going towards Chembur, and Wadala is midway, so would take you there.”

“Oops, but why does your meter start at 20 rupees? Isn’t this high than normal fare?”

“Sir, this is a cool-cab (Mumbai’s AC taxis), so the rate is higher. But don’t worry, since you don’t need the AC, I will charge a normal taxi’s fare only.”

“Thanks! By the way, Chembur is very close to my home. Why don’t you take me there?”

Understanding Behavioural Biases in Finance and Investing (E-Book)

“How do I read stuff you recommend when I have no time left after work etc.?”

This is one common reason I hear from people who have not yet gotten down to reading the brilliant literature out there on investing and investment behaviour.

If you have had similar excuses/reasons all these years, I present to you Mr. Balaji Ganesan, a Safal Niveshak tribesman from Chennai, who works as an IT professional, and who serves as a great proof that if you have a passion, you can take out time to follow it.

Balaji has been the most prolific contributor to the Safal Niveshak Forum, and shares largely on behavioural finance and his experiences dealing with the same.

He has contributed more than 100 posts on the Forum pm various biases, and I thought it would be great if he could create an eBook on the subject and share with other tribesmen.

I Wish You…

“It is during our darkest moments that we must focus to see the light.” ~ Aristotle

I wish you a very happy Diwali, dear tribesman.

I also wish that not only you enjoy the lights you see around, but you also be the light – either by being a candle of love, compassion, and wisdom…or by being the mirror that reflects it.

Then, even as the stock market gets more euphoric and you hear an army of experts telling you how this tower of cards would rise even higher, I wish you keep a calm mind and join the party not because you are frustrated to have missed it all this while, but only if you find some value here.

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