Archives for January 2014

Do You Own the Stock or Does The Stock Own You?

That successful investing is more a matter of a strong heart than a strong mind is something I have repeated innumerable times on Safal Niveshak.

Of course, succeeding as an investor requires a strong mind – the ability to study and identify the good and great businesses while avoiding the gruesome.

But what you need is a stronger heart so as to keep your emotions at bay and behaviour in check, especially when stocks plunge – or soar.

I met a friend yesterday who has multiplied his money 8x in Symphony Ltd. in less than four years. Prior to that, I met a relative few weeks back who has grown his money in Bajaj Finance 6x in less than 5 years.

Surprisingly, instead of being happy about their stupendous gains in these stocks, these people were suffering from a peculiar fear.

In fact, I must not term their fear as surprising or peculiar because this is the exact emotion I have gone through a few times in my own investing life.

Like when I was sitting on a 5x gain in Page Industries in January 2011 and 7x in KPIT Technologies in October 2013.

Do You Want to Meet Me in ‘Your’ City?

2 years. 8 cities. 20 sessions. 500+ tribesmen.

Well, that’s the short story of Safal Niveshak’s Art of Investing Workshop, which I started in April 2012 with the hope that it will find at least a few takers.

However, the response I have received in these two years has been amazing, and beyond my expectations. Here’s some proof…

2012 Workshops
Bangalore

New Delhi Mumbai

Pune Ahmedabad

2013 Workshops
Bangalore

Bangalore Chennai

Mumbai Kolkata

New Delhi

Pune Ahmedabad

Hyderabad

2014 Workshops
Bangalore

I have been stumped by this tribe’s willingness to learn, whichever of the eight cities I have been to.

Now, I wish to take the Workshop to more Indian cities in the future.

An Excel to Save Your Life

While India is ranked amongst the skinniest nations in the world (as a large percentage of people cannot afford food), there is no doubt we are getting fatter and unhealthier.

This is especially true of an average adult in urban India, who combines the stress of work with junk food and with sedentary lifestyle, all of which makes for a lethal combination.

Now, many people erroneously suggest that education is the answer to achieving good health. Really?

In 2014, we have more education, information, awareness, policies, programs and getting-in-shape resolutions, than any other time in history. But the fact is that in 2014, more people reading this would get weightier, and unhealthier.

The simple reason you see more young people visiting doctors and hospitals is – we have created a lifestyle that is unsustainable.

What My Little Girl Taught Me About Investing Wisely

“Why can’t I buy that toy, papa?”

“You already have another one like that.”

“But why can’t I buy one more?”

“You won’t like playing with two similar toys. Isn’t it?”

“Why are you saying this?”

“I know that dear, because I was a kid myself!”

“Why have you grown up, papa? If you were still small, you could have played and enjoyed with me and my toys!”

“Everyone has to grow up, my baby!”

“Why papa?”

Tata Motors: Will You Play Devil’s Advocate for Me?

Rolf Dobelli wrote this in The Art of Thinking Clearly…

Have you ever bitten your tongue in a meeting? Surely. You sit there, say nothing and nod along to proposals. After all, you don’t want to be the (eternal) naysayer. Moreover, you might not be 100% sure why you disagree, whereas the others are unanimous – and far from stupid. So you keep your mouth shut for another day.

When everyone thinks and acts like this, groupthink is at work: this is where a group of smart people makes reckless decisions because everyone aligns their opinions with the supposed consensus. Thus, motions are passed that each individual group member would have rejected if no peer pressure had been involved.

Nowhere do you see groupthink than in the world of business and investing.

Whether it’s the case of a CEO allocating capital, or an investor doing so, it’s easy to fall into groupthink and allocate precious cash on things that “seem” right because others also think so, rather than those that “are” right.

Launching StockTalk 3.0

I am writing this in the month of January, so this is not an April Fool’s joke. 🙂

I am planning to re-launch the StockTalk initiative, and in a new avatar (again!).

If you have been a reader of Safal Niveshak for long, you know that I launched the original StockTalk initiative in November 2011.

My plan was to take requests from readers to research on specific companies and write reports explaining their businesses, without making any recommendations.

However, I stopped writing those reports after covering twelve companies.

How to Lose Big Money in 2014

“All men’s miseries derive from not being able to sit in a quiet room alone.” ~ Blaise Pascal

One of the many investing mistakes I made during the early part of my investing career was to be rash with cash.

Any extra cash I ever had was immediately invested in the stock market. Cash in bank was considered a wasted opportunity and every chance to “let-me-buy-stocks-now” was grabbed upon.

In the pre-2008 period, I invested a lot of the cash while keeping my eye on stock prices that were rising incessantly.

I see a lot of investors making a similar mistake now.

After getting frustrated by the way stock prices have performed over the past few years, any stock market rise is first disbelieved and then when prices rise further, people jump in so as to not miss out on any further rise.

2014 – The Year of Inversion

Happy New Year to all reading this blog!

Here is a quick thought on the year ahead.

At Safal Niveshak, 2014 will be a year of inversion of the traditional dictum – “What doesn’t kill you, makes you stronger”.

Instead, this year, the motto will be – “What doesn’t make you stronger will kill you”.

I dedicate this year to Charlie Munger and his thought – “All I want to know is where I’m going to die so I’ll never go there.”

This implies that in 2014, we will discuss ideas –

Less of how to earn great returns, and more on how to avoid permanent capital loss;
Less on how to pick the great stocks, and more on how to avoid the dangerous ones;
Less on things to do for investing success, and more on things to avoid for investing failure.