Safal Niveshak

Wit. Wisdom. Value Investing.

10 Warren Buffett Quotes That Will Make You a Richer Investor – I

If He-Man is the master of the universe, Warren Buffett is the He-Man of the investing world.

The only student to get an ‘A’ from his teacher and the father of value investing Ben Graham, Buffett is the most followed and revered investor the world has ever seen. And we are fortunate to have him living in our times.

Often called the ‘Oracle of Omaha’ (Omaha is where Buffett lives in the US), Buffett is the chairman of Berkshire Hathaway, his investment company that was once an ailing textile manufacturer when he took it over.

Buffett’s investment philosophy has been a mixture of Graham and Philip Fisher (another legendary investor), plus his own ideas that he has developed over his investing career.

His principles have worked wonders for him for the past many decades. And he believes that they will still be the cornerstones of investing a hundred years from now as well.
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Is it the Right Time to Invest in Stock Markets?

The last week has been pretty hectic for me, especially given the numerous telephone calls I’ve received from friends and relatives asking me whether now is the right time to invest in stock markets.

“You see, the Sensex has fallen by almost 25% since its highs in November 2010, and stocks look cheap,” argued a cousin.

Most investors I encounter during such periods of market volatility ask me this very question.

Even you might have this very question at the top of your mind now – “Is it the right time to invest in stock markets?”

If yes, here is a study I’ve done that will answer your question (whether it is the ‘right’ time to invest in stocks), and hopefully to the best of your satisfaction.
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How to Stop Worrying and Start Investing

In the spring of 1871, a young man picked up a book and read twenty-one words that had a deep effect on his future.

He was a medical student at the Montreal General Hospital, and was worried about passing the final examination. He was also worried about what to do in the future, how to build up a medical practice, and how to make a living.

These twenty-one words helped him to become the most famous physician of his generation. That’s not all. He organized the world-famous John Hopkins School of Medicine.

He was knighted by the King of England. When he died, two huge volumes containing almost 1,500 pages were required to tell the story of his life.

This man was Sir William Osler, and the twenty-one words that helped him live a life free from worry were…
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We Are All Weird

“We are all a little weird and life’s a little weird, and when we find someone whose weirdness is compatible with ours, we join up with them and fall in mutual weirdness and call it love.”

These words from the famous American writer, poet, and cartoonist Dr. Seuss rings a bell in my mind every time I hear someone complaining about how the stock market is like a casino that has robbed him of his wealth.

“Stock market is a weird place to be in. I’m better betting on race horses,” said my neighbour as I asked the reason for his sadness during our early morning walk.

“Seemingly he has lost some money as Indian markets have crashed this week,” I thought to myself.

What I thought was right, as he said, “You know what? The Sensex was down 700 points on Thursday and another 200 on Friday! Isn’t this madness?”

I am a good neighbour, so I wanted him to pour out his heart before I could have spoken anything in defense of the market.
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Stocks Crash! What Should Investors Do NOW?

The Sensex was down 700 points yesterday. It’s down 250 points as I write this today.

Whenever we get days like this — like when the Sensex is down 500 points or more — my phone begins ringing with inquiries from friends and relatives.

They always ask the same question: “What should I be doing now?”

Even my wife has this question every time she sees the markets fall like this.

“What are you doing now?” she asks me.

You see, this is ‘not’ the right question to ask in such times.
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Is Stock Market a Casino?

My eyes were caught by a headline in a business paper yesterday. It said, “Steady rise in shady deals, price rigging”.

At first I thought this was an article on the real estate sector in India. But then as I read it further, things really started to look ‘shady’.

The article talked about how data from the stock market regulator SEBI suggests that the cases of market manipulation and price rigging in stock markets have steadily increased over the past few years.

In fact, such cases now account for almost 50% of the cases taken up for investigation by the SEBI.

What this data simply means is that a growing number of people in the Indian stock markets are following the mantra ‘Greed is Good’ as was said by the character of Gordon Gekko in the Hollywood classic Wall Street.
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In Investing, Catch the Right Anchor to Avoid Sinking

First, a quick question. Take the last three digits of your telephone number, and add 400 to it.

So if your telephone number ends in 146, adding 400 to it will give you the answer 546.

Now answer this question – In which year did Alexander invade India?

Think…think!

Even though your telephone number has nothing to do with ancient India’s battles, you will note that your answer to the above question would most likely revolve around the first number i.e., 546 in the above example.

Whatever number you come up with for the sum of the last three digits of your telephone number and 400, your guess for the year of Alexander’s invasion will be close to your sum.
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Infosys, Share Your Cash!

Well, this isn’t what I’m saying. This is what investors and analysts have been pestering Infosys to do for years now.

The company currently has accumulated almost Rs 151 billion (or US$ 3.2 billion in cash) on its balance sheet. That’s a lot of moolah!


But with ever rising cash balance, even the hounding it has received at the hands of its investors, analysts, and fund managers has risen over the years.
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Kill That Idea Before It Kills Your Wealth

“The hardest virus to kill is an idea,” said the character of Leonardo DiCaprio in the movie Inception. This idea – of the difficulty of killing an idea – is widely prevalent.

We see this in businesses where once a management gets an idea that sounds wonderful, it is very difficult to ask it to change its plans even if the idea is destined to fail.

Things aren’t any different in stock market investing.

Investors seldom expect to be wrong, and thus hold on to bad ideas – bad stocks – even when it seems clear that their original idea was faulty.

But this is a typical behavioral attribute and you can’t blame anyone who shows this kind of a tendency – of not accepting that his idea is bad, and therefore must be killed.

In this post, we look at the relevance of killing bad ideas in stock market investing, and how you as an investor can do that.
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