“We can pick multibaggers. Subscribe to our services and get MULTIBAGGERS” – Tom, Dick & Harry Looking at the current scenario, there seems to be a slot machine game being played on the bourses. Any Tom, Dick or Harry in some corner of the country thinks he is skilled enough to spot multibaggers! Since all the stocks are moving up, there are high chances that all the recommendations will work. This means that ‘Luck’ is predominant in stock picking. Ones who are getting thrilled are forgetting what if the tide goes out? What if they held on to their investment and market went belly up? Do they have strong conviction to hold on to those stocks for long term or may be till next bull market? Seems unlikely! “Only when the tide goes out do you discover who’s been swimming naked.” –Warren Buffett People usually overestimate their stock picking ability […]Read more
Do you stay glued to the daily ups and downs of stock prices? Do you wonder what to conclude from the prices, fluctuating every now and then? Do you hope to make a windfall on the hot new stock you bought? And yet, things don’t go as you want. Trust me; this can be simply termed as human misjudgement of the underlying value. What is a stock? It’s a small piece of business. What does that mean? Simply, that you own the earnings and the cash flows that the business generates from time to time. To give you an evident analogy, the dividend on the stock is similar to rent you receive on your property and capital gain from the stock is similar to gains you earn after selling the property. Does the rent or property price change every day? It changes only over a period of time, may be […]Read more
Recently, while going through my set of business dailies, I found many experts commenting about the recent bull-run in the Indian equity markets. And I found a striking similarity between a bull-run and a Marathon. Both, Marathon and Bull-run can be broken down into three phases. I have jotted down a few points that I feel are analogous, read on:- (Bull run in italics) Marathon, Initial 14 kms: You have to be strong and confident to take up this challenge. You have to trust your ability and prepare mentally to finish the task at hand. Start slow, running slow is the key to enjoy and complete the marathon. Remember, the hare and the tortoise story? Don’t worry about the people who have passed you starting way too fast. These people will get eliminated anyways due to early fatigue. Don’t get obsessed with winning or thinking about your reputation. Bull-run Phase […]Read more
‘Patience is a virtue’, more so in the world of investing! Patiently waiting for bargains to come your way, is often the best strategy an investor can follow. We are constantly dealing with different market conditions. It is important for us to realize the investment environment we are currently in and act accordingly. There may be times when greed and fear are balanced. At such times, everything will be fairly priced. And thus markets may not present great buying opportunities at bargain prices or selling at irrationally high prices. And at such times, doing nothing at all is the best option we have. However, this is easier said than done. Let me give you an oft mentioned example. In soccer penalty kicks, goalkeepers choose their action before they can clearly observe the kick direction. (The ball takes 0.2 seconds to reach the goal after it is kicked, giving the keeper […]Read more
How would economy evolve and Stock Markets react if a Third Front/Federal Front government is formed?
Throughout the month of March we have been looking at how political outcomes post 2014 General Election. Till now we have seen three possible scenarios. Today we will look at a fourth possible scenario -What if a Third Front/Federal government forms a coalition government after the general election?
And finally we will try tying all these together by building market expectation for the near future.Read more