After 10 years in investing/trading, with my fair share of wins & losses, spectacular busts across some of my high conviction ideas, & having at times made more returns in cos. where I actually had very poor biz understanding / conviction, one simple rule...
RESPECT. THE. PRICE!
RESPECT. THE. PRICE!
Whether it is for the technical analyst or the fundamental long term investor, whether it is for tactical gains or wealth creation, and irrespective of your understanding of the business, always pay close attention to what the price is saying....
That's because 3 things are universal in markets:
1. No one knows everything
2. No matter how much you know/understand, there's always someone who knows better...
3. Price/volume action always gives clues...often, far before the fundamentals change. You just need to catch them...
1. No one knows everything
2. No matter how much you know/understand, there's always someone who knows better...
3. Price/volume action always gives clues...often, far before the fundamentals change. You just need to catch them...
Never let your personal bias (positive or otherwise) or excellent understanding of a business / conviction on an opportunity, cloud your judgment to the negative possibilities or externalities against your investment
Assess your original views often, maybe even with every conversation around them with anyone. Let it be reinforced if needed, but never let it be an indispensable or final view...be always prepared to change your mind with changing data
Every time I have tested my conviction against the tide; the tide has won...knowing when and where to put in the efforts, is as important as putting the efforts itself.
Everyone seeks / suggests "tips" to "buy"; rarely do people seek / advise a "sell". That's because it is always easier to buy than sell...even Abhimanyu knew how to enter the chakravyuh!
It is the exit that's hard, and that is where the men are separated from the boys...
It is the exit that's hard, and that is where the men are separated from the boys...
And this applies to cyclical as well as structural opportunities, commodities as well as moats, value, momentum, BAAP and whatever else...know when to sell! Actually...it is not so much about knowing, as internalizing and sticking to a rigorous discipline. Behavioural skills 101!
And finally, this one from the writer within me:
Midnight musings on a random night,
As I sit down and reflect on a decade gone by...
So many questions, few solutions in sight
Until...
I stumble on the answer to every "how" & "why"!
Midnight musings on a random night,
As I sit down and reflect on a decade gone by...
So many questions, few solutions in sight
Until...
I stumble on the answer to every "how" & "why"!
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