GREED,FEAR AND WARREN BUFFETT

 

ALWAYS REMEMBERS WHAT INVESTMENT GURU WARREN BUFFETT SAYS

Be Fearful When Others Are Greedy And Be Greedy When Others Are Fearful

Biggest Mistake Done By Common Investor Is 
They Dont Buy When Stock Market Come Down At Value Buying Levels. 

3 Essential MUST HAVE Strategies for Investors

3 Essential MUST HAVE Strategies for Investors:

1. Entering strategy

2. Exiting strategy

3. Re-entering strategy

1. ENTERING STRATEGY

It about buying

It about making portfolio

Right kind of diversification

Choosing right sectors. avoidng wrong sectors for e.g. fmcg and pharma and not telecom.

Avoiding all-time unfavorable sectors such as pulp and paper, plantations etc.

Use of technical analysis if/while investing in a bull market.

A review of situation and impact of other markets, for e.g. bond market, commodities market etc.

-why to invest?

Target/goal of investing, gains, speculative gains, dividend.

Deciding whether Economic recovery in sight or more pain for capital markets?

Comparison with other asset classes

Are valuations cheap or there is bubble element.

-Where to invest?

Sectors to pick and sectors to drop

Intra sector and stock selection i.es to chose between an l and t and bhel.

-how to invest?

Allocation of capital amongst stocks, sectors, intrasector and other classification.

2. EXITING STRATEGY

When to book profits.

Of What use the paper profits are?

When markets are fundamentally over priced and technically also.

The best way is to look for macro factors for overheating signals.

Also look for behavioral indicators such as excessive euphoria such as p/e ratios soaring to 50-100 and even more. And floods of IPOs over subscribing by several times with no justification for such a valuation of its business.

How much return should be a threshold for booking profit-50% or less  or more? How much for individual stock and how much for the combined portfolio?

Oh oh …you may miss 20-30 pc market rise, but if you know the top, please let us know too.!

-

Your targeted return has arrived or not.

Better opportunity in other sectors/stocks/asset class or shifting to debt or bank fd.

Valuations entering into bubble zone.

Strategy to exit NEAR top (and not AT top, which is not possible for all)

Making sure of your bull market PROFITS DOESNT remain ONLY ON PAPERS. (which happens with more than 70 percent of retail investors.)

3. REENTERING STRATEGY

When will you reenter into stocks?

May be you just wait and watch with cash during the bear market or you may invest into commodities or other asset class during this period.

Time for value buying.

Buying stocks at real real throw away prices in a completely distressed and panic driven markets. Having courage, confidence, vision and insight to do so.

The new economic policies, new themes of investing.

Rise of some sectors while fall of few others.

Reentering in wrong sector may give bitter experience at the start such as investing in telecom in this new bull market began in 2009.

Invest more and more when markets have corrected beyond 40 percent of its previous bull market high.

-

Market trading at or below fair valuations like average p/e, historic p/e, historic low earnings, etc.

Worst and pain coming to be over

Valuations becoming attractive

Your targeted downside in prices and valuations achieved.

Readiness to bear notional loss up to 20 percent and readiness to average at further declines.

Strategies of entering NEAR Bottom (and not bottom)

Readiness to take contrarian call.

Readiness to go against the crowd.

Close observation of macro economic cariables, monetary policy hanges, and your targeted companies for investment.

Remaining ready with a list of your targeted companies and their prices at which you will buy,

Making sure we may be early but not late in the bull party.

3 STRATEGIES APPLIED TO AN INDIVIDUAL’S INVESTMENTS:

Portfolio building strategy.

Portfolio monitoring strategy.

Diversification strategy. Within asset class i.e. equity.

Asset allocation strategy. Between asset classes.

Portfolio shuffling strategies.

Comments are invited @ wealthcaresolution@gmail.com.

Advantage Of Early Investments

Dear investors,
Many Times you all have read about multi-bagger stock or rising stars and many investments companies gives example about early investments that how small companies became big corporate and successful business. Let’s see some example of the same,


Change in share prices over the past 10 years:

Stock	Price of 15/12/1999	Price of 15/12/2009
Aban Offshore	6.7	1191
Era infra	1.2	197
Shriram transport	4.5	451
Kalpataru power	20	1020

      Now tell me are you a person who has invested in any of the company for the above given period? Ask the track of analyst who is suggesting you to invest in stock market.
      Let me give you track of our research team’s fundamental and technical analyst head mr.nishesh jani, who have experience of more than 8 year and his family has experience of 40 years ,how they spot the long opportunity at low levels or early stage of the business or early stage of economy.

STOCK	INV.PRICE	CURRENT PRICE
Tata power	25	1300
Tata steel	25	500
Larson	20	1600
Reliance ind (demerger)	10	1000
Values adjusted for merger/	Demerger/bonus/split etc

      Now see the gain after long term, many analyst or economist including we believe Indian economy will grow but which stock or companies are worth to buy and beat the stock market in the long run? Like warren buffett, rakesh junjunwala, ramesh damani, ramdeoo agrawal or even like our nishesh jani’s family?
      Try and find out the Companies with negligible revenue from core operation but with mega plans under implementation are worth a look.
      Few companies have little or nothing to show by way revenue and profit from their core business operations. Many of these companies have mega future plans that could completely transform the company, its business profile and size of operations. 
Investing in such stocks makes sense before their core business goes on stream and start contributing to the top line as immediately after this it is most likely that such stocks would witness re-rating and rise further.
       Before investing in such companies, investors can try to reduce risk by focusing on various aspects of the industry and company. Such as management credentials, project implementation skills and experience, corporate governance norms, financial backing by group, industry dynamics and size of the business opportunity etc
We don't have to tell that in past we have find out HIDDEN GEMS of the future at early stage of the business like tata power, tata steel, reliance group, larson and tubro and more.

        Now if you feel that you or your family not enough lucky like nishesh jani, ramesh damani,rakesh junjunwal, ramdeoo agrwal who always find out "diamond" at early stage of the business/economy like gillette, mcdowell, find out by ramesh damani, praj ind or beml find out by rakesh junjunwals, hero honda and bharti find out by ramdeoo agrwal or hdfc bank find out by sameer arora of Helios capital then don.t worry we have find out the next"HIDDEN GEMS"or "DIAMOND" at early stage of the business and ready to become big business in terms of revenue and profit in the next decade.

Manager,
Wealthcare Solution TEAM,
Please feel free to contact me on,
09879586722, 08128988722
wealthcaresolution@gmail.com

Be Technical NOT Skeptical

"A Skeptic who doesn't like prices rising randomly, continuously, without reasons is ill-suited for bull markets"

The AVERAGE should be better than the AVERAGE

            It should always be a trader's target to not become better but become better than the average. Because all counts is comparative competitiveness in markets. If Einstein is not trading then you don't have to prepare to compete with him. You don't need to be the best pr the smartest. Just remember this to win in any market: "Average should be better than the average". There will be people who don't learn from mistakes and who will continue to continue to do mistakes. Your job is to do them and take their money before or either anyone else does that. Yes, thats trading!. You have to take benefit before his days are over. Trade with an attitude of rising ABOVE AVERAGE. And the market consists of these 'Averages' which always remain above the Average.

Long-term, Value Investing: What matters and What Doesn't

Long-term and value investing has nothing to do with…

• Whether or not how many times your stock is featured on biz channels.
• Weather of not how newspapers, pink papers give research report on it or not.
• Neither if your stock is recommended by brokerage houses or so-called star analysts.
• How frequently your company comes in lime-light for product launches, conferences, corporate actions and so on.
• The increase or decrease in volume of shares on stock exchanges.
• Weather FIIs are buying or selling and MF managers are adding or dumping it.
• Weather no one is giving a tip about it.
• Your neighbour or broker has never heard about the company. (Many never heard or know about P&G, Gillette, Wyeth etc.)
• How frequently it announces corporate actions such as bonuses, splits, etc.

…But yes it matters…

• That you have bought it at discounted valuation than what it is actually worth. It could be discount to assets, order book, cash-flow, EBIDTA etc.
• You have measure your margin of safety.
• That you have analyzed the 5 to 10 year financial results for the company.
• The management is reliable, competitive and corporate governance is robust.
• That you have determined to hold some piece of the company’s business (shares) for certain minimum longer duration.
• That you have set your minimum realistic annual compounded return target from this investment.
• That you have gone farther than checking merely EPS, PE and debt-equity ratio; and thought of Cash EPS, working capital per share, long term viability of the sector, economic moat of the company’s business.

Rational Behavior in Investing: Some practical points

Investors many times take unnecessary risk. They tend to buy stocks pricey due to fear of losing opportunity and being left out of the rally. But why should at all investors rely on rally? This is wrong approach. You buy first and then let the markets justify it for you. If you have invested right it will eventually come up. Remember: Value investing always beat everything.

Always wait if you are not finding any value picks. Remain on cash. Remember your investment would only reap returns if you follow your value-investing strategy. And otherwise not. So then why invest when you are not sure, and it is like taking unnecessary risk?

If some stocks are going up today and you don’t own many of them or most of them, so what? They were the very stocks that were not going up in past while others were. So you thing to shift to the rising stocks or some others stocks because your stocks are not in the rising or 52-week high list is not rational thinking. They will be some day. You can not predict it. Also see by how much volume this whole lot of mid-cap and small-cap stock are rising. How much is the market float. Many stocks rise with thin volume and in a way to benefit a very few who are on the inside rather than the general investors community like you and me or our friends. Just ask yourself that looking at the given volume or sudden erratic rises how many could have been able to earn out of it? How many could have taken position before not many day? This kind of rational thinking will help you overcome your fear of losing opportunity and being left-out of the market or that your strategy is not right or thoughts that your picks are wrong and so on.

Difference between Winners and Losers in Trading

• Winners come for long-term career; losers come for short term bull market gains and fast money.
• Winners have adequate capital, losers are generally undercapitalized.
• Winners are always preparing for the best and prepared for the worst, whereas losers learns nothing and forgets everything.
• Winners never repeat a mistake or if does then very less compared to the previous time they made similar mistake. While losers repeat mistake, even worse than that that they lose bigger than the previous time they made the mistake.
• Winners trade/work in up and down and sideways all three types of markets, while losers play on favorites and comfortable side.
• Winners learn and improve; losers sharpen their ego and continue to lose.
• Losers think they have to earn a minimum daily, while winners know in trading we don’t earn daily. In fact it is a question of saving capital and safety many times.
• Winners learn from others mistakes while losers think they know how to play the market and that luck is all they need.

Signs of a Losing Trader

1. He doesn't have a trading System.
2. He doesn't know the different between trading and investing.
3. He acts on impulse and follow every bit of piece of news. His eyes remain on CNBC in hotel while his    girlfriend is talking him something.
4. He doesn't have a trading plan strategy.
5. He let's his losses become bigger. He is more lose averse than risk-averse.
6. He doesn't trade with probability assumptions.
7. He is undisciplined.
8. Tries to read too much into the news.
9. Mistake of overtrading and exhaustive trading.
10. Lack of sound Money-management plan.
11. Lack of risk management techniques.
12. Does not have control on his emotions such as greed, fear, rage, depression.

1. He doesn't have a trading System.
2. He doesn't know the different between trading and investing.
3. He acts on impulse and follow every bit of piece of news. His eyes remain on CNBC in hotel while his    girlfriend is talking him something.
4. He doesn't have a trading plan strategy.
5. He let's his losses become bigger. He is more lose averse than risk-averse.
6. He doesn't trade with probability assumptions.
7. He is undisciplined.
8. Tries to read too much into the news.
9. Mistake of overtrading and exhaustive trading.
10. Lack of sound Money-management plan.
11. Lack of risk management techniques.
12. Does not have control on his emotions such as greed, fear, rage, depression.

List of Markets All Over the World