If you are a long term investor you are going to be in the equity markets for a long period of time…please read ahead only and only if that is a valid assumption.

Go and get yourself an Investment Thoughts Book – a 200 page note book – you choose what quality that you want to buy. I want you to keep it for a few years, say 10 years plus. So please make your choice accordingly.

Then write down your thoughts EVERYDAY or whenever you are being asked to make a decision. Say you read on my blog that Coromandel International is a good buy at 170. Or that it is a good time to buy buying sugar shares. Or Real estate is likely to boom in smaller towns and crash in bigger cities.

Whatever you read, you will come to your own conclusions.

WRITE DOWN YOUR OWN CONCLUSIONS – AND also write down what you would like to do. If you think you can do it, CREATE AN IMAGINARY PORTFOLIO on a website –

 www.moneycontrol.com

Every few days read what you have written. REMEMBER when after say 6 months say Reliance is at 1200 – and you FEEL you should have bought it at 800 – READ what you wrote when the price was 800…Maybe YOU thought it would reach 600..maybe an analyst told you Reliance is finished and will become 350….See what played in YOUR mind.

This book SHOULD be hand written – not typed in some word document. Remember to write YOUR thoughts, YOUR interpretation, YOUR views, YOUR fears….what I say does not matter….WHAT YOU CONCLUDE matters.

There cannot be a better book than this for your learning. Charles Munger does it, some of the best equity TRADERS who I know do it. Based on this book one trader stopped trading on Fridays – he felt that if he is forced to take delivery through a weekend, he could get killed. This stopped him from taking aggressive positions…so he transacts only Mon-Thu. Friday he follows the market and writes down phantom transactions, but NO REAL transactions. This he found out because 50% of his losses arose from a Friday originated transaction.

NO TEXT BOOK WILL TEACH YOU this. Only your notebook will.

For those who meditate – this is like Meditation class 101 – just watching your breath is useful. That is what I am asking you to do.

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  1. Aptly written. Those who heed your advice in this article will benefit a lot. You have rightly said maintaining one’s notebook will help him/her a lot .

  2. Subra, good practical suggestion. If implemented, it would bring in a world of good to investors. And imagine, its simple too!

  3. i like the advice /suggestion barring ‘SHOULD be hand written – not typed in some word document’. previously i used to maintain home expense accounts ,and family portfolio monitoring handwritten, though my son was advising to use word and excel sheet for them.before some 3 yrs or so i started to use word and excel for both , and i am now regretting for late using , as i found , my old hand written home expense notes and other records so clumsy and terrible to eyes,i could not get easily what i need, whereas the word and excel sheet records are nice to get any thing ,and even to modify.

  4. @bharat shah
    ur last line “even to modify”- thats the reason why subra sir tells it to be “hand written’ so that ur thoughts are not modified

  5. I have already started long ago writing my own note book but not in these above stated topics. Thank you 4r making me realising to Invest in a Investment Thoughtbook.

    Notebook > Textbook as a teacher.

    Jai Subra Sir.

  6. Good Idea. I do have a personal handbook where I have been writing down “strong buy” recommendations alongwith the rationale and short analysis. The entries made 2-3 years ago, almost all of them are trading at 50 – 90 % discount to the recommended values! The ones I did invest- I regret, and the ones I did not, I feel lucky to have escaped. And if there had been a secular long term bull run, I would have probably regretted not investing and been happy with the ones I invested in.Does all this so called stock research and analysis really makes sense, when the stock market direction,economic and political factors mainly decides if the stock rises or falls

  7. Subra,

    Thanks for educating or should I say enabling us to improve our financial life.

    Been reading your posts for about a month now. Have read most of the posts…

    Was a long term investor for wrong reasons.. Bought shares on tips(broker) now trading at <10% of invested value…
    Cleared all the muck on my portfolio, shifted to SIP.

    Need to clear the endowment policies now…

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