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 –
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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