All websites will soon be screaming about ‘Investment Resolutions for 2014’ – except this blog. The last time I wrote was in 2009. All the other years I have just done a cut paste and changed the year. Really it is so simple. People read it, like it, share it with a couple of others and then forget it.

So this year I am planning to tell you how I BECAME A BETTER INVESTOR over the years. Remember it is not a one day or a one week kind of affair, it is a long journey, so fasten your seat belts:

1. Believe that it is possible to be a better investor: Read it 10 times and internalize it. It is possible. If I could, anybody can.

2.Keep an Investment diary: write down most of your investment thoughts. A hard copy is better, but if u are too lazy to do that start with an excel or word document – and write down your thoughts. However random. If you feel Airtel is a good buy, say why. If you think Liberty phosphate is over priced, say why.

3. Meditate: all the time that you spend in disturbing outside noise like media is better spent meditating. I am serious.

4. Control your ego. Your diary, should be useful in this. Look at some of your stupid thoughts and you will be happy that you did not implement them in real life.

5. Create an imaginary portfolio – in www.myiris.com or www.valueresearchonline.com or www.moneycontrol.com – and monitor it on a daily basis seeing how is your performance vis a vis any appropriate index or a well run mutual fund.

6. Focus on YOUR goals, YOUR strengths, YOUR portfolio. Media is noise. When on TV we are pandering to the paid media…Imagine when I am on TV with the CEO of a life insurance company he also says ‘oh we are worried about mis-selling’ – seriously it is a joke. All CEOs know what is happening – they are waiting for the other guy to stop. So nobody is.

7. When somebody comes on some media and says ‘Markets fell by 240 points because of Raghu Ram Rajan’s statement’ – smile to yourself and remember – a) there is nothing called Mr. Market and b) Mr. Market does not announce why he fell or rose up – he exists only in books. The truth is ‘Markets fell by 240 points due to various random reasons and we have no clue what is the impact of each of those reasons’. But that is too boring – so we have to give reasons every day, so we happily contradict each other.

8. Write down your portfolio and MEASURE, do not rely on mental accounting.

9. Read and hear about fund manager mistakes – all of us love to talk about how great we are – look out for mistakes.

10. When you read www.subramoney.com please remember it is ONLY a blog written by a graduate who has passed a few more accountancy exams. And if you do not analyze his portfolio on a day to day basis YOU SHOULD NOT BE BUYING the examples. For e.g. I bought and sold Bharti Airtel 12-13 times in 2012 and 2013. Currently I have only 100 Bharti (mistake of buying 1100 and selling 1000 in one transaction) Reliance about 9-10 times (as of now it is an open position), I bought, sold, arbitraged Coromandel International (with Liberty),….so YOU cannot copy what I am doing. So please learn but do not copy.

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  1. I like your no 2 & no 3 point. Earlier in your blog you also wrote that we should also write down our financial mistakes. I think maintainig that journal is also good idea.

  2. Great post and advise. Guess, fundamentals of investment phiolosophy would remain same throughout. Much of my portfolio is in debt, gold and real estate. Started MF investment previously but did not work out well. Fund selection gone wrong. Lesson learnt that even the best funds some times fumble.

    This year want to try out direct equity investment (buying stocks) and taking cue from the post, would maintain a investment diary to see how it would span out.

  3. hi Subra
    just wana knw how many percentage of return(Net return after excluding transaction cost and another will be opportunity cost means if u really succesful then only issue arise) you earn in 12-13 times transaction u did?

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