I have said on many occasions that making money in the stock exchange is easy…here are some tips. I am calling it some more tips because I have given tips in the past…
- Change the image: Trading is not investing. Making money investing is easier than trading. Works for me.
- Keep Investing learning as simple as possible: it is possible to make money by keeping things simple
- Remember you are buying a business, so markets do not matter, the share that you buy matters a lot
- Indexing is fine if you do not wish to learn
- If you are ready and willing to learn, Indian indices are easy to beat. All our fund managers do that. Regularly.
- Have sensible expectations: 10-13% p.a. as of now (June 2016). I mean about 4-5 % above the SBI 3 year FD.
- You are buying a business – behave like the owner.
- Show patience like an alligator. After selecting the share wait for the price.
- Do not bother about the last 5% of the price. If you have zeroed in on a share, and buy. If your target is 300, Rs. 308 is fine.
- Make sure that the price at which you are ready to buy is not some previous low or some other ‘mental’ price.
- Read and understand Equity History and Investor Psychology
- Even brilliant companies cannot go against the tide
- Read the balance sheets, see management interview. If he sounds like a oilskin salesman, he must be one
- Past trends continue….but they could rhyme just as well and sometimes they could differ dramatically…
begin with a prayer.
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