Having spent a real long time in the equity markets here are a few obvious things. However, some of it was not so obvious to me when I started out, and even now there are many people who do not think it is so obvious:

  • It is ONLY the equity market that will protect small bits of money against inflation – so a Rs. 500 pm sip is possible
  • All Market corrections do not lead to bear markets
  • Market has gone up and down but the Sensex has gone up from 100 to 36000 over 40 years
  • Using leverage in Equity investing leads to bad results in the long run almost ALWAYS.
  • The US President has little control over the Global Economy. Oops even over the American economy.
  • Wars, fashions, weather and Quarterly results – are all media events as much as real. Ignore them.
  • Bull markets last much longer than Bear markets
  • Accounts of a company do not capture the soul of the business
  • A share does well because a company EXCEEDS expectation..so after a particular growth in share price comes from real growth in sales and profitability, not humbug.
  • An automobile company selling 5 million vehicles is worth 4 billion Rs. but a website selling 12000 motorcycles is worth Rs. 3 billion because it is OBVIOUSLY growing faster. If you believe this, you ought to be a Vee Cee.
  • A company can keep raising money year after year by improving its narrative. Amazing but true for many companies.
  • Uncertainty is always present and it is not a wise choice to use it as an excuse not to invest. It is like waiting for the waves to stop before you step into the sea.
  • Investing in the fastest growing world economies will not guarantee higher investment returns. Investing in US has been more profitable than investing in China.
  • Not all recessions have turned into depressions.
  • Investment costs, savings rates and time in the market are the most important and perhaps biggest components in generating healthy investment returns.
  • There is a large gap between total mutual fund returns and what investors actually receive. Caused by behavior.
  •  The great majority of mutual fund managers will under perform low-cost index funds because of costs, going forward. Etf will be better than index funds.
  • Diversification works, just not every year.
  • Diversification is not to increase returns, it is to protect capital.
  • Patience is a virtue
  • Shares can stay massively over- and undervalued for very long periods of time.
  • Real returns after inflation and taxes are the only returns that matter.
  • Stocks are in a bull market 85% of the time.
  • If your investments let you sleep well and be confident that ALL your goals will be met, your investing is successful
  • Bad, corrupt fund managers are also very rich and keep changing avataars
  • Some people can get money continuously over their life times – many a time more in capital than in Sales.
  • Being short of money in business is not a problem, it is a symptom of a bigger problem.

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  1. “Real returns after inflation are the only returns that matter.” – perhaps we should add after ‘inflation & taxes’

  2. Disagree with fourth last point. “If your investments let you sleep well and be confident that ALL your goals will be met, your investing is successful” – This means you are not taking enough risks.

    Needless to say, agree with all other points. 🙂

  3. “Real returns after inflation are the only returns that matter.”

    ” inflation + taxes + costs + bad decisions from everyone + emergency in life etc…”

  4. “A company can keep raising money year after year by improving its narrative. Amazing but true for many companies.”

    My favorite point 😀

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