Investment Myths: Trading or Investing?
Too many blogs, too many columns, too many writers. Very little actionable ideas.
Too many theories. Too much of cut paste.
Let us look at one of them today.
It is not the timing, but the time spent in the market that is important.
Is it true? Yes of course. Is it true always and in all circumstances? Sadly no. You need to keep picking signals from the equity market and act on that. When you see smart money act, you need to act accordingly. When Ta Mo was languishing at 170 (even at 270!) the whole world was in a pessimistic mode. It was almost impossible to buy Ta Mo. However one big investment company picked up a big lot. Even if you kept track of Ta Mo big transaction you would have known which. Yes it is necessary to be alert – alert to PUBLICLY available information.
Of course it is easier if you know people in Enam, JM Kotak, Motilal Oswal, Edelweiss, Anand Rathi, Sharekhan, Hdfc securities, Icici direct, DSP, India bulls, Indiainfoline, or fund managers, – not necessarily in that order. It is however not at all necessary for inside information. Keep track of the portfolios of mutual funds, of unit linked plans, see what the big guys are doing. Invest in a few companies – and track them like a fanatic. You also need to be aware that I have preserved a SELL on Ta Mo at 170 by a big broking house :). You also need to know the difference between views, news and noise….too much noise these days..be careful.
Going forward investment clubs have to be formed (without being branded as a ‘ABC Brokers club’ – more like a big information company – wanting to create clubs for investors. Investors should meet, discuss and create their own portfolios. It time has come.
Muthu
Dear Sir,
Everything needs to be read in reference to a context. Not all mortals are gifted with the original writing skills you’ve. There are lesser mortals too. Nothing wrong in using what is available in public domain, not copyrighted, duly acknowledging the source. You should not also forget the value addition people provide to what is already available in public domain.
Producing originally is a great skill. Duplicating by adding value is not an inferior skill.
I would like to quote (‘cut and paste’ in your parlance) Nassim Nicholas Taleb here ‘You may not be able to change the world but can atleast get some entertainment and make a living out of the epistemic arrogance of human race’.
I agree with you as for investing in stocks in concerned. While investing in stocks, one need to time the entry and exit. Even Warren Buffett,who says his favourite holding period is forever, does it.
While investing in stocks, I do time the entry and exit. When everybody was selling in panice in Novermber’08, I got stocks like IDFC (Rs.50) , Karuturi Global(Rs.6) etc. for a song. I’ve got 400% appreciation already and would exit at an appropriate time.
You may refer to the below page in our web portal.
wisiwealth–advisors.com/ti-me-or-timing/
This is meant for mutual fund investors. When Prashant Jain, Kenneth Andrade, Sunil Singhania, Anup Maheswari manages our money, they take care of buying and selling (not trading)at the right time. Timing the mutual fund is not necessary, especially when one follows SIP mode.
Also what John Bogle refers is for Index fund investors. If you’re going to hold an Index forever, timing is immaterial.
If you cannot encourage other bloggers, it is fine. You are in a superior position.
Kindly do not discourage us. You may browse my portal completeley before passing any judgement.
Regards
Muthu
D.Muthukrishnan
Muthu
Dear Sir,
I would like you to sample two articles in my portal which were written using the data (as you may say ‘cut and paste’) available in the public domian.
India: Dark Facts and Stats
http://wisewealthadvi sors.com/2010/08/25/india-dark-facts-and-stats/
Gold: Interesting Facts and Stats
http://wisewealthadv isors.com/2010/09/09/gold-intere sting-facts-and-stats/
You are a ‘Jambhavan’. Being a ‘Big Bear’, please do not discourage tiny ones like us.
We definitely agree that you are a superior mortal.
Regards
Muthu
Muthu
Dear Sir,
One more thing.
I’m paying ‘Word Press’ to keep our portal free of ads.
I do not earn any money out of blogging.
We do not want advertisements of NFOs, ULIPs,PMS, Derivative trading etc. in our blogs which we believe are poisonous to investors.
We want to practice what we preach.
Once again, humbly request you not to discourage budding bloggers.
I acknowledge your superior writing skills and ability to think originally.
Do not discouarge people who voraciously read, distill and share the knowledge with others with some value addition.
A maturity of a great man lies in acknowleding whatever little strength the inferior one has.
If time permits, go through the web portal thoroughly (like previous articles) before condemning budding bloggers as ‘cut pasters’.
Regards
Muthu
D.Muthukrishnan
Manshu
Watching the data that comes out may well be more useful than just watching their actions because for every bull there’s a bear. If you can get access to reports that list out the data behind decisions, and how it fits in their plan, then it might give you context of what they are doing and why.
But simply knowing that John Paulson is buying gold, and then trying to ride on his coat-tails won’t get investors very far.
Muthu
Dear Sir,
I was sincere enough to share my appreciation for you.
You chose to criticize me with out even going through our website fully and misinterpreted me by just reading one page without even understanding the context.
When I responded to you with 3 comments, which are factual, nothing vulgar or obscene, you did not have the courage to publish them.
I understand that you feel proud about you showing ‘Malice towards all’ but unable to publish comments which are critical of you.
If you freely criticize others, you should also have guts to get back criticism.
I’m disappointed that you are not as courageous as you sound in your writings.
I’ve the courage to publish whatever your comments be in our ‘Visitor’s Arena’ and can give appropriate response too. I publish any comment which is even critical of me, as long as it is factual and not indecent or vulgar.
When a small, obscure person like me can be bold, why not the mightier you, who may be read lakhs of people.
I’m sincere, have complete trust in God, 100% ethical in my profession, which is my passion and is confident of facing even mightier peope like you.
I try to live by sage Ramana’s quote ‘ Whatever destined not to happen will not happen, try as you may. Whatever is destined to happen will happen, do what you may to prevent it. This is certain’.
I cannot force you to publish my three comments where I explained with context why I wrote what I wrote of not timing the market, but being in the market for a long time.
By now I know that you would not publish this. If you change your mind and have the courage to publish the same, kindly publish it with my earlier 3 comments so that readers would understand the total sequence and context.
Even ‘cut pasters’ like me have a small role to play in spreading the financial awareness. It is not restricted to or monopoly of original creators like you.
Regards
Muthu
Young@Market
Dear Subra,
I am in my early years of investing… not much experienced.. still learning to understand market and the various signals… I like ur articles… they are really thought provoking. I had Ta Mo bought at those levels(around 200.. not big quantity)….coz I believed TATA. but once that came near 500… I sold them 🙁 ..now thinks why I sold them…..
subra
Muthu,
I did not criticize your blog ‘even without going through it fully’ – I have NOT VISITED your website except when you posted something about me…so I cannot comment about your website, let alone criticize it.
Asoke
Completely unable to understand what this guy Muthu wants. Subra please elucidate. Is he saying he is a great trader because he has done 2 transactions? Then God save him. There are just too many newly qualified people who have only theory …but no practical knowledge. Sorry but concepts like asset allocation cannot be taught as easily as people think they can by reading a book 🙂 GOD bless them
Muthu
Asoke, Firstly I’m against trading and consider it as poisonous. I gave 2 examples to say that timing the entry and exit is important for individual stocks and not for mutual funds. I’m not a good stock picker and most of our family’s investments are in mutual funds. I’ve been in the markets for atleast last 15 years and learnt things thro’ trail and error and is still learning. So I’m ‘oldly’ qualified with ‘some’ practical knowledge.