Some of my Learning
This cannot be original for sure. It is the result of lots of reading (subconscious cut paste), learning from health related stuff (subconscious cut paste), experience (original mistakes), client mistakes (even tried to prevent a few), …so if you find it common to something somewhere (even my own old post, pardon me):
- It is not easy to go against the tide especially if you talk to a lot of people. Silence is Golden.
- The market can be irrational far far longer than your patience. I have Ta Mo Dvr and I keep wondering why people are not doing an arbitrage on Share and dvr.
- Greed, Fear, etc. do not matter. You cannot even make out when your greed turned to fear and the reverse. Forget reacting.
- Picking a fund manager who will consistently beat the Russell 9000 over 17 years is IMPOSSIBLE in the US.
- Picking a fund manager who will consistently beat the sensex in India is easy. Not because theses skills are great, but because the Index is badly constructed.
- Experts appearing on media are either being paid to be there, are building their own brand or are just vela and come on TV for a social time pass.
- As long as nobody keeps a subject wise or scrip wise what experts say, experts an talk like they make no mistakes..
- Women think men know all about finance and men think women know all about cooking. Not true!!!
- Men and women have to learn about finance and cooking. However it is easier said than done
- We underplay the role of luck. I was lucky to spend my childhood with Gujarati friends who breathed stocks
- Great companies need not make great investments
- Great companies do not slip down in one day, but the decay and death can be multi year, multi decade a process
- Great wealth can be made by a concentrated portfolio, but once made it has to be protected by diversifying the portfolio.
- Dramatically reducing mistakes is a far superior strategy than trying to spot multibaggers
- Legendary investors have largely picked up a few multi baggers and then waited for compounding to work
- People claim to understand compounding, but do not have the patience to wait for ‘n’ to work
- The more comfortable an investment feels, the more likely you are going to under perform the index
- Sell all the shares / mutual fund shit in your portfolio. Put it in an etf. Keep repeating process annually.
- Accepting your mistakes is very important. Sit with a friend and ask him to review portfolio – FOR A FEE.
- Spend one hour a month discussing mistakes during the month. Write down in a notebook. Next week summarize learning
- Warren Buffett’s returns in absolute terms is like Sir Don Bradman’s. It is of a bygone era. Things have changed now.
- Warren Buffett is a greater compounding theory and less of a stock picking theory.
- Discipline is brilliant to see and appreciate. You benefit only if YOU do.
- MBA schools CANNOT teach equity. Not enough professors who have created wealth.
- Great wealth has been created by involuntary inertia. Later on packaged as strategy.
- If you bought Eicher Motors for the great trucks they make, but made money on the motorcycle, keep quite.
- If you bought Hdfc Ltd. shares for the home finance business, keep silent.
- Go and get success. I can weave a story around that. Later on I will tell you how to believe it.
- I have seen many NICE and humble people making a lot of money. Is it a pattern of confirmatory bias I have no clue.
- The more time a person appears on TV the less accurate he is likely to be.
Good 30? well more will follow.
Sarang Damle
I think No. 4 has typo error.
Picking a fund manager who will consistently beat the fund manager over 17 years is IMPOSSIBLE in the US.
Looks like you meant…
Picking a fund manager who will consistently beat ‘Index’ over 17 years is IMPOSSIBLE in the US.
subra
corrected Sarang Damle, thanks
MPSingh
Oh Subra,how much could one Digest?
Savithri
No. 30 reminds me an old saying.
‘If you want to become a best orator, assume for yourself that all the people sitting in front of you are fools and talk what ever you want to’
They just do not hesitate to talk what ever comes to their mind if we fools blindly follow them, Oh God!
aparoop
point 11, 12 and 13 talks about great companies
how do we define Great company
More than 100 years , zero debt , atleast working in 4 sectors
Renga
Can some one explain me this please? I am struggling to get why Subra Sir is saying this.
18. Sell all the shares / mutual fund shit in your portfolio. Put it in an etf. Keep repeating process annually.
Ravichandar
Well, What can i say. Speechless 🙂
subra
Renga read point no. 18 again and see if you have missed some word
subra
if you have accumulated some shit shares like patheja forging, shaan interval, silverline, indiana dairy, Krishna filaments in your portfolio and you can sell them sell it off and put it in an etf…the operating word is shit 🙂
similarly there are some mutual fund schemes which were unadulterated shit from the day they were formed..some of the schemes from ILfs mutual fund, ..etc..if you have some poor performers with poor fund managers…sell all that shit and put it in an etf..
Subrata
Why ETF and not any good performing stocks or MF?
Krishnan
Point 5:
Picking a fund manager who will consistently beat the sensex in India is easy. Not because theses skills are great, but because the Index is badly constructed.
A classic example is the Bank Nifty-with so much weight for SBI, ICICI these two counters are perpetually manipulated by big fish.
We can broadbase this index with more scrips perhaps that is a solution. But given the state of our PSU banks it is better to scrap this index. And perhaps study of other indices could prove the same ‘bad construct’