Stock Advisory For Value Investors
Buying a stock is technically buying a piece of a business. Will you buy any business without thoroughly understanding it?
Most of the investors will answer the above question in negative but when it comes to actually making the buying decision in stocks, they look for hot tips, tend to trade too often and too soon and believe anybody who gives any credible story on the business without doing any due diligence.
How often you have heard that people will talk about how buying 'shares' is akin to 'gambling'. With the temptation to make quick buck, most of the investors, without even doing an elementary research about the stocks, invest their hard-earned money simply on the advice of a broker or a friend or sometimes even a random analyst on business channel(s). It is a pity that we do more research before buying a cell phone than before investing into a stock! No wonder, such investors invariably lose money in stocks and then label stock markets as ' Casino '.
Another common tendency of investors is to 'chase' stories.
“Something new, I must have it, what if this is that stock that will make me rich… I can’t miss it.”
"This guy at the office told me that he is hearing some problems with this company, It is also down 5% today, I should sell this. I don’t want to lose all my money in this."
"I have doubled my money in the stock.. Let’s just sell it and book profits"
There are many such reasons why people buy and sell their stocks. People tend to trade more often and make less money.
Why trade for short-term when there are stocks of quality companies that could go up multi-fold over the next few years.
9 out of 10 traders make losses in all kinds of trading. It is not by accident but is designed that way. The only guys that make money in this process are stock brokers.
Choice is yours – get rich slowly & consistently or get poor quickly.
India is a developing nation with tonnes of opportunity making it a dreamland for any long-term investor. A strong Government at center, prospects of better governance, favorable demographics, consumption boom and a trillion dollar infrastructure investment makes a solid case to invest in India. If you believe in the India story, it is imperative for you to select right stocks in the right industries to participate in this great story and we can help you with that.
The winning strategy in wealth creation is to identify few good companies, buy their stocks at attractive prices, track their performance closely & stick to them as long as they execute. Buying such off-the-radar and under-tracked stocks when no one was even talking about, becomes the next hot stock one day. You don't have to have a portfolio of 40-50 stocks (over-diversify) or bet all your money on just 2 or 3 stocks (over-concentrate). You have to strike the right balance. Indeed it sounds simple but as Warren Buffet puts it ‘Investing is simple but not easy'.