Monthly Archives: October 2024

A-Gamers

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Hey, …

…nowadays, …

…we only play our A-game.

There’s no time for formalities.

It’s late in the day.

All weapons are out.

This is the need of the hour.

So, what are the salient features of our A-game?

A well-forged, multiply-faceted, time-tested road map – our system of systems – our one Strategy. This one’s 360 degrees. It incorporates both trading and investing, and leads to very long holds in cost-free form. Includes more than twenty highly competitive, sharpened, edge-providing Modules, about which I wrote a few articles back. As far as strategies go, we are cruising in a Maybach on the Autobahn. No worries there.

Patience. In the last twenty odd years, we have learnt how to sit. Makes biggest money, said we know who. Patience is ubiquitous, or is it? Many people have developed it. Many are born with it. But then, many are not. And, markets demand their own kind of patience. Over the years, we have learnt and developed market-patience. We wait for our levels before acting. We sit on our Cost-Free-Ness, like, forever. We are not in a hurry. I ‘can behave’ as if this is my own module 🙂 (do allow me the indulgence), but patience is universal and out there for everyone to incorporate and exploit on their own.

Liquidity. This is a module. Am reiterating it here since it is key. Our initial small-entry-quantum strategy (remember, that’s how we started!) allowed us ample liquidity, always. Yes, we were always liquid in situations, when they came, while building up the backbone of our portfolios. Slowly, portfolio-size started to grow. Then came the incorporation of position-sizing, thanks to my learnings from Dr. Van K.Tharp. Subsequently, I instinctively added my own twist to this, making it Non-Linear Position Sizing (NLPS) that we follow. NLPS initially allows for small entry quanta. As portfolio-size increases, so does each entry quantum-size. However, the latter increases more than y = x, i.e. more than linear. This means that over the very long term, entry quanta become remarkably substantial in size. Nevertheless, we still maintain balance by perhaps Fine-Tuning entries and exits to the nth level, i.e. with huge win probabilities, which automatically / mathematically leads to lesser entries. Strategy thus goes on cruise-control. Furthermore, outstanding entry-prices, followed by Quick Generation of cost-free-ness make our very long-term holdings as Anti-Fragile (thanks for the term, Mr. Taleb) as possible.

Talking of cruise-control, our back-end allows for full Automation at button-clicks. All transactional trail-mail is auto-forwarded to every required avenue. It’s a one-time self-setup time-expense, so don’t be afraid of it, since the reward is disproportionately huge. Each avenue allows preview and further transfer / storage after button-clicks. Taxation? Button-clicks. Indexing? Button-clicks. Retrieval? Button-clicks. Viewing in any format? Button-Clicks (baby).

Time. We have all the time in the world. We do our own thing. Income is sorted. Wealth is being generated on auto, and is multiplying. Learn languages. Travel. Pro-bono. I teach kids. To manage their own finances. From a young age. Currently I’m teaching four kids. It’s a give-back, and they can pay it forward.

In a nutshell, that’s my A-game. I’ve taught it forward, so I can talk about a we. You’ve seen it develop in this space over the last 14+ years. I’ve nothing to hide. It’s for everyone to use and benefit from. The act of Giving gives me the most Satisfaction in life.

Synthesis…

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…makes for a call.

What exactly is…

…synthesis?

Multiple factors amalgamate, react, cook, boil, simmer…

…and lead to synthesis.

Where does it happen?

This one happens inside…

…of one.

What is it’s value?

Synthesis is a per saldo action resultant pointing the way forward. It’s value is proportional to acumen generated by experience.

Acumen is a translation into DNA thing. It’s how we pull the bow, aim, and shoot. It’s how we get the arrow to swerve, and how we keep firing when it’s hot. It’s how we…

…don’t fire when there’s no need.

Acumen also varies as per how we are feeling. Ill-health dims it temporarily. Thus, when action is coming up, we try and stay healthy. We, in general, try and stay healthy in body and mind.

Not all living beings have full capacity to synthesize.

Not all who do use their capability.

Synthesis in the Zone leads to some huge market calls.

Waiters

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Hey, …

…what’s your hurry?

This is a long game.

It will continue…

…after you.

Hurry will spoil the curry.

Learn to wait…

…for your level.

We’re waiters.

We win…

…because we wait.

No level, no action.

If we’ve leant how to wait, we’re already ahead of most players. Almost 90% don’t know how to wait.

What’s the worst that can happen?

Our level doesn’t come, and we don’t get some particular action. Could be a buy, could be a sell.

Fine.

We can live with that.

There’s always another day, another opportunity, another set of actions, …

…just move onto the next scrip, entry and / or exit available.

What’s most important is that we have kept our liquidity intact.

We are financially sound for the next action.

A hurried entry without the level coming would have used up this particular liquidity, making it unavailable for the next action.

We act…

…at our level.

Our level is set to make winning highly probable.

That’s why, in the long game, …

…we win.

Obviousness

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Knowledge streams…

…at unprecedented speed.

You want it?

You got it.

Lag is negligible.

Everyone has access.

Conclusion? Fazit? Nichor? Bilan?

What seems obvious is likely a trap.

Fundamentals can be fudged, to an extent. A closer look at gaps between fundamentals vs actuals unveils those who fudge. Actuals on the ground will need to match fundamentals, somewhere. For example, if there’s no debt on the balance-sheet, there will well be a surplus which the company in question accumulates, and there will be a path on which this surplus flows. This path should be visible in the annual report. If there’s no surplus, company will show visible signs of stagnation. If something officially declared by a company doesn’t match (visible) actuals, the fudging window opens. We steer clear of companies with even a fudging crack open.

Technicals can be used to set entry and exit traps.

By professionals

For the masses.

Masses act at levels.

Generally, price hovers around an obvious level till the majority has acted. Then, generally, price goes against. When crowds cut entries, institutions enter on their exits. This strategy paves the way for relatively easy and heavy entries.

Moral of the story for us?

We wait for an obvious level.

We don’t act. Yet. However, we are on alert.

We envision an aftermath play in our minds.

Entry pivots are coming quick, nowadays. There’s hardly any time to act, especially if one has an otherwise busy schedule.

Therefore…

…we only deal in GTTs. Period.

Thus we feed in our GTTs, as per mentally outlined situation, and back up these with funding, if entry-trigger is less than 5.2% away. All this we do in a cool moment, after market hours, away from the noise, when we can think clearly.

And, most importantly, …

…we do it away from the obviousness.

Chronology

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Pipelines…

…come at a cost.

And, first up, there’s no need to fret about this cost.

I know, it pinches.

Having funds at a 20 second disposal will definitely cost.

Why go this extra, extra mile?

That’s a very befitting question.

We are not mad to create pipelines on call within 20 seconds.

Well, just to give you a heads up about how things can go down, here’s something.

June 4th, India, markets tank in the first hour.

Alerts, GTDs, GTTs, what-have-yous trigger.

I’m busy. Business meeting. Can’t get away.

6 of 7 GTTs in place get hit, and I’m in on these 6 scrips, at my price. 7th gets hit. No entry. No more funds in purchase account reported.

As meeting leader delivers on taxation laws in the country, there’s regret in my mind. Why did I not have enough funds in place?

Idea.

Let’s slimily look busy, and, meanwhile, activate a pipeline, put funds in place, and forcefully enter this particular scrip at CMP.

“Could you please pay attention, Mr. Nath, and put your phone away!”

Yikes.

Meeting ends (phew).

Action stations. Funds in place. Yes.

But what have we here?

Scrip’s showing a huge pin, and live daily candle has become a hammer. Bottomed out and then some, has the scrip. CMP is now 11% above the bottom.

Chickening out.

11% shaved off my margin of safety, in 45 minutes.

Yes people, that’s the window nowadays, for getting dream entries.

45 minutes.

Had it not been for the meeting, I would have been in within a minute or two, after reading the alert that GTT got triggered but no funds were available.

Lost time in this case would have been the interval between reading messages, plus a minute or two to have funds in place and go through with the buy. I’m not very regular about messages, though, perhaps on purpose, and 30 minute plus periods can well elapse. So, window cuts very fine. Idea is, whenever awareness kicks in, one needs to be in within a minute or two, if the GTT option has failed to deliver due to whatever reason.

The case described above was the one time that did not work, despite having everything of the highest quality in place.

What puts salt on the wounds is that the scrip quasi doubled from there within three months, so those lost 11% on margin of safety were peanuts. Yeah, the final fail was my fearful mind.

Painfulllllll….

That’s how it crumbles. One learns from the pain.

No pain, no learning.

My learning from this is that when GTT limit is 5.2% below CMP, we just sheer put funds in place for that GTT…

…now.

Pigs

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A structural component of markets…

…are its hands.

There are weak ones.

Then, other hands are strong.

Weak hands can be snatched from…

…easily.

They panic fast, and throw their holding during mild turmoil, …

… they are afraid, …

…not possessing holding-power, because they haven’t created the circumstances, and have prematurely jumped into a market.

Buying without margin of safety is one such premature jump.

Without fundamental, technical and / or general knowledge are others.

They are the mythical ‘pigs’ that get ‘slaughtered’.

Evert cycle produces new ones.

The ‘pig’ of one cycle eventually goes on to become a strong hand of another future cycle.

Strong hands know.

They study fundamentals, or technicals, or are generally savvy from experience, having developed market intuition. Strong hands have come prepared, perhaps, with a combination of all these traits.

They are liquid.

The’ll buy through the fall, piece by piece.

You can’t throw them off, …

…because they have holding-power.

It didn’t come for free, for once upon a time, they too were ‘pigs’ that got slaughtered, but they survived to live another day, learn, and rebuild.

As we grow in market experience, our hands tend to get stronger.

Some ‘pigs’ don’t make it to the next market.

Their slaughter moment might come late, paralyzing them financially, with no time, or energy, or both, to recover.

Some just give up on markets after an early slaughter experience.

We need to make many mistakes, early in the game, by sheer doing, learning, and not repeating, these. Early on, the numbers that we play with, are generally small. That’s when we need to get fatal errors out of the way.

As our numbers grow, and as our hands become strong, we then position ourselves…

…to thrive in the markets.

Any market.

Holders

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Holding- …

… power…

…is not a given.

Meaning, that it is not necessary…

…that an individual, ample in liquidity, …

…carries this asset to the table.

We need to learn to hold.

Who’s going to teach us?

Not text-books. How do we know that the writer concerned knows how to hold? We don’t.

Not professors. Do they even have their own money on any line? We don’t know.

So, where do we stand?

How do go about developing holding-power?

Only reliable option is to do, and learn.

How should learn how to hold?

One practices.

It’s like learning how to catch a ball…

…by doing it again and again,…

…till one can catch the ball by reflex.

Creating time-, ease-, comfort- and wealth-buffers around our investment helps.

As to the why, holding makes the difference between nominal and outstanding returns.

To generate multibagger returns, one needs to hold long-term.

This is extremely difficult to teach the mind, since almost everything comes in between, luring the mind to sell early.

Instead of teaching it, one sheer tricks the mind into very long-term holds without being bothered about how high the price might be interim.

This trick played on the mind hides itself under the banner of generating…

…cost-free-ness.