Category Archives: Applied Finance

Pain is Pain

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Pain is pain.

Can you see it?

I know you can see yours.

Thanks for reconfirming.

Can you see the pain of others, by the way?

Does it register?

Do you walk by?

Who are you… or… what are you?

Decide which question applies to you.

For example, do you see the pain of that earthworm writhing in the sun?

It rains. Coupla earthworms come out, only to be met by scorching sun. They writhe. Do you pick them up with a twig and install them in a wet muddy patch? Do you ignore them? Do you even notice them?

Finance is not too different.

It rains on your plans.

You writhe.

If your overall strategy has not been adequate, you can even perish due to your predicament.

Do you expect help?

Well, who doesn’t?

Only, you are that earthworm now. You are in pain.

Pain is pain.

The earthworm feels it, and so do you.

However, the earthworm is not able to do much. It will probably perish.

You, however, are human capital.

Stop writhing.

Prove you prowess as being superior in performance when compared to an earthworm, or perhaps to a donkey.

Stand up.

Clear your head.

Analyze the situation.

Pain dulls.

You’ve got to push through, and come out of it.

Once you’re up, and through, as in out of your predicament, well, don’t make the same mistake again. You’ll make other ones, sure, we all make other ones, but let’s not repeat the same one.

Safe investing.

🙂

Core-System Maintenance

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First up, one needs to discover one’s core-system.

That’s a big chunk.

We’ve spoken about it. Again and again.

Why?

Meaning, why was it required to speak about this again and again?

We have problems putting our core-system together, that’s why.

Why do we have these problems?

We fail to sort properly. What belongs in? What needs to be kicked out? We’re not able to answer these questions properly.

People, what is working? While this thing is working, are we comfortable? Yes? Lastly, is this thing looking lucrative? Yes? Keep it.

Is something not working? Kick it out.

Look for the next thing that works.

Find three or four things things that work.

Intertwine them into a core-system.

That’s it.

It’s that simple.

Maintain your core-system. Tweak it upon requirement. If something stops working, replace it.

Yeah, even maintenance is that simple.

When will we acknowledge that…

… the best things in life are not complicated or sophisticated, but…

… simple?

The CC

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Done it again.

Introducing…

…the…

…Constitutional Comparative (CC). 

It’s in our constitutions…to compare. 

We exhibit the constitutional comparative by default…

…and we need to expunge this trait from our DNA…

…which takes time…

…but can be done, with determination and practice. 

Each one of us is unique, and we’ve come to do unique things. 

Some blossom early. 

Some blossom late. 

Some don’t blossom at all, or so it seems. Turns out later, their sole purpose in life was to provide stabilizing energy to their environment. They became activated from the womb, and they deactivated upon death. There was no question of blossoming at a certain time. You could also say, that they blossomed their whole life long. 

SEE?

Don’t compare. 

You can’t see the wheels within wheels just like that. 

Seeing wheels within wheels takes insight, penance and an appropriate state of mind. Therefore, if you really must compare, at least graduate to that state of mind first, where you possess the capability to see wheels within wheels in action. 

Or, if graduating to this state of mind is not worth your while, well, fine, no probs, but…

…DON’T COMPARE then…please. 

Live your life. 

Do what you’ve come to do. 

If you don’t know what you’ve come to do, well, FIND OUT. 

HOW?

Go within. 

Talk to yourself. Yeah, it’s not crazy to talk to yourself. 

In solitude come phenomenal solutions. 

You realise who you are…

…and what you’ve come to do. 

In a crowd, such finer points get lost, in the noise. 

And, why all this on a blog which has to do with finance?

Well, you can only invest properly if you’ve found yourself first. 

If you know who you are, you’ll also invest like who you are, as per your risk profile. 

A portfolio put together with the knowledge of your own risk profile will last you long, and will give you good returns for life. 

🙂

 

 

WoC

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I think I found something. 

It’s very possible someone chanced upon my discovery before me. 

Doesn’t bother me. 

Reason?

I’m happy that I found something…myself. 

Struggle in finding…taught…me. 

I’m richer in implementational knowledge. 

Oh, I forgot to mention that I’m sharing the essence of my discovery…with you. 

Why?

I like to share. 

I won’t be spoon-feeding you…believe me. 

However, I won’t fall short of inserting the seed in your mind. 

Spare me the BS. 

I’ve heard it a million times before.

I have enough, and beyond that, I’m not commercially minded. 

In sharing are the riches. Hoarding leads to blockage…which leads to disease.

Sharing is flow. 

Flow leads to health…and happiness. 

Anyways, I’ve just established the WoC. 

Stands for Window of Confidence. 

You make it. 

How?

With your System. 

How?

Any which way you can mould your System to make it. 

Why do you make it?

It’s your basket…, your fishing net, actually. 

What do you catch in it?

That, which you wish to investigate further…for the purpose of investment. 

Whatever you delve into needs to meet certain standards, right?

There, you have it. 

Oh, one last thing…

…you ONLY look in your WoC…

…for that which needs to be investigated. 

You don’t look anywhere else.

Period. 

Happy Investing!

🙂

System Addict

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System. 

Make. 

Now. 

Life in the markets requires a plan.

No plan…no life…in the markets. 

Many don’t know this. 

Some are finding out…the hard way. 

Others are looking for free lunches…and not finding any. 

Few…have found out. 

They’re perfecting their plan…chiseling away. 

When they have something substantial…it’s called a system. 

Have system…will move. 

It’s as simple as that. 

That’s another master-word. 

What?

Simple. 

The most powerful systems in the world…are simple. 

They consist of a few basic elements, woven into a mother element. 

They have an on-off switch which even a donkey can operate. 

But that’s about it. The donkey can operate the on-off switch. Only the maker can operate his or her system properly.

Why?

Because the maker knows the nitty-gritty. 

Nitty-grittiness shows itself while making. 

No one else knows it. 

Only you do, as a system-maker. 

Also, no one else needs to be bothered about your system, because your system only applies to you, and to no one else. Unfortunately, it ain’t so in real life. Many don’t want the hard work involved in developing a system. They just want the system. That’s dangerous. 

Why?

You see, those who have a system falling into their lap, well, they don’t know its pitfalls. They can’t know. They haven’t had that alone time, when the system showed its limitations. That’s why, they’re in for a big surprise if things get ugly. They risk losing everything. 

Don’t bother about anyone else’s system. 

Develop your own. Know how to work it. Know when to work it. Know when to stop. Know when to find remedies. Know when to pull the plug and develop a new system. 

This game is about you. Not about the markets. Not about the money. Not about anyone else. Not about anything else. 

It’s about you. 

Realise that. Now. Please.

Nothing Uncool About Solitude

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Solitude…

… happens.

Sometimes, we’re in company, and sometimes we’re alone.

Being alone is ok.

One thinks.

One evolves.

There’s introspection.

Solutions dawn.

Before greatness…

… comes solitude.

In company, you grow relative to another.

In solitude, you grow relative to yourself.

Both kinds of growth are necessary. In other words, growth that occurs whilst being by yourself is also necessary.

Cut to the markets.

In the markets, one is responsible for oneself.

Decisions are required. Sometimes big ones. Who does one rely on?

On oneself.

How?

One has learnt to.

During tenures of solitude.

Impedimenting

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Market strategy often sounds ridiculous. 

Take impedimenting for example. 

You put impediments in your own path. 

Absurd?

No. 

Uselful?

Very.

Why?

Because we are human. We are full of behavioural quirks which invariably cause market losses. 

That’s why impediments. 

Where?

In your path?

Why in your path?

Who are these impediments meant for?

They are speed-breakers for your quirks. 

Because your quirks are inside of you, the breakers are in your path, put by you, not for yourself, but for your quirks, when these choose to expose themselves. 

1). One example – money transfer before market entry – there’s no beneficiary added. Ha. You need to add the beneficiary first and wait for it to be approved. Then you transfer money to your other account, which is linked to your transaction account. Impediments. 

Why have you done this? You don’t wish to enter anything on a whim. Whenever money moves, it’s movement should not be made easy. You’ve seen to it. Good. 

2). Example numero two – Calls Blacklist. Make it very difficult for market people to speak to you if you don’t wish to speak to them. Why? Bias. You don’t want their bias. You have limited time. You have your own opinion. Many times during market-play, there’s no room for another opinion. 

3). Doing the DD (due diligence) – don’t act without DD. Make the DD huge. Have steps and procedures which you are going to follow – period. When you shudder at the idea of DD, that’s when DD becomes an impediment. You want the upcoming DD to make you shudder. You don’t wish to enter the underlying on a whim, remember?

4). Don’t discuss your portfolio – with anyone. YOU DON’T WANT ANYONE’S BIAS. You are mentally diligent enough to build your own opinion. People asking for causal tips are going to bother you. You need to impediment your way away from these. 

5). Systems – make systems. Stick to them. They cost time. They are impedimenting. Good. While a system engulfs you, it gets the chance to scour your approach for mistakes. Your system will alert you, so it’s been worth it. 

6). Blockage – new funds are to be blocked for a while. Don’t act with new funds immediately. Give yourself ample time to decide your strategy with new funds. Pickle them away in a fixed deposit till you are sure what you want to do with them. 

Make your own list. Above are just examples, and yeah, there’s more, but double yeah, make your own list. 

Working with self-made speed-breakers to enhance your performance makes you grow. 

Your returns grow too. 

Walking on the Moon?

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giant steps are what you take
walking on the moon
i hope my legs don’t break
walking on the moon

Don’t know how old this song is.

There was the version from Sting, or perhaps The Police.

Heard another jazz version of the song on internet radio the other day.

Got me thinking.

We all do. Walk on the Moon, that is.

The Moon stands for something undiscovered.

Each human is unique.

Our next moments are undiscovered, yet.

We live them in our own way.

Yeah, we walk on the Moon, each day, every new moment.

Even in uncharted territory, one wants a smooth walk, doesn’t one?

There are three steps that ensure this.

1). Proper due diligence.

2). Smelling liability from a distance.

3). Walking the other way, away from liability.

Even a donkey understands what’s written above.

Enjoy your walk, on your Moon, on your own personal journey.

The lyricist has penned it aptly. He or she knows about giant steps, so due diligence has been done. He or she hopes that his or her “legs don’t break”,  so he or she is alert that liability could be lurking.

Yeah, above three steps, people.

Let It Come To You

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Don’t run after the investment.

Let it come to you.

Let it breathe down your neck.

You’re not hungry for it…

…but, if it’s that good…

… you might take it.

Let it reveal its hidden goodness.

Let it ignite your curiosity to look for even more than basic goodness in the investment.

Play a passive-then-active role.

Some call this the sweet spot.

I call it the sweetest spot…

… which you really want to be in, in the world of investing.

Yeah, don’t be in a hurry.

Hurry spoils the curry.

Take your time, to the extent that…

… take time out of the equation.

Give your money the best possible chance…

… to make loads more.

Did You Hear About the Last Mile?

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Yawn.

So you did, huh?

In investing?

No?

Yeah, I just thought about it.

Sharing it with you.

Churning, churning, churning…

… inside.

As you do your due diligence, information churns inside of you.

What is it that says yes, I’m investing?

Where does that go-ahead moment happen?

In the last mile.

Inside of you.

This is not to take away anything from your due diligence.

DD is central.

Very important.

However, last mile is important too.

One needs to respect it.

First, one needs to know about it.

Knowing about it will stop you from pushing an investment.

Don’t push… …in the markets.

Just be.

Take the shape of the container. Your container is your system.

Wait for your last mile to respond. Learn to understand its style of expression.

It’s a feeling…

… of well-being, …

… or something suffocating, nausea-like.

Embrace the former. Dump what’s causing the latter.

It’s as simple as that.

The most meaningful things in life are…

… exactly…

… SIMPLE.

Not in the Mood?

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Right, good.

You don’t have to be. And good that you’ve recognized it.

Mood sets the tone for success… or failure.

For example, just now, I’m not in the mood to conduct due-diligence. There’s one company which has sparked my interest, a few days ago. Work needs to be done, to decide whether I’m investing or am out. Quality of work needs to be of the highest order. Otherwise I might take a wrong decision, meaning that I might invest in a dud, or might reject a multibagger. And what happens? I’m not in the mood to conduct any kind of due diligence. For whatever reason. What’s to be done?

Nothing.

I just don’t conduct it.

Period.

What if the opportunity goes away?

So be it. Another will come along. When? Whenever. World is full of opportunities.

Why am I so pricy about my behaviour?

Well why not? It’s called being in the sweet spot. You call all the shots. Including working when in the right frame of mind. Such a condition enhances the probability of success.

When will I be conducting the due due-diligence?

When would that be?

Whenever it happens naturally, without artificial pressure.

Am I just born lucky, to be in a position to work when I want?

Well, I’ve definitely had my share of great luck, and continue to have it, by the grace of Nature. On the other hand, and to put things in perspective, I also have, over the last twelve years, worked hard to create a situation for myself where I only invest when I wish to. There’s no pressure on me to invest. My bread and butter isn’t dependent on it. I call it being in the sweet spot.

Work towards your sweet spot.

Now.

Deciding to Invest?

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An investment opportunity comes along.

How do you react?

This is how I react.

First up, funds. Do I have clear funds to invest? No? Forget it, obviously.

Funds – maybe? Meaning, if I do some wangling around, fund demand could be met? Ok, move on to next step before taking a decision on the wangling.

Funds – clear – yes? Next step by default, but I’m telling myself that I’m not letting these hard-earned funds go just like that. The opportunity will need to clear my scrutiny. Period.

Then – time? Do I have 15 clear days to conduct deep due diligence.

No? Forget it. I may be travelling. Some event might occupy my time and mind. No time – no investment. Period.

Yes? Ok. Next step.

Energy? Due diligence is exhausting. I need energy reserves. My body and mind tell me. If they’re up to it, I’ll know. If not, the sheer idea of due diligence at that point will make me want to puke. Such is the power of mind and body to convey a message. No energy means improper due diligence. Not happening. No investment.

Yes for energy? Body is alive. Mind is alert. Moving to next step.

Due diligence. Digging deep buddy. I’m going to get under their skin. I’ll pick out their lie. I’m going places they won’t imagine I could get to. The internet is my oyster. We’ve never had it so good wrt information flow and disclosure. I start digging, and get so engrossed, that I forget about time.

Due diligence scrutiny check block oblique spoiler alert oblique deal-breaker? Could be an uncovered lie. Recently I discovered 100% pledging in a company, with everything else ok. Could be any dirt or its tracks. No investment.

Due diligence cleared. Go back to funds – maybe. Bring out mental weighing scale. Is the investment so worth it that I’ll wangle fund demand?

No? No investment.

Yes? Next step.

Think clearly. Very hard earned funds are about to go away for a while. What does the sum total of my everything tell me?

No? For whatever reason. I don’t question my sum total. No investment.

Yes?

Investment.

Happy investing! 🙂

Making it Count

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You’re playing a big one.

What’s foremost?

Make it count. For heaven’s sake.

Why?

Big plays don’t come too often. When they do, you have to catch them. You need to have energy left, to play. Then you just go all the way. Till the play plays itself out.

Life is an accumulation of knicks and knacks.

At first, you don’t know what you’re good for.

When you do know it, you start out as a net-net loser in whatever you’re good for, because every rookie needs to pay tuition fees. These are the costs of your mistakes.

Then you start getting the hang of something you’re naturally good at. Tricks of the trade – you learn them. You succeed in making your activity applicable, perhaps even financially viable.

Next step is to scale up.

You need to make your successful model count. Period.

Tired? Want to do other things? Need to borrow? Too big a pain? Time-issues? Overdose? Bureaucracy?

Whatever.

Don’t lessen the flow. Hold on. Ask the Universe for reserves. See the play through.

One life can mean just a few big plays.

When you’ve latched onto one, and have set it up so beautifully, now’s the time make it count.

Best of luck!

🙂

The Valuation Game

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Value is a magic word. 

Ears stand up. 

Where is value?

Big, big question. 

Medium term investors look for growth. 

Long-termers invariably look for value. 

How do you value a stock?

There are many ways to do that. 

Here, we are just going to talk about basics today.

For example, price divided by earnings allows us to compare Company A to Company B, irrespective of their pricing.

Why isn’t the price enough for such a comparison?

Meaning, why can’t you just compare the price of an Infosys to that of a Geometric and conclude whatever you have to conclude?

Nope. 

That would be like comparing an apple with an orange. 

Reason is, that the number of shares outstanding for each company are different. Thus, the value of anything per share is gotten by dividing the grand total of this anything-entity by the number of outstanding shares that the company has issued. For example, one talks of earnings per share in the markets. One divides the total earnings of a company by the total number of outstanding shares to arrive at earnings per share, or EPS. 

Now, we get investor perception and discovery into the game. How does the public perceive the prospects of the company? How high or low do they bid it? How much have they discovered it? Or not discovered it? This information is contained in the price. 

So, we take all this information contained in the price, and divide it by the earnings per share, and we arrive at the price to earnings ratio, or P/E, or just PE. 

Yeah, we now have a scale to judge the value of stocks. 

Is this scale flawed?

Yeah. 

A stock with a high PE could have massive discovery and investor confidence behind it, or, it could just have very low earnings. When the denominator of a fraction is low, the value of the fraction is “high”. You have to use your common-sense and see what is applying. 

A stock with a low PE could have low price, high earnings, or both. It could have a high price and high earnings.  The low PE could also just be a result of lack of discovery, reflected in a low price despite healthy earnings. Or, the low PE could be because of a low price due to rejection. What is applying? That’s for you to know. 

At best, the PE is ambiguous. Your senses have to be sharp. You have to dig deeper to gauge value. The PE alone is not enough. 

Now let’s add a technical consideration. One sees strong fundamental value in a company, let’s say. For whatever reason. How does one gauge discovery, rejection or what have you in one snapshot? Look at the 5-year chart of the stock, for heaven’s sake. 

You’ll see rejection, if it is there. You’ll understand when it is not rejection, because rejection goes with sell-offs. Lack of discovery means low volumes and less pumping up of the price despite strong fundamentals. You’ll see buying pressure in the chart. That’s smart money making the inroads. Selling pressure means rejection. You’ll be able to gauge all this from the chart. 

Here are some avenues to look for value :

 

– price divided by earnings per share,

– price divided by book-value per share,

– price divided by cash-flow per share,

– price divided by dividend-yield per share,

– in today’s world, accomplishment along with low-debt is a high-value commodity, so look for a low debt to equity ratio,

– look for high return on equity coupled with low debt – one wants a company that performs well without needing to borrow, that’s high value,

– absence of red-flags are high value, so you’re looking for the absence of factors like pledging by the promoters, creative accounting, flambuoyance, 

– you are looking for value in the 5-year chart, by gauging the chart-structure for lack of discovery in the face of strong fundamentals. 

 

We can go on, but then we won’t remain basic any more. Basically, look for margin of safety in any form. 

Yeah, you don’t buy a stock just like that for the long-term. There’s lots that goes with your purchase. Ample and diligent research is one thing. 

Patience to see the chart correct so that you have your proper valuations is another. 

Here’s wishing you both!

🙂

 

IUCS – Investing Under Controlled Stress

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Let’s assume there are funds waiting to be invested. 

In what form do you keep them?

Free?

Bound?

What?

Investors have the luxury of time. Traders don’t. 

I’m really telling you, an investor’s funds need not be kept in free form. 

Traders need to pounce, not investors. 

If you don’t need to pounce, don’t keep your funds in free form. 

Keep them bound. Semi-bound. Let’s call it stressed. Keep them stressed. Stress that is under your control. 

What are we talking about?

Also, why are we talking about whatever we are talking about?

Free funds are open to whims and fancies. 

Whose? 

Yours. Your bankers’. Anyone’s, who has an eye on the funds. 

Plush with free funds, you take liberties. Your defences are down. You are liable to make mistakes, perhaps big ones. 

Bound funds, on the other hand, are subject to activation barriers before release. 

You think twice before releasing them, or perhaps thrice, if the locking is tight. You win precious time. During the extra time, you can well scrap an investment with a faulty premise, or you can discover hidden agendas or angles which cause you not to follow through. You get saved because of controlled stress. 

Furthermore, bound funds don’t reflect on your banker’s system as funds waiting to be invested. He or she won’t bother you or incite you to make a mistake. You’ve knocked him or her out of the equation. Bravo!

Controlled stress can be of different degrees. When funds are irreversibly locked-in, then we cannot talk of control anymore. Anything below that is under our control with varying levels of effectivity. The stronger the (reversible) lock-in, the harder you’ll think about the new investment, because the activation barrier for making funds free again to invest is large. 

Let’s not get too carried away. We can just make simple fixed deposits. These are completely within our control. You can break them with a letter to the bank manager. The activation barrier to free them is relatively small. However, you do think twice before freeing them. The’ve disappeared from your banker’s horizon. They’ve also disappeared from any online fraudster’s horizon, who was perhaps looking to clean you out. 

Also, actually, you don’t really need to break these fixed deposits to get into a new investment, since breaking goes with a small interest-penalty. If you’ve got fresh funds coming in at a later date, but wish to invest now, you can borrow against a fixed deposit. This will again make you stop and think, because borrowing comes with a cost, i.e. interest. You will only get into the fresh investment if you really, really have to / want to. You will discard any half-baked investment idea. It’s still worth it, despite the interest. You might find this a bit crazy, bit I like to do it like this. For me, the biggest win here is that I am not breaking a former structure. Add to this the extra safety. Plus the extra thinking-time to ward-off bad investments. Add everything up, and you might also think that the borrowing cost is peanuts when compared to the benefits. Don’t forget, since you’ve got fresh funds coming in soon, you’ll soon be releasing the fixed deposits you are borrowing against from their overdraft mode. This is a meta-game strategy. 

Yeah, keep investible funds in fixed deposits. It is really as simple as that. 

The best things in life are really very simple. 

Complication and sophistication are facades used by humans to hide their mediocrity.

A successful person does not need to hide his or her simplicity. 

Simplicity is one of the biggest precursors to mega-success. 

You Might Think I’m Crazy

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you might think i’m crazy

to hang around with you

maybe you think i’m lucky

to have something to do

…

you might think it’s foolish

or maybe it’s untrue

you might think i’m crazy

but all i want is you

The Cars

Some years ago, we went to see “Cars 2” with my daughter and her cousins. Yawn, I thought. Animation movie, blah blah blah, but anything for the kids, when suddenly, above song started playing and took me back to school. How appropriate, a song by the Cars in a movie called Cars. Actually ended up enjoying the movie.

Anyways, something about the lyrics caught my attention.

What do you read in this space?

Words, words, words.

No graphs. No images. No math. No numbers, really. 

And this blog is supposed to be what? A commentary on applied finance?

So am I crazy?

Maybe, …

… but, this is exactly how I want to do it. 

No hocus-pocus. 

Here, we break it down to the bare minimum. 

Words. 

We talk. 

It’s all very light. 

You read through in a jiff. 

There’s a powerful flow which you might not even be aware of. 

And, as the lyrics say, all I want is you.

Yes, I want your attention, and I want to keep it riveted. 

How am I to achieve that in an age of very short attention spans?

We keep it simple. Bare minimum stuff, wrapped in enjoyable words. Stories. Analogies. Parallels. Bridges. As seemingly non-finance as possible, but still not missing the point.

Sure, I still could be crazy.

What do I hope to achieve?

So much time involved.

All this for free.

Yeah, I really must be delirious.

Stop. 

It’s deep. 

I enjoy writing. 

It relaxes me. 

My thoughts get organized. Concepts get strengthened. I focus. Many mistakes in my approach get nullified. I don’t want more from this. 

Also, it’s my giveback. I use a lot of free stuff from the net. I give this for free. It’s all a give and take. 

So, just bear with me. 

Read if you want to, it’ll make me happy. 

It is definitely a different way to learn about finance, with all the jugglery left out. 

Well, why not?



 

 

Understanding and Assimilating the Fear-Greed Paradox

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Holy moly, what are we talking about?

Let’s say you’ve done your homework.

You’ve identified your long-term stock.

Fundamentals are in place. Management is investor-friendly. No serious debt issues. Earnings are good.

Valuation is not right.

You wait.

How long?

Till the price is right.

What happens if that doesn’t happen.

You don’t pull the trigger. It’s difficult, but you just don’t pull.

Let’s say the price is becoming right.

You are looking for an extra margin of safety.

You are waiting to pounce. How long?

What’s your indicator?

Your gut?

Many things have been said about the gut.

It does feel fear.

Look for that fear.

Scrip is near a very low support, but holding. You are afraid that this last support might break and that the scrip might go into free-fall. Look for that fear. There goes your buying opportunity, you are probably saying. Intraday, support is broken. You are now sure it’s gone. Look for that feeling. Intraday, scrip comes back. Closes over support. Large volume. This chronology is your buy signal. You pick up a large chunk. Scrip doesn’t look back.

You don’t have to go through this rigmarole. You don’t have to bottom-pick. This exercise is for those who want that extra margin of safety.

Now invert the situation.

You’re sitting on a multibagger.

Lately, you’re not agreeing with the company’s business plans. You want out. Best time for you to exit would be now, sure. But, scrip is in no resistance zone, and is going up and up and up. What do you do?

Look for greed within yourself, when you start saying “Wow, this is going to be the next 100-bagger!” Look for the moment during this phenomenal rise when you’re getting attached to the scrip and don’t want to get rid of it, despite having concluded that you don’t agree with the vision of the promoters. Look for the time you start going “My Precious!”

Sell.

This chronology is your intrinsic sell signal.

Sure, radical.

I agree.

Sure, I’m combining trading techniques to fine-tune my investing.

I’ve stood on the shoulders of giants.

I’ve seen from their heights.

It’s time I start contributing.

The Market Aha Moment

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What is an Aha moment?

Any ideas?

Simple. It’s when you go “Aha, so that’s what it’s like!”

Or “Aha, so that’s what it’s supposed to be!”

You’ve understood something big. Finally. You see light. That’s an Aha moment. 

The human being likes to be happy. 

Professional happiness adds to our well-being. 

To be professionally happy, you need to be doing something during which you forget about time. 

What is this something for you?

Wait for your Aha moment. 

Let’s assume you’ve decided upon a profession in the markets. The next question is… which market?

Which market draws you out fully? Which market consumes you? In which market do you perform the best? In which market are you happy?

Why isn’t your Aha moment coming here too?

Well, Aha moments aren’t for free. You have to struggle for them. 

Start trying out different markets. 

See what gives you a kick.

See where you have a natural flair.

See what lingers.

Discard what you can’t stand.

Hit and try.

Try everything if you must.

Eventually, something will speak to you.

You’ll want to be in one particular market, perhaps two.  

It’ll be your calling. 

Aha. 

I’ll tell you how it went with me. 

I started with Equity. 

Fluked a few. Made some money. Bet bigger. Thought I was good. Won some more. Bet really big. Lost huge. Thought to myself – no more Equity. 

Then came Gold and Silver. Did ok. Found it boring. No more Gold and silver. 

Tried Private equity. Did ok. Boring. 

Arbitrage. Boring. But, an avenue for parking.  

Real estate. Corrupt.

Commodities…didn’t get a kick. The delivery option always loomed over my head. What if I forgot to square off?

Stock futures. Got hammered. No more. 

Foreign stocks. Time difference killed my evenings. Out. 

Foreign mutual funds. Expense ratios were sky-high. Slugged it out for a while, but then finished it off. Lost. 

Structures – broke even, then won a bit. Got bored. 

Debentures. Only do short term ones, to park funds. No kicks. Debt is boring by default.

Mutual funds. Yeah, well, did my fair bit of them. Did excite me, since they were connected to Equity. As of now, there’s just light MF activity. 

Stock options. Lost a bit, but didn’t actually get hammered. Gave me a bit of a kick. Well, it was Equity related, so no wonder. Started interfering with my second Equity stint. I let options go. 

Second Equity stint. Did ok…ok…ok…lost a bit, won a bit, was enjoying it, when suddenly…came Forex. 

Forex…whoaahh…I loved it. Swept me away. Technology, charting, skill-set, I wanted to be here. Aha. Huge leverage, though. Risk. This had to be my second game, not my first. Yeah, safety first, always. Alright, what would be my first game? Yeah, what would be my bulk game? 

Equity of course. I understood it and enjoyed it. I’d done ok. Had leant lessons. Knew how to handle it. Infrastructure was in place. Aha. Nailed it in the third attempt.

So and thus, I found my games upon my Aha moments. That’s where I am. Don’t plan to do anything else.

When’s your Aha moment coming?

Work towards it. 

Less is More

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Fill your plate.

Work.

Go all out.

Nobody’s asking you to work less.

Research.

Hit it with your best shot.

Do quality work.

Work with the best tools.

Enjoy your work…

…so much so, that time ceases to exist.

Yeah, that means you’ve found your calling.

However, connect less to live Mrs. Market.

Here, less is more.

Keep her away as much as possible when she’s live.

Only connect live when you really, really have to.

What are you achieving?

Minimal bogging down live market forces.

You’re away from the pandemonium, the confusion.

You’ve set your self up brilliantly, to think clearly.

Now, gather your thoughts, gather your research.

You get into the Zone.

You have a purpose.

It can be anything. A market instruction. An instrument alteration. A structural change. A query. A test. A probe. A check. Something small. Something big.

With your purpose right before your eyes, connect live.

Solve your purpose.

Disconnect.

Relax.

Let remnant market forces leave you, yeah, let them dissipate.

Do some other stuff for a while.

Then, when you’re ready, get back to your research.

If you’re not ready after a while, call it a day.

Go for a swim. Or something.

Take that –>@&%# Mr. Peer Pressure

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Dear Mr. PP,

I don’t give in to you, never have, never will.

You’re not that important.

I don’t spend my time thinking about you.

I don’t respect any entity without a backbone, and you certainly don’t have one.

I’ve met you many times.

At first, I felt you, and was taken aback. You wanted me to do something I didn’t wish to do. You were strong.

I was stronger.

When you don’t know anything about the reputation of your opponent, frankly, you don’t give a d*m*. You fight. Till you fall or till the other fellow backs down.

I won my first head to head with you. Thank my stars.

After that I found out who you were. Yeah, who was it exactly that I didn’t succumb to?

After I’d grown up and all, and fully realized your devastation potential, I always leaned back on my first head to head. I mean, you were beatable. Period.

Yeah, I was lucky to have beaten you first up. It’s been a huge psychological advantage.

I’ve carried over this advantage into my market life.

Take a hike, Mr. PP.

[As far as market related activities go, I follow and advocate an unbiased, singular and customized path which doesn’t follow any crowd or any myths as such.

This path certainly does not let me invest under any kind of pressure.

Where there’s pressure, there are vested interests.

Please beware of investments which don’t suit your risk profile and are touted to quench vested interests].