Tag Archives: #PayingItForward

Basics Baby

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In the…

…ongoing…

…and incoming…

…frenzy…

…there’s only one go-to strategy…

…for me.

Basics…

…always.

During CoViD, during which everything was supposed to go bankrupt, one stuck to the ‘Basics, Always’ approach, and the rest became History.

This, today, has the potential to become a CoViD like crash.

First up, there’s been mass AI hypnosis. Everyone and their Aunties are in the loop and are talking AI. No one cares anymore about companies with great fundamentals and a penchant cum track record for metamorphosis. It’s ok. We do, since that’s what counts for a steady, long-term return in the market. We are not greedy. We wish to put away our money safely, not let inflation eat at it, and we would like it to grow over the next twenty to thirty odd years. We’re balanced. We’re basic. We’re simple. We’re the opposite of complicated and sophisticated.

And now, there’s all out war. Provoked. Just to bury Epstein consequences? All pipelines choked. Gold-nugget question being asked in this moment is…

…how should one act?

Should one get swept into the AI madness and buy into abysmally high PE multiples? Infinite PE multiples? Should one buy international stocks? Gold? Bitcoin? Silver? Sit in cash? WHAT?

Answer in such scenarios is SIMPLE, always.

Basics. Baby.

Basics, always.

Basics to the rescue.

What are your basics? Go back to them.

I’ll tell you my basics. I’ve gone back to them since I started buying, February 6th onwards. And I shall remain with them, till I’ve finished buying, or till I’m fully invested, whichever comes first.

Shareholder-friendly managements.

Companies with clean balance sheets.

Companies with zero or quasi-zero long-term debt.

Free cashflow to market cap upwards of 2% for large- and mid-caps, and upwards of 1% for small-caps.

Companies with multi-decade penchants and track-records for / of successful metamorphosis and navigation through disruption.

Margin of safety. Each high-conviction buy lowers average. Mathematics to support buying and selling. A low average has the capacity to quickly give a multiple in better times, from where then one’s principal can be skimmed off to fight another battle, and the profit stays in the market for eternity, on the back of the mathematics of compounding.

These are my basics. Shared with you, with pleasure, to inspire you to find yourself in the chaos. Use these till you find your own. You can pay it forward. Leads to a better world.

One doesn’t need more. Just one’s basics. Basics that are superimposable on the entire market, and when something conforms, there’s action. Like now, for me.

Please go back to your basics at a time like this. That’s why you have developed them. Your happy, go to place. Market success is more about a high-conviction frame of mind with holding power.

The rest, rest assured, will be History. Go for it.

🙂

Take a Bow!

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Hey.

So, what’s our model?

It’s not sector based.

First I thought it was.

I now realize it’s not.

Well, to be honest, our model has various facets.

One of these is on, currently.

Value? Buy. Deep value? Buy.

Objective? Make a multiple fast. Pull principle out. Leave profit in the market for compounding.

Sector?

Doesn’t matter.

Moving on to next facet.

Ok. In range bound markets, what do we do?

No value buying, of course.

Ideally nothing.

However, action does get the better of us, at times, ya, ya, we are all human, and have that video game need. So, in range-bound markets, we do buy, at times, with the objective of making a small profit, slowly. When the profit objective is achieved, principal is pulled out and the profit is left in the market to compound if not required otherwise.

Right. Next facet.

What happens for us in a market that breaks out?

Two things.

First up, we are looking to make a quick let’s say 25%, and then getting principal out. Profit stays in the market to compound, irrespective of the level, ya we have the guts, since that which stays in the market enjoys 100% margin of safety. Secondly, some of the deep value still in the market has made a mega multitude by then, and we can take a call about it. We might or might not liquidate a fraction, depending upon our 2 to 3 year liquidity needs.

Moving on.

What happens to the stuff that gets stuck?

If our world is not falling apart because of that something that’s stuck, that something is and remains for us just another position. Downside is the position going down to zero. Upside is unlimited. We stay or cut, depending on our per saldo existence and / or situation in the world.

Stuff will get stuck. This is the markets baby, not a vacation in Hawaii. [Thought to self – let’s make activity in the markets like a vacation in Hawaii. Hands off, no engagement during market hours, let’s do an Ed Seykota baby, adding a few leg-glances like only handling in GTTs, disengaging after Thursday analysis and market input (3:45 pm to 4:15pm), only to re-engage on Monday morning 8 am to 8:30 am, to punch in GTTs for Monday.]

Very long-term play allows us to work well with even hundred positions stuck, because a handful of lucrative positions will offset these and then some. Perhaps one will even be able to say ‘and then lots’.

Now comes the pointe. This is something I learnt from Dr. Van K. Tharp, God bless his soul. Position-sizing.

Our one entry quantum is a function of our networth.

Make it whatever function you are comfortable with, corresponding to your own networth.

As our networth increases, our one entry quantum increases in size. As our networth decreases, our one entry quantum decreases in size. When we are winning, we set ourselves up to win bigger. When we are losing, we set ourselves up to lose lesser.

Final question – answered here.

Ya, final frontier. We tackle this very maturely.

Why are you getting all this for free?

Free? Please remember, that nothing in life is for free. Not one breath. There always needs to be a karmic field to support an event. No field, no action, meaning this here wouldn’t be taking place.

I’ve taken freely from a lot of people. This is my giveback. Please take freely of this. Don’t feel any burden. All you need to do is to pay it forward, at some stage in your life, when you comfortably can. Help someone in need. Make our world a better place. If perhaps you already are doing so – take a bow!

🙂

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.