Tag Archives: #ProfitBooking

Mini Models

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Hey.

Patterns …

… keep changing.

Sometimes, markets move with a rhythm.

At other times, there’s none.

Rhythm, that is.

What is there, then, at these times?

Nothing recognizable?

Noise?

Something developing, but still not discernable?

A mix of all this?

It’s ok.

We don’t have to have a pattern at all times.

We’re ok with occasional mini-models.

Once defined, one moves as per these.

When the mini-model doesn’t work anymore, one discards it.

Examples?

Mondays are slow. Then they’re not. Helps in entry-planning, and sometimes also in exit-planning.

There’s one breakout in the watch-list per day. Then there’s none. Helps during profit-booking and / or exit-planning.

There’s one addition to one’s in-profit watch-list per day. Then there’s none. Helps in recognizing bullishness picking up and slowing down.

Monthly profit target not met by far, and it’s nearing the last week of the month. Rally slowing down? Reversal coming?

One gets the gist. Make up any mini-model.

Make up?

Yes. That’s the thing.

Working with something that no one else in general is using, or has thought of, is an edge.

What this means is, that while others might be making use or no use of slow Mondays, these haven’t become a mass pile-on party like a Fibonacci event, which the whole world knows about, uses, and can be fooled with.

Our own mini-models work …

… just for us,…

… and then they don’t, …

… which is when we discern the next one that is working.

We traverse from mini-model to mini-model, learn tremendously, and …

… create more and more cost-free-ness.

Over time, all our created cost-free-ness makes one’s cup run over.

🙂

Bookability

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Booking?

Understandable. 

Don’t book your basics though.

What are these basics?

Stuff you’re convinced about.

We’re long beyond due diligence here.

These underlyings are running. These are your right calls. 

They are not to be booked – as long as your conviction persists.

Any price?

Hmmm – this question brings in the concept of “Bookability”.

Save the booking angle here – for now. 

We’ll just try and answer above question about price. 

Sell everything else, as in any low-conviction holdings,…

…bit by bit,…

as markets tread higher and higher. 

Ultimately, it’ll all be gone. 

You’ll have done very well, and will have made good profits. 

You’re also left with your high-conviction holdings. 

As a bull market persists, these will start quoting at…

…ridiculous prices.

Is something a hold at…

…any price?

If you wish to be holding a multi-multi-bagger, well, then, yes, with a caveat.

When you can’t hold your trigger-fingers any longer, take your principal off the table. 

There.

Happy?

Now, what’s on the table for you, are high-conviction holdings, with principal off the table – aha – so these holding are free of cost for you.

When these high-conviction holdings are free of cost for you, the urge to sell can only persist because of two things. 

You could need the money. 

Fine.

Or,…

…because of an unfounded urge to book, as in “Score!”… .

Not fine. 

Tell your urge to sell that you want to make much, much more, by allowing an underlying to grow to 100x, for example. 

Urge to sell will subside.

What’s causing such urge?

Fear of a correction. 

When you’re holding free stuff, fear of a correction is unfounded. 

This needs to be instilled into our DNA.

With that, we’re done already!

Winning on Psychology

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Hey!

🙂

It’s been a while…

Didn’t feel the need to write since beginning May…

There’s a thing about words.

When they want to come out…

…they do…

…and one should let them.

Right, and there’s a need for words, since…

…(wouldn’t you say),…

it’s time for a status check.

Where do we stand?

Positions are running.

How long?

When to cut?

What’s the plan?

Hmmmm.

Frankly, I don’t believe in cutting something I like and am convinced about.

Well, there’ll be no cutting of anything I’m convinced about.

If and when we reach euphoria levels, we’ll take another call about what kind of profit one is booking from one’s high-conviction holdings.

It’s very possible, though, that there will be no profit booked here.

Why?

High conviction holdings translate into multibaggers.

If I’m booking even part of such a holding, I’m lessening my quantum of multibagger-holding in the future.

So that’s sorted – high-conviction holdings – not booking.

Maybe, at extreme euphoria, we might take the cream off the top of an overflowing glass.

Now let’s come to other holdings.

Along the way, one’s conviction in certain holdings tends to waiver.

We’re booking all of these.

How much?

Completely.

When?

At extreme euphoria.

How to know when that’s happening?

Look for signs.

Least likely people will start behaving like market-experts.

You’ll start getting calls from lay-people, asking whether they should double their SIP.

Other-field mavericks have now become F&O maniacs, voluming seven figures per day as if it’s a normal activity, like eating food.

You’re suddenly being asked about all kinds of stocks running at absolute peaks, whether they are good investments.

Don’t get irritated.

Listen.

You’re privy to the best possible indicator – human psychology.

This one will never change.

Earlier, you fell here.

Now, this avenue has become your guiding stone to gauge market bottoms, and tops.

It’s a win-win for you.