Monthly Archives: November 2008

Financial Goal – Week 11

Things are not so very good. I really don’t know how to handle the mess. I don’t wish to get out of market, if I did then I would incur pretty heavy losses. The thing of solace is that, I have not yet made any loss on the principal. I am still having the principal with me. The gains that I had have started eroding. It is not a good sign but still things does look bleak.

I am just hoping that things will get better and better in the days to come..

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Investing with Emotions

Investing is a very scary topic these days. The whole world is facing the music and many are not sure about the future of the money. All that one feels is things will be back to normal and everyone reaps benefit out of it. No matter what the world economy is, there are always fundamentals in investing. No matter what happens to the world, the fundamentals don’t change. They remain the same way for a long time.

None of us are perfect as investors. Even the world’s most respected investors have confessed to making errors. I would like to quote Warren Buffet as an example. It is not because I am an ardent devotee of him but he is regarded as one of the best investors of the modern world. In various annual letters, Warren Buffett has told his shareholders: “You’d have been better off if I had gone to the movies [this year]” and “I have erred [by] not making repurchases [of shares].” Continue reading

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Bangalore Traffic Woes

Bangalore, the garden city is now a city without a garden. The gardens are making way for the roads and the roads are filled with vehicles which has become a mess. Commuting in Bangalore is really a tiring affair and gruesome at times. To travel 30 KMs some 10 years back would have taken 40 minutes anywhere within city limits now to travel the same distance one requires more than 90 minutes. I am not exaggerating, that is how the traffic has grown and that is how the Bangalore’s Traffic Control has progressed. Everyone complains about the same. The thing is that they don’t realize that they are a part of it and they have to do something about it and not just keep complaining about it.

I used to live in Malleshwaram, which is where my entire childhood was spent. I lived for more than 16 years there. It was a wonderful place. I used to play cricket on the roads. Now I don’t see a single soul playing on the roads since you can’t afford to do so with the current stupid traffic situation. I know the roads are not meant to play cricket. What I mean is, ten years back things were like you can play on the road and now you can’t even drive on the road properly, you can imagine the amount of vehicles plying on the road.

Continue reading

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How to be a trader, as well as investor – Part 3

Please read the first part and second part before you go further.

Q: What about the other way around when you are making money, we often hear that people bought at Rs 100 and sold at Rs 110 and the stock moved from Rs 100 to Rs 200, they made small chunks of it but could not hold for the entire rise or doubling of the stock. Is it also to have that maturity to say that I am not playing for small gains and maybe something good is happening out here and I will play for a bigger game?

A: Yes exactly, they need to define, at the end of the day you have to define yourself, you have to define your system. Just as when people trade for Rs 10 and are able to take Rs 50 hit on the downside, similarly it should not be the other way round that I am ready to stand for Rs 50 on the upside, but my stop losses are very thin, so immediately the stop losses get triggered or there about. You really have to have great perspective in terms of time, in terms of entry, exit, stop losses and there’s always this ratio. You cannot have a stock that is a sure short and risk-free. Then why are you in the equity market? You should be having money in FD because that’s the only sure short method. So there has to be a balance and there has to be the risk-reward profile and it maybe 2:1 or 3:1 but the ratio always has to be there. Continue reading

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How to be a trader, as well as investor – Part 2

Please read the first part before you go ahead.

Q: Can you be both – a trader and an investor?

A: Yes. I also had these doubts till I met some successful people, where I found that they were able to keep a very different mindset as a trader, as a investor. I really think that’s a really fairly advanced stage in the whole mental makeup, maturity, intellectual and psychological. For example, as a trader you may be short but as an investor you would be having some long-term bets. So the conflicts that are there within you, would really come up. So you have really been a very good evolved person psychologically to be able to have this conflict. It’s possible but definitely very challenging.

Q: How important is it to just concede that the market is always supreme? Do you have to start by saying whatever I am seeing on the screen is a right price and I am often wrong? Continue reading

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