Stocks for the long and short term portfolio

[Einstein]

Cause Einstein said so?

Not because I said so, because it is not an attractive security.

 

[praveen taneja]

Instead of making posts about it, I think the better option will be demonstrate. It will be crystal clear to all. Else, no matter how much I express myself....

thats good idea too but for that you have to make detailed view for everything chosing stock entering time waiting time and exiting level with why and how:thumb:

 

[jamit_05]

thats good idea too but for that you have to make detailed view for everything chosing stock entering time waiting time and exiting level with why and how:thumb:

Yes. Every move will be well thought out. And Risk well understood. The reason for taking this approach seriously lies in an observation.

I have come across many short term traders (Short-Term-Traders) in my pursuit to become one. Have befriended some, whereas others were only passing acquaintances. I have also met several Investors (Investors), who do not take margin or debt. The percentage of winners is very high in the latter category.

When I speak of Investors I am not referring to speculators who place their bets on stocks they expect will "touch the moon". I am talking about level headed blokes, who purchase shares of Maruti and Infosys.

The statistics makes sense. These Investors feel no pressure, which, for Short-Term-Traders, comes from two fronts:

1) Their reasonably high expectations.
2) Evils of margin.

Short-Term-Traders aim to earn upwards of 10% each month. This is a very high bar to jump. And, trust me, it takes A LOT. And the chances of success are very very slim. One might as well take his chances at becoming a US Navy Seal!

It also induces the factor of stress, which finds its root in taking Margin money, (read Drawdowns). This affects the overall quality of life.

Whereas, Invs buy good, hold and sell. They do not earn more than 18% Y-o-Y.

Now, my question to you is, which category do you think earns MORE in terms of Rupees. In terms of Return on Assets?

My belief is that Invs are better off. They expose a larger portion of their self worth to the markets than Short-Term-Traders, probably 10 to 25 times as much. Hence, although they earn a measly 18%, it applies to a lot more money!

 

[blisscapital]

Yes. Every move will be well thought out. And Risk well understood. The reason for taking this approach seriously lies in an observation.

I have come across many short term traders (Short-Term-Traders) in my pursuit to become one. Have befriended some, whereas others were only passing acquaintances. I have also met several Investors (Investors), who do not take margin or debt. The percentage of winners is very high in the latter category.

When I speak of Investors I am not referring to speculators who place their bets on stocks they expect will "touch the moon". I am talking about level headed blokes, who purchase shares of Maruti and Infosys.

The statistics makes sense. These Investors feel no pressure, which, for Short-Term-Traders, comes from two fronts:

1) Their reasonably high expectations.
2) Evils of margin.

Short-Term-Traders aim to earn upwards of 10% each month. This is a very high bar to jump. And, trust me, it takes A LOT. And the chances of success are very very slim. One might as well take his chances at becoming a US Navy Seal!

It also induces the factor of stress, which finds its root in taking Margin money, (read Drawdowns). This affects the overall quality of life.

Whereas, Invs buy good, hold and sell. They do not earn more than 18% Y-o-Y.

Now, my question to you is, which category do you think earns MORE in terms of Rupees. In terms of Return on Assets?

My belief is that Invs are better off. They expose a larger portion of their self worth to the markets than Short-Term-Traders, probably 10 to 25 times as much. Hence, although they earn a measly 18%, it applies to a lot more money!

Some good observation by you.
However I have some doubts. You have given the example of Infy and Maruti here.
Lets say you bought Infy at around a 52 week low. Now my question is Infy was once growing at around 30%, then growth slowed down to 20% and keeps falling. Now it may stablize and grow but at a lesser pace. Then the stock might get trade at a lower PE and so on..We know that this story continues in Nifty/Sensex stocks, I dont know the exact churning ratio but good amount of stocks go out of the indices every year. Also every bull run has new leaders and stocks. So how can we make decent money if we buy the matured stocks from the indices, (which may fall out of the indices) and hold them for a decade or so

 

[cvas]

Some good observation by you.
However I have some doubts. You have given the example of Infy and Maruti here.
Lets say you bought Infy at around a 52 week low. Now my question is Infy was once growing at around 30%, then growth slowed down to 20% and keeps falling. Now it may stablize and grow but at a lesser pace. Then the stock might get trade at a lower PE and so on..We know that this story continues in Nifty/Sensex stocks, I dont know the exact churning ratio but good amount of stocks go out of the indices every year. Also every bull run has new leaders and stocks. So how can we make decent money if we buy the matured stocks from the indices, (which may fall out of the indices) and hold them for a decade or so

This is exactly why I think this article just may have got it right. There is no buy-and-hold (what investors usually do).

http://www.traderji.com/fundamental-analysis/93826-buy-hold-investing-dead.html

 

[jamit_05]

Some good observation by you.
However I have some doubts. You have given the example of Infy and Maruti here.
Lets say you bought Infy at around a 52 week low. Now my question is Infy was once growing at around 30%, then growth slowed down to 20% and keeps falling. Now it may stablize and grow but at a lesser pace. Then the stock might get trade at a lower PE and so on..We know that this story continues in Nifty/Sensex stocks, I dont know the exact churning ratio but good amount of stocks go out of the indices every year. Also every bull run has new leaders and stocks. So how can we make decent money if we buy the matured stocks from the indices, (which may fall out of the indices) and hold them for a decade or so

Firstly, what is your CAGR expectation when you use the term "decent money".

Secondly, Diversification is a very important concept, without which one won't survive the investing-game. Sure stocks get thrown out of the index. But, you may not have invested more than 3% in each. Then how much do you stand to lose? On the brighter side, several stocks get doubled almost every year. This time IT stocks have done exceedingly well, along with pharma and FMCG.

Finally, you won't make money every year. That is assured too.

 

[praveen taneja]

Bro what are the main things to check before making investment in certain stock????

On me I only check news flow, P/E, EPS and BV balance tukka

 

[jamit_05]

Bro what are the main things to check before making investment in certain stock????

On me I only check news flow, P/E, EPS and BV balance tukka

Looking at one or two particular ratios would be misleading. Company CAs know very well how to dress up a balance sheet.

The business should be "simple" to operate, this gives the investor a certain amount of predictability. For ex. Reliance Industries has a very complex business model and so does Grasim, but Gail is pretty simple. So, I would expect that the EPS for Gail would be fairly predictable as compared to Grasim or say Cairn.

After that, the ratios should also be decent.

 

[cvas]

ok, so HDIL is doing pretty well these days. Especially after a truckload of foreign investment. Signs of recovery?

 

[jamit_05]

ok, so HDIL is doing pretty well these days. Especially after a truckload of foreign investment. Signs of recovery?

Property stocks should not be a part of core portfolio. One could purchase a small amount on whims/instinct, but must be assured that no amount of calculation will bring any sense to the chaos that such companies operate in.