@ Vivek Gautam - Those were exciting times. You could find gems at screaming undervaluation. Manjushree went up 3-4x in 3-4 months from 32 to 100. The business has continued scaling up leaving everyone behind - they are the largest in Siuth Asia - Mr Market taking it to now 300+ or 10x in 5 years. Even though we rejected Manjushree and moved on to much higher (ROCE - Cost of Capital) spread businesses like Mayur and Astral - which have certainly done better - who will not take a 10x in 5 years - much better than the 10x in 10 years that most folks are happy with.
Just goes to show if we are early into a stock idea, we just need to bet on honest management, who are good at execution, in a business that can scale (even if the economic characteristics are average).
@ Subash - You are right about no short cuts. But what you have listed will end up scaring off any newbie. Your list is a whole investing competence life journey … getting to decent competence level needs much lesser but single-minded focused effort.
@ Nikhil & Sathya -
below - only for consumption of the new learners
My honest experience.
The reading list need not go beyond 3-4 books to reach decent competence level - where you can dissect any new promising opportunity - that will hold up to scrutiny from any seniors. Start with Peter Lynch which reads like a novel and dive into Pat Dorsey. Immediately take up 1 live stock/business idea for dissection. Along the way imbibe all that is there in the PAT Dorsey D-I-Y Template, and get into practicals - discuss the business/domain/competition/sustainability of competitive edge why or why not. If performance has been good/improving so far, why will the company be able to sustain - or not - that’s all that you need to really answer. From Intelligent Investor - just grasp the central concepts of Mr Market and Margin of Safety - get these two firmly embedded in your head. Everything else is already/better covered in the other texts mentioned. Get interested in the Business - not so much the stock.
I suggest please ignore big reading lists now for next 2-3 years. Get practical and more practical, churn more stocks and read more Annual Reports - 100s of them. Many learners prefer to read more investing tomes - which essentially rehash the same 4-5-6 basic principles in different insightful ways and read far too less ARs. That’s a big big mistake …and to my mind (intellectual, but) lazy effort. Once stuck in that rut of endless reading, they find it difficult to make the transition/connect the dots - from theoretical to practical constructs - which is really the essence - as any Senior Investor/Fund Manager will tell you.
Catching businesses in transition - is key to superior performance. That is what Ayush has taught me with endless patience. You don’t get a picture-perfect textbook case like Mayur often. Catching that business while in transition to the next level - having a hypothesis why for this business the ODDS are stacked in favour - will require you to connect the dots - transfer theoretical constructs to the practical level.
Connecting the dots - getting the 100’s of mental models in - that’s the ART side of Investing - will come only from churning more and more stocks/ideas/real life businesses in front of you. Along the way - sure do read up a couple of nice intellectual books - to spur and broaden your thinking - again much of which we continue to capture at VP Capital Allocation forums - as we are maturing/refining what we have done in previous years, and progressing on the journey!. Business Value Drivers, Capital Allocation, and the ART of Valuation threads capture I would say 90% of our learning in last 4-5 years - unfortunately, you don’t find most of these central concepts in the investing textbooks listed. Yet, no regular ValuePickr will deny that these have been central to the VP Portfolio selections/performance - these are all that really mattered.
Pardon my rants. This is a favourite rant of mine - as I See 80-90% of folks don’t take the trouble of going deep into a business or a few businesses = and therefore continue growing every 6 months , a year. Rather they keep on spraying the same generalisations around or quote Guruspeak in sometimes right and sometimes entirely the wrong context! And we are dismayed to see the lack of growth.
No need for any defense from anyone on this. This is only aimed at wannabe analysts. Those who think they can do as good as any analyst in the market. Don’t quote back full time job and lack of time. Its never a lack of time - it’s your single-minded focus - and keeping things simple. Investing is pretty simple end of the day - just 5-6 central concepts - we somehow love making things complicated
If you follow the process, and are not in a hurry ( to make super-normal profits), you will be able to stay away from fear and greed. I don’t agree you have to make lot of mistakes to learn. A few mistakes will be inevitable when our temperament gets the better of our better judgement - and we jump in fear and greed.
Most of the mistakes come from fear and greed - the more you will take it slow, stay true to the process, stay humble and open to learn, respect what Mr Market is telling you, and continuously seek out folks more experienced/smarter than you - you will commit very few mistakes. Beginners luck would be with you - believe in it
I was fortunate to have folks like Ayush and Hitesh and Abhishek around me when we started, and Mr D & Mr M whom we sought out. Our journey is all documented here in the various stock discussion threads. I made few mistakes - the first was Reliance Power IPO (pure humongous greed and paid a good price for that), Laxmi Energy & Foods (greed), Riddhi Siddhi Gluco Biols (greed+inability to dissect the real scenario playing out). You get the picture!