I am one of those newby investors who started investing in March 2020 and have become a butt of jokes since March 2022 . I am a late entrant in stock market going for equity investing at the ripe old age of 36 .
I am starting this topic to keep track of my way of thinking as it evolves with experience in the market .This is going to be a rambling account but I am no writer …so if someone is reading this, accept my apologies .Comments and observations are welcome .
In January 2020, some of my colleagues had started revealing their successful investments( one guy having turned his 5K to 30K via Adani Green shares) and others were opening their accounts . I decided to join in and had initially decided to invest about 50K(The ridiculous bonus amount that year from my employer) by March. My idea was to generate extra income to buy books(my lifelong hobby).
However, even before my demat account had become active Corona caused the Nifty to hit LC . This saved me from a lot of heartburn and gave me easy confidence by May, that whatever I picked (PE<20 ,Book value near price or lower) can only go up as Corona must go sometime or other and normalcy will return . Initially this meant mostly PSU stocks and ITC\TCS like stocks and I sold on 10-20% profit. After a few months I had come across Valuepickr and this site has the unique feature that allows you to learn for most stocks i.e… what has happened in the past. Sure , one can learn that by going through AR’s, con-calls etc. as well but these discussion threads were much more juicy and one could also see what investors thought in 2015 about company X, has become true in 2017 or not . I also learned reading balance sheet and what screener could show.
Now as I made profits, my confidence grew and I decided to really invest in stock market. Even then I have only invested less than 20% of my savings in equity directly .Being a lifelong FD lover (I know its fullish) , I just can’t stomach too much volatility till now .
In past 2 years, I have seen my invested amount X , grow to 2.2X and fall back to 1.7X but this is not a surprise. My target is to grow my portfolio at about 26% each year and I am still ahead. Secondly, on bad days I tell myself that unless I exit the market I have not made any profit or loss . That is easy till the time portfolio value stays > 1.1X(FD returns assumed on my invested X) .
I have read a few books (Graham, Lynch, Ivanov, Greenblatt etc.)and gone through many internet blogs and resources and my conclusion is … “As many opinions, So many ways” .
Ultimately, its all about what one is confident with without losing the peace of mind . Its about learning about ones own temperament.
This learning about oneself only comes with time in the market and is called experience by others . Its no good thinking one should buy TCS or Vaibhav Global etc. and stay put like Buffet or Mr. Kedia.
Initially I checked my Demat account like a cricket scorecard and took intraday trades without knowing any technical . After a month I gave up intraday (lost 2K or so) and switched to swing trades . For next 6 months this went very well but by then I learned a bit about judging companies and that meant that I could not buy anything but very safe stocks(cautiousness) still well below March 20 price.
So I decided to go for longer term investment and I am still in this stage but what constitutes long term for me is changing with time .Earlier in 2021, I would sell most of my stocks after 3 months and portfolio churn was very heavy , but now this has reduced a bit helped by some experience and current market situation where nothing seems to be good enough for a price rise .
I have gone through hundreds of stock threads in VP & screener and nowadays I do read some recent con calls & ARs before taking the jump. I still do not invest too much in a single stock to justify the rigor of a forensic audit of BS(don’t know how to) or reading of 10 year old ARs . I depend on the accumulated wisdom of VP for that purpose .But I go through each Concall of the Smallcap companies I invested in. I do not do that for ITC or Infy like behemoths.
Overall, I think that now I have toughened my stomach a bit and is fit for long term thinking over companies . But I am yet to reach that level where I can do concentrated investment. I still fret too much for that. Its OK to see a 2% drawdown of portfolio because of a stock that has gone down 40% in price for no fundamental change but I would lose my sleep if I allocate 10% to that stock .Someday I hope to get that level of Zen… but not yet…not yet …
I will post my current high conviction stocks and present way of thinking on later posts…