25 Lessons – Great Investing Wisdom

First published by me on May 11, 2018

Here is a brilliant tweet from @jposhaughnessy. I have added to it some of my commentary. In the note, he touches upon the classic challenges – uncertainty, fear, under-performance, the big new industries, standing out, biases and luck. It is great investing wisdom. 

Jim O Shaughnessy My Thoughts

I’ve added a few of my thoughts, and an Indian angle.

jainmatrix investments
jainmatrix investments
jainmatrix investments
jainmatrix investments
jainmatrix investments
jainmatrix investments

Here are the links that Jim had referred to in case you are interested

Hope you liked this. Do comment below.

Punit Jain

DISCLAIMER:

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JM at punit.jain@jainmatrix.com.

When to make a stock SELL decision

First published July 8, 2014

With the Indian markets pushing to new highs over the last 6 months, its time to ask a loaded, important, yet difficult question.

When should you SELL your stock?

I assume here that you are a long term investor. You are growing your equity portfolio from a minimum 3 year perspective and want to see it meet your big life goals.

Of late you would have looked at your nest egg with a glad eye. In the last 6 months, chances are you have been surprised at the excellent performance of these stocks. It is in these very happy times that you should note the importance of a Sell decision. After all it is very difficult to Time the Market. In stocks it is important to think contrarian. It makes more sense to decide for yourself on your sell decision, execute on it and be satisfied with it.

On a personal note, my favorite holding period for a stock is forever. This is a wisdom gained from the greats of investing. However there are some practical and real situations that we can face. The Indian market is more volatile than the ones the greats live in. These are the situations where you need to think of the Sell decision, and take a call. Here they are:

1. You need the Cash urgently 

The best of well laid out plans can get interrupted. It could be a medical condition. Or education admissions time. Or it could be a desired asset that has become available. Go ahead, and sell. You have earned the luxury of encashing your Demat balance.

Embed from Getty Images

2. Maintain your asset allocation 

Asset classes are varied such as Direct Equity, equity mutual funds, debt/ bond mutual funds, Gold ETFs, real estate, fixed deposits, insurance and cash. You may in consultation with your ‘Investment Adviser’ have agreed to maintain your asset classes in a certain proportion. So when the time comes to re-allocate, its possible that selling of Equity is the call by the agreed formula. This is good, and can help you align your portfolio risk with your personal risk appetite and objectives.

3. Switch to a stronger share 

For a long term investment portfolio, your objective should be to enter into investments with a chosen set of stocks. Read up and track them. And always be on the lookout for a better investment idea. If one comes by and you are convinced, make a switch from a weaker stock to a stronger one. It could be from the same industry. Or even an industry change. You now have a stronger stock portfolio.

Embed from Getty Images

4. Tax considerations 

In India any listed stock investment when sold at a profit after holding for one year constitutes a Long Term Capital Gain, which is not taxed. The one year period should be noted & considered before deciding to Sell.

Sophisticated investors may also consider the converse situation. A Short Term Capital (STC) Loss can be declared in case a loss is booked in an equity investment for a period less than one year. This can then be set off against a STC Gain, in the same year or (by carry forward) in the next few tax years. Speak to your Chartered Accountant before using this strategy.

5. Exceptional gains from a stock 

If you are invested for the long term in a number of stocks, you may be witness to a lot of stock specific activity that can be quite interesting. If your stock has recorded massive recent gains, which are difficult to justify on the basis of fundamentals, it may be time to book partial or even full gains in the stock. Things happen. Shares can appreciate suddenly and unexpectedly. This is a good problem to have. Greed may stop you from doing this. This is where good advice from your Equity Service can be useful.

(JainMatrix Investments is an Equity Service that tracks 3 portfolios for its subscribers, the Large Cap Portfolio 2014, the Mid Cap Portfolio 2014 and the Post Elections Investment Seven)

6. Business has deteriorated (but does not reflect yet in the price) 

You got some good equity research, assessed an opportunity and the risk, and decided that XYZ stock was a great investment. Six months later, something unexpected happened. Maybe one of your investment assumptions went wrong, or an industry specific regulation change, or such. And the future doesn’t look so good for XYZ now. Review the situation with inputs from your Equity Service. Bite the bullet. If justified, take the Sell call. Don’t get married to your stocks. You have to be solid yet nimble in your long term investment decisions. Get out quickly to minimize your losses.

Embed from Getty Images

7. The share price has fallen sharply 

Markets, and shares, by nature are volatile. If the share you hold has seen a sharp fall in price recently, this needs to be analysed. If the fall is due to temporary reasons, like some bad publicity over a minor issue, a temporary technical correction or such reason, then it can be ignored. It may even be a good point to accumulate more shares. But if the reason for the fall is found to be due to a ‘fundamental’ deterioration, then again it may be time to exit.

8. The market changes direction for the worse 

Sometimes the market reaches an inflection point and changes direction. If it is positive like the recent elections schedule announcement then its good for your portfolio. But if it is negative then it may be time to exit, at least partially. This is a tough call to predict. Here again, you can review the situation with inputs from your Equity Service.

Having said all this, it is in the nature of stocks to see long periods of both under and over performance. The market is very very inefficient, and this gives good value and growth investors in India lots of opportunities.

The Converse, a few reasons why you should NOT Sell your stocks in these times:

  1. You can get 10 baggers only if you leave your high potential appreciating stocks alone and let them fly.
  2. If the Modi government delivers on their potential, promise and visibly bold approach, the party for Indian investors has just begun.
  3. For a long term investor, a short term correction of say 10% is not something to worry about. Markets move in a ripple or zig-zag fashion in the short term, but pan to the multi year view, and the Indian indices haven’t looked so bullish since 2004-05.
  4. Valuations for the Indian indicies are just above the average. If the investment cycle is kick starting again, aided by a Modi government, earnings will accelerate and valuations may stay just above average even if the Indices forge ahead sharply.
  5. Indian Retail, hurt by the dull period of 2008-12 and big damaging overpriced IPOs, is just about starting to join this market rally, if MF numbers are anything to go by. Picture abhi baki hai mere dost.

Overall Opinion

  • Stay positive.
  • Book partial gains in some stocks.
  • Temper future expectations from Indian Indices after the recent run up.
  • Watch for cues from the budget.

But as usual there are no easy answers.

Happy Investing,

Punit Jain, JainMatrix Investments

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Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent Financial Expert/Advisor. Either JM or its affiliates or its directors or its employees or its representatives or its clients or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior to publication. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Equity Portfolio Thoughts – Control, Wealth and your Reflection

——————————————————————————————————-

Date 28/01/2022, first published 23rd March 2015  

Summary

  • An Indian investor is free to invest in any of 5000+ stocks listed on the exchanges.
  • He may have a range of needs in his equity portfolio, which we have captured in a hierarchy.
  • He may like to progress on this range and exercise his choices in a calibrated fashion

Introduction

I was speaking to an investor a few weeks ago. A busy executive, he had a medium size equity portfolio by value. But I was astonished to see that he had almost a hundred shares in his Demat account. And he looked at me and asked, “So what should I do with my portfolio?” I was of course on a tight time schedule, and ran through my 4-5 step standard template for portfolio discussions.

A little later, on reflecting on the above question, I realized that the answer to the above question can be very nuanced. And really there can be multiple approaches and answers to this question.

Let’s step back to the very basics of the question, what does a person need from his equity portfolio?

An Equity Portfolio – A Hierarchy of Needs

To answer this question, we need to draw parallels from the Maslow’s hierarchy of needs, and it is summarized below. Expressed simply, every human can have a number of needs, but at different times in his life, and in different situations, the needs change. Generally speaking, the needs follow a hierarchy.

Portfolio hierarchy, JainMatrix Investments

An Equity Portfolio – A Hierarchy of Needs. Source: JainMatrix Investments. Click to enlarge.

In a similar way as Maslow’s needs hierarchy, a person’s equity portfolio reflects different needs in investing and his ability to focus efforts and achieve his personal needs and objectives. Here are the levels that I am able to present:

  1. Gain Control: I have seen many equity portfolios that are nothing more than a legacy of 15 years of sporadic investment enthusiasm. With funds available and a pep talk by anyone, individual investors may make a series of purchases. This may be followed by 6 months of watching the results unravel, followed by 4.5 years of inaction. All of which may be repeated again. As a result the shares may be an uncoordinated mass of choices from the past. Selling is more difficult than buying.
    • It may seem that ‘Do nothing’ is an option here. After all these stocks can sit in your portfolio for another 5 years, and your carrying cost is as less as Rs 1000/year. Wrong. If you are not in the right stocks for a ‘long only’ portfolio, chances are that over time your portfolio will decay in value rather than strengthen.
    • The task of the Investor (along with his portfolio adviser) would be to try and gain control of this portfolio. The basic issues here are –
      • 1. What’s the objective and primary need of this portfolio?
      • 2. How many shares are we comfortable with?
      • 3. Whats the risk appetite and profile of the investor?
      • 4. How do we achieve these 1, 2 & 3, and in what time frame?
    • Also essential to Gain Control, is the need to identify and exit the low potential stocks.
    • In my opinion even stable long term (example – avg. holding of 10 years) investment portfolios should be reviewed once a year to align with macro/ sector events and to evaluate opportunities.
  2. Absolute Returns and Profits: Typically equity trading has a very clear objective, of maximizing returns from any trade. Similarly we obviously invest money with the plan of gaining profits and building wealth. The question here is, over what time span? One hour? One week? One year? A decade? New investors are typically looking for a simple quick absolute return.
    • For an investor, the portfolio strategy here is to simply find the shares that have a high confidence rating of highest upside potential. To find such shares is an ongoing exercise. Many successful finds for example may achieve their potential and may not be investment worthy any longer. Others may continue appreciating for decades. However this exercise is also fraught with risks. Many highly rated shares may fail. Or a sector may be affected by an unexpected event.
    • Its critical here to not just understand a target investment firm for its financials, management and business assets, but also the sector and macro context of this firm.
  3. Safety and Stability: Very soon a trader/ investor may realize that just desire for profits and available funds is not enough. One has to approach investing with a safety plan, and temper high profit expectations with realistic back up plans and a safety net. Am I taking too high a risk, with the possibility of a big loss? What’s my worst case scenario? What risk am I comfortable with? And for how much of my portfolio? With some experience, an investor is able to balance the profit expectation with an understanding of risk, and build his checks and balances.
    • For some thoughts on Risk v/s asset classes see LINK.
    • Every asset class has an associated risk. And a good fundamental researcher can assess and understand this risk well. So for a long term equity investor to have a 100% returns per annum expectation is asking for too much. He may actually get it but only once or twice in a decade. And this may soon be followed by a hurtful loss, equally unexpected.
    • A good equity Portfolio should be able to limit equity holdings within individual firms and within a sector, and also align the market cap focus with risk profile such as Safety – large caps, Higher risk – mid caps and Aggressive – small caps.
    • Embed from Getty Images
  4. Belonging: Community, Region, Profession, etc: At another level of the investment hierarchy, a wealthy investor may start thinking of his investments not just as a means to grow wealth, but as an expression of his place in society. This means the person is focusing a part of his funds towards the things that are important to him, an extension of his personality.
    • This could perhaps mean that for a Bangalore based person like me, I could invest in firms like Titan, Brittania Industries, BF Utilities, Mindtree, etc. which are local firms. I may get a feeling of pride to see these firms doing well, and even though a small shareholder, would be sharing a part of a big success.
    • Similarly as a former software executive, I may like to invest in a few software small caps that I not just understand well but also hope that my ownership in a small way can contribute to its success. It’s more about encouragement and support than just returns.
    • In terms of an exclusion list, a lot of people may be uncomfortable about investing in sectors such as cigarettes and liquor/alcohol. Its really upto the investor to be comfortable with his investments, right?
  5. Self Actualization: A wealthy investor may actually decide to focus his funds towards doing real good, or addressing problems of society. In the past the only way one could do this was in making donations to NGOs, and Education or Religious Trusts. In today’s economy there are several listed corporates that address the needs of the weaker sections of society, or of the environment, and still have an objective of making profits for shareholders. I see no essential compromise in achieving both these objectives. There is, possibly, “A Fortune at the bottom of the Pyramid”.
    • I believe firms in sectors like education, environment, renewable energy and some NBFC’s in housing finance and micro-finance may be addressing and solving large problems of society.
    • Readers are invited to revert to me with their ideas or suggestions of such firms that they have come across.

In Conclusion

Different investors may have vastly different needs in their equity portfolio, and we have mapped these in the form of a simple hierarchy. Many of us could be frozen in inaction at Stage 1 of this hierarchy. Others may have progressed along the stages and gained control and solid wealth from it. Some may actually have a portfolio that expresses their hopes and dreams for their society. Its essential for an Investor to reflect objectively about his own portfolio and think about improvements.

So where are you in this hierarchy? Drop me an email to see if I can help you with aligning your Equity Portfolio to your own needs. See Portfolio Review for a short description of our services.

JainMatrix Knowledge Base:

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Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. Many firms are mentioned in this report, and it should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Either JM or its affiliates or its directors or its employees or its representatives or its clients or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior to publication. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

GREAT INVESTING WISDOM / 23 lessons I learned

23 lessons I learned on my path from $0 to $2M in 8 years / Mar 14, 2021

Here is an excellent tweet. Thanks Danny Baldus-Strauss @BackpackerFI. I’ve added my commentary.

Danny Baldus-StraussMy Thoughts
1. “Play long term games with long term people” @naval Anything that provides instant gratification is probably bad for you and your wealth. Anything that provides delayed gratification is likely good for you. There’s no such thing as “get rich quick” or “overnight success”  
Truly agree.
2. “Focus on the $10K+ questions, not the $5 ones.” @ramit Spend time focusing on the big decisions like asset allocation & building good credit rather than the $5 Starbucks decisions. Set an hourly rate for yourself. Outsource everything that’s under that rate to save time.  
Lets say you earn Rs 60,000/month. That’s 2,000/day or 250/hour. Outsource any work or task if it can be done for less than 150/hr.
3. Invest early and often. Time in the market > timing the market Consistency is the name of the game. Automate everything. Sometimes investing can be boring and that’s a good thing. Early on, investing more and often is far more important than yield or portfolio performance.  
In investing, smaller and earlier is better than later and more.
4. Learn to avoid lifestyle inflation. You really do need less than you think, trust me. Get out in nature, and you’ll see. Freedom + time are worth much more than nice cars and clothes. Keep your lifestyle flat even as you get promoted and make more. Invest the difference.  
5. You can get rich at your job, but you only get wealthy at home. 9-5s build necessary cash flow to consistently invest. But your employer isn’t responsible for your wealth building, you are. You are the director, try to do things every day that build your future.
 
6. Live in the present, while still building and planning for the future. The point of having $ is to not have to worry about having $. If you’re miserable while building wealth, you’ll be miserable when wealthy. If $ is all you think about, you’ll miss the present moment.  
Or Rupees
7. “You’ll never get wealthy renting out your time” @naval  9-5s can be great and necessary tools for building financial independence. But have an exit plan if you truly want freedom over your time and energy. For every 9-5, you have an entrepreneur to thank for your job.
9-5 is important to learn skills. To do things. But you are doing them for others. At some point, you should start doing things for yourself.
8. “Cut expenses in areas you don’t care about so that you can spend extravagantly in areas you do” @ramit You don’t need to live frugally your entire life to become wealthy. Cut out what doesn’t bring you immense joy and don’t feel guilty for splurging on things that do.
 
9. “Every action is a vote for the type of person you wish to become” @JamesClear  Your net worth is a lagging indicator of your financial habits of the past few years. Start now by “placing votes” every day for the financial future you desire. Habits compound just like your $.
 
10. “Money’s greatest intrinsic value is its ability to give you control over your time” @morganhousel Time and freedom is what you’re after. Nice things, looks, social validation … they all fade away. Time does too, but at least you can control it through financial freedom.
 
11. Generating income is more important than cutting expenses, but it’s a balance. Cutting expenses has a floor, you can only cut out so much. Generating income has no ceiling. Promotions, side gigs, investments, and business ownership have no limits, only you.
Stock market investing too has no ceiling. Rs 500 invested in 5 stocks can lose you Rs 500. They can also gain you Rs 10,000 (over a long time).
12. Mind, body, and business are connected. Wealth starts in the mind. Being broke is also a mindset and identity. Healing what’s in your mind, becoming aware of your limiting beliefs and toxic thoughts, & taking care of your body, spills over into business and wealth.
 
13. Be an optimist. Being a pessimist rarely lines your pockets. This doesn’t mean it’s ok to be reckless and ignore risk. But envision a better future and invest in it. The point of maximum fear is the point of maximum opportunity. “Be greedy when others are fearful”.
This is so important. Long back I used to be hopeless and negative. But positivity can be learned and practiced. I do it.
14. Invest in your greatest asset – You! I’ve invested tens of thousands in my own education, retreats, and men’s groups. The ROI has been incalculable. Don’t be cheap when it comes to your self-improvement. You are your only asset that is truly recession proof.
Always keep learning. Asking. Reading. And changing.
15. Money is made in the waiting. Sometimes good investing can be boring. Sometimes it’s more about the stomach than the brain. Sometime it’s more about inaction than action. Tune out the noise and play the long game.
 
16. Volatility is not the same as risk. It’s the price you pay to outperform. And it’s a mechanism that “transfers wealth from those who can’t handle it to those that can” @BrianFeroldi
 
17. “Focus on the future – not as in the next year, or even 3 years, but as in the next decade, or even two decades. Focus on the world-changing trends that will occur, irrespective of recessions, boom and busts, interest rates, even wars.” @OphirGottlieb
This is hard. Its uncertain. But so important.
18. “Only when the tide goes out do you discover who’s been swimming naked” @WarrenBuffett  It’s only after crashes and bubbles pop that people realize how over-leveraged they were. It’s only after one loses a lot of money that they realize how much needless risk they took.
It surely takes several cycles of boom and bust to really get this.
19. The way to create life changing returns is to hold onto your winners. You want to be in great companies in the first inning, out by the 7th. Pay up for quality and only invest in the very best businesses.
True about Long Term Investing.
20. Tune out the noise Financial media makes money on your fear. People on TV or on social media have very different backgrounds, risk tolerances, time horizons, and amounts invested than you. Take it all with a grain of salt and stick to YOUR plan and what works for YOU.
Note that People on TV or SM may have very different incentives than you. Why should they help you become wealthy? Are your objectives aligned?
21. Realize that stocks take the stairs up and the elevator down. Risk can come in a flash when you least expect it. So use the good times to plan for the bad times. Expect the best, but prepare for the worst.
 
22. “You do not rise to the level of your goals, you fall to the level of your systems” Goals help with process, but it’s your systems that allow you to make real progress. Set up your investing rules, create a non-negotiable morning routine, automate your finances.
 
23. “People who are right a lot of the time are people who often change their minds” @JeffBezos  Don’t get married to your stocks or portfolio. Embrace conflicting opinions to understand the other side. Humility is key. It’s ok to be wrong, but staying wrong is even worse.
Its true, of course. But I’m still grappling with this. This also means that whatever I know is always up for discussion, and can also become wrong sometime.

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

25 Investing lessons – Great Investing Wisdom

Here is a brilliant tweet from @jposhaughnessy. I have added to it some of my commentary. In the note, he touches upon the classic challenges – uncertainty, fear, under-performance, the big new industries, standing out, biases and luck. It is great investing wisdom. 

Jim O Shaughnessy My Thoughts

I’ve added a few of my thoughts, and an Indian angle.

jainmatrix investmentsjainmatrix investmentsjainmatrix investmentsjainmatrix investmentsjainmatrix investments
jainmatrix investments

Here are the links that Jim had referred to in case you are interested

Hope you liked this. Do comment below.

Punit Jain

DISCLAIMER:

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JM at punit.jain@jainmatrix.com.

How much is Conviction and Confidence worth?

Hi friends, here’s a small story I’d like to share with you.

Over a year ago, JainMatrix Investments (JM) did a research and found an interesting investment opportunity. It was a mid cap firm. JM then went ahead and created a detailed 9 page equity research report and shared it with its subscribers. They projected a target price with a 50% gain in 2 years. They were convinced that this was an excellent firm, with good prospects. In the next 6 months, the share did well, it appreciated 60%, and seemed to justify the recommendation. The target price was achieved, but JM continued to be positive about the firm and retained a BUY on it.

Then things changed suddenly. There was a ‘bad news’ article about the firm in the papers. It contained unconfirmed but serious allegations. Suddenly there was uncertainty around the firm. The share price started falling. Market pundits all said they were unsure about the firm. Every action of the firm became suspect. Management interviews and press releases were cast aside by investors. Within weeks, the share price plunged 65%. In such a situation most investors would buckle under the pressure. Mutual funds cannot allow such losses on investments. HNI investors in the firm panicked. FPIs demanded investor calls and worried about everything. Naturally everyone was worried.
In share market parlance, this is called a Falling Knife.

At JM, the approach is to analyse such situations from the fundamentals and find the facts out of the news flow. The recent quarterly results of the firm were excellent. The stated 3 year vision was taking shape. There is normally no reason to disbelieve management statements and official press releases. Most of the rumors were vague, difficult to disprove and causing more controversy. Its possible that share market operators may have grasped this opportunity to drive down the price. But this can only be done for a short period of time.

It requires a lot of character to stand up to a Falling Knife. But the analyst at JM was sure. So JM advised their subscribers to hold on and not be swayed by the price movements and controversy.

jainmatrix investments

After the 65% fall, the share stabilized. It then started rising again. The JM subscribers, who were invested and took our advice, saw their notional losses disappear. The brave ones actually took advantage of the fall and saw a nice profit in a few weeks.

This brings me to my question,

How much is Conviction and Confidence worth to an investor in the stock markets?

Any answers, my friends?

Feel free to add your comments, below, to this post.

Regards,

Punit Jain, founder JainMatrix Investments.
PS – This note has been created as marketing and educational content to help investors. No security is mentioned here. Such a situation can arise many times in the stock markets.

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012.

This note has been created as educational content to help investors. No security is mentioned here. Such situations can arise many times in the stock markets. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

Why are Indian stock markets attractive for Investments?

In this 5 minute video, JainMatrix Investments founder Punit Jain presents a few reasons for investing in Indian stock markets. This is part of the Investor Education section of http://www.jainmatrix.com.

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DISCLAIMERS

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Punit Jain is a registered Research Analyst and compliant with SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.