Good learnings posted by you…
The most important mistake to avoid mentioned in the Lynch book is to stay away from the hot stock in hot sector. When Nykaa IPO came, platform companies was the buzzword and froth was clearly visible in the narrative. I think some analyst made projections for 2050 ( or sometime nearby) for Paytm or Nykaa. When something like this happens, we have to consider it as an obituary for the company or companies concerned.
And when the pendulum swings, it goes to the other extreme. So on the way down too, these kind of hot stocks in hot sectors can surprise.
Averaging down in a stock which has a clear down trending chart is fraught with risk… Again Lynch mentions about “How low can this go” anecdote and example. These can go much lower than we expect.
If you have read One Up on Wall street once, or maybe twice, I would suggest you to read it a couple of more times… Every time I read the book again, I love it more. Because of the wisdom imparted and the sheer beauty of the written word. I must have read it more than a dozen times and I can find parallels (to his examples) happening in the markets happening all the time .
One thing to remember in markets is never to get disheartened. Keep learning from success and failure stories and be ready to latch on to the next winner. (One way to do this is to read the full thread of big winners Ajanta, Avanti, Laurus etc and big losers e.g DHFL, Yes bank, on VP and try to understand investor psychology at each juncture of the stock’s journey. Benefit here is that its all documented here. ) Markets keep giving loads of chances every year or two, if we know how to take them. Best of luck on your learnings and journey.
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