My key learnings are:
1. Do a lot of diligence on management. Biggest losses come from management which are not looking out for minority shareholders. There are many ways to judge this.
2. Only invest in stocks where you understand the business. If you don’t understand the business, don’t invest.
3. It is good to average up on a stock as confidence builds in a company/stock. Many times we anchor ourselves to the initial price and want the stock to come back to that price. However, if you can see yourself holding it 5-10 years there is no harm in buying more at higher price.
4. Mentally think through how you will react if the stock you have purchased falls by 10%, 20%, 30%, 40%. Do the reverse for stock that is approaching your sell price.
5. Know your stocks/business better than most. This means keep track of what is changing in that business/price and be willing to act.
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