1/n Do read this article. It's very important I would say.
I am a newbie compared to this gentleman writer. But I made few decisions to manage the fall so far both from an execution perspective & an emotional perspective. I could be wrong.
I have even before this had written down my process for core equity investment. I maintain one fundamental growth equity portfolio, a small momentum & a trading book.
I truly believed in equity debt allocation & stuck to in my core portfolio no matter what. It was painful.
3/n
I used to make weekly notes. I tried to do it daily. I made a plan as per reversion strategy to deploy cash into equities.
I tried to be as unemotional as possible. Infact I made sure to check my holdings on a regular basis & reiterate to myself to stick to the rules.
4/n
I am down considerably since Jan 2020. But not shaken yet. Yes at times there is an end I feel. But always stick to my rules.
Muhammad Ali said winners are made in the gym & not under the lights in the ring.
In good times raise cash, build buy lists & cultivate patience.
5/n
Mentally I am prepared for more than double the drawdown. For a period as long as 2 years as of now.
1 of the keys I think is to visualise the worst case scenario & what actions will u take if that occurs. Once you have visulaized that it will probably not come as a shock.
6/n
Also very important to remember -
They are old traders and then there are bold traders.
But there no old bold traders.
Mr Market can be merciless.
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Make a consolidated mail for them. And tag that mail in their inbox. For instance my wife has a tab "DV" & color code it. Do this for your sibling & parents if possible
3/ MY NSDL CAS statements get forwarded to my wife and her statement to mine. I have maintained sporadically though CAS statements in a google drive folder to which both of us have access. As investors your close ones should know every single investment you have.
Short notes from the book 'Dead Companies Walking' by Scott Fearon.
I think this is a must read book for all investors to understand when to stay away from a company even if you don't want to short it.
2/n Things go wrong more often than they go right. Failure is actually a natural - even crucial - element of a healthy economy. And the people who are willing to acknowledge that fact can make a hell of a lot of money.
3/n One of the most enduring & important business traditions is failure
1/n A look at the oldest companies & earliest traded stocks
The 1st stock exchange was established in 1602 in Amsterdam. It was made by the Dutch East India Company, chart below
The south sea bubble of 1720 can be seen. The company lasted under 2 centuries & finally went bankrupt
2/n Another company traded in Amsterdam was The Dutch West India Company which also went into bankruptcy in late 1700s. In the chart below we can see both the Tulip mania & the South Sea Bubble.
3/n But these two companies are no match for the oldest companies which exist till today. They could have merged. Some are listed via the new parent too. The types are:
2/n Being a govt doctor working on the field most of the time he rarely put in effort to do any detailed analysis. He tried his hand at a business & failed miserably. Went back to job.
His learning - give money to people who can run businesses efficiently.
3/n You can never create a business in 1-2 years. It takes decades. So why do you think you will make returns in a few months? He bought stocks with the expectation that for 5+ year nothing would happen.