Thread by @deepakshenoy

Five perils of momentum investing you cannot ignore ift.tt/2T1QzFW

To provide my addition to this. This is the actual performance of this in the @CapMindWealth PMS which @calminvestor runs at @capitalmind_in

@CapMindWealth @CalmInvestor @capitalmind_in This is post fees and charges and STT and all. But income taxes are separate. The point is this:

Read the article first. Too many people show you the returns first.

If you have been in the markets long enough, you know that every strategy will have its great days and horrible days. Usually both last for uncomfortably long amounts of time.

Sometimes you're the pigeon, sometimes you're the statue.

You can build stories in momentum, if you like. This is my account at the CM PMS. Since I also add money each month, the first stock was bought over a period time roughly 7 months (The "Avg..." is the average buy price)

Can say electric vehicles, great company, Tata as story.

But the perils are there: lack of a story you feel comfortable with.
Why did you buy?
Oh, it hit a new high.
That's not me. I sell at a high and wait for lower level

Sounds intelligent, but you mentally wonder how long to wait if he sold at 2000 and stock's now at 4000.

And @CalmInvestor is so right about the fear of being wrong. When a stock refuses to behave, you don't hold on until you're right; you walk away and find something else that's moving up.

It's all right to be wrong. Not so much to stay wrong.

There are different ways to make money from the markets. There are even ways to just derive satisfaction from telling people that someone else's strategy doesn't work, which is fine if it makes them happy.

Everyone gets what they want from the market. (Seykota)