MY MISTAKES IN STOCK MARKET 🧵
Purely based on my 8 year experience in the market. Learnings from zero. Might have some very basic mistakes and learnings, but it’s a journey of very hard learnings
Purely my learnings
@dmuthuk @Vivek_Investor
#Investing #StockMarket #Trading
Purely based on my 8 year experience in the market. Learnings from zero. Might have some very basic mistakes and learnings, but it’s a journey of very hard learnings
Purely my learnings
@dmuthuk @Vivek_Investor
#Investing #StockMarket #Trading
1/ Having No Plan
Started investing in stocks to make money. No Plan, No Goal, just to make some money
Used to buy when I had money & sell when I needed it. Often, the returns where 2-3 digit & I made 100s of trades to achieve
Learning:
SET A GOAL & KEEP INVESTING TO ACHIEVE
Started investing in stocks to make money. No Plan, No Goal, just to make some money
Used to buy when I had money & sell when I needed it. Often, the returns where 2-3 digit & I made 100s of trades to achieve
Learning:
SET A GOAL & KEEP INVESTING TO ACHIEVE
2/
No Capital Allocation
Had not learnt basics of capital allocation, believed all stocks are the same (Small-mid-large cap)
Result, initial portfolio had 18 small & 2 large caps.
Learning
Learnt the hard way during the 2017-18 small cap crash to allocate capital wisely
No Capital Allocation
Had not learnt basics of capital allocation, believed all stocks are the same (Small-mid-large cap)
Result, initial portfolio had 18 small & 2 large caps.
Learning
Learnt the hard way during the 2017-18 small cap crash to allocate capital wisely
3/
Everything under the moon
Followed stock suggestion over news & invested in every stock. At a point had 52 stocks with limited capital. Even if stock went 100% up, never made big money
Learning - It's not the qty, it’s the size of investment that matters. Money makes money
Everything under the moon
Followed stock suggestion over news & invested in every stock. At a point had 52 stocks with limited capital. Even if stock went 100% up, never made big money
Learning - It's not the qty, it’s the size of investment that matters. Money makes money
4/
Chasing the upward stocks (Ruchi Soya)
With FOMO effect, used to run after the stocks moving in circuits. Wanted to follow the herd & get rich quickly
Learning - Never chase a stock, Infact never buy a stock at any price. Every stock is bound to get back to sanity some day
Chasing the upward stocks (Ruchi Soya)
With FOMO effect, used to run after the stocks moving in circuits. Wanted to follow the herd & get rich quickly
Learning - Never chase a stock, Infact never buy a stock at any price. Every stock is bound to get back to sanity some day
5/
Chasing the falling-knives (Sanwaria)
When this stock fell 50% from 30 to 15, I thought it was the best opportunity and kept on chasing and adding the stock till Rs.6 levels.
Learning - It’s a trap to chase falling knives without understanding the basic fundamentals
Chasing the falling-knives (Sanwaria)
When this stock fell 50% from 30 to 15, I thought it was the best opportunity and kept on chasing and adding the stock till Rs.6 levels.
Learning - It’s a trap to chase falling knives without understanding the basic fundamentals
6/
Fell in love with a stock (DHFL)
Had this one portfolio stock which I loved (everything rosy till that one day). Once, had 80% profit in the stock & finally exited at 80% loss as I couldn't accept losses early
Learning - Never Love a stock, always analyze regularly
Fell in love with a stock (DHFL)
Had this one portfolio stock which I loved (everything rosy till that one day). Once, had 80% profit in the stock & finally exited at 80% loss as I couldn't accept losses early
Learning - Never Love a stock, always analyze regularly
7/ Dump Lumpsum
Used to dump lumpsum in the markets when I had money. Learnt with multiple draw-downs that even good stocks will have bad days.
Learning - Better to invest in SIP mode to get the benefits of averaging
Used to dump lumpsum in the markets when I had money. Learnt with multiple draw-downs that even good stocks will have bad days.
Learning - Better to invest in SIP mode to get the benefits of averaging
8/
Listening to others
Used to take tips from people & thought it's their mistake when things went wrong. Unfollowed them & followed someone else to get new tips … repeated thrice
Learning - Mistake is in me to follow someone & invest blindly. My money, my risk, my mistake
Listening to others
Used to take tips from people & thought it's their mistake when things went wrong. Unfollowed them & followed someone else to get new tips … repeated thrice
Learning - Mistake is in me to follow someone & invest blindly. My money, my risk, my mistake
9/
Immortal Companies (JET AIRWAYS)
Not my mistake, but had this learning from friend. Used to believe JET AIRWAYS is the best airline in India, fastest growing
Learning : No company is immortal. Go back to basics and learning that investing is risky & a stock can tend to zero
Immortal Companies (JET AIRWAYS)
Not my mistake, but had this learning from friend. Used to believe JET AIRWAYS is the best airline in India, fastest growing
Learning : No company is immortal. Go back to basics and learning that investing is risky & a stock can tend to zero
10/
Revenge Trading
Lost some money in a stock and wanted to get back the money in the same stock. The revenge trading mentality pressurized me to take positions when there are none.
Learning : Stick to fundamentals, never go against them
Revenge Trading
Lost some money in a stock and wanted to get back the money in the same stock. The revenge trading mentality pressurized me to take positions when there are none.
Learning : Stick to fundamentals, never go against them
11/
Never use leverage
In 2016, had a position in CRUDE OIL using margin/leverage. Slept with ~3L profit and Crude dives overnight. In the morning, all the positions closed and lost all the ~6L that I earned hard
Learning - Never used margins after that. Only cash or none
Never use leverage
In 2016, had a position in CRUDE OIL using margin/leverage. Slept with ~3L profit and Crude dives overnight. In the morning, all the positions closed and lost all the ~6L that I earned hard
Learning - Never used margins after that. Only cash or none
12/
Buy High, Sell Low
Even for good fundamental stocks, I let emotions drive decisions. Purchased stocks like BAJFIN at 4000 and sold around 2500 because I panicked
Learning - Never sell in panic. Not sell unless the business story changes
Buy High, Sell Low
Even for good fundamental stocks, I let emotions drive decisions. Purchased stocks like BAJFIN at 4000 and sold around 2500 because I panicked
Learning - Never sell in panic. Not sell unless the business story changes
13/
Book profits early & leave losses forever
Used to book profits at 40-50% levels, but losses tend to go to 80-90%.Emotional thinking of cutting the winners early led to very low returns even with good stocks
Learning - Flip it, carry forward your winners and cut your losers
Book profits early & leave losses forever
Used to book profits at 40-50% levels, but losses tend to go to 80-90%.Emotional thinking of cutting the winners early led to very low returns even with good stocks
Learning - Flip it, carry forward your winners and cut your losers
14/
Watching stock movements daily
Used to watch the stock prices daily, worried at 5% fall and excited at 5% growth. In both cases, made a mistake to sell.
Learning:
I dont watch the prices daily, stay invested in business than the price. Price will catch-up sooner or later
Watching stock movements daily
Used to watch the stock prices daily, worried at 5% fall and excited at 5% growth. In both cases, made a mistake to sell.
Learning:
I dont watch the prices daily, stay invested in business than the price. Price will catch-up sooner or later
15/
Comparing with others
Used to compare with others returns of 30-40% CAGR tweets & thus led to much churn in my portfolio seeking for more & more
Learning: Compare with self, learn from others but no need to beat everyone everyday. Lay a good approach to achieve your goals
Comparing with others
Used to compare with others returns of 30-40% CAGR tweets & thus led to much churn in my portfolio seeking for more & more
Learning: Compare with self, learn from others but no need to beat everyone everyday. Lay a good approach to achieve your goals
16/
Investing like gambling
Investing in crypto for fun that they will grow 100x. One of them grew 20x, but capital was so low (as it was fun investment) that it never yielded anything for the time invested
Learning: No reason to invest for fun. Instead use the time elsewhere
Investing like gambling
Investing in crypto for fun that they will grow 100x. One of them grew 20x, but capital was so low (as it was fun investment) that it never yielded anything for the time invested
Learning: No reason to invest for fun. Instead use the time elsewhere
Will add more learnings over time. Some might sound foolish, but these are hard learnings as the outcome was loss of time (or) money (or) both
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Summary of learnings
- Set your goals
- Learn fundamentals of investing
- Know your risk
- Allocate capital wisely
- Never trust someone for stock suggestions
- Stay invested
- Don't over trade
- Never take loan/leverage to invest
#Investing #StockMarket #Trading
- Set your goals
- Learn fundamentals of investing
- Know your risk
- Allocate capital wisely
- Never trust someone for stock suggestions
- Stay invested
- Don't over trade
- Never take loan/leverage to invest
#Investing #StockMarket #Trading
Kept learning from the mistakes, survived all these phases in the market and now built a good sizeable portfolio with 10 stocks and MFs.
I still make mistakes, I still learn from them and try not to repeat the mistakes
#Investing #StockMarket #Trading
I still make mistakes, I still learn from them and try not to repeat the mistakes
#Investing #StockMarket #Trading
@FI_InvestIndia - Sir tagging you as I have seen you share knowledge on some of these as well.
Kindly share your thoughts and any key mistakes too 👍
Kindly share your thoughts and any key mistakes too 👍
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