The Major Points Peter Highlighted in first 5 Chapters where he is trying to create an investment mindset for new investors .
The points are as below:
1.
Do not overestimate the skill and wisdom of
professionals like fund managers or high rated stock investors .At times they also do wrong.
2.
Take leverage from what your know
3.
Look for Value investing .Means Off the Rader stocks if
you have good skill in picking companies when they are young.
4.
Please have a house before investing in stocks directly.
Sometimes people in overconfidence invest all of their hard earned money in stocks and are ruined.
5.
Invest in companies that are not in stock market. This
might be very risky but highly rewarded if you are smart and highly skilled to analyze.
6.
Ignore short-term noise from social media and TV channels .Just stay the course once you have done your homework proper.
7.
Large Profits can be made from common stocks. In Indian
market sticks like HDFC bank, Asian paints etc have given 4x-5x return in 10 years horizon
8.
Large Loss also can be made in well-known stocks .Ex:
Kingfisher, Satyam Computer and Yes Bank
9.
Nobody can predict economy and stock market correctly
either in short term or in long-term .So please do not try to time the market .That is foolishness.
10. Historically Long term returned from stocks are greater than FD and bonds. So First plan and invest your money.
11. Once you buy stock need to analyze in regular interval. You need to have high risk profile .The stock price can fall 50% and later rise 4 times as well .At the same time it may fall and stay there for decades.
12. Direct Stock buying is not everybody’s cup of tea .So stay away if you relying on speculation rather than own idea and analysis.
13. Always look for common stocks and don’t run behind some fancy stories to pick stocks.
14. Buy only those numbers of stocks, which you can analyze. Do not over crowd your stock portfolio. Remember the number of stocks from different companies are like your babies. Please keep those numbers of stocks that you can manage peacefully and not in chaos.
My sincere advice to readers are if you don’t have time and have a day job better hire an advisor or Invest through MFD in well diversified Mutual Funds or BONDS after calculating your Risk profile and closing your Goals. Remember Good Return is not Goal.
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That’s all from me , Yours Abinash 🙂