Hocus-Focus

Yeah, where’s your focus at…

…as your market drops. 

Is it on your benchmark index?

Sure.

Ok. Drops further. Developing into a crash…

Where’re you at now?

My focus has shifted. 

Tell me more. 

I’m now focusing on the shares i’ve begun to accumulate,…

…and, specifically, I’m focused on the number of shares being added to my portfolio,…

…that’s my number. Yeah, that’s where my focus is at.

Not on your benchmark index?

First up, I feel the joy as this number enters my demat. After that, I cast a brief glance at whatever benchmark indices I’m looking at, and decide for myself, whether my focus needs to remain shifted. 

What if you’re rubbing your hands in glee, and dud shares are being added to your name?

That’s the whole point. These are not duds. They are gems as per due diligence done, and are going for the price of non-precious counterparts. That’s why my focus remains shifted. 

When will it shift back?

That switch happens on auto. When benchmarks start oozing expensiveness, focus automatically shifts to the benchmarks. It should no longer be on the number of shares entering your folio, because shares should not be entering your folio when benchmarks ooze expensiveness. 

Exceptions?

Sure. Specific stocks could be cheap when a benchmark is expensive. Let’s not deviate from the point though. This is about a healthy shift of focus, and then a second – healthy – shift back. 

Right. 

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Nadir Non-Focus

Scared to enter?

Things look gloomy?

Forever?

NO.

Look at History.

Markets are where they are despite what’s happened. 

Governments, scams, frauds, bribes, wars, disasters – the list is endless. 

In the end, we are still where we are.

Is that good news?

YES.

What does it mean?

Growth – reflects in the corresponding market – eventually. 

Sure – we might not be growing at 7%+.

We definitely are growing at 5%+, perhaps at 5.5%+.

In a few years, growth could well accelerate.

Why?

Earning hands are growing.

So are aspirations. 

The consumption story in India is alive and kicking. 

What we’re seeing currently is a result of eighteen months of bad news. 

Such a long spate of negative stuff churning out gets the morale down. 

People start letting go of their holdings in despair. 

Maybe there’s another eighteen months of negativity left – who knows. 

That’s not the right question.

Don’t worry yourself about the bottom and when and where it is going to come. 

Why?

Please answer something far more fundamental first.

If you don’t have the courage to go in at this level (with small quanta of course, we do follow the small entry quantum strategy)…

…do you really thing…

…that you will muster up…

…anything remotely resembling courage…

…at a number that is let’s say 20% below current levels?

Gotcha there?

Give Me My Table & I’ll Undetach

Detaching…

… .

My work is done for the day.

Enjoying the remainder of the day is now a priority. 

Would that be possible without detaching from the workplace?

No.

Is it that easy…

…to detach?

No.

Am I successful in detaching?

Reasonably.

Just like that?

No.

Meaning?

It’s taken me fifteen years to learn to detach reasonably well from the markets, …

… and, there are still times when external factors cause unwanted and untimely re-attachment.

The next time I wish to undetach (yeah, just made up this word!) is the next time I wish to engage. 

To undetach, all I need is my work-table. 

Rest follows on auto. 

However, when I’m not on my work-table, mostly, I don’t wish to undetach, …

…and surely enough, someone will want to discuss markets, …

…or someone switches on financial TV, …  

…or one catches a headline in the paper, …

…or a tip can’t be refrained from being given, …

…or, well, use your imagination.

Getting around peoples’ free-fund-attitude is the biggest challenge for a market-practitioner, in my opinion. 

You might master market-etiquette, and you might learn how to detach in isolation. However, people won’t spare you

Detaching despite people while living and thriving amongst people is one huge win. 

Getting there…

… 🙂 .

Sometimes, you don’t like it

Sure.

Like now.

Bloodbath in small-caps.

Alleged suicide.

NPAs.

Witch-hunt.

Did you choose Equity as an area of expertise?

Ok, then deal with it.

First up, India’s History is laden with scams.

We are where we are despite these.

Secondly, there’s growth. In other parts of the world, there is not much growth.

India is an emotionally volatile nation.

So are its markets.

Since this is where we act, let’s get used to things.

If you’ve been following the small entry quantum strategy, well, then you’ve got ammunition…

…at a time, when the value of this ammunition is immense…

…because lots of stuff has started to go for a song.

You do feel the pinch though…

… because whatever’s already in, is bleeding.

You don’t like it.

It’s normal.

Going in at a time like this, you will feel pathetic.

However, for your money, you are getting quality at cheap multiples. This will translate into immense long term wealth. Quality at cheap multiples multiplies fast.

Here are a few reasons you should feel ok about going in.

The small entry quantum strategy has rendered you liquid…

…after sorting out your basic family life, income-planning and what have you.

You are going in with money you don’t require for a longish time.

Muster up the courage.

Get over your pinch.

Engage.

Buy quality.

Debt-free-ness.

Shareholder-friendliness.

Generated free cashflow.

Transparency.

Diligent managements.

Product-profile that’s going to be around.

Less dependency on water.

Versatility.

Adaptibility.

Make your own list.

Use the stuff above.

Wishing you lucrative investing with no tears and with lots of smiles.

Shutting Down the Manipulator

Markets…

…manipulate. 

That’s their very nature.

Are we in the game to be manipulated?

What’s your answer?

Mine is no.

It’s a pretty emphatic no. 

I’ve backed my no with action. 

How do I stop the markets from manipulating me?

The answer if found in one’s trajectory of action.

Is there anything in one’s market actions that can be easily second-guessed by the market?

For example, is one acting upon plain vanilla technicals?

Is one acting upon news? Results? Announcements? 

Let’s not base our action upon anything the market is doing or telling us to do. 

Period. 

It’s as simple as that. 

With that, we’ve already shut out all avenues for manipulation.

Where does that leave you?

What to do now? 

You must be asking this. 

Well, build your own system. 

Let it expand and explore. 

Let it gain complexity. 

Let it boil the complexity down to simplicity. 

Let your actions be based upon your unique bridges. 

Yes, build your bridges.

Make your own market landmarks.

When you act, nobody knows that you are acting.

If nobody even knows that you are implementing an action, well, then nobody can know what that action is, or how it is implemented.

You’re done already. 

Enjoy your non-manipulable existence. 

I wish for you that it is lucrative!

🙂

Have the Guts?

Somebody did say …

… that Equity was not for the faint-hearted.

Oh, how true!

Everyday, my heart stands tested!

However, because of a small entry quantum strategy, I am able to stay in the game.

If I am able to stay in the game for multiple cycles, I will prosper.

Why?

Firstly, the strategy by default renders me liquid, such are its tenets.

Then, a good hard look at fundamentals is always called for.

To close, it is important is to enter with technicals to support you.

Now let’s say I make a mistake.

What is a mistake?

Ya, good question – in the markets, what is a mistake?

In the markets, when the price goes against you, you have made a mistake.

So let’s say that I’ve made a mistake.

Is the mistake big?

No.

Why?

Because of my small entry quantum.

What does it mean for my next entry?

Added margin of safety.

Is that good?

You bet.

Why?

Because fundamentals are intact.

What’s going to eventually happen?

Stock’s going to bottom out.

I’ll have a decent amount of entries to my name.

My buying average will be reasonably low.

The margin of safety my buying average allows me will let me sit on the stock forever, If I wish to.

Down the road, one day, I might be sitting on a big fat multiple.

Please do the math.

Happy and lucrative investing!

🙂

Trigger-Happiness triggering your happiness?

Action?

All the time?

Do you crave it?

And, are you in the markets?

Boy, do you have your work cut out for you, or do you have your work cut out for you?

Ideally, your long-term investment should not give you action.

When it does, it should push you to act.

What backfires is when you act to push it.

Unless you’re convinced by a stock, you don’t buy it.

Unless there’s margin of safety, you don’t buy it.

Unless there’s more margin of safety, you don’t re-buy it.

Unless you’re fed up with the stock or the antics of its management, you don’t sell it.

The whole long-term game is biased towards inaction.

Those who master the art of inaction are good long-term investors.

Bridging gaps is paramount.

What do you do with the vast amounts of time at your disposal?

Do twenty other things.

Create value in many walks of life.

Let the areas not overlap with any of the markets you are tapping.

Capture the attention of your mind.

What happens if you don’t?

Boredom, inaction or the need for action will propel you towards making a mistake.

Mistakes in the market cost money.

That’s how they’re defined.

Do yourself a huge favour.

Approach the markets after having embraced inaction.