Yeah, who’s buying?
Sure. Tremendous pipeline, great bargains, of course they’re buying.
They buy and sell for a living.
They make the market for us to trade in.
Let’s forget about them for this discussion.
I mean, is there even a syndicate?
Let’s not go into conspiracy theories.
Whether or not there is a syndicate should not affect us.
…think of anyone else?
Lots of SIPs going in, a few NFOs doing the rounds, yeah, MFs are biting.
More like exiting.
Busy trading I guess, won’t count them as strong hands, they’ll book a profit and will be sellers, over the short to medium term.
What about retail guys?
Retail investors are scared.
They’re tired of bad news.
They’re tired of the markets.
Most have run away.
Most of those who haven’t, want to.
Is any retailer buying?
Well, the small entry quantum guys are.
Firstly, they’re liquid.
Their strategy leaves them liquid, … , like forever.
Till when are they going to buy?
As long as quality is selling cheap, they’ll continue to buy.
Are they scared?
Their strategy gives them the courage to work on full throttle at times just like these.
Times like what?
You know, bad news galore, whatsapps, lay-offs, scams, everything under the sky that can take place – is taking place.
And you know, bring it on. Gloom, doom, kaboom, and quality will start selling even cheaper.
We are loading up on quality and will continue to do so as long as it is cheap.
We’re happy that there’s a buying opportunity.
Where do I want to be?
Do I want to look at a stock price and know where things stand with the stock in question?
That’s where I want to be.
It’s not going to come for free.
What will it take?
Looking at the stock…
…for an year or two.
That’s what it will take.
How boring, you say?
When stock market investing seems boring…
…that’s when you’re doing it right.
Excitement and roller-coaster rides are for video-game pleasure, and for making losses.
Money is made when it’s outright boring out there.
Where do you want to be?
In the money?
I thought so.
Then, please get used to boring and don’t ever complain again that things are boring.
How does one position oneself in such a manner that one studies a stock for an year or two.
Let’s put some skin in the game.
I know, this phrase is becoming more and more popular, what with Nicholas Taleb and all.
Yeah, we are picking up stock.
The one we wish to observe for an year or two.
Why pick it up? Why not just observe it?
You won’t. You’ll let it go.
Because it’s not yours.
So we pick up the stock? What’s the point of observing if we’re picking it up now?
Well, we’re picking up a minute quantity – one quantum – now. That gets our skin into the game. Then we observe, and observe. Anytime there’s shareholder-friendly action by the management, we pick up more, another quantum. We keep picking up, quantum by quantum. Soon, while we’ve kept picking up, we’ve observed the stock for so long, that now, one look at the stock price tells us what kind of margin of safety we are getting in the stock at this point.
Now, future entries become seamless. One look and we have a yes or no decision. Isn’t that wonderful?
That’s where we want to be.
When I shoot…
… it has to be a dunk.
If I’m not getting a dunk in…
… I’m not shooting.
What are the implications?
Imagine only taking market dunks for multiple decades in a row.
Where do you think that’s going to leave you?
Most of the time, though, one’s not shooting.
That’s because, most of the time, dunk trajectoires are not available.
When one is not shooting, does it become boring?
Only if you let it.
Yeah, just don’t let it.
No action is a good thing.
It saves resources.
Then, when opportunity is available, one might get twenty dunk days in a row.
Things can get so active, that one wants activity to normalize again, if not stop for a while.
Actually, not a challenge.
I’ll tell you what is a challenge…
… for me.
… and travel.
I don’t like this combination.
How do I deal with it?
First up, what don’t I like about it?
Not doing full justice to the trip.
Not doing full justice to the investing opportunity either, as in distracted due diligence.
What do we do here?
Sure, you’ll argue, today one carries one’s terminal where one goes.
Does one also carry one’s zone, you know, the magical frame of mind, from within which one takes magic decisions?
Very probably not.
When one takes an investment decision, is it not better to be in this magical zone?
Therefore, unless the opportunity is just too pressing, such that it makes me open my terminal even during travel, …
…, yeah, my terminal mostly stays shut when I’m on the move, …
…, because then it’s time to do other things. Yayyyyy!
Today, we turn eight.
This is an extreme time.
Extraordinary moves have become normal.
How do we react to a world full of upheavals?
Does anyone have a satisfactory response?
We don’t know, and time will tell if our responses are correct.
However, we do know, that we possess common sense…
…, and we are going to hold on to it for all our life’s worth.
It has not come for free.
It has been earned after making costly mistakes.
It is very valuable.
It is going to see us through.
The topsiness and the turvyness is good for us.
It will set up opportunities.
We are only going to grab opportunities.
When there’s no opportunity, we do nothing.
We have learnt to do nothing.
Doing nothing actually means no entry.
We use this time to do due diligence for the future, when entry is allowed as per our entry criteria.
Doing nothing is a steady part of our repertoire.
However, when opportunity comes, we are going to let go of all fear, and we are going to pull the trigger.
We know how to pull the trigger.
We are not afraid.
We are debt-free.
Our basic incomes are in place.
Our families are taken care of.
Without that, we don’t move.
We invest with surplus.
We implement a small entry quantum strategy.
We enter again and again and again, upon opportunity.
Because of our small entry quantum, we are liquid for life.
Bring it on.
We’ll keep going in, small entry quantum upon small entry quantum.
Don’t forget, we have rendered ourselves liquid for life.
And, we’ve got stamina!
Happy eighth birthday, Magic Bull!
61). We’re able to take many, many small losses, without flinching.
62). Only that sets us up for the big wins.
63). We don’t second guess our stops.
64). In fact, we want the stop to hit. As in, hit me, if you’ve got the *****.
65). When the trade moves in our direction, we let it. We’re doing other stuff.
66). When the trade moves against us, we let it. We’re doing other stuff.
67). That’s because we fully understand the function of our stop. It will take us out of the market, whether in loss or in profit. It’s dynamic, you see. It moves with the market as per the definition provided by us while punching in the trade.
68). We’re not afraid that our stop could be jumped. Can happen, in a panic. Hopefully, our technicals will have placed us in the right trade direction before huge and fast moves. It comes to mind that this kind of move occured at least twice in the last six years, once with the swiss franc, and once during Brexit. If we start worrying about such one-offs, we won’t trade at all.
69). We look at the technicals, and we listen to what they’re saying. The trend is our friend. We trade with the trend, either on fresh highs (fresh lows) or on pullbacks, depending upon the conditions.
70). This is trading, so I personally don’t look at fundamentals. However, cook your curry the way you like it.
71). We might zero into tradable underlyings with screens or searches, but…
72). …we eyeball into final trade selection.
73). Yes, the chart needs to look and feel just right. All but the one tradable entity are rejected by the look and feel of the chart. The one remaining is the one we trade. If none remains, we don’t trade.
74). Price is king. We’re into price action.
75). Indicators only indicate. Price does the talking.
76). What the price is saying will reflect in the indicator, but with a time-lag.
77). Do we want this time-lag? I don’t.
78). Thus, price action it is, for me. However, everyone is looking at the same price.
79). Therefore, we need to think slightly out of the box, to make money.
80). Edge + out of the box thinking + stamina nails it.
That’s what a small entry quantum approach demands of its player.
To be frank, I’ve not run any marathons on field and track.
However, I’ve done my share in life, and continue to do so.
If it’s not a marathon, I don’t get a kick.
If you’ve got that in yourself, you’re cut out for the small entry quantum approach.
Life in the background.
Going on and on…
…till you break through,…
…and the contents of your portfolio spill over…
…and start to show.
Might take a few decades.
Do you have it in you?
What will make you hold out?
Stick to the tenets of the small entry quantum approach, and you will not only hold out, but your folio will burgeon too.
Buy with surplus.
Buy with margin of safety.
Learn to sit.
Enter small. Many times.
Keep entering over the years, till there is reason to enter.
Exit on highs. Only get rid of those stocks you don’t feel like holding anymore.
No fear please. Kill it. Create the circumstances for fear to vanish.
No euphoria either. That’s a tough one, especially when the whole world is dancing around you.
Do your homework.
Don’t listen to anyone.