Investing Ideas- Sourcing from everyone. 

Meeting greatest investors around - identify and learn and brainstorm and do some project / investments together

 

The game is not zero sum. When a friend and I chop down a tree, and build a house from it, the house has value, far greater than the value of a standing tree. Our labor has turned into something of value.

 

In theory, a company starts from an idea, and offers either a good or service to create value. There are scams that make it seem like a Vegas casino. There are times a stock will trade for well above what it should. When I buy the S&P index at a fair price for 1000 (through an etf or fund) and years later it's 1400, the gain isn't out of someone else's pocket, else the amount of wealth in the world would be fixed and that's not the case.

 

Over time, investors lag the market return for multiple reasons, trading costs, bad timing, etc. Statements such as "90% lose money" are hyperbole meant to separate you from your money. A self fulfilling prophesy.

 

The question of lagging the market is another story - I have no data to support my observation, but I'd imagine that well over 90% lag the broad market. A detailed explanation is too long for this forum, but simply put, there are trading costs. If I invest in an S&P ETF that costs .1% per year, I'll see a return of say 9.9% over decades if the market return is 10%. Over 40 years, this is 4364% compounded, vs the index 4526% compounded, a difference of less than 4% in final wealth. There are load funds that charge more than this just to buy in (5% anyone?).

 

Lagging by a small fraction is a far cry from 'losing money.'

 

There is an annual report by a company named Dalbar that tracks investor performance. For the 20 year period ending 12/31/10 the S&P returned 9.14% and Dalbar calculates the average investor had an average return of 3.83%. Pretty bad, but not zero. Since you don't cite a particular article or source, there may be more to the story. Day traders are likely to lose. As are a series of other types of traders in other markets, Forex for one.

 

While your question may be interesting, its premise of "many experts say...." without naming even one leaves room for doubt.

 

Note - I've updated the link for the 2015 report. And 4 years later, I see that when searching on that 90% statistic, the articles are about day traders. That actually makes sense to me.

 

For some studies on why investors make the decisions they do, check out

 

Kahneman, D., & Riepe, M. (1998). Aspects of investor psychology. The Journal of Portfolio Management, 24 , 52-65.

For a more readable, though less rigorous, look at it, also consider Kahneman's recent book, "Thinking, Fast and Slow", which includes the two companion papers written with Tversky on prospect theory.

 

In certain segments (mostly trading) of the investing industry, it is true that something like 90% of investors lose money. But only in certain narrow segments (and most folks would rightly want traders to be counted as a separate beast than an 'investor').

 

In most segments, it's not true that most investors lose money, but it still is true that most investors exhibit consistent biases that allow for mispricing. I think that understanding the heuristics and biases approach to economics is critical, both because it helps you understand why there are inefficiencies, and also because it helps you understand that quantitative, principled investing is not voodoo black magic; it's simply applying mathematics for the normative part and experimental observations for the descriptive part to yield a business strategy, much like any other way of making money.

 

Investors grow over time. Pick the right stocks and stick to them. They will eventually grow.

Mapping all companies which are getting listed or not and then calculating their worth over time and projecting those. Understand all technologies being used by wall street and how can their softwares / algorithms / technologies be brought in India and leveraged.

 

People who dont buy judicially regret and face massive losses and also they never invest again in their lifetime. Stock market is a magical place where a poor can become rich over time and a billionaire can end up going bankrupt in no time. 

 

Every investor has their own unique journey and it is indeed a journey to amass great fortune or lose it over time.

 

Only risk you take in equity is that the value of company plummet when they make regular loses. Investing intelligently is all about reducing or managing the risks and buying the stock of companies at low prices. 

 

Misplaced sentiments temporarily reduce prices of even good companies and that’s when you can buy good amount of shares. Read financial news regularly to stay abreast about what’s happening with.

 

teach yourself to be like a businessman. stay invested for long term in companies which have reliable, honest management.

 

If you really like what company makes and you like it too then chances are there then millions of their customers also like them.

 

Shoopers shop - retailing - when you are in a shopping mall, observe the visitors, what are they buying, where are they spending most of their times. Understand the product line. Talk to salesman too. WHat's the inventory movement speed.

 

Finding patterns, what product is common across the offices / homes you visit. Identify the promising product - before everyone else does.

 

No recession lasts forever so stock prices may plummet but that's okay, eventually it will rise. Buy more when they plummet and rest of the times have stock in FD / Liquid Funds.

 

Starting early gives you more exposure to markets highs and lows ( bull and bear markets ) and therefore more chances of buying and selling are there with you. 

 

If you are short of time, then buy equity mutual funds which fetches decent returns every year. It wont be much fun as much as share trading is but you wont lose your entire fortune which is probable in shares as there is dedicated fund manager who does all the hardship on your behalf.

 

Diversify by identifying couple of dozen of companies to track and invest in 5-10 companies you think are good enough / have solid management / has ethical business policies / high demand among customers. Then hold your shares for long period of time ( 5-15 years as you never know which of these would be multi-bagger ) but it is the risk worth taking. 

 

Over the years the companies will bloom to their full potential rewarding you with lots of wealth. Sell a good stock only if you have solid crunch of cash, there is some serious issue with the industry / company. 

 

Idenityfing companies which may give away bonus shares / dividends. In the market, there are no permanent blue chips. Massive debt of companies can lead to massive reduction in stock prices. Figure out how much debt the company has before actually investing in it.

 

"Lose the money" they say to "learn a new lesson". When the share you like is down and goes further down, think of it as buying more stocks on certain discount. Buy more instead of selling. 

 

Behavioral Finance is important and Daniel Kahneman got Nobel prize to research on it. Winning in stock market is about winnign over overconfidence, emotions, biases. Also you cannot always win. 

 

What we do is invest heavily in training. And so, even from a 

built his fortune by buying multinational stocks during the late-80s and early-90s. "My philosophy is long term, with a horizon of five to 10 years," he says. "If I like something and believe in it, I am committed to it."

 

Basic front-end, when they rise to store-level managers, they are not seen as target candidates by others, who cannot accept a 10th standard fail."

 

How am I saving Money - where my money is going - mapping every single penny - daily. Having extra money - hoarding money - making every item i have an asset. convert and complete transformation has happen.

 

Converting everything into an asset. Stay invested.

 

Someone became a CEO at 25, and died at 50, while another became a CEO at 50 and lived to 90 years.

Obama retires at 55, while Trump starts at 70. Everyone in this world works based on their "time zone"​.

Everyone is running in their own time. Life is about waiting for the right moment to act.

So, RELAX. We are not late we are not early. We are very much ON TIME in our TIME ZONE.

 

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