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March 20, 2010
 

Gladwell Time

And how did Burry get so good at picking stocks? BY STUDYING!

Yup, doing the work.

This is Gladwell time.

We live in a country where no one wants to do the work.

Oh, I know that’s an overstatement. But most people want to watch television. They want to focus on their image. Is it any wonder they’re left behind?

Not that you need a formal education to make it. You can’t learn the stock market in school. You’ve got to learn it on your own, like the music business.

via ritholtz.com

Many people fail to realize how much time and effort is required to find good stocks. This is an excerpt from The Big Picture... written by a guest blogger on Michael Lewis (Liar's Poker fame) who's recently published a book called the Big Short - featuring Dr Burry (who been talked about here). Follow the links to read more...

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Filed under  //   education   investing   investor   stocks  

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March 14, 2010
 

Potash Corp - POT - The Commodity Play

As I promised, I'd be back with some investment ideas. But before that, let me share with you how I got started.

Before I invest in a stock, I try to figure out where (or what) the mega trend is. If it's logical, then I try to narrow down to few good companies that benefit from that trend. Then I sit my but* down and research information to prepare an investment thesis. In the old days, it used to be as much as I could possibly get my hands on to convince myself that the company was worth investing. Today, I just write investment considerations - bullet points (watch out for my next post).

In November of 2007, I worked around the idea of fertilizer's being a sure shot bet. The logic was fairly simple:
  1. People still need to eat food. 
  2. Arable land is decreasing. 
  3. Fertilizers help increase the land's yield, producing more food.
There. That's the basic fundamentals. Now for the details: I bought Potash Corp (no option play, it was just ordinary stock) you can read the attached report. 

What happened after my recommendation? Well I made a tonne of money on that... :) See the chart below...


I did lose some upside, hey, you don't always win (completely). But this time, I'm looking at the fundamentals again - more than a year after the crash in the US stock markets - and I still believe POT is going to do better. From a technical pov, POT was showing a steady up-trend (before I bought my recent call option). If you're into technicals, then check out this chart below. What you see happen is a "gap" and when that happens, usually you can expect more upside to come (hey technical gurus... correct me if I'm wrong). Honestly, I wish there wasn't a gap up like that... I prefer consistently performing stocks, those that move up slowly at say 1% each day :) (Do the maths).

POTc1dl1654.png

I'm definitely long term, but there's no harm in making some short term money if possible. So if you understand options, you'll be glad to know that I bought POT Jun 150 Call Option for 1.25. Which means that I'm expecting the price of POT to reach 150 by Jun. Could be a far fetched call... but hey, I'm already up 130% on this option. Who's complaining?!?

Read more: Money Morning (Coincidentally, the same theory and stock today).

Disclaimer (READ THIS): I'm not an expert, and not authorized to give you financial advice or any recommendations. I'm just telling you what I did. Use your own decision making brain cells. Just some free tips: Always keep a Trailing Stop. Stick to your Position Sizing. Smile - because tomorrow is going to be better.

(download)

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Filed under  //   ideas   investing   options   POT   Potash   stocks  

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December 27, 2009
 

Investment Idea 2010 - BRIC. Period.

BRIC nations - Brazil, Russia, India, and China - are seeing a higher share of global investments coming their way. This is if one is to believe a report on a leading business paper today. The report cites EPFR Global a tracking agency for global fund flows. Its stats show that BRIC-focused equity funds have already seen inflows of US$ 20 bn during the first nine-months of this year. Importantly, this is almost 40% of funds of all emerging market stock funds.

Such large fund flows into BRICs are not without reason. Stockmarkets in these countries have risen sharply over the past 12 months. The MSCI BRIC index is up almost 90% in 2009 as compared to 70% gains recorded by the MSCI EM (emerging markets) index.

Apart from the promise of better returns, and as compared to developed markets, the BRIC economies also promise a better economic future for the coming few years. India is one clear case in point here. And if one has this conviction that the coming decades are going to be extremely bright for India and stays invested in the right kind of stocks, he will be glad that he pulled the trigger.

via equitymaster.com

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Filed under  //   2010   bric   investing  

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September 2, 2009
 

Think Global, Act Local

I live in the Middle East - before you start thinking up all kinds of images, hear me out. Middle means between - West and East (I still dont know why they call it Middle East, why not Middle West!? Half Full).

I currently trade globally, US Markets, Indian Markets, International (Forex). The advantage about being in this part of the world is timing. I can trade in the early morning for India, head off to office - focus on my day job, then around 4.30 pm head back home - to trade US markets. Not bad, but it is a real time killer - unless you have the passion for such trading/investing - DONT do it! Social life can be messed up...

I'm also curious how my fellow Indians trade the US / International Markets - do you stay up all night?

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Filed under  //   global   investing   local   middle east   trading  

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January 25, 2009
 

The 10 Commandments Of Investing

A good one from Investopedia. I like 4,5 & 7.

  1. Thou shalt set clear goals.
  2. Thou shalt put thy financial house in order.
  3. Thou shalt question authority.
  4. Thou shalt not follow sheep.
  5. Thou shalt be humble.
  6. Thou shalt be patient.
  7. Thou shalt show moderation.
  8. Thou shalt not ogle thy investment.
  9. Thou shalt not court or spurn risk.
  10. Thou shalt not make heros of mere men.

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Filed under  //   investing   rules   top 10  

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