Stocks

autobiography_of_stocl

Lessons from the book  
1. Start young  
2. Never invest on tips  
3. Never have a short term horizon  
4.  Stock market's volatility is what helps it give you stellar returns  
5. Do not invest with borrowed money or a faint heart, both are fatal  
6. Your portfolio must beat inflation after paying taxes, year on year  
7. Real estate is no match for stock investing  
8. Mutual funds are next best to stock investing  
9. Mutual funds do not allow for your intellectual growth, stocks do  
10. Stocks returns far outweigh the returns from mutual funds, with almost similar amount of risk  
11. Wealth creation is not complex. Follow the simples steps, over and over again - with faith and commitment  
12. You do not just buy a stock, you buy a part of the company  
13. A lower share price of an IPO gives you no clue of its worthiness to buy or sell  
14. A stock's current market price (CMP) alone, gives you no clue of its worthiness to be bought or sold  
15. A blue chip or a brand gives you no clue of its worthiness to be bought or sold  
16. Stock investing is only 20 percent technical and 80 percent attitude  
17. A decision to buy or sell should be based on comparison of a stock's current market price (CMP) with its intrinsic value(actual company worth)    
18. Great investors wait patiently for a bargain price - much below intrinsic value  
19. Herd mentality drives irrational behavior  
20. Value analysis works to create massive wealth over a long period of time  
21. THe 'collective', 'perceived' worth by investors determines its market price dynamically  
22. Between periods of fluctuating collective perception, the market price of a stock will always hit close to a stock's true intrinsic value  
23. Market concepts, including stock homecoming , are simple, explicity and powerful  
24. An investor's job is to leverage the 'window of opportunity' created by the difference between market price and intrinsic value  
25. Book losses without hesitation, if your CMP-Intrinsic value calculation guides you to do so  
26. In stock investing there are no guarantees but only probabilities  
27. For an investor looking for high returns, what matters is dividend yield, not dividend payout ratio  
28. Dividend paying stocks outsmart the non-dividend paying ones, in the long run  
29. Dividend oxidation effect leads to capping the possible capital gains  
30. Stock movement can be quite different from market movement  
31. Timing the market is a myth, if your value analysis throws open a right stock, go for it, irrespective of market dynamics  
32. Stock investments need to be predicted and protected for at least the next 10 years. Strong company fundamentals help here  
33. Between a great business and great management, former holds much more weight  
34. Four Golden rules to Stock Selection: Industry - Company - Management - Intrinsic Value (ICMI)  
35. Look for companies that have competitive advantage  
36. A stable industry, no matter how old-fashioned, mitigates your investment risk over a 10-year period  
37. The first thing you check on a stock is its stabiity  
38. Annual reports tells about company growth, EPS - check for last 5 years to predict next years' outcomes  
39.