I will tell you 3 short stories about 3 very different men.
Story 1:
This story is about Rahul. Rahul was a middle aged working professional, who inherited his father’s stock portfolio worth Rs 70 Lacs in 2006. The portfolio was made up of some decent companies like HUL, Nestle, SBI, etc. But in Bull Run of 2008, share prices of most of these boring businesses did not rise like some of the other crap that went up during that time. Rahul sold most of the stocks he inherited from his father and invested in then-glamorous companies like Suzlon, Unitech and few other un-nameable business so-called businesses. As of today, that Rs 70 lac has turned into Rs 10 Lacs and Rahul repents what he did. But he knows what mistakes he made. As of today, he wants to leave his children with an inheritance of good stocks like his father did.
Story 2:
This story is about Jignesh. Jignesh is a 55 year old government employee who has been dabbling in stock markets for last 20 years. But ask him how he fared in these 20 years and you will get to know that there is nothing much to tell about. His portfolio consists of shares of more than 70 companies of all variety and sizes. Most of these were bought at high prices which Jignesh is never going to see again. Worse is the fact that he bought more to average down his purchase costs. He is not able to sleep at night because, apart from the pension he will get after retirement and real estate, his stock portfolio was suppose to be his only savior in old age. As of today, he is still waiting for a massive rally, which can push up the share prices of companies he holds (and are down more than 70% in value). And when such rally comes, Jignesh plans to sell these and invest in shares of sound businesses.
Story 3:
This story is about Venkatraman. Venkat has been trading in stock markets for last 20 years. But he cannot be said to be a man who has a knack of making money by trading. But now, his portfolio is not the only thing Venkat is worried about. It’s his 22 year old son Ganesh. Ganesh is working in a reputed IT company and has recently become interested in stock markets. And having started investing after the crash of 2009, he has a better track record of investing than his father Venkat’s. And that is where the stress is building. The son does not respect his father and feels that he is not made correct financial decisions. Venkat is aware of his son’s views. He now wants to approach stock markets more sensibly and more importantly, wants to regain his son’s respect.
Though I have changed names to protect their identity, these 3 men are not figments of my imagination. These guys mailed me their stories and how stock market has affected much more than just their finances. And to be honest, I have received several such mails during last one year.
But this post is not about identifying mistakes made by Rahul, Jignesh or Venkat.
We all make mistakes. But sooner we learn from them, better it is. All 3 men and many more like them have lost money in stock markets because they wanted to become rich overnight and took unnecessary risks.
But to become rich, all they needed was a few simple ideas and a dose of patience to stick with those ideas.
And for past two years, I have been trying to make people understand that it’s not tough to make money in stock markets.
You just need to be sensible, have discipline and be patient. That’s all.
And as an extension of the work I have been doing here, I am happy to present something special which I have created for you…
The idea of launching Stable Investor’s Ultra Long Term Stocks is simple. And it is to help you become rich in the long run.
What Will You Get By Joining?
- Detailed but easy to understand analysis of Companies which can be bought for decades.
- Thoughts on how to invest in such companies(Lump Sum Investments / Staggered Purchases)
- Analysis of Special Events which cause temporary undervaluation in wonderful companies. This can help you take advantage of such short term mis-pricings in stock markets.
- Focus would be on selecting stocks based on simple, solid & passive form of investing. I am not into regular churning of portfolio to make a quick buck. I personally do, and want you to invest for decades so that you can become rich in the long run. And because of this approach, Ultra Long Term Stocks will include:
– Only those Stocks that allow you to leave a rich legacy
– Only those Stocks that allow you to sleep peacefully at night
– Only those Stocks that will make your children respect you
How Is This Different From Services Offered By Other People?
If you have above question in your mind, then it’s a pretty valid concern. My answer to this question is that…
- This service is a result of one-man operation (that’s me). And I am a risk-averse investor who believes in taking simple, sure shot bets rather than going after multibaggers. I am neither offering hot stock tips nor any kind of portfolio management services. I am sharing my ideas about stocks which have capability of creating wealth in the long run.
- Others service provides have many people working for them. And their teams can generate stock research reports and analysis on a daily basis. But being along here, I cannot do that. And the benefit of this is that I focus more on giving less number of concrete ideas rather than giving more numbers of daily/monthly ideas.
- The number of ideas that would be shared with you all would depend on current state of markets. The number of ideas I would be sharing would be more in Bear markets than in Bull markets. This is in contrast to what other commercial players are offering. Generally, these players increase the number of BUY calls with rising markets. And that is against common sense.
When Is Ultra Long Term Stocks Launching?
Stable Investor’s Ultra Long Term Stocks would be launched on 15th June 2014. Don’t worry. Regular posts of Stable Investor would continue to remain free. 🙂
But Ultra Long Term Stocks would be exclusively about stocks for long term wealth creation.
How Can You Join?
As mentioned, the service would be launched on 15th June 2014. But you can Pre-Registerfor the same right now.
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Sorry…Pre-Registrations Have Closed.
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I will continue sharing details about Ultra Long Term Stocks with readers of this site. Additionally, those who pre-register will receive detailed updates and special offers.
In case you have any specific query, feel free to drop a mail at stableinvestor@gmail.com
You too Dev…..? 😉
I believe the courses on investments / recommendations are profitable businesses than applying the concepts 🙂
Investing in diversified mutual funds is always better than investing based on recommendations. The ultimate motive of any blog is sell something to the readers.
I don't agree with any of you. What do you mean “You too Dev”. There is nothing wrong in making money if it happens along with helping other people and I believe all of you are a bunch of free loaders!
Thanks for the encouragement Vinay. J
Almost everyone having a blog is trying to get attention of its readers. And
I am just one of them. I just hope that apart from gaining my readers’ attention,
I am also able to add some value and money to subscribers’ long term portfolio.
🙂
Investing in mutual funds is one of the first steps towards building a good
solid portfolio of market linked asset class. And you are right that almost
everyone having a blog is trying to get attention of its readers. I am just one
of them and do hope that I can add value and money to subscribers’ long term
portfolio. 🙂
Both have their own benefits Jai.
And to be honest, for someone who is passionate about stocks markets, recommendations and application of concepts are like two sides of the same coin.
Both have their own benefits Jai.
And to be honest, for someone who is passionate about stocks markets, recommendations and application of concepts are like two sides of the same coin…
Hi Vinay, Sorry I didn't mean Dev should not launch a paid stock recommendation service ! I saw many of the known investors/bloggers are coming out with such ones, then made tht comment. I too pr-register for it, although not sure will subscribe or not, anyway Happy investing Vinay, tc.
Hi Dev, I didn't mean anything negative. I am just a beginner started 2 yrs back learning this game by doing mistakes and otherwise. I strongly believe cloning/sidecar investing will be benificial for small investors who have limited time to reaserch and with limited capital to invest. Few things want to ask you,
1) What will you be sharing in this service? (Recommendations now and then/ A model portfolio/ Share your own portfolio )
2) I know you are learning and watching stock investing for many years, may I know when you first purchased your first stock ( Just curious, I am not trying to scale your “stock market experience” )
No worries Rajesh
I didn’t take it as a negative comment at all. 🙂
I still don’t consider myself to be an expert of stock markets even though I have been investing for last 11 years. And to be honest, when I started out, markets seemed more like gamble. But after getting a taste of common sense based investing i.e., sticking with good companies and accumulating them in hard times, I realised that its not necessary to go after finding the next multibagger when one decides to invest for decades and not just months. And broadly speaking, this is the approach I plan using for Ultra Long Term Stocks.
I will share more details about the service in days to come.
Thanks Dev,
Really common sense makes a lot of sense, and common sense is not so common 🙂
True 🙂
There are only 3 things if you learn, you can make lot of money without anyone's recommendation.
1.Understand Financial statements.
2.Understand magic of compounding
3.Control your emotions.
Those who can't do this can follow a good blog like Stable investor and just stick to it.
Happy investing …!!
I guess 3rd one is the most important, followed by the second one. 🙂
hi dev
i have been reading stable investor for last six moths plus . i find your analyses excellent. and your approach conservative .
i am sure the ultra long term investor will also begood .
however you have not mentioned the cost .
will be obliged if you give some idea of the same
Thanks for your kind words Vijay 🙂
I will be providing more details about the product on launch day itself.
Hi,
1. Most people have no business investing in individual stocks on their own!
2. Reread point number 1.
But if you must . . . and you can actually predict normalized earnings several years down the road, use
those estimates to figure out earnings yield and return on capital. Then, use the principles of the magic formula to look for good companies at bargain prices based on your estimates of normal earnings.
The above words are from Joel Greenblatt in his book The little book that beats the Market.
Yet, most of the small investors here talking about investing in individual stocks for many years ( on monthly investment basis). If one is so disciplined and focussed about long term (20years) there is a simple investment vehicle called mutual funds that achieve the same result, yet we dont use them to the fullest.
First of all accept the fact not all companies listed in the market became INFY, ITC kind of companies. The probability of losing money in an indvidual stock is much more than the losing money in a mutual fund.
In 2007, Punj Llyod was touted as 2nd L&T (Just google about this company and recommendations from brokers in 2007/8). At some point., this stock went up to 575Rs. today trading at 57Rs. and there are many other companies in including some of the so called bluechip or index names (Reliance Infra, Tata Steel, etc).
If the monthly investing sum is small, don't even bother about investing directly in stocks, just stick to quality mutual funds, you will do lot better than your friends who invest rather speculate in direct stocks. If you have too much money after meeting all your goals and are are not worried about losing the capital, you can try the direct stock investing. I am quite sure most of us are not even half way mark in reaching our prime financial goals and direct stock investing is not advisable.
If you still want to do it, educate yourself thoroughly on how to go about it. If you edcuate yourself, you will be atleast better prepared to handle it and most likely you will know what is the risks involved in doing it. Unless you feel the pain (due to loss) by yourself, you are most likely not going to agree with what I say here.
Money compounding is a very long process and it will certainly test your patience.