Saturday, July 5, 2008

Boldness Changes Everything!

More and more traders are being wiped out every single day as markets move up and down like a bouncing rubber ball. A trader I know was telling me how trading is a game where 99% of people donate their money to 1%. If you belong to the elite 1%, trading is great. However a lot goes into being a part of that 1% and not everybody will be a part of that 1%. Very few people will even get access or know such traders as they are extremely secretive and low profile. I like giving a part of my money to that 1% as I don't have the time to trade and I feel I don't have the mentality needed to trade successfully.

I have been having conversations with a few investors in international markets to understand what is happening better. From what I hear from them, America and the West will be affected very badly and still there are a lot more losses to be revealed. This will lead to a global slow down which will eventually run into commodities causing things like crude, metals, cement, etc. to all fall drastically. In India financial institutions will surely be affected by this and so will other businesses, however the affect on India will be much less purely in terms of economic fundamentals, however it can cause markets to correct as foreign investors will pull out money to save themselves. Personally I feel that this will be a great opportunity as with the rise of products like ULIPs/Insurance and Mutual Funds over the next 5 years, lots of local money will be coming into our markets.

As Laxmi Mittal's company ArcelorMitaal says Boldness Changes Everything. Boldness made Laxmi Mittal one of the richest Indian's in the world and the richest man in Europe. I shared his inspiring and motivating story with all of you in ITHW because I felt we investors can learn priceless lessons from entrepreneurs like him. In fact now is the best time to make use of the ideas you read about in ITHW. It seems the number of people wanting to buy cakes is reducing each and every day. The baker has no choice but to offer things cheaper. Now is the time to be bold because everyone else isn't. However being bold doesn't mean going and buying 100%. It doesn't mean buying based on rumors without research and knowledge. Being bold doesn't mean being crazy and suicidal. Buying 100% at one go, according to me is extremely risky because it doesn't let you benefit from future opportunities. Instead buy gradually into companies you like, I for example bought more into one of the companies I shared earlier which wouldn't be too affected by the international economic challenges. While reading my post there, you will notice how the same companies which had shot up over 20% within a matter of weeks are once again much lower. In fact almost all the companies shared earlier are much lower today in terms of stock prices. A few of you had written to me that time telling me how you regret not buying, but I had simply told you that don't worry about the stock prices and spend time learning. Opportunities will come if you have patience.

As Warren Bufett, the richest man on earth, says:

"Interpreting market volatility as a destroyer of opportunity when it is instead a creator of opportunity. If your approach is sound then volatility allows you to buy that which was cheap yesterday cheaper today"

Do you agree or disagree? Share your thoughts in our Comments section. I would love to hear from you.

Also several of you have been asking me about Exchange Traded Funds (ETFs). I shall be sharing my views on them shortly, however till I do that you can find out more about them by going through the FAQ at Benchmark Fund's website. I had met their executive director Sanjiv Shah, sometime ago and I found their fund quite interesting.

Have a great weekend and make the most of life and the opportunities life gives you!

Yogesh Chabria

Read the wonderful thoughts shared by fellow Happionaires on Politicians and the theory of Karma.


Anonymous said...

Personally I have put in around 40% in the markets. Am looking at investing more into quality picks over time. I feel markets can go down further and thus will give good buying opps. As you have said Insurance and Mutual funds are going to grow huge in the next 5-10 years so lots more potential.

Anonymous said...

I was seeing a wonderful interview of Aditya Mittal last night on CNBC and he was saying the same things you said. He said that the steel sector was in the pits when he entered and was supposed to be the worst sector. That is when they bought companies very cheap and see the results today.

I agree with this thought process rather than running behind 'hot real estate' and all. Thanks for letting more and more common investors think this way while keeping things simple and fun.

Have a great Sunday! Oh by the way I have bought all the educationl reports and they have been priceless gems. I have taken print outs and read them often and learn alongwith reading the ITHW. Have already read the ITHW 3 times.

Looking forward to your next book!

Nobody said...

It is a time to do cherry picking.
Many value stocks are quoting below book value. Who does not like to buy a business if offered at price less than book value.

In fact the realty sector stocks are crushed, may go down further if real realty price drops as expected in next few month due to all round pressure.

But remember, the growing nation like India or China needs lot of space for doing business or stay in course, so in longterm the realty sector may be good bet.

Unknown said...

I have been reading all your mails and got an excellant oportunities to learn about investments. I do also feel that this is the best time to go for quality stock and fundamentally good stocks. But problem is donot have any money for the time being. I neither have opportunity to buy nor have opportunity to sell the present holdings because the stocks value had corrected almost 50%. Though I bought some in the last month the same had corrected still further.
What I feel one should have siziable amount for investment. Else its very difficult to play. In yesterday's economics times I find a very article about the retail sector when the stocks had declined a lot. Patiently look for upward move to come to create some money.

I have learnt from your mails and it would great help in educating people like us.

However I feel the good pharmaceauticals and FMCG might give good returns if the same is bought at the ruling price.

with best regards


Anonymous said...

Thanks for the lovely post as usual and sharing details of what an ETF is. I found the Benchmark ETF very nice and it is a simple concept. First time I came to know about them.

Do they offer such things also for Oil? As in an Oil ETF? I think I will be investing some money in their ETF too on a regular basis.

Do share such interesting concepts and funds more often, we really get to learn a lot.

Anonymous said...

It is nice that you encourage people learn for themselves and share new ideas. ETF is something I have heard a lot about from people like Warren but didn't know India offered something in it.

Thanks for sharing it. Even though I have not heard of Benchmark before I'm sure Benchmark must be good as you found it interesting.

Looking forward to your next book which will help me move ahead and learn more.

Hypocrite said...

helloooo yogesh...wru??? the markets are falling everyday and we miss your blogs? busy fighting the markets?

The Happionaire™ Blog said...


Nice to hear from you. I have been out of the country on a small break, that is why no posts. However inshallah I will be back soon.

Take care and keep smiling!