I like emulating the good things people do. All of you might have heard of the billionaire investor and philanthropist Sir John Templeton. He created his wealth by using a contrarian approach and not doing what everybody else was doing. It was based on buying into companies others were not buying into. He was amongst the first people to invest in Japan and also amongst the first to exit Japan before the bubble burst there. He did quite well for himself.
However he would do another thing which many people don’t know about. He would regularly give small parts of his money to people who had different outlooks towards investing and trading in order to make sure he can benefit from opportunities he might have overlooked. I like doing the same. There isn’t only one right way to do things, and I don’t like being stubborn. Being stubborn can mean a loss of opportunity.
As all of you might be knowing by now is that I am a long term investor because that is what I understand best. I believe it is much simpler to select a good company and hold it for the long term rather than constantly stay updated with what is happening in the markets and try to trade. I have traded in the past on my own and am not hesitant to say that have also incurred losses due to trading. What I have learnt is that even though I might like to benefit from every possible opportunity, I might not have the necessary skills, time or inclination to do so.
For example earlier when markets would go down, I would feel extremely tempted to buy put options or go short. Even though this did give me good returns, it also caused me to incur losses as I wasn’t fully aware of how things worked. I did not have associations with other traders in the markets who knew how things worked. Trading does depend largely on what major players in the market are doing. Knowing what they are doing is extremely important.
Presently I have Aniket Waghmare, a good friend who is a professional trader, trade for me. Initially I had put in 15% of my capital, but lately thanks to the recent volatility my trading capital has increased significantly. Aniket trades on the basis of technical as well on the basis of timely information usually not yet available in the media.
Besides me Aniket also trades for a select few HNIs and I usually get returns in the range of 45-50% a month. Of course even though the returns are extremely good, I don’t put larger amounts of money as the risks associated with trading are much higher than long term investing. Mostly trading is done in Options as the downside is limited, unlike in the case of Futures, while the upside is unlimited.
I thought it would be great if I could get Aniket to share some of his trading ideas with more people especially since markets have become so volatile. He has agreed to let more people in onto some of his trading ideas and decided to share his knowledge. To start with he has decided to share his ideas for a month starting from the 1st of August 2008.
All those interested can find out more about it here.
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Keep smiling and happy wealth creation!