How WARREN BUFFETT and RAKESH Converted Their Major Failures into Major Success?

January 1, 2016.

How WARREN BUFFETT and RAKESH Converted Their Major Failures into Major Success?

Greetings from Hitesh! Just see 2015 is over and we are in 2016. Time passes very fast or our life is passing very fast – I don’t know. The fact is we are in 2016. We have always appreciated the success of Buffett and Rakesh. We have been always learning from them. But the fact is – very few people know about their failures. In fact, their major success is the results of their major failures in the area of investments. Let me deal with this on the first day of the year.

What is their BASE of investments?

They are value investors and they go by value investment parameters while they invest in their chosen company. They operate on their circle of competency and choose the business they like the most. Chose the business they think will give them the best return in the times to come. People follow them like GOD.

What is the REALITY?

Buffett has investments in about 215 companies and Rakesh has investments in about 40 companies. Buffett has just 15 best performing stocks and Rakesh has just 4 best performing stocks in his portfolio. (I don’t have the exact data as on DATE but the larger picture is the same).

Just look at their failures – 15 companies out of 215 companies and 4 companies out of 40 companies and they are considered the BEST INVESTORS!! Failure of 90% or More. This year – Buffett company stocks is down by 11% in spite of US market moving up!!

Buffett has gone WRONG 200 times and RAKESH has gone wrong for 36 times!! Mind well that they have not invested the way most invest on TIPS. They have studied the business / management / other fundamentals – still their 90% of shares have not moved up and still they are most successful!! What a Paradox!

(Most NORMAL guys I come across – will leave the market – if the stocks do not move up in a day/ month/year!! They think – since they have bought – share must GO UP, UP and only UP. No doubt – they always remain NORMAL)

In spite of Going Wrong – how come one is the 2^nd richest guy in the WROLD and other is making a way towards richest Individual Investor of India?

What they KNOW about investments – that NORMAL GUYS are not ready to understand?

Normal guy always looks for GUARNATEE / SURITY when they approach investments. That is the reason they are manipulated by so called experts with their Targets and Market predictions. Their short-term attitude makes them the PREY for these kinds of people. The expert makes tons of money – thanks to NORMAL Guys. In fact, market moving up and down may or may not affect your stocks as much. It depends on variety of factors and they are not possible to predict exactly.

Knowing these – Master investors pick up the stocks after their due studies like we do. Here the NORMAL GUY and MASTER GUY follow relatively same procedures.

However, master guy has the LONG TERM VIEW and they keep on ADDING their WINNERS without looking at the SHORT TERM movements of the price and market.

They create sizeable holding of the WINNERS in their portfolio and they don’t worry much about the Non Moving stocks. They keep their holding of non-performing stocks UNCHANGED or may reduce depending on their need of CASH or Fundamental changes in those companies.

This is the REASON – why RAKESH has a sizeable holding in TITAN. He was adding from Rs.40 to Rs.900. Today Titan stock is worth Rs.7000             (Rs.350X20).

Everyday I look at NORMAL Investor’s portfolio – they also have such multi-beggars in their portfolio but since they have not been adding to them – their overall performance remains AVERAGE over the long period of time.

Now they blame their luck / they look out for alternative investments as if they will give them what they really want /they will diversify unnecessary. They will do all possible things except simple thing to go on adding the winner!! Probably they are so intelligent that SIMPLE IDEAS may not be making sense to them!! 

Why Normal Investors Do Not Add to Their Winning Stocks?

There are many reasons. Lack of Study / Lack of Conviction / Lack of Vision and Lack of Regular Funds for investments are the MAIN.

How do we deal with these Issues?

We educate all our investors about the potential of the company. Train them to hold in spite of short-term movements. We teach them trading so that they generate funds to invest more and more in their winning companies.

A good portfolio needs at least 3 years to build. We request them to be with us for 3 years and by the time they learn the fine art of trading from us and also develop the capacity to understand the overall market picture themselves.

Once they know how to generate funds on their own and they understand the market – they can be on their own for lifetime. They don’t need us – unless they want to go for ADVANCE LEARNINGS.

What NEXT?

Today is the FIRST DAY of 2016. Everybody will change the year / month and date. Very few will take steps to change their DESTINY. If you want to change your DESTINY forever, I suggest you join us in this weekend. Do contact us NOW.

Wish You ALL A VERY HAPPY WEEKEND.

Follow me on Twitter @hiteshmparikh or on Whatsapp - +91-9869425399 or www.hiteshmparikh.com

Live With Passion…Invest With Passion.

Hitesh Parikh.