10 TRADING and INVESTMENT STRATEGY - You can apply BEFORE and AFTER BUDGET – 2017 – A REPUBLIC DAY GIFT TO ALL MY READERS.
January 26, 17
10 TRADING and INVESTMENT STRATEGY - You can apply BEFORE and
AFTER BUDGET – 2017 – A REPUBLIC DAY GIFT TO ALL MY READERS.
Greetings from Hitesh! On 26th December we gave a
bold call to buy in our post titled How do we see market in 2017? Must read for every Indian Investor.
Since then
Nifty has moved up from 7894 to 8610!! 700 points up!! Did any EXPERT told you
so categorically about buying in Indian Market on 26th December? Do you still need
anymore TESTIMONIAL for our SKILL SETS?
Our last post on making tons of money in spite of going wrong
50% of the time has evoked an interest in investing. Readers have come up with
the demand to share some of the TRADING and INVESTMENT Strategy which can help
them to Make tons of money. So, I am taking all of the readers to the MASTER
TRADER of the last CENTURY – JESSE LIVEMORE. I have learned my best of the
trading skill from HIM. I consider him as my mentor though we have never met
personally.
I am sharing 10 of his best strategies with my comment below it.
This will make it easy for all of you to understand the QUOTE in right
perspective. Just read each of the QUOTES as if you are SIPPING your COFFEE or
BEER. Do not be in a HURRY to GULP it like WATER.
1) The stock
market is never obvious. It is designed to fool most of the people, most of the
time.
This is the REASON – most seasoned investors like BUFFETT
always does the REVERSE in the market. If the market goes up – they sell and if
the market goes down they buy. This is
SIMPLE STRATEGY but most guys failed to implement the same!!
In the FRIST and LAST week of DECEMBER – I was reminding all
the readers to invest. Just see NIFTY has moved up from 7900 to 8600 today!! Not
a single SO CALLED expert was talking when I said!! By the grace of GOD, I am
always on the right side of the market.
Having EDUCATION or MBA/CA degree is different from making
money in STOCK market. That’s why we always tell our clients to be with us for
MINIMUM of 3 years.
I have always said – you have a MIND. I am DEVELOPING your
MINDSET!! Without MINDSET – you will always FAIL in spite of Intelligence /
Degree or other qualities.
2) Play the
market only when all factors are in your favor. No person can play the market
all the time and win. There are times when you should be completely out of the
market, for emotional as well as economic reasons.
As a RULE we do not play in the market in the last week of each
of the month. MAUKE PE CHAUKKA rule apply here also. You have to see the market
holistically before you put your BET.
When you STAY AWAY for a WEEK – you get the time to look
yourself from DISTANCE / to look market from DISTANCE / to enjoy the time with
your FAMILY / to enjoy your money the way you think FIT.
Trading should always be done with some EDGE. JESSE calls it –
FAVOURABLE FACTORS.
3) Do not
use the words “Bullish” or “Bearish.” These words fix a firm market-direction
in the mind for an extended period of time. Instead, use “Upward Trend” and
“Downward Trend” when asked the direction you think the market is headed.
Simply say: “The line of least resistance is either upward or downward at this
time.” Remember, don’t fight the tape!
The most often asked question to me is – MARKET KYA LAGTA HEY. People want fixation before they do
anything. If they want LOVE, they get MARRIED. They prefer STATIC
SITUATIONS to DYNAMIC SITUATIONS.
Your THOUGHTS becomes WORDS and your WORDS become your ACTION.
There is a CHAIN effect. So, select proper words before you play in the market.
My personal experiences of meeting with legendary INDIAN
investors have always taught me above. They NEVER TALK about NIFTY LEVELS or
STOCK Targets. They only say – Market is GOOD or Stock is GOOD.
The NORMAL people fail to comprehend this and they stay away
from the market and miss the lifetime moneymaking opportunities.
4) The game
of speculation is the most uniformly fascinating game in the world. But it is
not a game for the stupid, the mentally lazy, the person of inferior emotional
balance, or the get-rich-quick adventurer. They will die poor.
This is my favorite quote and I have many times used this in my
various posts. He said there are 4 qualities STUPID / MENTALLY LAZY / INFIRIOR
EMOTIONAL BALANCE and GET RICH QUICK ADVENTURER.
I have found most people are not stupid but MENTALLY LAZY. They
are not ready to spend time in understanding simple investment and trading
strategies. They say – PLEASE DO WHAT EVER YOU THINK FIT or TELL ME WHATEVER I
HAVE TO DO? In fact, there are very few who reads my post in totality. They
read the CAPTION and judge the post.
Since they are METNALLY LAZY and did not understand the
concepts in totality – they have no faith in whatever is being done by their
broker or by them. Action without FAITH always leads to PANIC when something
unexpected happens or when the results are not in favor.
If person is MENTALLY LAZY and unstable Emotionally – he can be
taken for a RIDE by GREED and only GREED. You tell them the money will double
in shortest possible time and he will give you tons of money without much
thinking!! This way most of the guys can
be proved STUPID.
5) The only
thing to do when a person is wrong is to be right, by ceasing to be wrong. Cut
your losses quickly, without hesitation. Don’t waste time. When a stock moves
below a mental-stop, sell it immediately.
Almost all the legendary and highly successful investors have
suggested this time and again. When stock does not move as per your
calculations – just book loss and get out. This is the simplest thing to do.
Normal guys do AVERAGING when the stock goes down. This is even
more dangerous. Yesterday we had talked
about CARL ICAHN. He did not sell his loss making stock even when they have
gone down by 50% also. But he never added more of those stocks. He added his winning
stocks and those stocks gave him 87% return.
6) Emotional
control is the most essential factor in playing the market. Never lose control
of your emotions when the market moves against you. Don’t get too confident
over your wins or too despondent over your losses.
As a school kid, I was studying the reasons of FALL of RAJPUT KINGS.
One prominent reason was – they used to CELEBREATE too much on their SAMLL win
and they used to get DESPERATE When they to lose small battles. They used to
operate from EGO.
Same thing happens with the NORMAL investors. They get happy
when the stock moves up by few percentage and they get desperate when the stocks
move down by small percentage.
The smart ones see stocks as a MEANS to ACHIVE their purpose.
The do not see STOCK as their purpose. Normal guys see stock as the purpose and
they end up making mistake after mistake.
7) All
through time, people have basically acted and reacted the same way in the
market as a result of: greed, fear, ignorance, and hope. That is why the
numerical formations and patterns recur on a constant basis.
The KEY WORDS are GREED / FEAR / IGNORANCE and HOPE. If you
look this words honestly – you will see that GREED / FEAR / HOPE exists only
and only because you have IGNORANCE.
The day you have studied investment idea yourself or you have
appointed proper consultant for yourself – you are 100% informed about the
investment decision. When you KNOW what you are doing – you have cold blooded
calculation about your expected returns and not HOPE /FEAR or GREED.
The problem comes only and only because of IGNORANCE. At
DESTINY MANAGEMENT we spend good deal of time in education our clients about
investment opportunities before they act.
8) Watch the
market leaders, the stocks that have led the charge upward in a bull market.
That is where the action is and where the money is to be made. As the leaders
go, so goes the entire market. If you cannot make money in the leaders, you are
not going to make money in the stock market. Watching the
leaders keeps your universe of stocks limited, focused, and more easily
controlled.
This is the simplest way to spot investment opportunities. Just
see which stocks /sectors are moving in current market. Be with them and you
are making tons of money. When you follow leaders – you have very small stocks
to follow and you can focus more. What an intelligent idea. No doubt Mr. Jesse
was the legendary trader of his time.
9) Failure
to take advantage of a serendipitous act of good luck in the stock market is
often a mistake.
This is one of the major factors, which is being missed by many.
Just to give you perspective. In the wake of DEMONETISATION – the gold made
Rs.45000 to Rs.65000 per 10 grams. How many of you sold the GOLD or GOLD
ORNAMENTS. Just see had you sold you would have got an opportunity to buy back
at Rs.27500/-.
You could not have planned DEMONETISATION / you could not have
expected that GOLD will touch so and so levels – but when it touched that rate
– all you had to do was to SELL.
Had you sold – you could buy at least 1.5 times the GOLD you
sold NOW!!
This is missing the SUDDEN LUCK factor.
10) There is
nothing new on Wall Street or in stock speculation. What has happened in the
past will happen again, and again, and again. This is because human nature does
not change, and it is human emotion, solidly build into human nature, that
always gets in the way of human intelligence. Of this I am sure.
When Mr.Modi announced 3 objective
of DEMONETISATION – Stop Black Money / Stop Corruption and stop TERRORISM – I
was laughing. I had said categorically in my post that India has a long history
of MAHATMAS – still INDIANS are the same.
Human Psychology does not change
that fast. It takes generations and generations. Just to give you perspective –
if you have to choose between LOGIC and BELIEF – you will without fail choose
the BELIEF.
In the movie OH MY GOD – the character advised to donate MILK
to the people who are HUNGRY instead of pouring over SHIVLING. His arguments
were LOGICAL. But has India STOPPED after listening to him?
They removed the BAN on JALIKATTU
in TAMIL NADU just last week only. Did the LOGIC of PETA people prevailed or
the BELIEF of the local won the ORDINANCE?
I am writing since 1996. I have
large number of followers. They really like my writings. They really appreciate
my LOGICS and VISIONS. But they find it difficult to LEAVE their BELIEFS in
SAMLL SAVINGS. They know that BANK FDs are BAD in current times as the POST TAX
YIELD is very low. But very few are ready to change their BELIEFS.
Long back I had READ a book by
WAYNE DYER – “If you believe it, you will see it”. But since they are
not ready to change the BELIEFS only – they do not SEE the NEW and BETTER WAYS.
In short, HUMAN EMOTIONS do not
change fast and never change with the LOGICS. So, those who can go beyond their
EMOTIONS – make tons of money.
What NEXT?
These are 10 CARDINAL PRINICPLES
of making tons of money in market and in any situations. I have taken special
efforts to write this post for you on India’s REPUBLIC DAY.
May you DECIDE to FOLLOW above
given 10 rules and achieve your FINANCIAL INDEPENDENCE.
BLESS ME if you find my writings
useful to you.
Have a GREAT REPUBLIC DAY.
Live With
Passion…Invest With Passion.
Hitesh Parikh.
This is such an amazing site! I really enjoyed reading the content. Thanks!
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