Your Success Ratio in Stock Picking V/s. Your Wealth

14 February 2015

Your Success Ratio in Stock Picking V/s. Your Wealth

Greetings from Hitesh! You all have liked our last article on Silent Soniaji!! Thanks for the same. In fact, last two articles have been the most read and forwarded one so far. We had said that Soniaji had been deprived from her cash just yesterday and today MEDIA says Congress could not campaign against BJP and AAP due to cash crunch!! See, we keep you ahead of the MEDIA as always!!

Coming back to the above captioned subject matter.... in last 25 years of my evolution from an analyst to portfolio manager to an Investor I have observed a normal client always see the things in parts. They will always talk about the shares that had not moved up in their portfolio!! They will not talk about the shares which had moved up. I feel very sad for them as they do not talk about the trend of the total portfolio v/s their original investment goals. We have a habit of seeing things in totality.

Normal guy’s logic is simple – if he invests in 10 different companies – all the 10 companies must move – in order to make him a good profit and create wealth!! This looks logical to the average follower also!!

Let us see the reality.

RAKESH’s Portfolio:-

Rakesh has around 30 companies in his portfolio. Just 4 companies out of it – Titan / Lupin / Crisil / Karur Vaisya Bank had earned him a super wealth!! If you look at the ratio it is little more than 10%!! In other words, he has failed 90% of the time!!

Same is the case with Warren Buffet. Buffett has just 10 super stocks out of 200 stocks....just 5% and he is the 3^nd richest guy. In other words, he failed 95% of the time!! Same is the case with George Soros. If you look at them – your logic of maximum correct calls is equal to maximum wealth will not hold!!

That’s why Mr.Soros had always said – “It is not important how many times you go right or go wrong. But what is most important is what you earn when you go right and what you lose when you go wrong.”

We always ask our clients to allow their winners to run and/or add to their winners.

What Normal Investor does?

He will hold the losing shares and sell the profit making shares!! Person earning lakhs in his business or job – when he comes to share market – he is more concerned with paltry profit of Rs.1 to Rs.10!! What’s more, he wants it instant!! If the share moves up by say Rs.10 in a day or a week, he feels he has hit the jackpot. He will sell it immediately!! But if the share goes down by Rs.10, he will ADD/AVERAGE.

This is one of the main reasons to keep him AVERAGE investor through-out his life.

Our Achievement:-

Till now, we have been accurate about our market calls. Now we are giving you great calls about international scenarios and politics also!! That too ahead of the media or media experts!! Bless us. We praise lord for giving us the right kind of intelligent at right time.

What Next?

Always worry about your investment goals when you create your portfolio and do not worry about losing shares or winning shares. That will distract you from your goals.

If you really have strong investment goals, I suggest you follow us. I am sure with our understanding of the market and our strategy – you will 

see your goals are fulfilled faster than you anticipate.

February is turning out to be fantastic as told you in January end. Do not miss.

Have a Super Sunday.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.