Another insightful article Abhishek. All your writeups including curiosity, stock stories have been gold mine for me. It was an eye opener when you said on Smart Sync that averaging down is nonsense. Thanks for being my mentor. 🙏🙂
I have a few questions regarding exits.
1. What if you buy a very cheap stock whether on PE level or DCF & business is doing reasonably well but the price momentum is not building for more than 1-2 years? How long do you wait before you pull the trigger?
2. Do you still stick to stoploss even during broader market sell off? I mean the reason for stock price fall might be market crash right?
3. What if you find a stock with good divdidend yield, let's say 10%? The business is stable & there is high probability of sustained high dividend yield? Do you still have a stoploss? I mean most of the returns will be covered by the dividend itself right?
Eagerly waiting. I know that any one straregy will not fit all. For momentum investing I guess I am getting more clarity day by day. But with value, deep value, dividend growth (& of course there will be other opportunities I will come across eventually.), etc. I am still not sure. It doesn't make sense to sell a good value dividend growth opportunity just because price trend is broken for example unless one is not fairly confident about business quality & have clearly identified risks. But then there has to be some exit criteria. Because it could happen that one is sitting in such investment for a long period of time & gives a high opportunity cost. Selling (& rentry) is by far the most important thing to learn in investing I guess & seldom given much throught due to the buy & hold preachings.
A little bit about me.
I am a software developer. Always trying hard for financial freedom. Got a great partner who is also inspired by the same goal. Did MF investing through SIP from 2008 till 2018. Did quite a few mistakes by doing the right exits from the markets but missed on right capital allocation back into the markets at Covid lows. Started direct stock investing since 2020 (as you said no one can cook just by reading recipies). Made many many mistakes (still making). The only good thing is learning everyday & haven't left the arena yet.
Another insightful article Abhishek. All your writeups including curiosity, stock stories have been gold mine for me. It was an eye opener when you said on Smart Sync that averaging down is nonsense. Thanks for being my mentor. 🙏🙂
I have a few questions regarding exits.
1. What if you buy a very cheap stock whether on PE level or DCF & business is doing reasonably well but the price momentum is not building for more than 1-2 years? How long do you wait before you pull the trigger?
2. Do you still stick to stoploss even during broader market sell off? I mean the reason for stock price fall might be market crash right?
3. What if you find a stock with good divdidend yield, let's say 10%? The business is stable & there is high probability of sustained high dividend yield? Do you still have a stoploss? I mean most of the returns will be covered by the dividend itself right?
This month I had thought of making a video on selling. But then when I sat to write, this came out.
Probably will discuss selling in the next article (& video)
Eagerly waiting. I know that any one straregy will not fit all. For momentum investing I guess I am getting more clarity day by day. But with value, deep value, dividend growth (& of course there will be other opportunities I will come across eventually.), etc. I am still not sure. It doesn't make sense to sell a good value dividend growth opportunity just because price trend is broken for example unless one is not fairly confident about business quality & have clearly identified risks. But then there has to be some exit criteria. Because it could happen that one is sitting in such investment for a long period of time & gives a high opportunity cost. Selling (& rentry) is by far the most important thing to learn in investing I guess & seldom given much throught due to the buy & hold preachings.
A little bit about me.
I am a software developer. Always trying hard for financial freedom. Got a great partner who is also inspired by the same goal. Did MF investing through SIP from 2008 till 2018. Did quite a few mistakes by doing the right exits from the markets but missed on right capital allocation back into the markets at Covid lows. Started direct stock investing since 2020 (as you said no one can cook just by reading recipies). Made many many mistakes (still making). The only good thing is learning everyday & haven't left the arena yet.
All fine points Abhishek. But what stood out to me was:
> Investing styles are also cyclical in nature
We should diversify across the investing styles too: Large-cap, mid-cap, small-cap, value, growth, dividend, quality etc. Insightful.