What a year 2009 was? At the beginning of the year, the stock market was trying to find how deep the abyss was. Every other participant in the equity market was trying to run away like there was no tomorrow. Fast forward to second half of the year. The story changed and now the stock market is trying to find its peak. It was in true sense a roller coaster ride.
When the equity market goes up like it did in later part of the year, it gives a false sense of confidence in our abilities to pick stocks. Irrespective of what one thinks, any company stock you had touched in second of 2009, it has zoomed. It really did not matter which company stock it was! Lately, I have seen quite a bit of emails trying to point me towards how the stocks that I negated (or did not pick?) have zoomed up and made them money. I do feel happy for everybody who made good money in 2009. I wish you had shared those winners with readers of this blog. We all want to make money here. Right? Continue reading rest of this article…
I am continuing to keep looking for good companies and prepare my watch list. Keeping with this thought process; I looked at few stocks in small cap domain and applied my screening process. I have short listed following five small cap companies that I believe warrant further detailed analysis in the context of my buying objectives.
My objective of investing in index based ETF is to have a total return that is somewhat similar to the market performance as a whole. It also acts as my benchmark for other long term portfolios. As mentioned in earlier post, if I cannot beat the market by stock selection, I should just close my long term portfolio and invest everything in these index ETFs.
Last week, I discussed my stock screening process and four matrices that I use for short listing the company for further evaluations. One of the traits of any successful investor (or for that matter even a trader) is that they keep a watch list of stocks and monitor its performance. Since the market has run up and we investors believe that stocks are overpriced, it is time to prepare our watch list. In addition, after establishing the watch list, it is also important to determine what would be the price you would be willing to pay to buy it.
I take a considerable amount of time to perform a thorough quantitative and qualitative evaluation for any stock or the company. I believe it is necessary since I am investing for long haul. How does a one month or two month matter when I am attempting to visualize for next 10 years or more. Yes, I agree delaying couple of months will make me miss the window of opportunity or as the stock investing lingo says, missing the multi-bagger.
Two readers of this blog left couple of intelligent questions in comment section on some of the articles. Both of these questions relate to what I term as rebalancing the portfolio (or profit booking). I wanted to wait until I posted articles on TIPBlog portfolio update and risk analysis. I wanted to discuss these two questions in the context of TIPBlog portfolio. It will help better understand the re-balancing and profit booking processes.
Recent Comments