• Post category:Recap
  • Reading time:5 mins read

I was on a quest to learn all that was there. I was hovering books after books to learn and get insights. But I was easily maneuvered towards unwanted.

I read “How to make money in Stocks” by William O’Neil, and it challenged all my knowledge. When Peter Lynch guided me to stay away from the hottest stocks in the hottest sector, Mr. William preached precisely the opposite. When high PE was a No-No for Guru’s, Mr. William made me think twice. As I was easily convinced, I thought to give Mr. William a chance. He explained that we could time the market & steer clear when the danger of crashing down was hovering all over and make reasonable predictions based on technical charts for gaining more in less time.

Overall, I was doing OK in the bull market. Everything I touched was raining gold. But another investing lesson was waiting for me. Mr. William’s website predicted that volume in the last few days was huge, but the market wasn’t making any gain’s which meant hedge funds were selling, and we should keep a distance from the Stock market until fundamentals improved. So as a loyal blind follower, I made a move. I sold my entire portfolio.

And as Mr. William predicted, the market did come down a bit. I think it was a meager 6% in mid-2019. I was patting myself for making this excellent call. Then Mr. Market thought 6% was enough, and it started an upward move. It was 10% up within two months.

I was out of the market & had time to compare suggestions from Mr. Lynch to Mr. O’Neil. Mr. Lynch said he was invested 100% the whole time when he was leading at Fidelity. His record of generating 29.7% in his 13 years is a testament in itself, whereas Mr. William’s track record was nowhere to be found & his IBD Top 50 ETF wasn’t anything extraordinary.

I was watching on the sidelines when the market was making new peaks every day. I knew deep inside that this was not something I wanted. I wasn’t aligned with the strategy. After that point, I knew I had to come back with carefully carved out principles to lead my investment decisions.

Early 2020, I was still out of the market, but I was working on creating some principles to guide me. As I was ready again, I read about CVS and IRBT and started a small position. What else, I Jinxed it yet again. The market crashed 30% within a month, but this time, I was prepared.

I loaded up while going down and again while the market was coming back up. I now know better that good companies always make a comeback. Instead of jumping in and out, I decided to hold it until I was sure Mr. Market was exuberant. Now I am doing way better than S&P. You may very well call it a fluke, as the market jumped back within a couple of months. But I now know better. In retrospect, I am going over my holdings to check if my story aligns with companies’ performance or is a fluke?

In the following posts, I will go over what I have learned the hard way to help all the new investors or at least in the hope of stopping myself from committing the same mistakes. From now on, If I grasp something, It will be well documented. I will make mistakes as my learnings are continuous and open-ended. I aim to educate myself to evaluate companies & manage risk vs. rewards. I will create my own story of a company before I invest and document it here. Assess me in retrospect.