Tuesday, January 30, 2007

What Stocks Should I Buy: Part II

Read the following extract in a leading Indian daily talking abouts stocks selection:

"Market experts believe that it would be small and mid cap stocks that would pick up in the days ahead. However, the upside may be limited or only in selected stocks. Normally, retail and small investors are more active in small cap stocks due to the "value for money" illusion. But be very careful while betting on small cap stocks as the risk associated with these is much higher"

Looks fine but there are hardly any takeaways from that. Notice the words: however, experts believe, selected stocks, illusion, normally, But, much higher!!! So while the story talks about small and mid cap stocks picking up, there are many contradictions within one paragraph!!

Read what I learnt earlier here.

My learnings are:

Focus on the long term. Buy into a Company you are aware of. Select a few, say 10-15 stocks and gain knowledge about their Financials and Management. And stay put. Accept your mistakes and learn from them.

और ज्यादा confused हो गये? होता है!!
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