Saturday, November 21, 2015

Three reasons patience is essential for stock market investing

 Courtesy : esignal.com

 
In stock market investment, patience is necessary. If you don’t demonstrate patience, you will either miss out on opportunities to buy securities at the right price, or you will sell prematurely and lose money in the market. Whether you are new to stock market investing or have been doing it for years, taking your time and making smart, well-thought out decisions will help you achieve greater success. Accordingly, here are three things you should focus on to cultivate patience when investing:
1. Knowing when to buy
Determining when is the best time to purchase new securities should involve lots of research and careful consideration. You will have likely studied past performance, fundamentals and identified the ideal entry point. If, however, as you wait for the price to come down, it suddenly starts edging upwards, you should not panic and place an order in haste. By doing this, you not only give up potential profit, but you also nullify all the research and planning you have done up till that point. The point is that once you set a purchase price, you should stick to it. The whole reason you do research is to avoid guess work and impulse decisions. Emotional stock market investing will eventually lead to disappointing returns. Investopedia explained that investors who violate their discipline can end up in ruin. As such, that’s why sticking with a predetermined investment strategy will help mitigate the losses that result from emotional investing, lack of patience and failing to look ahead. Exhibiting patience is not always as easy it sounds, but the best investors and traders are able to trust their own discipline. By using sound methodologies and allowing your research to serve your strategy, you avoid buying prematurely. Remind yourself that patience is the most important investment discipline.

2. Knowing when to sell
Zentrader pointed out that private equity is consistently one of the highest performing asset classes because investors buy and sell when prices are optimal. They purchase companies and securities at a bargain and then hold them for a full business cycle. When the investment has appreciated enough, the investors sell them. Selling when conditions have improved substantially is how to make a huge gain. What retail investors should learn from this example is that, having bought a security at the right price, the next thing to do is wait. If you have done your research, then you have determined the best time or conditions to sell. You should hold steadfast in that decision. According to Investopedia, there are times when you can stick to your strategy diligently and the price of the security does not move. This is when patience will serve you the most. You can go back and re-examine your strategy and look for something you may have missed, but don’t sell impulsively. If the outlook for the security has changed, then you can set a new price at which to sell. Alternatively, you may find that your analysis is on track and that the security will eventually get to where you want it to be. In that case, continue to hold your position. Many institutional investors lose money in the market because they don’t know how to be patient. They will make sudden decisions that limit their ability to make a real profit. Knowing when to sell is essential.

3. Knowing yourself
The most important thing when cultivating patience is knowing yourself. If you are aware of your tendency to be impulsive and can react emotionally to volatility in your investment portfolio, then you can implement certain safeguards to ensure that your temperament doesn’t get the best of you. Zentrader mentioned that most studies done on the behavior and results of individual investors reveal that they routinely underperform the stock market over time. The main reason for this is that retail investors are too focused on the short term and don’t put enough time into forming strategies and waiting for them to materialize. It is also important to highlight that most of us aren’t experienced day traders. Making money with short term positions isn’t easy. The only people who really make money from frenzied buying and selling activity are brokers. However, long term strategies allow investors to capitalize on the simple fact that markets appreciate over time. Institutional investors who spend their days studying and predicting market fluctuations may be able to play the arbitrage game, but for the retail investor who wants to invest in the market as a hobby or as part of a retirement plan, the best way to make money is be patient.

Ultimately, like in any field, study or discipline, hard work pays off. Many investors operate under the assumption that making money through stock market investing is easy, but the truth is that it requires research, analysis and patience. Zentrader also pointed out that while it seems obvious, the best way to invest is to buy low, hold on to securities for a long time and sell high. This is what investment gurus like Warren Buffet advise individual investors to do.

122 comments :

  1. Dear sir,
    please share your view about necter lifescience ltd.

    ReplyDelete
  2. Dear sir your old recomondation eland apparel (mudra lifestyle) is moving very fast and there is lot of things happening like
    Now eland has bought back the whole promoter stake
    QoQ improvement
    In the edge of turn around
    Possibility of entering retail because of new rules

    Please let me know your view whether can we invest in this

    ReplyDelete
  3. Sir superb article about how to make handsome profit in time..

    ReplyDelete
  4. Hai sir like to know your view on intrasoft tech. They are posting good result and also expanding in new geography also.like to know your view. Thanks

    ReplyDelete
  5. Sir needed ur current view on 'Technofab Engineering', one of your very old recommendation
    They have posted good numbers this quarter
    Are u positive on this

    Thanks

    ReplyDelete
    Replies
    1. One among the few companies working satisfactory in this troubled sector . Expecting to outperform once the sector revive

      Delete
  6. How much patience still we need to show in IL&FS Eng. Which u recommend at 98 and now is at 59 ? A sheer wash of capital.

    ReplyDelete
    Replies
    1. Don't expect multiplication of capital in every stock invested . Wash of capital in some cases is part of investing .My opinion on this one clearly mentioned as a comment below the content of following link.

      http://value-picks.blogspot.in/2015/11/result-update-il-engineering.html

      Delete
  7. Please share your view on Butterfly and kpit tech for long term.
    Thanks a lot sir am follower of ur blog last two years .missed out MIC and SKM

    ReplyDelete
    Replies
    1. I think , the focus of management of Butterfly to develop business lost to a certain extent when they give priority to execute the TN Government orders . Future depends on how early they correct this .

      Not tracking KPIT

      Delete
  8. Dear VP,

    Your current views on one of your old recommendations 'kerala ayurveda', please.

    Thanks

    ReplyDelete
    Replies
    1. Potential business but not expecting wonders under the current management.

      Delete
  9. Following you since 2011 and did not find any better blog or value picker or humble person than you.Hats off to you.When I turn back to last four years, so many multi multi baggers though I could not hold many of those because of impatience.Any how do you track Manali petrol?With expansion plans ,zero debt and falling crude,is it worth investment for long term.Thanks

    ReplyDelete
    Replies
    1. Business is showing improvement but personally no big expectation from a SPIC group company .Neutral on it.

      Delete
  10. Valiant communications mcap below 75 cr exporting more than 100 countries, will benefit from digital India mission, great pick sir.

    ReplyDelete
  11. your views on Bharat gears.i bought 1000 at cmp@92.i want to hold minimum 2 years.please share your views

    ReplyDelete
    Replies
    1. Nothing to comment about time bounded investment in stocks.

      Delete
  12. VP sir, Any change of views on DION global after continues quarters bad results...though its products got good response why the business is not improving. Does the implementation of BASEL III norms by banks will help DION global businesses improvement. Your views please

    ReplyDelete
    Replies
    1. Till now not performed as expected , prefer to wait some more time.

      Delete
  13. Hi VP Sir,
    I have been following you and find you very knowledgable and kind...
    You adviced a script named ILFS Engineering and construction at 96 and later at 84 but now the stock is trading at 58-60 rupees.. Is this stock still a buy sir and if yes can you please tell the reason and a tentative target?

    ReplyDelete
    Replies
    1. Read the comment portion of below posting

      http://value-picks.blogspot.in/2015/11/result-update-il-engineering.html

      Delete
  14. Sir,

    What is your view on Kinetic Engineering ltd. is it turning around?

    Thanks & BR,
    Surya

    ReplyDelete
    Replies
    1. Last quarter profit only because of exceptional income.

      Delete
  15. Sir do u track lotus chocolate? Is this a worth buying for longterm..plz reply

    ReplyDelete
    Replies
    1. It is an already suggested stock and still hope in it.

      http://value-picks.blogspot.in/2011/09/lotus-chocolate-potential-take-over.html

      Delete
  16. Hi VP Sir,

    Do you feel the sugar sector get revival.
    Any stock from this sector do you track or study.
    Will be helpful for analyzing.

    ReplyDelete
  17. Dear sir, plese your view on pricol ltd

    ReplyDelete
  18. Dear Sir, pl share your opinion on talbros auto in view of their recent results.. Is it still a hold for you...

    ReplyDelete
    Replies
    1. Expecting range bound movement for the time being

      Delete
  19. Dear Sir,

    Thanks you very much for all the replies to my previous queries and I have one sincere request for you.

    Majority of the members of this group have greatly benefited because of your recommendations through this blog for past many years. But now, due to new SEBI regulations, you are not able to do provide detailed company analysis and views. Now you are giving financial results updates which is allowed as per SEBI rules for your old recommendations and expressing your view for the companies asked by blog members in the current format.

    Sir, is it possible for you to post the financial data of at least one company which you feel is turn around or value buy every month so that members can really benefit from it and do their own analysis for taking investment calls?

    Kindly consider this request so that all the members can benefit from your greatest skills of identifying potential winners which is missing in our current blog for last few months.

    Thanks & Regards,
    Venu.

    ReplyDelete
    Replies
    1. Even when I posted the reasoning, lot of people jumped into it without reading the same in full and analyzing whether that particular stock is suitable or not .In such a situation what will be the story if I post just a result ?

      Delete
    2. Sir, Kindly consider the above request... There will be people who are not ready to take time in analysing the companies... However there are lots of people who are serious about investments and learning... You are an great asset and inspiration for all the retail investors.. Take it as a request and consider it Sir. Thanks!

      Delete
  20. Good one VPji.. I would personally consider selling as the most difficult decisions to take..

    ReplyDelete
  21. Thank you for an excellent article sir. Your views on Lovable Lingerie for long term at current valuations. Stock corrected steeply and looks cheaper than industry peers?

    ReplyDelete
    Replies
    1. This is not the growth rate market expected from that company .

      Delete
  22. VP Sir,

    Any new smallcap or midcap Pharma company that looks interesting to you?

    What's your view on NGL Fine Chem Ltd?

    ReplyDelete
    Replies
    1. Suggested many stocks from Pharma Sector

      Not tracking NGL Fine

      Delete
  23. Good Article.Every person who want to earn from stock market must follow these set of rules.

    ReplyDelete
  24. Dear VP Sir, You told earlier that you would consider posting your recommendations through money control & face book where it would not attract SEBI restrictions. Why don't you do this for the benefit of small investors like many of us.

    ReplyDelete
  25. You just check the fate of one message I posted in MMB in the board of Lotus Chocolate recently,you will get the reason why I am not posting often in MMB .. Another blog writer ( as mentioned in his MMB Profile) simply deleted my message and put a 'Sorry' for that .Studying a company and prepare a report need months effort but the same may vanished in a single click there . The message I posted under Lotus was in a few sentences without anything offensive or violate MMB Code . The same thing may happen for any report we prepared after lot of effort . Really sad to see people become more and more arrogant and do anything to defeat others doing similar activities.

    ReplyDelete
    Replies
    1. Vp Sir, asked moderator to restore your message & he did the same :)

      Delete
    2. Thanks for your request and prompt action of moderator .

      Delete
    3. rakeshzunzunwala,

      thank you for your initiative in restoring the message.

      When most of us has benefited from VP sir's guidance and learnings over the years, we must find a way to continue learning from the hard work VP Sir dedicates for us. There are not just few people who guides in the market now a days.

      Perhaps, could we come up with some suggestions on how could we do so? About getting useful articles on learnings basics and research reports that VP Sir used to make? All this while complying with SEBI norms and of-course with VP Sir's comfort and approval.

      Any suggestion or brainstorming could help all of us.

      Delete
  26. Sir, One more of your recommended company Wanbury ltd has come under Edelweiss ARC apart Pioneer Embrodries ltd what's your take on this development, kindly have your views

    ReplyDelete
  27. Respected Sir, Is it wise think that fresh entry in GEI industrial at CMP

    ReplyDelete
    Replies
    1. Already suggested to exit from GEI , not tracking it.

      Delete
  28. VP Sir plz share ur valuable opinion on

    FDC
    Kempton
    Sun Pharma
    Gati

    Thanks a ton in advance.

    ReplyDelete
    Replies
    1. Tracking only Sun Pharma and long term investors with some risk appetite may go for an SIP

      Delete
  29. Sir please your view upon virat industries . Istreet Network and Talbrothers thanks

    ReplyDelete
  30. Dear Sir,

    Your View on Kanpur Plastipacks ?

    Regards,
    Venu.

    ReplyDelete
  31. Dear Sir,

    There are some people posting their analysis and recommendations about the companies on MMB. Is it allowed as per SEBI new rules?

    Regards,
    Venu.

    ReplyDelete
    Replies
    1. May or may not but responsibility may be with MMB

      Delete
  32. Dear Sir,

    Reliance is planning to lauch jio (4G service) by end of december, 2015. Does it have any positive impact on Subex financials as they had won deal for Jio 2 years back.

    Regards,
    Venu.

    ReplyDelete
  33. Dear vp sir,
    Please share your views on donear industries and HFCL.

    ReplyDelete
  34. Sir your views on marsons and rattan india power.

    ReplyDelete
  35. Sir, your current view on your old recommendation AVANTEL thanks

    ReplyDelete
    Replies
    1. Stock more than doubled , risk takers can hold

      Delete
  36. Sir, where to invest in metal sector for long term?

    ReplyDelete
    Replies
    1. Selectively , but may test patience .

      Delete
  37. Dear VP,
    Would like to know your views on Galaxy Entertainment and its latest Quarter results.
    Regards

    ReplyDelete
  38. Vp sir,
    There will be many ways to share your views, your effort should not be go waste and it should be utilized property. As a retail investor and poor people should get the right message through a right person like you. Only few people are there as like you whom we can trust. I personally request you to find a way to help us, there is will there is way. Under your kingdom we seen a success path with patients . The options which I could think of
    1. GTS, WITH MANY CLUES AND SHARE THE ANSWER AFTER A WEEK. this is like a puzzle game not like a analyzer.
    2. Monthly once share a company result and will study about the company and discuss on the comment section. As like now, each comment you respond is very valuable.
    3. Can we have a private blog own by you, just for your knowledge and no one as rights to ask any questions on that.

    Friends , any other best options you could think off .

    ReplyDelete
  39. This comment has been removed by the author.

    ReplyDelete
  40. Dear VP Sir Can I have your opinion on Srikalahasthi Pipes at CMP

    ReplyDelete
    Replies
    1. Stock suggested around Rs.55 level , neutral at CMP Rs.286

      Delete
  41. Sir , your views on Amruthanjan health care

    ReplyDelete
  42. Dear Sir,

    Your view on OMC's ? In particular HPCL, considering that crude oil price won't go more than $50 in the near future.

    Regards,
    Venu.

    ReplyDelete
  43. Dear Sir,

    Your View on NBCC considering the infra spending from the central government?

    Regards,
    Venu.

    ReplyDelete
    Replies
    1. Stock suggested at Rs.95 ( http://value-picks.blogspot.in/2012/04/national-buildings-construction.html)

      Now it is trading around Rs.1000 ,already turned as a ten bagger

      Neutral at CMP

      Delete
  44. Dear sir plese your view on IOC; PLEASE

    ReplyDelete
  45. Dear Sir,

    Would like to thank you from the bottom of my heart... its because of your messages, guidance and advice that I recovered all my loss in the market... Be it skm, amines and plasticizers, subex, suzlon, camphor, caplin, arrow coated... can not thank you enough.. You have been doing a great job.. your blog has changed my life totally and I hope to reap more such benefits by patiently investing in future too...May God bless you... I have learnt a lot from you and the more I wait patiently, the more determined and passionate i become about value investing and patiently waiting in market.... Thank you very much... Keep up the good work...

    Momin Imran

    ReplyDelete
  46. Hello sir, I have been investing on dips in Granules for some time now. Could the stock price further appreciate from the current levels of 160. your view on it sir?

    ReplyDelete
    Replies
    1. Stock suggested around Rs.75 before stock split , it already turned as a 20 bagger .Neutral at CMP

      Delete
  47. Greetings sir ,
    can you share ur current view on Astra microwave products .

    Thanks in advance

    ReplyDelete
    Replies
    1. Suggested at Rs.35 ( http://value-picks.blogspot.in/2013/06/astra-microwave-products-ltd-niche.html) and requested to take profit by partial profit booking . One can hold the free of cost shares at CMP Rs.145

      Delete
  48. Dear VPg, Taro and sun pharma dropped the plan of investing in wind power project in United States. Now what is your view on Suzlon energy please ? How will this affect Suzlon ?

    ReplyDelete
    Replies
    1. Neither Taro nor Sun pharma invested in Suzlon,it is Dilip S Shanghvi , the promoter of Sun invested in Suzlon using his personal fund and it is his liberty to do whatever he like with his own personal fund .

      Delete
  49. Dear VP Sir,
    Please share your views on
    1) Phoenix Lamps
    2) Graphite India
    3) Sudharshan Chemicals
    4) Waterbase
    5) Banco Products

    ReplyDelete
    Replies
    1. One can hold Sudarshan Chem, not tracking others

      Delete
  50. Dear Sir,

    Your view on Globus Spirits at CMP.

    Regards,
    Venu.

    ReplyDelete
  51. sir,
    whats your view on Roto pumps at current levels?

    ReplyDelete
    Replies
    1. Roto Pump suggested around Rs.80 when its FV was Rs.10 .Even after FV split is trading arond same rate which implies a 5 fold return . Neutral at CMP

      Delete
  52. VP, your current view on LT Foods, holding since your recommend level.
    Also, ur view on Lumax auto tech

    ReplyDelete
    Replies
    1. Hold LT Foods

      Lumax Auto Tech suggested @ Rs.92 ( http://value-picks.blogspot.in/2013/09/lumax-auto-technologies-ltd-long-term.html) , currently trading around Rs.335 . Those with some risk appetite may still hold .

      Delete
    2. Sir how do I access mmb and particularly your account

      Delete
  53. Dear VP, your views on Emmbi Industries?

    ReplyDelete
  54. Sir, is it worthwhile to make a fresh entry in NCL ltd.. the stock has almost doubled from ur reco?

    ReplyDelete
  55. Sir your views on NITCO pls..

    Regards

    Abhijeet

    ReplyDelete
    Replies
    1. Depends on the success of debt reduction scheme

      Delete
  56. Sir your valuable views on BILCARE also pls...

    Thanks and Regards...

    Abhijeet

    ReplyDelete
    Replies
    1. When some concerns came to light based on last year AR , suggested to take own call.

      Delete
  57. Dear VP Sir I seek your considered opinion on Camlin Fine Science at CMP

    ReplyDelete
    Replies
    1. Camlin Fine suggested around Rs.50 when its FV was Rs.10.Now,adjusted to FV split it already give 20 times return . Neutral at CMP

      Delete
  58. Sir, Enterprise value for Subex to growth is favourable, Surely a turnaround....your thinking is perfect as always

    ReplyDelete
  59. VP sir its always a pleasure reading your blogs , can u share Your view on firstsource solution ,
    Thanks ...

    ReplyDelete
  60. Dear VP Sir,

    Whats ur views on ANG Industries and NOCIL??

    Regards
    Arjeet

    ReplyDelete
  61. Dear Sir, please accept my friend request one Facebook. Sir I m very sincere in following your recommendations. Thank you.

    ReplyDelete
    Replies
    1. Friends number already crossed maximum permitted by FB , not in a position to accept more.

      Delete
  62. How do I can access you mmb account and particularly your advice

    ReplyDelete
  63. VP Ji
    Plz share your view on Emami @CMP

    ReplyDelete
  64. Please suggest about Network18 @ current price....

    ReplyDelete
  65. Please share your view on VTM and Rico auto

    ReplyDelete
  66. Dear VP sir,please give your valuable suggestions on syncom formulations.

    ReplyDelete

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