Monday, March 17, 2014

Why should investing be any different?

Warren Buffett started with nothing, wound up a billionnaire and did it all by investing. Today he's worth in excess of $50 billion.
Buffett buys stocks and whole companies and says his favorite holding period for investments is "forever."
He has some traits, a few core investing ideas that helped make him a billionaire.
Like every great secret of life, this one is hiding in plain sight.

  • Don't diversify
  • Avoid risk
  • Don't care what anyone else thinks

Consider what is likely your greatest source of wealth generation: your career. You probably haven't diversified at all in your career. Even if you tried many different careers, you were never doing several of them at once. And, even if you do more than one job, it's highly likely you spend the great majority of your time at just one of them and that just one provides the great majority of your income. Why should investing be any different?
For many years, Buffett had most of Berkshire Hathaway's money in just four stocks: American Express, Coca-Cola, Wells Fargo, and Gillette.
Today, most of Berkshire Hathaway's money is still in just four stocks: Wells Fargo, Coca-Cola, IBM, and American Express.
Wall Street wouldn't buy shares of The Washington Post when Buffett started buying it in February 1973. That's true, even though most Wall Street analysts acknowledged that this was a $400 million company selling for $80 million. They were too scared because the overall market had been falling for some time. Soros talks to lots of people to get a feel for where a market is going. But he never talks about what he's buying or selling. He just does it.
Think for yourself, avoid risk, and don't attempt to diversify into a bunch of investments you don't understand.
-By Dan Ferris, editor, Extreme Value.

What are the stocks one should invest to hold "forever" in India:

  • ITC - Rs.347.55
  • L&T - Rs.1,255.20
  • TCS - Rs.2,138.00 (on dips)
  • HDFC -Rs.853.90
  • Axis Bank - Rs.1,348.85
There are scores of other stocks having potential to give huge returns in the coming years. You must do your homework on them, be it a fundamental analysis or a technical analysis and unearth those potential outperformers.
Readers having experience and knowledge in this field could share their views.
I have hinted at Infrastructure stocks; I will continue to share more in the days to come.
As long as Nifty holds 6200, the future looks quite promising.